Exhibit 10.1
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[JPMORGAN LOGO]
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
July 25, 2005
among
CSK AUTO, INC.
The Lenders Party Hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
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▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS......................................................................... 1
SECTION 1.01. Defined Terms.................................................... 1
SECTION 1.02. Classification of Loans and Borrowings........................... 25
SECTION 1.03. Terms Generally.................................................. 25
SECTION 1.04. Accounting Terms; GAAP........................................... 25
ARTICLE II The Credits........................................................................ 26
SECTION 2.01. Commitments...................................................... 26
SECTION 2.02. Loans and Borrowings............................................. 26
SECTION 2.03. Requests for Revolving Borrowings................................ 27
SECTION 2.04. Protective Advances.............................................. 27
SECTION 2.05. Swingline Loans.................................................. 28
SECTION 2.06. Letters of Credit................................................ 29
SECTION 2.07. Funding of Borrowings............................................ 32
SECTION 2.08. Interest Elections............................................... 32
SECTION 2.09. Termination and Reduction of Commitments......................... 34
SECTION 2.10. Repayment of Loans; Evidence of Debt............................. 34
SECTION 2.11. Prepayment of Loans.............................................. 35
SECTION 2.12. Fees............................................................. 36
SECTION 2.13. Interest......................................................... 36
SECTION 2.14. Alternate Rate of Interest....................................... 37
SECTION 2.15. Increased Costs.................................................. 37
SECTION 2.16. Break Funding Payments........................................... 38
SECTION 2.17. Taxes............................................................ 39
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs.. 40
SECTION 2.19. Mitigation Obligations; Replacement of Lenders................... 42
SECTION 2.20. Returned Payments................................................ 43
SECTION 2.21. Commitment Increases............................................. 43
ARTICLE III Representations and Warranties.................................................... 44
SECTION 3.01. Financial Condition.............................................. 44
SECTION 3.02. No Change........................................................ 45
SECTION 3.03. Corporate Existence; Compliance with Law......................... 45
SECTION 3.04. Corporate Power; Authorization................................... 45
SECTION 3.05. Enforceable Obligations.......................................... 46
SECTION 3.06. No Legal Bar..................................................... 46
SECTION 3.07. No Material Litigation........................................... 46
SECTION 3.08. Investment Company Act........................................... 46
SECTION 3.09. Federal Regulation............................................... 46
SECTION 3.10. No Default....................................................... 46
SECTION 3.11. Taxes............................................................ 47
SECTION 3.12. Subsidiaries..................................................... 47
SECTION 3.13. Ownership of Property; Liens..................................... 47
SECTION 3.14. ERISA............................................................ 47
SECTION 3.15. Security Interest................................................ 48
SECTION 3.16. Copyrights, Permits, Trademarks and Licenses..................... 48
SECTION 3.17. Environmental Matters............................................ 49
SECTION 3.18. Accuracy and Completeness of Information......................... 49
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SECTION 3.19. Solvency......................................................... 50
SECTION 3.20. Labor Matters.................................................... 50
ARTICLE IV Conditions......................................................................... 50
SECTION 4.01. Conditions to Initial Extension of Credit........................ 50
SECTION 4.02. Conditions to All Loans and Letters of Credit.................... 53
ARTICLE V Affirmative Covenants............................................................... 54
SECTION 5.01. Financial Statements............................................. 54
SECTION 5.02. Certificates; Other Information.................................. 55
SECTION 5.03. Payment of Obligations........................................... 56
SECTION 5.04. Conduct of Business and Maintenance of Existence................. 56
SECTION 5.05. Maintenance of Property; Insurance............................... 56
SECTION 5.06. Books and Records; Inspection Rights............................. 57
SECTION 5.07. Notices.......................................................... 57
SECTION 5.08. Environmental Laws............................................... 58
SECTION 5.09. Additional Collateral, etc....................................... 59
SECTION 5.10. Appraisals; Field Examinations................................... 60
ARTICLE VI Negative Covenants................................................................. 60
SECTION 6.01. Indebtedness..................................................... 61
SECTION 6.02. Liens............................................................ 62
SECTION 6.03. Limitation on Contingent Obligations............................. 63
SECTION 6.04. Prohibition of Fundamental Changes............................... 64
SECTION 6.05. Prohibition on Sale of Assets.................................... 65
SECTION 6.06. Limitation on Investments, Loans and Advances.................... 66
SECTION 6.07. Financial Covenant............................................... 67
SECTION 6.08. Limitation on Dividends.......................................... 67
SECTION 6.09. Transactions with Affiliates..................................... 68
SECTION 6.10. Prepayment and Amendments of Material Indebtedness............... 69
SECTION 6.11. Changes in Fiscal Year........................................... 69
SECTION 6.12. Limitation on Lines of Business.................................. 69
SECTION 6.13. Limitation on Swap Agreements.................................... 69
ARTICLE VII Events of Default................................................................. 69
ARTICLE VIII The Administrative Agent......................................................... 72
ARTICLE IX Miscellaneous...................................................................... 74
SECTION 9.01. Notices.......................................................... 74
SECTION 9.02. Waivers; Amendments.............................................. 75
SECTION 9.03. Expenses; Indemnity; Damage Waiver............................... 77
SECTION 9.04. Successors and Assigns........................................... 79
SECTION 9.05. Survival......................................................... 81
SECTION 9.06. Counterparts; Integration; Effectiveness......................... 82
SECTION 9.07. Severability..................................................... 82
SECTION 9.08. Right of Setoff.................................................. 82
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process....... 82
SECTION 9.10. WAIVER OF JURY TRIAL............................................. 83
SECTION 9.11. Headings......................................................... 83
SECTION 9.12. Confidentiality.................................................. 83
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SECTION 9.13. Several Obligations; Nonreliance; Violation of Law............... 84
SECTION 9.14. USA PATRIOT Act.................................................. 84
SECTION 9.15. Disclosure....................................................... 84
SECTION 9.16. Appointment for Perfection....................................... 84
SECTION 9.17. Call Agreement and Exchangeable Note Indenture................... 84
SCHEDULES:
Commitment Schedule
Schedule 2.06 Existing Letters of Credit
Schedule 3.11 Asserted Tax Claims
Schedule 3.12 Subsidiaries
Schedule 3.13 Fee and Leased Properties
Schedule 3.15(a) UCC Filing Offices
Schedule 3.16 Intellectual Property
Schedule 6.01(a) Indebtedness to Remain Outstanding
Schedule 6.02 Existing Liens
Schedule 6.03(d) Existing Contingent Obligations
EXHIBITS:
Exhibit A Form of Revolving Note
Exhibit B Form of Swing Line Note
Exhibit C Form of Assignment and Assumption
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Guarantee and Collateral Agreement
Exhibit F-1 Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Exhibit F-2 Form of Opinion of ▇▇▇▇▇ ▇▇▇▇ LLP
Exhibit F-3 Form of Opinion of In-House Counsel of Holdings, the
Company and its Subsidiaries
Exhibit G-1 Form of Company Closing Certificate
Exhibit G-2 Form of Holdings Closing Certificate
Exhibit G-3 Form of Subsidiary Closing Certificate
Exhibit H Form of New Lender Supplement
Exhibit I Form of Commitment Increase Supplement
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 25,
2005 (as it may be amended or modified from time to time, this "Agreement"),
among CSK AUTO, INC. (the "Company"), the Lenders party hereto, and JPMORGAN
CHASE BANK, N.A., as Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Company entered into the Amended and Restated Credit
Agreement, dated as of January 16, 2004, as amended (the "Existing Credit
Agreement"), among the Company, the several lenders from time to time parties
thereto, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as
administrative agent, Credit Suisse First Boston, acting through its Cayman
Islands Branch, as syndication agent and Bank of America, N.A. and U.S. Bank
N.A., as co-documentation agents;
WHEREAS, the Company desires to (i) refinance (the "Refinancing")
the loans under the Existing Credit Agreement, (ii) issue up to $125,000,000 of
senior exchangeable notes (the "Issuance") and (iii) repurchase (the
"Repurchase") up to $25,000,000 of the outstanding Capital Stock (as defined
below) of Holdings (as defined below) plus pay any accrued and unpaid interest
and premiums and expenses in connection therewith (the Refinancing, the
Issuance, the repurchase and other transactions described in the foregoing
recitals are collectively referred to herein as the "Transactions"); and
WHEREAS, in connection with the Transactions, the Company has
requested that the Lenders make available senior secured credit facility and the
Lenders have agreed to provide such facilities subject to the terms and
conditions set forth herein;
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Account" has the meaning assigned to such term in the Guarantee and
Collateral Agreement.
"Account Debtor" means any Person obligated on an Account.
"Act" has the meaning set forth in Section 9.14.
"Adjusted Eligible Accounts" means the Eligible Accounts, minus the
Dilution Reserve.
"Adjusted Eligible Inventory" means, on any date, Eligible Inventory
minus Inventory Reserves.
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"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Aggregate Credit Exposure" means, at any time, the aggregate Credit
Exposure of all the Lenders.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, (a) with
respect to Revolving Loans, LC Exposure or Swingline Loans, a percentage equal
to a fraction the numerator of which is such Lender's Revolving Commitment and
the denominator of which is the aggregate Revolving Commitment of all Revolving
Lenders (if the Revolving Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon such Lender's share of the aggregate
Revolving Exposures at that time) and (b) with respect to Protective Advances or
with respect to the Aggregate Credit Exposure, a percentage based upon its share
of the Aggregate Credit Exposure and the unused Commitments.
"Applicable Rate" means, for any day, with respect to any Eurodollar
Loan, the applicable rate per annum set forth below under the caption
"Eurodollar Spread" based upon the Company's average daily Availability for the
most recently ended fiscal quarter, provided that until the end of the Company's
first fiscal quarter ending after the Closing Date, the "Applicable Rate" shall
be 1.50% per annum:
CATEGORY AVERAGE DAILY AVAILABILITY EURODOLLAR SPREAD
3 Greater than $150 million 1.25%
2 Less than or equal to $150 million but
greater than $75 million 1.50%
1 Less than or equal to $75 million 1.75%
For purposes of the foregoing, (a) the Applicable Rate shall be
determined as of the end of each fiscal quarter of the Company based upon the
Borrowing Base Certificates delivered in respect of such fiscal quarter and (b)
each change in the Applicable Rate resulting from a change in average daily
Availability shall be effective during the period commencing on and including
the date of delivery of the last such Borrowing Base Certificate to the
Administrative Agent and ending on the date immediately preceding the effective
date of the next such change.
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If any Borrowing Base Certificate referred to above has not been
delivered as of the end of the relevant fiscal quarter (or, if required to be
delivered on a date following the end of such fiscal quarter, as of such later
date) then, until such Borrowing Base Certificate is delivered, average daily
Availability shall be deemed to be the same as with respect to the immediately
preceding fiscal quarter; provided, however, that (a) if such Borrowing Base
Certificate, when actually delivered, would require an increase in the
Applicable Rate over the Applicable Rate in effect immediately prior to the last
day of such fiscal quarter (or such later date when such Borrowing Base
Certificate was required to be delivered, as the case may be), the Company shall
promptly pay to the Lenders and the Administrative Agent any additional amounts
of interest or fees which would have been payable on any previous Interest
Payment Date had such higher Applicable Rate been in effect from the last day of
such fiscal quarter (or such later date when such Borrowing Base Certificate was
required to be delivered, as the case may be) and (b) if any Event of Default
shall have occurred and be continuing as of any date on which the Applicable
Rate would have otherwise been adjusted in accordance with this definition, the
Applicable Rate shall in no event be reduced on such date (from the Applicable
Rate as in effect prior to such date) until such Event of Default is cured or
waived.
"Approved Fund" has the meaning assigned to such term in Section
9.04.
"Asset Sale" means any sale, sale-leaseback, or other disposition by
the Company or any Subsidiary thereof of any of its property or assets,
including the stock of any Subsidiary of the Company that is restricted by
Section 6.05 hereof, other than sales and dispositions permitted by Sections
6.05(a), (b), (c), (f), (g), (h), (i), (j), (k) and (l).
"Assignment and Assumption" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit C or any other form approved by the Administrative Agent.
"Availability" means, at any time, an amount equal to (a) the lesser
of the Revolving Commitment and the Borrowing Base minus (b) the Revolving
Exposure of all Revolving Lenders.
"Available Inventory" at any date of determination shall be equal to
the lesser of (i) an amount equal to (x) 60% of Adjusted Eligible Inventory,
less (y) Rent Reserves (provided that no Rent Reserves shall be taken until 120
days after the Closing Date) or (ii) 85% of the product of (A) the Net Recovery
Liquidation Rate in effect on such date of determination multiplied by (B) the
aggregate amount of gross domestic Inventory (as reported in accordance with the
Company's perpetual accounting system at such date of determination) as set
forth in the most recent Borrowing Base Certificate.
"Available Receivables" means, at any date of determination, 85% of
Adjusted Eligible Accounts.
"Available Revolving Commitment" means, at any time, the Revolving
Commitment then in effect minus the Revolving Exposure of all Revolving Lenders
at such time.
"Availability Period" means the period from and including the
Closing Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Bank Drafts" means drafts issued by the Company or its designee on
behalf of a Credit Party in connection with the SunTrust Draft Program or
similar program, pursuant to documentation reasonably acceptable to the
Administrative Agent.
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"Banking Services" means each and any of the following bank services
provided to any Credit Party by any Lender or any of its Affiliates: (a)
commercial credit cards, (b) stored value cards and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).
"Banking Services Obligations" of the Credit Parties means any and
all obligations of the Credit Parties, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor) in
connection with Banking Services.
"Banking Services Reserves" means all Reserves which the
Administrative Agent from time to time establishes in its Permitted Discretion
for Banking Services then provided or outstanding.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, (b) a Swingline Loan and (c) a
Protective Advance.
"Borrowing Base" means, at the time of any determination, an amount
equal to the sum, without duplication, of
(a) Available Receivables, plus
(b) Available Inventory, minus
(c) Other Reserves.
Standards of eligibility and reserves and advance rates of the Borrowing Base
may be revised and adjusted from time to time by the Administrative Agent in its
Permitted Discretion (provided, that the Administrative Agent may not revise
Borrowing Base standards if the effect thereof would be to increase the advance
rates or to add new asset categories to the Borrowing Base without the consent
of the requisite Lenders as set forth in Section 9.02), with any such changes to
be effective three (3) days after delivery of notice thereof to the Company and
the Lenders. The Borrowing Base at any time shall be determined by reference to
the most recent Borrowing Base Certificate delivered to the Administrative
Agent.
"Borrowing Base Certificate" means a certificate, signed and
certified as accurate and complete by a Financial Officer of the Company, in
substantially the form of Exhibit D (with such changes therein as may be
reasonably required by the Administrative Agent to reflect the components of and
reserves against the Borrowing Base as provided for hereunder from time to
time), or another form which is acceptable to the Administrative Agent in its
Permitted Discretion, which shall include appropriate exhibits, schedules,
supporting documentation, and additional reports (i) as outlined in Schedule 1
to Exhibit D and (ii) as reasonably requested by the Administrative Agent.
"Borrowing Request" means a request by the Company for a Revolving
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that,
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when used in connection with a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.
"Call Agreement" means the Confirmation Re: Call Option, dated as of
the Closing Date, among JPMorgan Chase Bank, the Company and Holdings, entered
into in connection with the Exchangeable Notes, as the same may be amended and
replaced from time to time in a manner not adverse to the Lenders.
"Capital Expenditures" means for any period, all amounts which
would, in accordance with GAAP, be set forth as capital expenditures (exclusive
of any amount attributable to capitalized interest) on the consolidated
statement of cash flows or other similar statement of the Company and its
Subsidiaries for such period but shall exclude (a) any expenditures made with
the proceeds of condemnation or eminent domain proceedings affecting real
property or with insurance proceeds and (b) expenditures made in connection with
Sections 6.06(h) and 6.06(j); provided that any Capital Expenditures financed
with the proceeds of any Indebtedness permitted hereunder (other than
Indebtedness incurred hereunder) shall be deemed to be a Capital Expenditure
only in the period in which, and by the amount which, any principal of such
Indebtedness is repaid.
"Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition, (b) certificates of deposit and eurodollar time deposits
with maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any Lender or with any domestic commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (a) and (b) entered into with any financial institution
meeting the qualifications specified in clause (b) above, (d) commercial paper
issued by any Lender or the parent corporation of any Lender, and commercial
paper rated A-1 or the equivalent thereof by Standard & Poor's Ratings Group or
P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and in each
case maturing within one year after the date of acquisition, (e) investment
funds investing 95% of their assets in securities of the type described in
clauses (a) through (d) above, (f) readily marketable direct obligations issued
by any state of the United States or any political subdivision thereof having
one of the two highest rating categories obtainable from either S&P or Moody's
and (g) indebtedness with a rating of "A" or higher from S&P or "A2" or higher
from Moody's.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
any Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of
such Lender or by such Lender's or such Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Change of Control" shall be considered to have occurred if (a)(1)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended), whether acting singly or in
concert with one or more other "persons" or "groups," other than any Person
acting in the capacity of an underwriter, shall, directly or indirectly, have
acquired, or acquire
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the power to vote or direct the voting of, 30% or more on a fully diluted basis,
of the outstanding Capital Stock of Holdings or (2) during any period of two
consecutive calendar years, individuals who at the beginning of such period
constituted the board of directors of Holdings together with any new members of
such board of directors whose elections by such board of directors or whose
nomination for election by the stockholders of Holdings was approved by a vote
of a majority of the members of such board of directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved shall cease for any reason to
constitute a majority of the directors of Holdings then in office, or (b)
Holdings shall cease to own and control directly, of record and beneficially,
100% of each class of outstanding Capital Stock of the Company, free and clear
of all Liens, other than Liens in favor of the Administrative Agent and the
Lenders pursuant to the Credit Documents.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Swingline Loans or Protective Advances.
"Closing Date" means the date on which the conditions specified in
Section 4.01 are satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all property owned, leased or operated by
a Person with respect to which a security interest is granted pursuant to the
Security Documents and any and all other property of any Credit Party, now
existing or hereafter acquired, that may at any time be or become subject to a
security interest or Lien in favor of Administrative Agent, on behalf of itself
and the Lenders, to secure the Secured Obligations.
"Collateral Access Agreement" has the meaning assigned to such term
in the Guarantee and Collateral Agreement.
"Collection Account" has the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"Commitment" means, with respect to each Lender, such Lender's
Revolving Commitment, together with the commitment of such Lender to acquire
participations in Protective Advances hereunder. The initial amount of each
Lender's Commitment is set forth on the Commitment Schedule, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable.
"Commitment Fee Rate" means 0.375% per annum.
"Commitment Increase Notice" has the meaning set forth in Section
2.21(a).
"Commitment Increase Supplement" has the meaning set forth in
Section 2.21(c).
"Commitment Schedule" means the Schedule attached hereto identified
as such.
"Commonly Controlled Entity" means any entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414 of the Code.
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"Company" means CSK Auto Inc., an Arizona corporation.
"Consolidated EBITDAR" means, for any period, the Consolidated Net
Income of the Company and its Subsidiaries for such period, plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) total income tax expense
(including any tax benefit or expense related to the dividend on any preferred
stock), (b) interest expense, amortization or write-off of debt discount, debt
issuance, warrant and other equity (including any preferred stock) issuance
costs and commissions, discounts, redemption premium and other fees and charges
associated with the Loans (including commitment fees and other periodic bank
charges), Standby LCs, letters of credit permitted hereunder, Financing Leases,
the Senior Unsecured Debt and the Senior Subordinated Debt or with the
acquisition or repayment of any debt securities of the Company permitted
hereunder, and net costs associated with Swap Agreements to which the Company is
a party in respect of the Loans, (c) costs of surety bonds, (d) depreciation and
amortization expense, (e) amortization of inventory write-up under APB 16,
amortization of intangibles (including, but not limited to, goodwill and costs
of interest-rate caps, leasehold interests and the cost of non-competition
agreements) and organization costs, (f) non-cash amortization of Financing
Leases, (g) franchise taxes, (h) all cash dividend payments, (i) Consolidated
Lease Expense, (j) any fees and expenses incurred in connection with the
Transactions, (k) any other write-downs, write-offs, minority interests and
other non-cash charges in determining such Consolidated Net Income for such
period and (l) all extraordinary losses in determining such Consolidated Net
Income for such period, and minus, without duplication and to the extent
reflected as a credit in the statement of such Consolidated Net Income for such
period, the sum of (i) extraordinary gains, (ii) non-cash income and (iii)
non-cash gains; provided that: (i) the cumulative effect of a change in
accounting principles (effected either through cumulative effect adjustment or a
retroactive application) shall be excluded and (ii) the impact of foreign
currency translations shall be excluded.
"Consolidated Lease Expense" means, for any period, the aggregate
amount of fixed and contingent rentals payable by the Company and its
Subsidiaries for such period with respect to leases of real and personal
property, determined on a consolidated basis in accordance with GAAP; provided
that payments in respect of Financing Leases shall not constitute Consolidated
Lease Expense.
"Consolidated Net Income" means, for any period, net income of the
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP; provided that: (i) the net income (but not loss) of any Person that
is not a Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or distributions
paid in cash to the Company or a Wholly-Owned Subsidiary, (ii) the net income of
any Person acquired in a pooling of interests transaction for any period prior
to the date of such acquisition shall be excluded and (iii) net income of any
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that net income is
prohibited or not permitted at the date of determination.
"Contingent Obligation" means, as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent (a) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (b) to advance
or supply funds (i) for the purchase or payment of any such primary obligation
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
8
thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount (based on the maximum
reasonably anticipated net liability in respect thereof as determined by the
Company in good faith) of the primary obligation or portion thereof in respect
of which such Contingent Obligation is made or, if not stated or determinable,
the maximum reasonably anticipated net liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by the Company in
good faith.
"Contractual Obligation" means, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Documents" means this Agreement, any promissory notes issued
pursuant to this Agreement, any Letter of Credit applications, the Security
Documents and all other agreements, instruments, documents and certificates
identified in Section 4.01 executed and delivered to, or in favor of, the
Administrative Agent or any Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, letter of credit agreements
and all other written matter whether heretofore, now or hereafter executed by or
on behalf of any Credit Party, or any employee of any Credit Party, and
delivered to the Administrative Agent or any Lender in connection with this
Agreement or the transactions contemplated hereby. Any reference in this
Agreement or any other Credit Document to a Credit Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to this Agreement or
such Credit Document as the same may be in effect at any and all times such
reference becomes operative.
"Credit Exposure" means, as to any Lender at any time, the sum of
(a) such Lender's Revolving Exposure at such time, plus (b) an amount equal to
its Applicable Percentage, if any, of the aggregate principal amount of
Protective Advances outstanding at such time.
"Credit Parties" means Holdings, the Company and each of the
Company's Domestic Subsidiaries from time to time party to a Credit Document and
their successors and assigns.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Departing Lender" has the meaning set forth in Section 2.19(b).
"Dilution Factors" means, without duplication, with respect to any
period, the aggregate amount of all deductions, credit memos, returns,
adjustments, allowances, bad debt write-offs and other non-cash credits which
are recorded to reduce accounts receivable in a manner consistent with current
and historical accounting practices of the Company.
"Dilution Ratio" means, at any date, the amount (expressed as a
percentage) equal to (a) the aggregate amount of the applicable Dilution Factors
for the twelve (12) most recently ended fiscal months divided by (b) total gross
sales for the twelve (12) most recently ended fiscal months.
"Dilution Reserve" means, at any date, (i) the amount by which the
Dilution Ratio exceeds 8% multiplied by (ii) the Eligible Accounts on such date.
9
"Document" has the meaning assigned to such term in the Guarantee
and Collateral Agreement.
"dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Subsidiary" means any Subsidiary of the Company other than
a Foreign Subsidiary.
"Eligible Accounts" means, at any time, the Accounts of the Company
which the Administrative Agent determines in its Permitted Discretion are
eligible as the basis for the extension of Revolving Loans, Swingline Loans and
the issuance of Letters of Credit hereunder. Without limiting the Administrative
Agent's discretion provided herein, Eligible Accounts shall not include any
Account:
(a) which is not subject to a first priority perfected security
interest in favor of the Administrative Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of
the Administrative Agent and (ii) a Permitted Encumbrance which does not
have priority over the Lien in favor of the Administrative Agent;
(c) (i) with respect to which the scheduled due date is more than 90
days after the original invoice date; (ii) which, in the case of Accounts
invoiced on payment terms of not more than seven days, is unpaid more than
15 days after the date of the original invoice; (iii) which, in the case
of Accounts invoiced on payment terms of not more than 60 days, is unpaid
more than 120 days after the date of the original invoice; (iv) which, in
the case of Accounts invoiced on payment terms of more than 60 days, but
not more than 90 days, is unpaid more than 150 days after the date of the
original invoice; or (v) which has been written off the books of the
Company or otherwise designated as uncollectible (in determining the
aggregate amount from the same Account Debtor that is unpaid hereunder
there shall be excluded the amount of any net credit balances relating to
Accounts due from an Account Debtor which are unpaid more than 90 days
from the date of invoice or more than 60 days from the due date);
(d) which is owing by an Account Debtor for which more than 50% of
the Accounts owing from such Account Debtor and its Affiliates are
ineligible hereunder;
(e) which is owing by an Account Debtor if the aggregate amount of
Accounts owing from such Account Debtor and its Affiliates to the Company
exceeds 10% of the aggregate Eligible Accounts , to the extent of such
excess;
(f) with respect to which any covenant, representation, or warranty
contained in the Guarantee and Collateral Agreement has been breached or
is not true in any material respect;
(g) which (i) does not arise from the sale of goods or performance
of services in the ordinary course of business, (ii) is not evidenced by
an invoice or other documentation satisfactory to the Administrative Agent
which has been sent to the Account Debtor, (iii) represents a progress
billing, (iv) is contingent upon the Company's completion of any further
performance, (v) represents a sale on a ▇▇▇▇-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, cash-on-delivery or any
other repurchase or return basis, (vi) relates to payments of interest or
(vii) arises from cooperative advertising programs or other vendor
allowances;
10
(h) for which the goods giving rise to such Account have not been
shipped to the Account Debtor or for which the services giving rise to
such Account have not been performed by the Company (it being understood
that if such Account is invoiced more than once, such Account shall only
be counted as an Eligible Account to the extent that the terms of the
first such invoice permit such Account to be counted as an Eligible
Account);
(i) with respect to which any check or other instrument of payment
has been returned uncollected for any reason;
(j) which is owed by an Account Debtor which has (i) applied for,
suffered, or consented to the appointment of any receiver, custodian,
trustee, or liquidator of its assets, (ii) has had possession of all or a
material part of its property taken by any receiver, custodian, trustee or
liquidator, (iii) filed, or had filed against it, any request or petition
for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as bankrupt, winding-up, or voluntary or involuntary case
under any state or federal bankruptcy laws, (iv) has admitted in writing
its inability, or is generally unable to, pay its debts as they become
due, (v) become insolvent, or (vi) ceased operation of its business;
(k) which is owed by any Account Debtor which has sold all or a
substantially all of its assets;
(l) which is owed by an Account Debtor which (i) does not maintain
its chief executive office in the United States of America or (ii) is not
organized under applicable law of the United States of America, any state
thereof or the District of Columbia unless, in either case, such Account
is backed by a Letter of Credit acceptable to the Administrative Agent
which is in the possession of, has been assigned to and is directly
drawable by the Administrative Agent;
(m) which is owed in any currency other than dollars;
(n) which is owed by (i) the government (or any department, agency,
public corporation, or instrumentality thereof) of any country other than
the United States of America unless such Account is backed by a Letter of
Credit acceptable to the Administrative Agent which is in the possession
of the Administrative Agent, or (ii) the government of the United States
of America or any department, agency, public corporation, or
instrumentality thereof, unless (A) the Federal Assignment of Claims Act
of 1940, as amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C. Section
15 et seq.), and any other steps necessary to perfect the Lien of the
Administrative Agent in such Account have been complied with to the
Administrative Agent's reasonable satisfaction or (B) the aggregate amount
of all such Accounts does not exceed $1,500,000 (provided that only the
amount of such excess shall be excluded from "Eligible Accounts" pursuant
to this clause (n));
(o) which is owed by any Affiliate, employee, officer, director,
agent or stockholder of any Credit Party;
(p) which, for any Account Debtor, exceeds a credit limit reasonably
determined by the Administrative Agent, to the extent of such excess;
(q) which is owed by an Account Debtor or any Affiliate of such
Account Debtor to which any Credit Party is indebted, but only to the
extent of such indebtedness or is subject to any security, deposit,
progress payment, retainage or other similar advance made by or for the
benefit of an Account Debtor, in each case to the extent thereof;
11
(r) which is subject to any counterclaim, deduction, defense, setoff
or dispute but only to the extent of any such counterclaim, deduction,
defense, setoff or dispute;
(s) which is evidenced by any promissory note, chattel paper, or
instrument that has not been delivered to the Administrative Agent;
(t) which is owed by an Account Debtor located in any jurisdiction
which requires filing of a "Notice of Business Activities Report" or other
similar report in order to permit the Company to seek judicial enforcement
in such jurisdiction of payment of such Account, unless the Company has
filed such report or qualified to do business in such jurisdiction;
(u) with respect to which the Company has made any agreement with
the Account Debtor for any reduction thereof (but only to the extent of
such reduction), other than discounts and adjustments given in the
ordinary course of business, or any Account which was partially paid and
the Company created a new receivable for the unpaid portion of such
Account;
(v) which does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal,
state or local, including without limitation the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of the
Board;
(w) which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding
(written or oral) that indicates or purports that any Person other than
the Company has or has had an ownership interest in such goods, or which
indicates any party other than the Company as payee or remittance party;
or
(x) which was created on cash on delivery terms or is classified by
the Company as a PPO account.
In the event that an Account which was previously an Eligible
Account ceases to be an Eligible Account hereunder, the Company shall notify the
Administrative Agent thereof on and at the time of submission to the
Administrative Agent of the next Borrowing Base Certificate. In determining the
amount of an Eligible Account, the face amount of an Account shall be reduced
by, without duplication, to the extent not reflected in such face amount, (i)
the amount of all accrued and actual discounts, claims, credits or credits
pending, promotional program allowances, price adjustments, finance charges or
other allowances (including any amount that the Company may be obligated to
rebate to an Account Debtor pursuant to the terms of any agreement or
understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by the Company to reduce
the amount of such Account. Standards of eligibility may be made more
restrictive from time to time solely by the Administrative Agent in the exercise
of its reasonable judgment, with any such changes to be effective three (3) days
after delivery of notice thereof to the Company and the Lenders.
"Eligible Inventory" means, at any time, the Inventory of the
Company which the Administrative Agent determines in its Permitted Discretion is
eligible as the basis for the extension of Revolving Loans, Swingline Loans and
the issuance of Letters of Credit hereunder. Without limiting the Administrative
Agent's discretion provided herein, Eligible Inventory shall not include any
Inventory:
(a) which is not subject to a first priority perfected Lien in favor
of the Administrative Agent;
12
(b) which is subject to any Lien other than (i) a Lien in favor of
the Administrative Agent and (ii) a Permitted Encumbrance which does not
have priority over the Lien in favor of the Administrative Agent;
(c) which is, in the Administrative Agent's reasonable opinion, slow
moving, obsolete, unmerchantable, defective, used, unfit for sale, not
salable at prices approximating at least the cost of such Inventory in the
ordinary course of business or unacceptable due to age, type, category
and/or quantity;
(d) with respect to which any covenant, representation, or warranty
contained the Guarantee and Collateral Agreement has been breached or is
not true in any material respect and which does not conform to all
standards imposed by any Governmental Authority;
(e) in which any Person other than the Company shall (i) have any
direct or indirect ownership, interest or title to such Inventory or (ii)
be indicated on any purchase order or invoice with respect to such
Inventory as having or purporting to have an interest therein;
(f) which is not finished goods or which constitutes
work-in-process, raw materials, spare or replacement parts (other than
spare and replacement parts to be sold to customers in the ordinary course
of business), cores, storage and fixture inventory, subassemblies,
packaging and shipping material, manufacturing supplies, samples,
prototypes, displays or display items, ▇▇▇▇-and-hold goods, goods that are
returned or marked for return, repossessed goods, defective or damaged
goods, goods held on consignment, or goods which are not of a type held
for sale in the ordinary course of business;
(g) which is not located in the United States of America or is in
transit with a common carrier from vendors and suppliers, provided that,
up to $6,000,000 of Inventory in transit from vendors and suppliers may be
included as eligible pursuant to this clause (g) so long as (i) the
Administrative Agent shall have received (1) a true and correct copy of
the ▇▇▇▇ of lading and other shipping documents for such Inventory, (2)
evidence of satisfactory casualty insurance naming the Administrative
Agent as loss payee and otherwise covering such risks as the
Administrative Agent may reasonably request, and (3) if the ▇▇▇▇ of lading
is (A) non-negotiable, a duly executed Collateral Access Agreement from
the applicable customs broker for such Inventory or (B) negotiable,
confirmation that the ▇▇▇▇ is issued in the name of the Company and
consigned to the order of the Administrative Agent, and an acceptable
agreement has been executed with the Company's customs broker, in which
the customs broker agrees that it holds the negotiable ▇▇▇▇ as agent for
the Administrative Agent and has granted the Administrative Agent access
to the Inventory and (ii) the common carrier is not an Affiliate of the
applicable vendor or supplier;
(h) which is located in any location leased by the Company unless
(i) the lessor has delivered to the Administrative Agent a Collateral
Access Agreement or (ii) a Rent Reserve has been established by the
Administrative Agent in its Permitted Discretion (it being understood
that, unless otherwise requested by the Company, the Administrative Agent
shall establish Rent Reserves for all leased locations not subject to a
Collateral Access Agreement); provided that no such Inventory shall be
excluded from "Eligible Inventory" solely as a result of this clause (h)
prior to the date which is 120 days following the Closing Date;
(i) which is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and which is
not evidenced by a Document (other than bills of lading to the extent
permitted pursuant to clause (g) above), unless (i) such warehouseman or
13
bailee has delivered to the Administrative Agent a Collateral Access
Agreement and such other documentation as the Administrative Agent may
reasonably require or (ii) an appropriate Reserve has been established by
the Administrative Agent in its Permitted Discretion (it being understood
that, unless otherwise requested by the Company, the Administrative Agent
shall establish such a Reserve for all such Inventory not subject to a
Collateral Access Agreement);
(j) which is being processed offsite at a third party location or
outside processor, or is in transit to or from said third party location
or outside processor;
(k) which is a discontinued product or component thereof;
(l) which is the subject of a consignment by the Company as
consignor;
(m) which is perishable;
(n) which contains or bears any intellectual property rights
licensed to the Company unless the Administrative Agent is satisfied in
its Permitted Discretion that it may sell or otherwise dispose of such
Inventory without (i) infringing the rights of such licensor, (ii)
violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties
incurred pursuant to sale of such Inventory under the current licensing
agreement;
(o) which is not reflected in a current perpetual inventory report
of the Company (unless such Inventory is in transit from the stores to the
distribution centers for purposes of inventory reallocation, and is
reflected as such in a report to the Administrative Agent); or
(p) which is subject to a reconciliation variance between the
perpetual records and the general ledger; or
(q) which consists of core charges.
In the event that Inventory which was previously Eligible Inventory ceases to be
Eligible Inventory hereunder, the Company shall notify the Administrative Agent
thereof on and at the time of submission to the Administrative Agent of the next
Borrowing Base Certificate. Standards of eligibility may be made more
restrictive from time to time solely by the Administrative Agent in the exercise
of its reasonable judgment, with any such changes to be effective three (3) days
after delivery of notice thereof to the Company and the Lenders.
"Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any Governmental Authority or requirements of law (including
court-ordered requirements of common law) regulating or imposing liability or
standards of conduct concerning, environmental or public health protection
matters, including, without limitation, Hazardous Materials, as now or may at
any time hereafter be in effect.
"Environmental Reports" means the Phase 1 environmental assessments
covering certain owned and leased real properties of the Company and its
Subsidiaries made available by the Company to the Administrative Agent prior to
October 30, 1996.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
14
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" means any of the events specified in Article VII,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Exchangeable Note Indenture" means the Indenture, dated as of the
date hereof, between the Company and The Bank of New York, as trustee.
"Exchangeable Notes" means the Company's senior exchangeable notes
due 2035 issued by the Company pursuant to the Exchangeable Note Indenture on
the Closing Date.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Company hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Company is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by the Company
under Section 2.19(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.17(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Company with respect to such withholding tax pursuant to
Section 2.17(a).
"Existing Credit Agreement" has the meaning set forth in the
recitals to this Agreement.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Property" has the meaning assigned to such term in Section
3.13.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"Financing Lease" means (a) any lease of property, real or personal,
the obligations under which are capitalized on a consolidated balance sheet of
the Company and its consolidated Subsidiaries and (b) any other such lease to
the extent that the then present value of any rental commitment thereunder
should, in accordance with GAAP, be capitalized on a balance sheet of the
lessee.
"Fixed Charges" means, with reference to any period, without
duplication, cash Interest Expense, plus Consolidated Lease Expense, plus
prepayments and scheduled principal payments on Indebtedness made during such
period, plus expense for taxes paid in cash, plus dividends or distributions
15
paid in cash, plus Financing Lease payments, plus cash contributions to any
Plan, all calculated for the Company and its Subsidiaries on a consolidated
basis.
"Fixed Charge Coverage Ratio" means, the ratio, determined as of the
end of each fiscal quarter of the Company for the most-recently ended four
fiscal quarters, of (a) Consolidated EBITDAR minus the unfinanced portion of
Capital Expenditures to (b) Fixed Charges, all calculated for the Company and
its Subsidiaries on a consolidated basis in accordance with GAAP.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Company is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary of the Company which is
not organized under the laws of the United States of America or any state
thereof or the District of Columbia.
"Funding Account" has the meaning assigned to such term in Section
4.01(n).
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee and Collateral Agreement" means that certain Amended and
Restated Guarantee and Collateral Agreement, dated as June 20, 2003, as amended
and restated as of the date hereof, between the Credit Parties and the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, substantially in the form of Exhibit E and any other pledge or security
agreement entered into, after the date of this Agreement by any other Credit
Party (as required by this Agreement or any other Credit Document), or any other
Person, as the same may be amended, restated or otherwise modified from time to
time.
"Guarantor" means Holdings and each Subsidiary Guarantor.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Holdings" means CSK Auto Corporation, a Delaware corporation.
"Increasing Lender" has the meaning set forth in Section 2.21(c).
"Indebtedness" means, of a Person, at a particular date, means (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) the undrawn face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder and unpaid reimbursement obligations with respect
thereto, (c) all liabilities (other than Lease Obligations and liabilities in
connection with reserves established in accordance with GAAP) secured by any
Lien on any property owned by such Person, even though such
16
Person has not assumed or become liable for the payment thereof, (d) Financing
Leases and (e) all indebtedness of such Person arising under acceptance
facilities; but excluding (i) trade and other accounts payable (including Bank
Drafts issued in connection therewith, so long as no such Bank Drafts in an
aggregate amount outstanding in excess of $10,000,000 (x) are in default as a
result of which the maturity of such Bank Drafts has been accelerated prior to
their stated due dates or (y) are in payment default (after expiration of any
applicable grace period)) and accrued expenses payable in the ordinary course of
business, (ii) letters of credit supporting the purchase of goods in the
ordinary course of business and expiring no more than six months from the date
of issuance and (iii) obligations in respect of Swap Agreements.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Information" has the meaning set forth in Section 9.12.
"Information Memorandum" means the Confidential Information
Memorandum dated July 2005 relating to the Company and the Transactions.
"Insolvency" means, with respect to a Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Interest Election Request" means a request by the Company to
convert or continue a Revolving Borrowing in accordance with Section 2.08.
"Interest Expense" means, with reference to any period, cash
interest expense (excluding (i) fees payable on account of Letters of Credit and
(ii) to the extent included in interest expense in accordance with GAAP, net
costs associated with Swap Agreements to which the Company is party in respect
of the Loans, amortization of debt discount (including discount of liabilities
and reserves established under APB 16), costs of debt issuance and interest
expense on customer deposits) for such period net of interest income and
amortization of deferred non-cash interest income associated with the settlement
of Swap Agreements, in each case for or during such period on a consolidated
basis for the Company and its Subsidiaries.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December and the Maturity Date, (b) with respect to any Eurodollar Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period and the Maturity Date and (c) with respect to
any Swingline Loan, the day that such Loan is required to be repaid and the
Maturity Date.
"Interest Period" means (a) with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of each Lender, nine or twelve months)
thereafter, as the Company may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
17
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
"Inventory" has the meaning assigned to such term in the Guarantee
and Collateral Agreement.
"Inventory Reserves" means reserves against Inventory equal to the
sum of the following, without duplication:
(a) a reserve for shrink, or discrepancies that arise pertaining to
inventory quantities on hand between the Company's perpetual accounting system,
and physical counts of the inventory in stores which will be equal to the
results of the physical inventory counts taken over the past 12 months with the
variance expressed as a percentage of Inventory; and
(b) a reserve for shortages or discrepancies that arise pertaining
to inventory quantities on hand between the Company's perpetual accounting
system and physical counts of such inventory in the distribution centers, which
will be based upon the results of the physical inventory counts taken over the
past 12 months and expressed as a percentage of Inventory; and
(d) a reserve for purchase discounts as recorded on the books and
records of the Company; and
(e) a reserve for gift card liabilities outstanding as recorded on
the books and records of the Company; and
(f) a reserve for return credit liabilities outstanding as recorded
on the books and records of the Company; and
(g) a revaluation reserve whereby capitalized favorable variances
shall be deducted from Eligible Inventory and unfavorable variances shall not be
added to Eligible Inventory; and
(h) any other reserve as deemed appropriate by the Administrative
Agent in its sole Permitted Discretion, from time to time.
"Investment" has the meaning set forth in Section 6.06.
"Investment Grade Securities" means (i) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof (other than Cash Equivalents), (ii) debt
securities or debt instruments with a rating of BBB or higher by S&P and Baa3 or
higher by Moody's or the equivalent of such rating by such rating organization,
or if no rating of S&P's or Moody's then exists, the equivalent of such rating
by any other nationally recognized securities rating agency, but excluding any
debt securities or instruments constituting loans or advances among the Company
and its Subsidiaries and (iii) investments in any fund that invests exclusively
in investments of the type described in clauses (i) and (ii) which fund may also
hold immaterial amounts of cash pending investment and/or distribution.
"Issuance" has the meaning set forth in the recitals to this
Agreement.
18
"Issuing Bank" means each of JPMorgan Chase Bank and any other
Lender that has agreed in its sole discretion to act as an Issuing Bank
hereunder and that has been approved in writing by the Company and the
Administrative Agent to act as an "Issuing Bank" hereunder, in each case in its
capacity as an issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.06(i). Each Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of such Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"JPMorgan Chase Bank" means JPMorgan Chase Bank, N.A., a national
banking association, in its individual capacity, and its successors.
"LC Collateral Account" has the meaning assigned to such term in
Section 2.06(j).
"LC Disbursement" means a payment made by any Issuing Bank pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Company at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"Leased Property" has the meaning assigned to such term in Section
3.13.
"Lenders" means the Persons listed on the Commitment Schedule and
any other Person that shall have become a party hereto pursuant to an Assignment
and Assumption, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption. Unless the context otherwise requires,
the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset or (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset.
19
"Loans" means the loans and advances made by the Lenders pursuant to
this Agreement, including Swingline Loans.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, condition (financial or otherwise), or results of operations
of the Company and its Subsidiaries taken as a whole, since January 30, 2005,
(b) the ability of the Company and its Subsidiaries (taken as a whole) to
perform their material obligations under the Credit Documents, (c) the
Collateral (taken as a whole), or the Administrative Agent's Liens (on behalf of
itself and the Lenders) on the Collateral (taken as a whole) or the priority of
such Liens, or (d) the validity or enforceability of any material Credit
Document or the rights or remedies of the Lenders or the Administrative Agent
thereunder.
"Maturity Date" means the date that is the fifth anniversary of the
Closing Date or any earlier date on which the Commitments are reduced to zero or
otherwise terminated pursuant to the terms hereof.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgages" means any mortgage, deed of trust or other agreement
which conveys or evidences a Lien in favor of the Administrative Agent, for the
benefit of the Administrative Agent and the Lenders, on real property of a
Credit Party, including any amendment, modification or supplement thereto.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Recovery Liquidation Rate" means, at any time with respect to
any domestic Inventory, the quotient (expressed as a percentage) of (i) the Net
Recovery Liquidation Value of such Inventory divided by (ii) the gross inventory
cost of such Inventory, determined on the basis of the then most recently
conducted inventory appraisal performed by an independent inventory appraisal
firm reasonably satisfactory to the Administrative Agent.
"Net Recovery Liquidation Value" means, at any time, with respect to
any domestic Inventory, the net orderly liquidation value of such Inventory as
then most recently determined, based on the then most recently conducted
inventory appraisal performed by an independent inventory appraisal firm
reasonably satisfactory to the Administrative Agent.
"New Lender" has the meaning set forth in Section 2.21(b).
"New Lender Supplement" has the meaning set forth in Section
2.21(b).
"Non-Consenting Lender" has the meaning assigned to such term in
Section 9.02(d).
"Notes" means the collective reference to the promissory notes
evidencing Loans; each of the Notes, a "Note".
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Exposure, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Credit
Parties to the Lenders or to any Lender, the Administrative Agent, any Issuing
Bank or any indemnified party arising under the Credit Documents.
"Offered Increase Amount" has the meaning set forth in Section
2.21(a).
20
"Other Reserves" means reserves against the Borrowing Base equal to
the sum of the following:
(a) a reserve for surety bonds for which the Company is liable; and
(b) a reserve for customer rebate accruals as recorded in the books
and records of the Company; and
(c) a reserve for royalties due to third parties pertaining to the
use of certain trademarks or trade names; and
(d) any other reserve as deemed appropriate by the Administrative
Agent in its Permitted Discretion, from time to time.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Participant" has the meaning set forth in Section 9.04.
"PartsAmerica Services Agreement" means the services agreement
between Advance Stores and the Company and any related agreements, as the same
may be amended, modified, restated or supplemented from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Discretion" means a determination made in good faith and
in the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment.
"Permitted Encumbrances" means any Lien permitted by paragraphs (a),
(b), (c), (d) or (e) of Section 6.02; provided that the term "Permitted
Encumbrances" shall not include any Lien securing Indebtedness.
"Permitted Liens" means any Lien permitted to exist under Section
6.02.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank as its prime rate at its offices at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇; each change in the Prime Rate shall be effective
from and including the date such change is publicly announced as being
effective.
"Projections" has the meaning assigned to such term in Section
5.01(d).
"Protective Advance" has the meaning assigned to such term in
Section 2.04.
21
"Refinancing" has the meaning set forth in the recitals to this
Agreement.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Rent Reserve" with respect to any store, warehouse distribution
center, regional distribution center or depot where any Inventory subject to
Liens arising by operation of law is located but with respect to which no
Collateral Access Agreement is in place, a reserve equal to two (2) months' rent
at such store, warehouse distribution center, regional distribution center or
depot.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization as such term is used in Section
4241 of ERISA.
"Report" means reports prepared by the Administrative Agent or
another Person showing the results of appraisals, field examinations or audits
pertaining to the Company's assets from information furnished by or on behalf of
the Company, after the Administrative Agent has exercised its rights of
inspection pursuant to this Agreement, which Reports may be distributed to the
Lenders by the Administrative Agent.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under Sections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. Section 4043.
"Repurchase" has the meaning given to it in the recitals to this
Agreement.
"Required Lenders" means, at any time, Lenders having Credit
Exposure and unused Commitments representing more than 50% of the sum of the
total Credit Exposure and unused Commitments at such time.
"Requirement of Law" means as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reserves" means Dilution Reserves, Inventory Reserves, Rent
Reserves and any other reserves which the Administrative Agent deems necessary,
in its reasonable judgment, to maintain (including, without limitation, an
availability reserve, reserves for accrued and unpaid interest on the Secured
Obligations, Banking Services Reserves, reserves for consignee's, warehousemen's
and bailee's charges, reserves for Swap Obligations, reserves for contingent
liabilities of any Credit Party, reserves for uninsured losses of any Credit
Party, reserves for uninsured, underinsured, un-indemnified or under-indemnified
liabilities or potential liabilities with respect to any litigation and reserves
for taxes, fees, assessments, and other governmental charges) with respect to
the Collateral or any Credit Party.
"Responsible Officer" means, with respect to any Person, the
president, chief executive officer, the chief operating officer, the chief
financial officer, treasurer, controller or any vice president of such Person.
22
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum possible aggregate amount of such Lender's
Revolving Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender's Revolving Commitment is set forth on the
Commitment Schedule, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' Revolving Commitments is $250,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans and
its LC Exposure and an amount equal to its Applicable Percentage of the
aggregate principal amount of Swingline Loans at such time.
"Revolving Lender" means, as of any date of determination, a Lender
with a Revolving Commitment or, if the Revolving Commitments have terminated or
expired, a Lender with Revolving Exposure.
"Revolving Loan" means a Loan made pursuant to Section 2.01.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Secured Obligations" means all Obligations, together with all (i)
Banking Services Obligations and (ii) Swap Obligations owing to one or more
Lenders or their respective Affiliates; provided that at or prior to the time
that any transaction relating to such Swap Obligation is executed, the Lender
party thereto (other than JPMorgan Chase Bank) shall have delivered written
notice to the Administrative Agent that such a transaction has been entered into
and that it constitutes a Secured Obligation entitled to the benefits of the
Security Documents.
"Security Documents" means, collectively, the Guarantee and
Collateral Agreement, the Mortgages and any other documents granting a Lien upon
the Collateral as security for payment of the Secured Obligations.
"Senior Subordinated Debt" means (a) the Indebtedness under the
Senior Subordinated Notes and (b) unsecured notes or debentures of the Company,
subordinated to the prior payment of the Loans and the other obligations under
the Credit Documents, that may be issued by the Company in order to refinance
the Senior Subordinated Debt and/or prepay the Loans, provided that (i) the
scheduled amortization, the final maturity and the subordination provisions
shall be at least as favorable to the Company and the Lenders as the Senior
Subordinated Notes, and the other terms and conditions thereof (including,
without limitation, the covenant and event of default provisions thereof but
excluding the interest rate and any call protection provisions) taken as a whole
shall be at least as favorable to the Company and the Lenders as the Senior
Subordinated Notes, (ii) no covenant contained in this Agreement or any of the
other Credit Documents would be violated on the proposed issuance date after
giving effect to (A) the issuance of such notes or debentures, (B) the payment
of all issuance costs, commissions, discounts, redemption premiums and other
fees and charges associated therewith, (C) the use of proceeds thereof and (D)
the redemption, repayment, retirement and repurchase of all Indebtedness of the
Company and its Subsidiaries to be redeemed, repaid or repurchased in connection
therewith and (iii) substantially final drafts of the documentation governing
any such notes or debentures, showing the terms thereof, shall have been
furnished to the Lenders at least 10 days prior to the date of issuance of such
notes or debentures.
23
"Senior Subordinated Notes" means the 7% senior subordinated notes
due 2014 issued by the Company pursuant to the Senior Subordinated Note
Indenture.
"Senior Subordinated Note Indenture" means the Indenture, dated as
of January 16, 2004, between the Company and The Bank of New York, as trustee.
"Senior Unsecured Debt": (a) the Indebtedness under the Exchangeable
Notes and (b) unsecured notes or debentures of the Company that may be issued by
the Company in order to refinance the Senior Unsecured Debt and/or prepay the
Loans, provided that (i) the scheduled amortization and the final maturity shall
be at least as favorable to the Company and the Lenders as such Exchangeable
Notes and the other terms and conditions thereof (including, without limitation,
the covenant and event of default provisions thereof but excluding the interest
rate and any call protection provisions) taken as a whole shall be at least as
favorable to the Company and the Lenders as such Exchangeable Notes, (ii) no
covenant contained in this Agreement or any of the other Credit Documents would
be violated on the proposed issuance date after giving effect to (A) the
issuance of such notes or debentures, (B) the payment of all issuance costs,
commissions, discounts, redemption premiums and other fees and charges
associated therewith, (C) the use of proceeds thereof and (D) the redemption,
repayment, retirement and repurchase of all Indebtedness of the Company and its
Subsidiaries to be redeemed, repaid or repurchased in connection therewith and
(iii) substantially final drafts of the documentation governing any such notes
or debentures, showing the terms thereof, shall have been furnished to the
Lenders at least 10 days prior to the date of issuance of such notes or
debentures.
"Single Employer Plan" means any Plan which is covered by Title IV
of ERISA and which is not a Multiemployer Plan.
"Solvent" has the meaning set forth in Section 3.19.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Standby LC" means an irrevocable letter of credit under which the
relevant Issuing Bank agrees to make payments in Dollars for the account of the
Company, on behalf of the Company or any Subsidiary thereof in respect of
obligations of the Company or such Subsidiary incurred pursuant to contracts
made or performances undertaken or to be undertaken or like matters relating to
contracts to which the Company or such Subsidiary is or proposes to become a
party in the ordinary course of the Company's or such Subsidiary's business,
including, without limiting the foregoing, for insurance purposes or in respect
of advance payments or as bid or performance bonds or for any other purpose for
which a standby letter of credit might customarily be issued.
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock of each class
or other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a
24
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, by such Person or by one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. A Subsidiary shall be deemed wholly-owned by a Person who owns
directly or indirectly all of the voting shares of stock or other interests of
such Subsidiary having voting power under ordinary circumstances to vote for
directors or other managers of such corporation, partnership or other entity,
except for (i) directors' qualifying shares and (ii) shares owned by employees.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company; provided that any joint venture in which an investment is made
pursuant to Section 6.06(j) shall at the option of the Company, so long as (a)
such investment is maintained in reliance on such Section 6.06(j) and (b) such
joint venture is not included in the consolidated financial statements of the
Company, not be a "Subsidiary" of the Company for any purpose of this Agreement.
"Subsidiary Guarantor" means each Credit Party other than the
Company and Holdings.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Company or the Subsidiaries shall be a Swap Agreement.
"Swap Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Swap
Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction.
"Swingline Lender" means JPMorgan Chase Bank, N.A., in its capacity
as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.05.
"Synthetic Purchase Agreement" means any agreement pursuant to which
the Company or any of its Subsidiaries is or may become obligated to make (a)
any payment in connection with the purchase by any third party from a Person
other than the Company or any of its Subsidiaries of any Capital Stock of the
Company or any of its Subsidiaries or any Indebtedness referred to in Section
6.08 (other than in connection with any such payment which the Company or any of
its Subsidiaries would be permitted to make pursuant to Section 6.08 or 6.10, as
applicable) or (b) any payment (except as otherwise expressly permitted by
Section 6.08 or 6.10) the amount of which is determined by reference to the
price or value at any time of any such Capital Stock or Indebtedness; provided,
that no phantom stock or similar plan providing for payments only to current or
former directors, officers or employees of the Company or any of its
Subsidiaries (or to their heirs or estates) shall be deemed to be a Synthetic
Purchase Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" has the meaning set forth in the recitals to this
Agreement.
25
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of New York or any other state the laws of which are required
to be applied in connection with the issue of perfection of security interests.
"Unliquidated Obligations" means, at any time, any Secured
Obligations (or portion thereof) that are contingent in nature or unliquidated
at such time, including any Secured Obligation that is: (i) an obligation to
reimburse a bank for drawings not yet made under a letter of credit issued by
it; (ii) any other obligation (including any guarantee) that is contingent in
nature at such time; or (iii) an obligation to provide collateral to secure any
of the foregoing types of obligations.
"Warrant Agreement" means the Confirmation Re: Warrants, dated as of
the Closing Date, between JPMorgan Chase Bank and Holdings, as the same may be
amended and replaced from time to time in a manner not adverse to the Lenders.
"Wholly-Owned Domestic Subsidiary" means each Domestic Subsidiary
which is also a Wholly-Owned Subsidiary.
"Wholly-Owned Subsidiary" means each Subsidiary of the Company which
is wholly-owned by it, as provided in the second sentence of the definition of
Subsidiary contained herein.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the
26
Administrative Agent notifies the Company that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith. In the event that historical accounting practices, systems
or reserves relating to the components of the Borrowing Base are modified in a
manner that is adverse to the Lenders in any material respect, the Company will
agree to maintain such additional reserves (for purposes of computing the
Borrowing Base) in respect to the components of the Borrowing Base and make such
other adjustments (which may include maintaining additional reserves, modifying
the advance rates or modifying the eligibility criteria for the components of
the Borrowing Base).
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Company from
time to time during the Availability Period in an aggregate principal amount
that will not result in (i) such Lender's Revolving Exposure exceeding such
Lender's Revolving Commitment or (ii) the total Revolving Exposures exceeding
the lesser of (x) the sum of the total Revolving Commitments or (y) the
Borrowing Base, subject to the Administrative Agent's authority to make
Protective Advances pursuant to the terms of Section 2.04. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Company may
borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. Any Protective Advance and any
Swingline Loan shall be made in accordance with the procedures set forth in
Section 2.04 and Section 2.05, respectively.
(b) Each Revolving Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans as the Company may request in accordance herewith.
Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Company to repay such Loan in accordance with the
terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $2,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(e). Each Swingline Loan shall be in an amount that is not less than
$250,000 or an integral multiple of $100,000 in excess thereof. Borrowings of
more than one Type and Class may be outstanding at the same time; provided that
there shall not at any time be more than a total of 10 Eurodollar Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Company shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
27
SECTION 2.03. Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Company shall notify the Administrative Agent of such
request either in writing (delivered by hand or facsimile) in a form approved by
the Administrative Agent and signed by the Company or by telephone (a) in the
case of a Eurodollar Borrowing, not later than 2:00 p.m., New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 2:00 p.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Company. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the aggregate amount of the requested Borrowing and a
breakdown of the separate wires comprising such Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period."
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Company shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Protective Advances. (a) Subject to the limitations
set forth below, upon the approval of the Company (provided, that following the
occurrence and during the continuance of a Default or Event of Default, no such
approval shall be required), the Administrative Agent is authorized by the
Company and the Lenders, from time to time (but shall have absolutely no
obligation to), to make Loans to the Company, on behalf of all Lenders, which
the Administrative Agent, in its Permitted Discretion, deems necessary or
desirable (i) to preserve or protect the Collateral, or any portion thereof,
(ii) to enhance the likelihood of, or maximize the amount of, repayment of the
Loans and other Obligations, or (iii) to pay any other amount chargeable to or
required to be paid by the Company pursuant to the terms of this Agreement,
including payments of reimbursable expenses (including costs, fees, and expenses
as described in Section 9.03) and other sums payable under the Credit Documents
(any of such Loans are herein referred to as "Protective Advances"); provided
that, the aggregate amount of Protective Advances outstanding at any time shall
not at any time exceed $10,000,000; provided further that, the aggregate amount
of outstanding Protective Advances plus the aggregate Revolving Exposure shall
not exceed the aggregate unused Commitments. Protective Advances may be made
even if the conditions precedent set forth in Section 4.02 have not been
satisfied. The Protective Advances shall be secured by the Liens in favor of the
Administrative Agent in and to the Collateral and shall constitute Obligations
hereunder. All Protective Advances shall be ABR Borrowings. The Administrative
Agent's authorization to make Protective Advances may be revoked at any time by
100% of the Lenders. Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent's receipt thereof. At any
time that there is sufficient Availability and the conditions precedent set
forth in Section 4.02 have been satisfied, the Administrative Agent may request
the Revolving Lenders to
28
make a Revolving Loan to repay a Protective Advance. At any other time the
Administrative Agent may require the Lenders to fund their risk participations
described in Section 2.04(b).
(b) Upon the making of a Protective Advance by the Administrative
Agent, each Lender shall be deemed, without further action by any party hereto,
to have unconditionally and irrevocably purchased from the Administrative Agent
without recourse or warranty, an undivided interest and participation in such
Protective Advance in proportion to its Applicable Percentage. From and after
the date, if any, on which any Lender is required to fund its participation in
any Protective Advance purchased hereunder, the Administrative Agent shall
promptly distribute to such Lender, such Lender's Applicable Percentage of all
payments of principal and interest and all proceeds of Collateral received by
the Administrative Agent in respect of such Protective Advance.
SECTION 2.05. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Company from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $15,000,000
or (ii) the sum of the total Revolving Exposures exceeding the lesser of the
total Revolving Commitments and the Borrowing Base; provided that the Swingline
Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Company may borrow, prepay and reborrow
Swingline Loans. To request a Swingline Loan, the Company shall notify the
Administrative Agent of such request by telephone (confirmed by facsimile), not
later than 3:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Company. The Swingline Lender shall make each Swingline
Loan available to the Company by means of a credit to the Funding Account (or,
in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e), by remittance to the relevant
Issuing Bank, and in the case of repayment of another Loan or fees or expenses
as provided by Section 2.18(c), by remittance to the Administrative Agent to be
distributed to the Lenders) on the requested date of such Swingline Loan.
(b) The Swingline Lender may by written notice given to the
Administrative Agent not later than 9:00 a.m., New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each
Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative Agent, for the account of
the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan
or Loans. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Revolving Lenders. The Administrative Agent shall notify the Company of
any participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline
29
Lender. Any amounts received by the Swingline Lender from the Company (or other
party on behalf of the Company) in respect of a Swingline Loan after receipt by
the Swingline Lender of the proceeds of a sale of participations therein shall
be promptly remitted to the Administrative Agent; any such amounts received by
the Administrative Agent shall be promptly remitted by the Administrative Agent
to the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear; provided
that any such payment so remitted shall be repaid to the Swingline Lender or to
the Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Company for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Company of any default in the payment thereof.
SECTION 2.06. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Company may request the issuance of Letters
of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and an Issuing Bank selected by the Company, at any time
and from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Company to, or entered into by the Company with, the relevant
Issuing Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control. It is understood and agreed that the letters of credit
listed on Schedule 2.06 shall constitute "Letters of Credit" for the purposes of
this Agreement and shall be deemed to have been issued under this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Company shall hand
deliver or facsimile (or transmit by electronic communication, if arrangements
for doing so have been approved by the relevant Issuing Bank) to the relevant
Issuing Bank and the Administrative Agent (prior to 2:00 p.m., New York City
time, at least three Business Days prior to the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the relevant Issuing Bank, the Company also shall
submit a letter of credit application on the relevant Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Company shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $75,000,000
and (ii) the total Revolving Exposures shall not exceed the lesser of the total
Revolving Commitments and the Borrowing Base, unless such Letter of Credit has
been cash collateralized.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the relevant Issuing Bank or the Revolving
Lenders, such Issuing Bank hereby grants to each Revolving Lender, and each
Revolving Lender hereby acquires from such Issuing Bank, a participation in such
Letter of Credit equal to such Lender's Applicable Percentage of the aggregate
amount available to be drawn under such Letter of Credit. In consideration and
in furtherance of the foregoing, each Revolving Lender hereby absolutely
30
and unconditionally agrees to pay to the Administrative Agent, for the account
of such Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by such Issuing Bank and not reimbursed by the Company on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Company for any reason. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Company shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 Noon, New York City time, on the date that
such LC Disbursement is made, if the Company shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Company prior to such time on such
date, then not later than 12:00 Noon, New York City time, on the Business Day
immediately following the day that the Company receives such notice; provided
that the Company may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 or 2.05 that such payment be financed
with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Company's obligation to make such payment shall
be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Company fails to make such payment when due, the Administrative
Agent shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the Company in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Revolving Lender shall pay to the Administrative Agent its Applicable Percentage
of the payment then due from the Company, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the relevant Issuing Bank the
amounts so received by it from the Revolving Lenders. Promptly following receipt
by the Administrative Agent of any payment from the Company pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
relevant Issuing Bank or, to the extent that Revolving Lenders have made
payments pursuant to this paragraph to reimburse such Issuing Bank, then to such
Lenders and such Issuing Bank as their interests may appear. Any payment made by
a Revolving Lender pursuant to this paragraph to reimburse any Issuing Bank for
any LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
relieve the Company of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Company's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by any Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Company's obligations hereunder. Neither
the Administrative Agent, the Revolving Lenders nor any Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to
31
in the preceding sentence), or any error, omission, interruption, loss or delay
in transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of any Issuing Bank; provided
that the foregoing shall not be construed to excuse any Issuing Bank from
liability to the Company to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Company to the extent permitted by applicable law) suffered by the Company that
are caused by such Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of an Issuing Bank (as
finally determined by a court of competent jurisdiction), such Issuing Bank
shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, each
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. Such Issuing Bank shall promptly
notify the Administrative Agent and the Company by telephone (confirmed by
facsimile) of such demand for payment and whether such Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Company of its obligation to
reimburse such Issuing Bank and the Revolving Lenders with respect to any such
LC Disbursement.
(h) Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, unless the Company shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Company reimburses such LC Disbursement,
at the rate per annum then applicable to ABR Revolving Loans; provided that, if
the Company fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(d) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the relevant
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse such
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Replacement of an Issuing Bank. Each Issuing Bank may be
replaced at any time by written agreement among the Company, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Revolving Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the
Company shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the replaced Issuing Bank under this Agreement with respect
to Letters of Credit to be issued thereafter and (ii) references herein to the
term "Issuing Bank" shall be deemed to refer to such successor or to any other
current or previous Issuing Bank, or to such successor and all other current or
previous Issuing Banks, as the context shall require. After the replacement of
an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.
32
(j) Cash Collateralization. If any Event of Default shall occur and
be continuing, on the Business Day that the Company receives notice from the
Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Company shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Revolving Lenders (the "LC Collateral Account"), an amount in
cash equal to 105% of the LC Exposure as of such date plus accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Company described in clause (h) or
(i) of Article VII. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the Secured Obligations. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account and the Company hereby grants
the Administrative Agent a security interest in the LC Collateral Account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Company's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse each Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Company for the LC Exposure at such time
or, if the maturity of the Loans has been accelerated, be applied to satisfy
other Secured Obligations. If the Company is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Company within three Business Days after all such Defaults have been cured or
waived.
SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders in an amount equal to such Lender's Applicable Percentage;
provided that Swingline Loans shall be made as provided in Section 2.05. The
Administrative Agent will make such Loans available to the Company by promptly
crediting the amounts so received, in like funds, to the Funding Account;
provided that ABR Revolving Loans made to finance the reimbursement of (i) an LC
Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the relevant Issuing Bank and (ii) a Protective Advance
shall be retained by the Administrative Agent.
(b) Unless the Administrative Agent shall have received notice from
a Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Company a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Company severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Company to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the greater of the Federal Funds Effective Rate and
a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Company, the
interest rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving
33
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Company may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Revolving Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Company may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Borrowings or Protective
Advances, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Company shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Company were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or facsimile to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Company.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Company shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, the Borrower shall be deemed to have delivered an Interest
Election Request requesting that such Eurodollar Revolving Borrowing be
converted to a Eurodollar Revolving Borrowing with an Interest Period of one
month at the end of such Interest Period. Notwithstanding any contrary provision
hereof, if a Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the Company, then, so
long as a Default is continuing (i) no outstanding Revolving Borrowing may be
converted to or continued as a
34
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing
shall be converted to an ABR Borrowing at the end of the Interest Period
applicable thereto.
SECTION 2.09. Termination and Reduction of Commitments. (a) Unless
previously terminated all Commitments shall terminate on the Maturity Date.
(b) The Company may at any time terminate the Commitments upon (i)
the payment in full of all outstanding Loans, together with accrued and unpaid
interest thereon and on any Letters of Credit, (ii) the cancellation and return
of all outstanding Letters of Credit (or alternatively, with respect to each
such Letter of Credit, the furnishing to the Administrative Agent of a cash
deposit (or at the discretion of the Administrative Agent a back up standby
letter of credit satisfactory to the Administrative Agent) equal to 105% of the
LC Exposure as of such date), (iii) the payment in full of the accrued and
unpaid fees, and (iv) the payment in full of all reimbursable expenses and other
Obligations together with accrued and unpaid interest thereon.
(c) The Company may from time to time reduce the Revolving
Commitments; provided that (i) each reduction of the Revolving Commitments shall
be in an amount that is an integral multiple of $1,000,000 and not less than
$2,000,000 and (ii) the Company shall not reduce the Revolving Commitments if,
after giving effect to any concurrent prepayment of the Revolving Loans, the sum
of the Revolving Exposures would exceed the lesser of the total Revolving
Commitments and the Borrowing Base.
(d) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) or (c) of
this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Maturity Date, (ii) to the Administrative Agent the then unpaid amount of
each Protective Advance on the earlier of the Maturity Date and demand by the
Administrative Agent and (iii) to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of the Maturity Date and the first
date after such Swingline Loan is made that is the 15th or last day of a
calendar month and is at least two Business Days after such Swingline Loan is
made; provided that on each date that a Revolving Loan is made, the Company
shall repay all Swingline Loans then outstanding.
(b) At all times that full cash dominion is in effect pursuant to
Section 7.3 of the Guarantee and Collateral Agreement, on each Business Day, at
or before 11:00 a.m., New York City time, the Administrative Agent shall apply
all immediately available funds credited to the Collection Account first to
prepay any Protective Advances that may be outstanding, pro rata, and second to
prepay the Revolving Loans (including Swing Line Loans) and to cash
collateralize outstanding LC Exposure.
35
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Company to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(e) The entries made in the accounts maintained pursuant to
paragraph (c) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Company
to repay the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Company shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11. Prepayment of Loans. (a) The Company shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (c) of this Section.
(b) In the event and on such occasion that the total Revolving
Exposure exceeds the lesser of (A) the aggregate Revolving Commitments or (B)
the Borrowing Base, the Company shall prepay the Revolving Loans, LC Exposure
and/or Swingline Loans in an aggregate amount equal to such excess.
(c) The Company shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by facsimile) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 2:00 p.m., New
York City time, one Business Day before the date of prepayment, (ii) in the case
of prepayment of an ABR Revolving Borrowing, not later than 2:00 p.m., New York
City time, on the date of prepayment or (iii) in the case of prepayment of a
Swingline Loan, not later than 2:00 p.m., New York City time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice relating to a Revolving Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial prepayment
of any Revolving Borrowing shall be in an amount that would be permitted in the
case of an advance of a Revolving Borrowing of the same Type as provided in
Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably
to the Revolving Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
36
SECTION 2.12. Fees (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Commitment Fee Rate on the average daily amount of the
Available Revolving Commitment of such Lender during the period from and
including the Closing Date to but excluding the date on which the Lenders'
Revolving Commitments terminate. Accrued commitment fees shall be payable in
arrears on the last day of each March, June, September and December and on the
date on which the Revolving Commitments terminate, commencing on the first such
date to occur after the date hereof. All commitment fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(b) The Company agrees to pay (i) to the Administrative Agent for
the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate used to determine the interest rate applicable to Eurodollar Revolving
Loans on the average daily amount of such Lender's LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Closing Date to but excluding the later of the date on
which such Lender's Revolving Commitment terminates and the date on which such
Revolving Lender ceases to have any LC Exposure (the aggregate amount of such
participation fee shall be reduced by the amount of the fronting fee paid to the
relevant Issuing Bank in accordance with clause (ii) of this sentence), and (ii)
to the relevant Issuing Bank a fronting fee, which shall accrue at the rate of
0.25% per annum (or at such other rate as agreed to by the relevant Issuing Bank
and the Company) on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Closing Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as such Issuing Bank's standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of each March, June, September and December
shall be payable on the third Business Day following such last day, commencing
on the first such date to occur after the Closing Date; provided that all such
fees shall be payable on the date on which the Revolving Commitments terminate
and any such fees accruing after the date on which the Commitments terminate
shall be payable on demand. Any other fees payable to an Issuing Bank pursuant
to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(c) The Company agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the relevant
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of commitment fees and participation fees, to the Lenders. Fees paid shall not
be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Each Protective Advance shall bear interest at the Alternate
Base Rate plus 2%.
37
(d) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Company hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(e) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (d) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior
to the end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period,
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or an Issuing Bank; or
38
(ii) impose on any Lender or an Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Company will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or such Issuing Bank's capital or on the capital
of such Lender's or such Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by such Issuing
Bank, to a level below that which such Lender or such Issuing Bank or such
Lender's or such Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or such Issuing Bank's
policies and the policies of such Lender's or such Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Company
will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing Bank
or such Lender's or such Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or such Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Company and shall be conclusive absent
manifest error. The Company shall pay such Lender or such Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or such Issuing Bank's right to demand such compensation; provided
that the Company shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or such Issuing Bank, as the
case may be, notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or such Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.09(d) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Company pursuant to
Section 2.19, then, in any such event, the Company shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have
39
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Company and shall be
conclusive absent manifest error. The Company shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of
any obligation of the Company hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Company shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Company shall make such
deductions and (iii) the Company shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Administrative Agent, each
Lender and each Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the Company
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Company by a Lender or an Issuing
Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender
or an Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Company to a Governmental Authority, the Company shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Company is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Company as will permit such payments to be
made without withholding or at a reduced rate. For avoidance of doubt, the
documentation covered by this Section 2.17(e) shall include but not be limited
to U.S. Internal Revenue Service Forms W-8BEN, Form W-8ECI, or W-8IMY or any
subsequent versions thereof or successors thereto or, in the case of a Foreign
Lender claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio
40
interest", such Foreign Lender delivers a Form W-8BEN or W-8IMY with the
appropriate forms attached thereto, or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Foreign Lender
and represents that such Foreign Lender is the sole record and beneficial owner
of the Loans or the obligations evidenced by Note(s) in respect of which it is
providing the following representations and is not (A) a "bank" within the
meaning of section 881(c)(3)(A) of the Code and furthermore (i) is not subject
to regulatory or other legal requirements as a bank in any jurisdiction, and
(ii) has not been treated as a bank for purposes of any tax, securities law or
other filing or submission made to any Governmental Authority, any application
made to a rating agency or qualification for any exemption from tax, securities
law or other legal requirements, (B) a "10 percent shareholder" of the Company
within the meaning of section 881(c)(3)(B) of the Code, or (C) a "controlled
foreign corporation" described in section 881(c)(3)(C) of the Code. Such forms
shall be delivered by each Foreign Lender on or before the date it becomes a
party to this Agreement. In addition, each Foreign Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Foreign Lender. Each Foreign Lender shall promptly notify the
Company at any time it determines that it is no longer in a position to provide
any previously delivered certificate to the Company (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Company or with respect to which the
Company has paid additional amounts pursuant to this Section 2.17, it shall pay
over such refund to the Company (but only to the extent of indemnity payments
made, or additional amounts paid, by the Company under this Section 2.17 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Company, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Company (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Company or any other Person.
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of
Set-offs. (a) The Company shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 2:00 p.m., New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, except payments to be made directly to an Issuing Bank or the
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars. At all times that full cash dominion is in
effect pursuant to Section 7.3 of the Guarantee and Collateral Agreement, solely
for purposes of determining the amount of Loans available for borrowing
purposes, checks and cash or other immediately available funds from collections
of items of payment and proceeds of any
41
Collateral shall be applied in whole or in part against the Obligations, on the
day of receipt, subject to actual collection.
(b) Any proceeds of Collateral received by the Administrative Agent
(i) not constituting either (A) a specific payment of principal, interest, fees
or other sum payable under the Credit Documents (which shall be applied as
specified by the Company) or (B) amounts to be applied from the Collection
Account when full cash dominion is in effect in accordance with Section 7.3 of
the Guarantee and Collateral Agreement (which shall be applied in accordance
with Section 2.10(b)) or (ii) after an Event of Default has occurred and is
continuing and the Administrative Agent so elects or the Required Lenders so
direct, such funds shall be applied ratably first, to pay any fees, indemnities,
or expense reimbursements including amounts then due to the Administrative Agent
and any Issuing Bank from the Company (other than in connection with Banking
Services or Swap Obligations), second, to pay any fees or expense reimbursements
then due to the Lenders from the Company (other than in connection with Banking
Services or Swap Obligations), third, to pay interest due in respect of the
Protective Advances, fourth, to pay the principal of the Protective Advances,
fifth, to pay interest then due and payable on the Loans (other than the
Protective Advances) ratably, sixth, to prepay principal on the Loans (other
than the Protective Advances) and unreimbursed LC Disbursements ratably,
seventh, to pay an amount to the Administrative Agent equal to one hundred five
percent (105%) of the aggregate undrawn face amount of all outstanding Letters
of Credit and the aggregate amount of any unpaid LC Disbursements, to be held as
cash collateral for such Obligations, eighth, to payment of any amounts owing
with respect to Banking Services and Swap Obligations, and ninth, to the payment
of any other Secured Obligation due to the Administrative Agent or any Lender by
the Company. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by the Company, or unless a Default is in
existence, neither the Administrative Agent nor any Lender shall apply any
payment which it receives to any Eurodollar Loan of a Class, except (a) on the
expiration date of the Interest Period applicable to any such Eurodollar Loan or
(b) in the event, and only to the extent, that there are no outstanding ABR
Loans of the same Class and, in any event, the Company shall pay the break
funding payment required in accordance with Section 2.16. The Administrative
Agent and the Lenders shall have the continuing and exclusive right to apply and
reverse and reapply any and all such proceeds and payments to any portion of the
Secured Obligations.
(c) At the election of the Administrative Agent, all payments of
principal, interest, LC Disbursements, fees, premiums, reimbursable expenses
(including, without limitation, all reimbursement for fees and expenses pursuant
to Section 9.03), and other sums payable under the Credit Documents, may be paid
from the proceeds of Borrowings made hereunder whether made following a request
by the Company pursuant to Section 2.03 or a deemed request as provided in this
Section or may be deducted from any deposit account of the Company maintained
with the Administrative Agent. The Company hereby irrevocably authorizes (i) the
Administrative Agent to make a Borrowing for the purpose of paying each payment
of principal, interest and fees as it becomes due hereunder or any other amount
due under the Credit Documents and agrees that all such amounts charged shall
constitute Loans (including Swingline Loans, but such a Borrowing may only
constitute a Protective Advance if it is to reimburse costs, fees and expenses
as described in Section 9.03) and that all such Borrowings shall be deemed to
have been requested pursuant to Sections 2.03, 2.04 or 2.05, as applicable and
(ii) the Administrative Agent to charge any deposit account of the Company
maintained with the Administrative Agent for each payment of principal, interest
and fees as it becomes due hereunder or any other amount due under the Credit
Documents.
(d) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the
42
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements; provided that (i)
if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Company pursuant to and in accordance with the express terms
of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Company or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Company consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against the
Company rights of set-off and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Company in the amount of
such participation.
(e) Unless the Administrative Agent shall have received notice from
the Company prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or an Issuing Bank hereunder that the
Company will not make such payment, the Administrative Agent may assume that the
Company has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the relevant Issuing
Bank, as the case may be, the amount due. In such event, if the Company has not
in fact made such payment, then each of the Lenders or the relevant Issuing
Bank, as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Issuing Bank
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
(f) If any Lender shall fail to make any payment required to be made
by it hereunder, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations hereunder until all such unsatisfied obligations are
fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. If any
Lender requests compensation under Section 2.15, or if the Company is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then:
(a) such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender (and the Company hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment);
(b) the Company may, at its sole expense and effort, require such
Lender or any Lender that defaults in its obligation to fund Loans hereunder
(herein, a "Departing Lender"), upon notice to the Departing Lender and the
Administrative Agent, to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in Section 9.04), all its
interests, rights and
43
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Company shall have received the prior written
consents of the Administrative Agent and each Issuing Bank, which consents shall
not unreasonably be withheld, (ii) the Departing Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such assignment will
result in a reduction in such compensation or payments. A Departing Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Company to require such assignment and delegation cease to apply.
SECTION 2.20. Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the
Administrative Agent or any Lender is for any reason compelled to surrender such
payment or proceeds to any Person because such payment or application of
proceeds is invalidated, declared fraudulent, set aside, determined to be void
or voidable as a preference, impermissible setoff, or a diversion of trust
funds, or for any other reason, then the Obligations or part thereof intended to
be satisfied shall be revived and continued and this Agreement shall continue in
full force as if such payment or proceeds had not been received by the
Administrative Agent or such Lender. The provisions of this Section 2.20 shall
be and remain effective notwithstanding any contrary action which may have been
taken by the Administrative Agent or any Lender in reliance upon such payment or
application of proceeds. The provisions of this Section 2.20 shall survive the
termination of this Agreement.
SECTION 2.21. Commitment Increases. (a) At any time after the
Closing Date, provided that no Event of Default shall have occurred and be
continuing, the Company may request an increase of the aggregate Revolving
Commitments in an aggregate amount up to $75,000,000 by notice to the
Administrative Agent in writing of the amount (the "Offered Increase Amount") of
such proposed increase (such notice, a "Commitment Increase Notice"). Any such
Commitment Increase Notice must offer each Lender the opportunity to subscribe
for its pro rata share of the increased Revolving Commitments; provided,
however, the Company may, with the consent of the Administrative Agent (which
consent shall not be unreasonably withheld or delayed), without offering to each
Lender the opportunity to subscribe for its pro rata share of the increased
Revolving Commitments, offer to any bank or other financial institution that is
not an existing Lender the opportunity to provide a new Revolving Commitment
pursuant to paragraph (b) below. If any portion of the increased Revolving
Commitments offered to the Lenders as contemplated in the immediately preceding
sentence is not subscribed for by the Lenders, the Company may, with the consent
of the Administrative Agent as to any bank or financial institution that is not
at such time a Lender (which consent shall not be unreasonably withheld or
delayed), offer to any existing Lender or to one or more additional banks or
financial institutions the opportunity to provide all or a portion of such
unsubscribed portion of the increased Revolving Commitments pursuant to
paragraph (b) below.
(b) Any additional bank or financial institution that the Company
selects to offer the opportunity to provide any portion of the increased
Revolving Commitments, and that elects to become a party to this Agreement and
provide a Commitment, shall execute a New Lender Supplement with the Company and
the Administrative Agent, substantially in the form of Exhibit H (a "New Lender
Supplement"), whereupon such bank or financial institution (a "New Lender")
shall become a Lender for all purposes and to the same extent as if originally a
party hereto and shall be bound by and entitled to the benefits of this
Agreement, and the Commitment Schedule shall be deemed to be amended to add the
44
name and Commitment of such New Lender, provided that the Commitment of any such
New Lender shall be in a principal amount not less than $5,000,000.
(c) Any Lender that accepts an offer to it by the Company to
increase its Commitment pursuant to this Section 2.21 shall, in each case,
execute a Commitment Increase Supplement with the Company and the Administrative
Agent, substantially in the form of Exhibit I (a "Commitment Increase
Supplement"), whereupon such Lender (an "Increasing Lender") shall be bound by
and entitled to the benefits of this Agreement with respect to the full amount
of its Commitment as so increased, and the Commitment Schedule shall be deemed
to be amended to so increase the Commitment of such Lender.
(d) The effectiveness of any New Lender Supplement or Commitment
Increase Supplement shall be contingent upon receipt by the Administrative Agent
of such corporate resolutions of the Company and legal opinions of counsel to
the Company as the Administrative Agent shall reasonably request with respect
thereto
(e) Unless otherwise agreed by the Administrative Agent, on each
closing date of an increase in the Revolving Commitments, the Company shall
borrow Revolving Loans from each Lender participating in the relevant increase
to the extent necessary to rebalance the outstanding Loans pro rata among the
Lenders in an amount determined by reference to the amount of each Class of Loan
(and, in the case of Eurodollar Loans, of each Eurodollar Borrowing) which would
then have been outstanding from such Lender if it had been a Lender on the date
such Loan was made.
(f) Notwithstanding anything to the contrary in this Section 2.21,
no Lender shall have any obligation to increase its Commitment unless it agrees
to do so in its sole discretion.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans and to induce each Issuing Bank to issue, and the Participating
Lenders to participate in, the Letters of Credit, the Company hereby represents
and warrants to each Lender and the Administrative Agent, as of the Closing Date
and as of the making of any extension of credit hereunder:
SECTION 3.01. Financial Condition. The consolidated balance sheet of
the Company and its consolidated Subsidiaries as at January 30, 2005 and the
related consolidated statement of operations for the fiscal year of the Company
ended on such date, audited by PricewaterhouseCoopers LLP, or any successor
thereto, a copy of which has heretofore been furnished to each Lender, present
fairly in accordance with GAAP the consolidated financial condition of the
Company and its consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the fiscal
year of the Company then ended. All such financial statements have been prepared
in accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants and as disclosed therein). Neither the
Company nor any of its consolidated Subsidiaries had, at the date of the most
recent balance sheet referred to above, any material Contingent Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any material
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto or expressly
permitted to be incurred hereunder. During the period from January 30, 2005, to
and including the date hereof there has been no Disposition by the Company or
any of its Subsidiaries of any material part of its business or property.
45
SECTION 3.02. No Change. Since January 30, 2005, (a) there has been
no change, and (as of the Closing Date only) no development or event, which has
had or could reasonably be expected to have a Material Adverse Effect and (b) no
dividends or other distributions have been declared, paid or made upon the
Capital Stock of the Company nor has any of the Capital Stock of the Company
been redeemed, retired, purchased or otherwise acquired for value by the
Company, except as permitted by Section 6.08.
SECTION 3.03. Corporate Existence; Compliance with Law. Each of the
Company and its Subsidiaries (a) is duly organized and validly existing under
the laws of the jurisdiction of organization, (b) has full power and authority
and possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to use its name and to own, lease or otherwise
hold its properties and assets and to carry on its business as presently
conducted other than such franchises, licenses, permits, authorizations and
approvals the lack of which, individually or in the aggregate, would not have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries, taken
as a whole, (c) is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership, leasing or
holding of its properties makes such qualification necessary, except such
jurisdictions where the failure so to qualify would not have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole, and (d) except
as disclosed in the Environmental Reports, is in compliance with all applicable
statutes, laws, ordinances, rules, orders, permits and regulations of any
governmental authority or instrumentality, domestic or foreign (including,
without limitation, those related to Hazardous Materials and substances), except
where noncompliance would not be reasonably likely to have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole. Except as
disclosed in the Environmental Reports, none of the Company or any of its
Subsidiaries has received any written communication from a Governmental
Authority that alleges that the Company or any of its Subsidiaries is not in
compliance with all material federal, state, local or foreign laws, ordinances,
rules and regulations, except to the extent such noncompliance, individually or
in the aggregate, would not reasonably be expected to have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries take as a whole.
SECTION 3.04. Corporate Power; Authorization. Each of the Company
and its Subsidiaries has the power and authority to make, deliver and perform
each of the Credit Documents to which it is a party, and the Company has the
corporate power and authority and legal right to borrow hereunder and to have
Letters of Credit issued for its account hereunder. Each of the Company and its
Subsidiaries has taken all necessary action to authorize the execution, delivery
and performance of each of the Credit Documents to which it is or will be a
party and the Company has taken all necessary corporate action to authorize the
borrowings hereunder and the issuance of Letters of Credit for its account
hereunder. No consent or authorization of, or filing with, any Person
(including, without limitation, any Governmental Authority) is required in
connection with the execution, delivery or performance by the Company or any of
its Subsidiaries, or for the validity or enforceability in accordance with its
terms against the Company or any of its Subsidiaries, of any Credit Document
except for consents, authorizations and filings which have been obtained or made
and are in full force and effect and except (i) such consents, authorizations
and filings, the failure to obtain or perform (x) which would not have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, and (y) which would not adversely affect the validity or enforceability
of any of the Credit Documents or the rights or remedies of the Administrative
Agent or the Lenders thereunder and (ii) such filings as are necessary to
perfect the Liens of the Lenders created pursuant to this Agreement and the
Security Documents.
46
SECTION 3.05. Enforceable Obligations. This Agreement and each of
the other Credit Documents and any other agreement to be entered into by any
Credit Party pursuant to the Credit Documents have been duly executed and
delivered on behalf of such Credit Party that is party thereto. This Agreement
constitutes, and each of the other Credit Documents and any other agreement to
be entered into by any Credit Party pursuant to the Credit Documents will
constitute upon execution and delivery, the legal, valid and binding obligation
of such Credit Party, and is enforceable against such Credit Party in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
SECTION 3.06. No Legal Bar. The execution, delivery and performance
of each Credit Document, the incurrence or issuance of and use of the proceeds
of the Loans and of drawings under the Letters of Credit and the transactions
contemplated by Credit Documents, (a) will not violate any Requirement of Law or
any Contractual Obligation applicable to or binding upon the Company or any
Subsidiary of the Company or any of their respective properties or assets, in
any manner which, individually or in the aggregate, (i) would have a material
adverse effect on the ability of the Company or its Subsidiaries taken as a
whole to perform their obligations under the Credit Documents, (ii) would give
rise to any liability on the part of the Administrative Agent or any Lender or
(iii) would have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole, and (b) will not result in the creation or
imposition of any Lien on any of its properties or assets pursuant to any
Requirement of Law applicable to it, as the case may be, or any of its
Contractual Obligations, except for the Liens arising under the Security
Documents.
SECTION 3.07. No Material Litigation. No litigation by,
investigation known to the Company by, or proceeding of, any Governmental
Authority is pending against the Company or any of its Subsidiaries (including
after giving effect to the Transactions) with respect to the validity, binding
effect or enforceability of this Agreement or any other Credit Document, the
Loans made hereunder, the use of proceeds hereof, or of any drawings under a
Letter of Credit and the other transactions contemplated hereby. No lawsuits,
claims, proceedings or investigations pending or, to the best knowledge of the
Company, threatened as of the Closing Date against or affecting the Company or
any Subsidiary of the Company or any of their respective properties, assets,
operations or businesses (including after giving effect to the Transactions) in
which there is a probability of an adverse determination, is reasonably likely,
if adversely decided, to have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole.
SECTION 3.08. Investment Company Act. Neither the Company nor any
Subsidiary of the Company is an "investment company" or a company "controlled"
by an "investment company" (as each of the quoted terms is defined or used in
the Investment Company Act of 1940, as amended).
SECTION 3.09. Federal Regulation. No part of the proceeds of any of
the Loans or any drawing under a Letter of Credit will be used for any purpose
which violates the provisions of Regulation T, U or X of the Board. Neither the
Company nor any of its Subsidiaries is engaged or will engage, principally or as
one of its important activities, in the business of extending credit for the
purpose of "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under said Regulation U or for any purpose
that violates the provisions of the Regulations of the Board.
SECTION 3.10. No Default. The Company and each of its Subsidiaries
have performed all material obligations required to be performed by them under
their respective Contractual Obligations (including after giving effect to the
Transactions) and they are not (with or without the lapse of time or the giving
of notice, or both) in breach or default in any respect thereunder, except to
the extent that such breach or default would not have a material adverse effect
on the business, assets, condition
47
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole. Neither the Company nor any of its Subsidiaries
(including after giving effect to the Transactions) is in default under any
material judgment, order or decree of any Governmental Authority, domestic or
foreign, applicable to it or any of its respective properties, assets,
operations or business, except to the extent that any such defaults would not,
in the aggregate, have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole.
SECTION 3.11. Taxes. Each of the Company and its Subsidiaries has
filed or caused to be filed all material tax returns which, to the best
knowledge of the Company, are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any amount of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves (or other sufficient provisions) in conformity
with GAAP have been provided on the books of the Company or its Subsidiaries, as
the case may be); and no tax Lien has been filed, and, to the best knowledge of
the Company, no written claim is being asserted, with respect to any such taxes,
fees or other charges other than as disclosed on Schedule 3.11.
SECTION 3.12. Subsidiaries. As of the Closing Date, the only
Subsidiaries of the Company are those listed on Schedule 3.12. On the Closing
Date and at all times thereafter, Holdings owns 100% of the issued and
outstanding Capital Stock of the Company.
SECTION 3.13. Ownership of Property; Liens. As of the Closing Date
and as of the making of any extension of credit hereunder (subject to transfers
and dispositions of property permitted under Section 6.05) each of the Company
and its Subsidiaries has good and valid title to all of its material assets
(other than real property or interests in real property) in each case free and
clear of all mortgages, liens, security interests or encumbrances of any nature
whatsoever except Permitted Liens. With respect to real property or interests in
real property, as of the Closing Date, each of the Company and its Subsidiaries
has (i) fee title to all of the real property listed on Schedule 3.13 under the
heading "Fee Properties" (each, a "Fee Property"), and (ii) good and valid title
to the leasehold estates in all of the real property leased by it and, in the
case of any such leasehold estates located in the United States with an
aggregate annual base rent in excess of $100,000 listed on Schedule 3.13 under
the heading "Leased Properties" (each, a "Leased Property"), in each case free
and clear of all mortgages, liens, security interests, easements, covenants,
rights-of-way and other similar restrictions of any nature whatsoever, except
Permitted Liens, including with respect to Leased Property, the terms and
provisions of the respective lease therefor, including, without limitation, any
matters affecting the fee title and any estate superior to the leasehold estate
related thereto. The Fee Properties and the Leased Properties constitute, as of
the Closing Date, all of the real property (with an aggregate annual base rent
in excess of $100,000, with respect to Leased Properties) owned in fee or leased
by the Company and its Subsidiaries.
SECTION 3.14. ERISA. The "amount of unfunded benefit liabilities"
(within the meaning of Section 4001(a)(18) of ERISA) of any Single Employer Plan
of the Company or any Commonly Controlled Entity would not result in a material
liability to the Company if any or all such Single Employer Plans were
terminated. None of the Company, any Subsidiary of the Company or any Commonly
Controlled Entity would be liable for any amount pursuant to Sections 4063 or
4064 of ERISA, if any Single Employer Plan were to terminate. Neither the
Company nor any Commonly Controlled Entity has been involved in any transaction
that would cause the Company to be subject to material liability with respect to
a Single Employer Plan to which the Company or any Commonly Controlled Entity
contributed or was obligated to contribute during the six-year period ending on
the date this representation is made under Sections 4062 or 4069 of ERISA.
Neither the Company nor any Commonly Controlled Entity has incurred any material
liability under Title IV of ERISA which could
48
become or remain a material liability of the Company after the Closing Date and
the consummation of the Transaction. None of the Company, any Subsidiary of the
Company, or, to the best knowledge of the Company, any director, officer or
employee thereof, or any of the Plans or any trust created thereunder, or any
fiduciary thereof, has engaged in a transaction or taken any other action or
omitted to take any action involving any Plan which could constitute a
prohibited transaction within the meaning of Section 406 of ERISA which is not
otherwise exempted and which would result in a material liability to the
Company, or would cause the Company to be subject to either a material liability
or material civil penalty assessed pursuant to Sections 409 or 502(i) or (l) of
ERISA or a material tax imposed pursuant to Sections 4975 or 4976 of the Code.
Each of the Plans (to the best knowledge of the Company with respect to any
Multiemployer Plan) has been operated and administered in all material respects
in accordance with applicable laws, including but not limited to ERISA and the
Code. There are no material pending or, to the best knowledge of the Company,
threatened claims by or on behalf of any of the Plans or any fiduciary, by any
employee or beneficiary covered under any such Plan, or otherwise involving any
such Plan or fiduciary for which the Company could have any material liability
(other than routine claims for benefits). To the best knowledge of the Company,
no condition exists, and no event has occurred with respect to any Multiemployer
Plan which presents a material risk of a complete or partial withdrawal under
Subtitle E of Title IV of ERISA for which the Company could have any material
liability, nor has the Company or any Commonly Controlled Entity been notified
that any such Multiemployer Plan is Insolvent or in Reorganization. Neither the
Company nor any Commonly Controlled Entity nor any Subsidiary has been a party
to any transaction or agreement to which the provisions of Section 4204 of ERISA
were applicable. None of the Company, or any Commonly Controlled Entity or any
of their respective Subsidiaries is obligated to contribute to a Multiemployer
Plan, on behalf of any current or former employee of the Company, any Commonly
Controlled Entity or such Subsidiary. The liability to which the Company, any
Commonly Controlled Entity or any of their respective Subsidiaries would become
subject under ERISA if all such Persons were to withdraw completely from all
Plans on the Closing Date (after giving effect to the Transaction) is not in
excess of $2,000,000. None of the Plans or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in Section 302 of
ERISA and Section 412 of the Code), whether or not waived, as of the last day of
the most recent fiscal year of each of the Plans. No contribution failure has
occurred with respect to any Plan sufficient to give rise to a lien under
Section 302(f) of ERISA.
SECTION 3.15. Security Interest. The provisions of this Agreement
and the other Credit Documents are effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein. In the case
of the Pledged Stock described in the Guarantee and Collateral Agreement, so
long as stock certificates representing such Pledged Stock are in the possession
of the Administrative Agent, and in the case of the other Collateral described
in the Guarantee and Collateral Agreement, as of the date when financing
statements and other filings specified on Schedule 3.15(a) in appropriate form
were filed in the offices specified on Schedule 3.15(a), the Guarantee and
Collateral Agreement constituted, and such Lien and security interest continue
to constitute, a fully perfected Lien on, and security interest in, all right,
title and interest of the Credit Parties in such Collateral, as security for the
Secured Obligations, in each case prior and superior in right to any other
Person, except to the extent that a security interest cannot be perfected
therein by the filing of a financing statement or the taking of possession under
the UCC and subject to Liens permitted by Section 6.02.
SECTION 3.16. Copyrights, Permits, Trademarks and Licenses. As of
the Closing Date, Schedule 3.16 sets forth a true and complete list of all
material registered trademarks, trade names, service marks, patents, pending
patent applications and registered copyrights and applications therefor owned,
used or filed by or licensed to the Company and its Subsidiaries and, with
respect to registered trademarks (if any), contains a list of all jurisdictions
in which such trademarks are registered or applied for and all registration and
application numbers. Except as disclosed on Schedule 3.16, the Company or a
49
Subsidiary owns or has the right to use, without payment to any other party,
registered trademarks, trade names, service marks, patents, pending patent
applications and copyrights and applications therefor referred to in such
schedule. To the best knowledge of the Company, no claims are pending by any
Person with respect to the ownership, validity, enforceability or the Company's
or any Subsidiary's use of any such registered trademarks, trade names, service
marks, patents, pending patent applications and copyrights, or applications
therefor, challenging or questioning the validity or effectiveness of any of the
foregoing, in any jurisdiction, domestic or foreign, except to the extent such
claims could not reasonably be expected to have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
SECTION 3.17. Environmental Matters. Except as set forth in the
Environmental Reports and except to the extent that the facts and circumstances
giving rise to the failure of any of the following to be true and correct would
not be reasonably likely to have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole:
(a) to the best knowledge of the Company, no parcel of real property
owned or operated by the Company or any of its Subsidiaries contains, or has
previously contained, in, on or under including, without limitation, the soil
and groundwater thereunder, any Hazardous Materials in amounts or concentrations
that constitute or constituted a material violation of, or could reasonably give
rise to material liability under, Environmental Laws.
(b) to the best knowledge of the Company, each parcel of real
property owned or operated by the Company or any of its Subsidiaries and all
operations and facilities at such properties taken as a whole are in material
compliance with all Environmental Laws, and there is no contamination or
violation of any Environmental Law which could materially interfere with the
continued operation of, or materially impair the fair saleable value of, the
such property taken as a whole.
(c) neither the Company nor any of its Subsidiaries has received or
is aware of any written complaint, written notice of violation, written alleged
violation, or written notice of investigation or of potential liability under
Environmental Laws with regard to any parcel of real property owned or operated
by the Company or any of its Subsidiaries or the operations of the Company or
its Subsidiaries, nor does the Company or any of its Subsidiaries have knowledge
that any such action is being contemplated, considered or threatened.
(d) to the best knowledge of the Company, Hazardous Materials have
not been generated, treated, stored, disposed of, at, on or under any parcel of
real property owned or operated by the Company or any of its Subsidiaries, nor
have any Hazardous Materials been transported from such properties, in material
violation of or in a manner that could reasonably give rise to material
liability of the Company or any of its Subsidiaries under any Environmental
Laws.
(e) there are no governmental administrative actions or judicial
proceedings pending or, to the best knowledge of the Company and its
Subsidiaries, threatened, under any Environmental Law to which the Company or
any of its Subsidiaries is a party with respect to any parcel of real property
owned or operated by the Company or any of its Subsidiaries, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements, other than permits
authorizing operations at facilities at the real property, outstanding under any
Environmental Law with respect to such properties.
SECTION 3.18. Accuracy and Completeness of Information. The factual
statements contained in the financial statements referred to in Section 3.01,
the Credit Documents (including the schedules thereto) and any other
certificates or documents furnished or to be furnished to the
50
Administrative Agent or the Lenders from time to time in connection with this
Agreement, taken as a whole, do not and will not, to the best knowledge of the
Company, as of the date when made, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances in which the same
were made, all except as otherwise qualified herein or therein, such knowledge
qualification being given only with respect to factual statements made by
Persons other than the Company or any of its Subsidiaries; provided, that with
respect to projected financial information, the Company represents only that
such information has been and will be prepared in good faith based upon
assumptions believed by the Company to be reasonable at the time.
SECTION 3.19. Solvency. As of the Closing Date, each Credit Party
is, and after giving effect to the Transactions and the incurrence of all
Indebtedness and obligations being incurred in connection herewith and therewith
will be Solvent. For purposes hereof, "Solvent" means, with respect to any
Person on a particular date, that on such date, (i) the fair value of the
property of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (ii) the
present fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (iii) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (iv) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
an unreasonably small amount of capital.
SECTION 3.20. Labor Matters. As of the Closing Date only, there are
no strikes or other labor disputes against the Company or any of its
Subsidiaries pending or, to the knowledge of the Company, threatened that
(individually or in the aggregate) would reasonably be expected to have a
material adverse effect on the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole. As of the
Closing Date only, hours worked by and payment made to employees of the Company
and its Subsidiaries have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) would reasonably be expected to have a
material adverse effect on the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole. As of the
Closing Date only, all payments due from the Company or any of its Subsidiaries
on account of employee health and welfare insurance that (individually or in the
aggregate) would reasonably be expected to have a material adverse effect on the
business, operations, property or financial condition of the Company and its
Subsidiaries taken as a whole if not paid have been paid or accrued as a
liability on the books of the Company or the relevant Subsidiary.
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to Initial Extension of Credit. The
effectiveness of this amendment and restatement of the Existing Credit Agreement
and the making of the Revolving Loans, if any, on the Closing Date are subject
to the fulfillment, to the satisfaction of the Administrative Agent, of each of
the following conditions:
(a) Credit Agreement; Guarantee and Collateral Agreement; Notes. The
Administrative Agent (or its counsel) shall have received (i) from each party
hereto either (A) a counterpart of this Agreement signed on behalf of such party
or (B) written evidence satisfactory to the Administrative Agent (which may
include facsimile transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement and (ii) duly
executed copies of the Credit Documents and such other certificates, documents,
instruments and agreements as the
51
Administrative Agent shall reasonably request in connection with the
transactions contemplated by this Agreement and the other Credit Documents,
including any Notes requested by a Lender pursuant to Section 2.10 payable to
the order of each such requesting Lender.
(b) Capital Structure. (i) Holdings, the Company and its
Subsidiaries shall have no Indebtedness other than the Senior Subordinated Notes
and the Exchangeable Notes and except as otherwise permitted by this Agreement.
(ii) The execution, delivery and performance of this Agreement
and the other Credit Documents and the related documentation with respect
to the Commitments and the making of Loans and issuances of Letters of
Credit as contemplated hereby and the proposed Issuance and Repurchase
shall not violate any of the provisions of the Senior Subordinated Note
Indenture or the Exchangeable Note Indenture and the Company shall have
provided a certificate in reasonable detail to such effect.
(iii) Any changes since January 16, 2004 to the certificate of
incorporation, by-laws, other governing documents and corporate structure
of the Company and its Subsidiaries, in each case after giving effect to
the consummation of the Transactions, shall be in form and substance
reasonably satisfactory to the Administrative Agent (the execution and
delivery of this Agreement by the Lenders and the Administrative Agent
being deemed to evidence the satisfaction of the Administrative Agent with
such of the above-referenced matters as shall have been disclosed and made
available to the Administrative Agent prior to the date hereof).
(c) Fees. ▇.▇. ▇▇▇▇▇▇ Securities Inc., as Sole Lead Arranger and
Sole Bookrunner, the Administrative Agent and the Lenders shall have received
all fees required to be paid and all expenses for which invoices have been
presented, on or before the Closing Date.
(d) Filings, Recordings; and Registrations. The Administrative Agent
shall have received evidence in form and substance satisfactory to it that (i)
all filings, recordings, registrations and other actions, including, without
limitation, the filing of financing statements on form UCC-1, necessary or, in
the opinion of the Administrative Agent, desirable to perfect the Liens created
by the Security Documents, have been filed, recorded, registered or taken and
(ii) the Administrative Agent, for the benefit of the Lenders, shall have a
perfected security interest in all of the Collateral.
(e) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in blank
by a duly authorized officer of the pledgor thereof and (ii) each promissory
note (if any) pledged to the Administrative Agent pursuant to the Guarantee and
Collateral Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank) by the pledgor thereof.
(f) Legal Opinions. The Administrative Agent shall have received,
dated the Closing Date and addressed to the Administrative Agent and the
Lenders, (i) an opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to Holdings and
the Company, in substantially the form of Exhibit F-1 with such changes thereto
as may be approved by the Administrative Agent and its counsel, (ii) an opinion
of ▇▇▇▇▇ ▇▇▇▇ LLP, Arizona counsel to the Company, in substantially the form of
Exhibit F-2 with such changes as may be approved by the Administrative Agent and
its counsel, (iii) an opinion of in-house counsel of Holdings, the Company and
its Subsidiaries, in substantially the form of Exhibit F-3 and (iv) opinions of
such local counsel as may have been reasonably requested by the Administrative
Agent, which opinions shall be in form and substance reasonably satisfactory to
the Administrative Agent.
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(g) Closing Certificate. The Administrative Agent shall have
received a Closing Certificate of the Company, Holdings and each Subsidiary
dated the Closing Date, in substantially the form of Exhibit G-1, Exhibit G-2
and Exhibit G-3, respectively, with appropriate insertions and attachments, in
form and substance satisfactory to the Administrative Agent and its counsel,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary of the Company, Holdings and each Subsidiary, respectively.
(h) Consents, Authorizations and Filings, etc. Except for financing
statements to be filed in connection herewith, all consents, approvals,
authorizations and filings with any Person (including, without limitation, any
Governmental Authority), if any, required in connection with the Transactions
and the execution, delivery and performance by Holdings or the Company, and the
validity and enforceability against Holdings and the Company, of the Credit
Documents to which any of them is a party, shall have been obtained or made, and
such consents, approvals, authorizations and filings shall be in full force and
effect, except such consents, approvals, authorizations and filings, the failure
to obtain which would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole.
(i) Existing Credit Facilities. The Administrative Agent shall have
received satisfactory evidence that the obligations with respect to term loans
under the Existing Credit Facilities shall have been extinguished and all
amounts thereunder shall have been (or will be with the proceeds of Revolving
Loans) paid in full.
(j) Litigation. On the Closing Date, there shall be no actions,
suits, investigations, arbitrations, claims, or proceedings pending or, to the
knowledge of the Company, threatened, nor shall there be any judgment, decree,
injunction, rule or order of any court, Governmental Authority or arbitrator
outstanding, against Holdings, the Company or any of its Subsidiaries, in which
there is a probability of adverse determination which, individually or in the
aggregate, if adversely determined has had or would reasonably be expected to
have a Material Adverse Effect.
(k) Restrictions. The consummation of the Transactions and the other
transactions contemplated hereby shall not (i) violate any order, judgment,
writ, injunction, determination, award, decree, law, statute, rule or regulation
applicable to Holdings, the Company or any of its Subsidiaries or any portion of
their properties or assets, or (ii) require any consent, approval or notice
under, or conflict with or result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease,
agreement (including material supplier contracts) or other instrument or
obligation to which Holdings, the Company or any of its Subsidiaries is a party
or by which any of them or any portion of their properties or assets may be
bound, except in the case of clauses (i) and (ii), with respect to matters that
are not, individually or in the aggregate, reasonably likely to (x) result in a
Material Adverse Effect with respect to the Company or (y) delay in any material
respect or prevent the consummation of the Transactions.
(l) Exchangeable Notes Issuance. All aspects of the Issuance shall
have been consummated pursuant to the terms of the Exchangeable Note Indenture.
(m) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets of the
Credit Parties are located, and such search shall reveal no liens on any of the
assets of the Credit Parties except for liens permitted by Section 6.02 or
discharged on or prior to the Closing Date pursuant to a pay-off letter or other
documentation reasonably satisfactory to the Administrative Agent.
53
(n) Funding Account. The Administrative Agent shall have received a
notice setting forth the deposit account of the Company (the "Funding Account")
to which the Lenders are authorized by the Company to transfer the proceeds of
any Borrowings requested or authorized pursuant to this Agreement.
(o) Control Agreements. The Administrative Agent shall have received
each Collection Deposit Agreement (as defined in the Guarantee and Collateral
Agreement) required to be provided pursuant to Section 6.19 of the Guarantee and
Collateral Agreement.
(p) Solvency. The Administrative Agent shall have received a
satisfactory solvency certificate from a Financial Officer of the Company.
(q) Borrowing Base Certificate. The Administrative Agent shall have
received a Borrowing Base Certificate which calculates the Borrowing Base as of
the close of business on May 29, 2005.
(r) Insurance. The Administrative Agent shall have received evidence
of insurance coverage in form, scope, and substance reasonably satisfactory to
the Administrative Agent and otherwise in compliance with the terms of Section
5.05 of this Agreement and Section 6.17 of the Guarantee and Collateral
Agreement.
(s) Other Documents. The Administrative Agent shall have received
such other documents as the Administrative Agent, any Issuing Bank, any Lender
or their respective counsel may have reasonably requested.
The Administrative Agent shall notify the Company and the Lenders of
the Closing Date, and such notice shall be conclusive and binding.
SECTION 4.02. Conditions to All Loans and Letters of Credit. The
obligation of each Lender to make a Loan on the occasion of any Borrowing, and
of each Issuing Bank to issue any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties made in or pursuant to Article III or which are contained in any
other Credit Document shall be true and correct in all material respects on and
as of the date of such Loan or of the issuance of such Letter of Credit as if
made on and as of such date (unless stated to relate to a specific earlier date,
in which case, such representations and warranties shall be true and correct in
all material respects as of such earlier date).
(b) No Default or Event of Default. At the time of and immediately
after giving effect to such Borrowing or the issuance of such Letter of Credit,
as applicable, no Default shall have occurred and be continuing
(c) Senior Debt. A Financial Officer of the Company shall certify in
writing to the Administrative Agent that the incurrence of Indebtedness
represented by the requested extension of credit is permitted under the Senior
Subordinated Note Indenture.
Each borrowing by the Company hereunder and the issuance of each
Letter of Credit by any Issuing Bank hereunder shall constitute a representation
and warranty by the Company as of the date of such borrowing or issuance that
the conditions in clauses (a) and (b) of this Section 4.02 have been satisfied.
54
ARTICLE V
AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or LC Disbursement remains outstanding and unpaid, any
amount (unless cash in an amount equal to such amount has been deposited to a
cash collateral account established by the Administrative Agent) remains
available to be drawn under any Letter of Credit or any other amount is owing to
any Lender or the Administrative Agent hereunder or under any of the other
Credit Documents, it shall, and, in the case of the agreements contained in
Sections 5.03 through 5.06, 5.08 and 5.09, the Company shall cause each of its
Subsidiaries to:
SECTION 5.01. Financial Statements. Furnish to the Administrative
Agent (with sufficient copies for each Lender which the Administrative Agent
shall promptly deliver to each Lender):
(a) as soon as available, but in any event within (i) 95 days after
the end of each fiscal year of the Company or (ii) if earlier, five days after
the filing thereof with the Securities and Exchange Commission, a copy of the
consolidated balance sheet of the Company and its consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated statements of
stockholders' equity and cash flows and the consolidated statements of income of
the Company and its Subsidiaries for such fiscal year, setting forth in each
case in comparative form the figures for the previous year and, in the case of
the consolidated balance sheet referred to above, reported on, without a "going
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, or qualification which would affect the computation of
financial covenants, by independent certified public accountants of nationally
recognized standing;
(b) as soon as available, but in any event not later than (i) 50
days after the end of each of the first three quarterly periods of each fiscal
year of the Company, or (ii) if earlier, five days after the filing thereof with
the Securities and Exchange Commission, the unaudited consolidated balance sheet
of the Company and its Subsidiaries as at the end of each such quarter and the
related unaudited consolidated statements of income and cash flows of the
Company and its Subsidiaries for such quarterly period and the portion of the
fiscal year of the Company through such date, setting forth in each case in
comparative form the figures for the corresponding quarter in, and year to date
portion of, the previous year, and the figures for such periods in the budget
prepared by the Company and furnished to the Administrative Agent, certified by
a Financial Officer as being fairly stated in all material respects;
(c) as soon as available, but in any event within 35 days after the
end of each fiscal month of the Company, the unaudited consolidated balance
sheet of the Company and its Subsidiaries as at the end of each such fiscal
month and the related unaudited consolidated statements of income and cash flows
of the Company and its Subsidiaries for such fiscal month and the portion of the
fiscal year of the Company through such date, setting forth in each case in
comparative form the figures for the corresponding fiscal month in, and year to
date portion of, the previous year, and the figures for such periods in the
budget prepared by the Company and furnished to the Administrative Agent,
certified by a Financial Officer as being fairly stated in all material
respects;
(d) (i) as soon as available, but in any event not later than 30
days after the beginning of each fiscal year of the Company, a copy of the plan
and forecast (including a projected consolidated and consolidating balance
sheet, income statement and funds flow statement) of the Company for each month
of the upcoming fiscal year (the "Projections") in form reasonably satisfactory
to the Administrative Agent and (ii) as soon as available, any material revision
to any such Projections.
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All such financial statements (other than the Projections) shall be
complete and correct in all material respects (subject, in the case of interim
statements, to normal year-end audit adjustments) and to be prepared in
reasonable detail and (except in the case of the statements referred to in
paragraph (d) of this Section) in accordance with GAAP. The Projections
contained in the materials referenced above shall be based upon good faith
estimates and assumptions believed by management of the Company to be reasonable
at the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount.
SECTION 5.02. Certificates; Other Information. Furnish to the
Administrative Agent (with sufficient copies for each Lender which the
Administrative Agent shall promptly deliver to each Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in Section 5.01(a), a letter from the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary to express their opinion on such financial
statements no knowledge was obtained of any Default or Event of Default under or
in respect of Sections 2.06, 6.01, 6.03, 6.07 and 6.08, except as specified in
such letter;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.01(a) and (b), a certificate of the chief financial
officer of the Company (i) stating that, to the best of such officer's
knowledge, each of the Company and its Subsidiaries has observed or performed
all of its respective covenants and other agreements, and satisfied every
material condition, contained in this Agreement, any promissory note evidencing
Loans and the other Credit Documents to be observed, performed or satisfied by
it, and that such officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate, (ii) showing in detail as of
the end of the related fiscal period the figures and calculations supporting
such statement in respect of Sections 6.07 and 6.08 and any other calculations
reasonably requested by the Administrative Agent with respect to the
quantitative aspects of the other covenants contained herein and (iii) if not
specified in the financial statements delivered pursuant to Section 5.01,
specifying the aggregate amount of interest paid or accrued by the Company and
its Subsidiaries, and the aggregate amount of depreciation, depletion and
amortization charged on the books of the Company and its Subsidiaries, during
such accounting period;
(c) promptly upon receipt thereof, copies of all final reports
submitted to the Company or to any of its Subsidiaries by independent certified
public accountants in connection with each annual, interim or special audit of
the books of the Company or any of its Subsidiaries made by such accountants,
including, without limitation, any final comment letter submitted by such
accountants to management in connection with their annual audit;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available to
holders of the Senior Subordinated Debt and the public generally by Holdings,
the Company or any of its Subsidiaries, if any, and all regular and periodic
reports and all final registration statements and final prospectuses, if any,
filed by the Company or any of its Subsidiaries with any securities exchange or
with the Securities and Exchange Commission or any Governmental Authority
succeeding to any of its functions;
(e) concurrently with the delivery of the financial statements
referred to in Sections 5.01(a) and (b), a management summary describing and
analyzing the performance of the Company and its Subsidiaries during the periods
covered by such financial statements;
56
(f) within 45 days after the end of each fiscal quarter, a summary
of all Asset Sales during such fiscal quarter;
(g) (i) if Availability as reported on the most-recently delivered
Borrowing Base Certificate was less than $50,000,000, weekly Borrowing Base
Certificates as soon as available but in any event, within three days of the end
of each calendar week, or (ii) otherwise, monthly Borrowing Base Certificates as
soon as available but in any event, within 15 days of the end of each calendar
month, or at such other times as requested by the Administrative Agent in its
Permitted Discretion, in each case together with appropriate exhibits,
schedules, supporting documentation and additional reports as outlined in
Schedule 1 to Exhibit D as well as any additional reports with respect to the
Borrowing Base as the Administrative Agent may reasonably request (it being
agreed that the Company may deliver additional Borrowing Base Certificates at
any time it chooses to do so); and
(h) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
SECTION 5.03. Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations and liabilities of whatever nature including tax
liabilities, except (a) when the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Company or
any of its Subsidiaries, as the case may be, (b) for delinquent obligations
which do not have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole, and (c) for trade and other accounts payable in
the ordinary course of business.
SECTION 5.04. Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now conducted by it
(after giving effect to the Transactions), and preserve, renew and keep in full
force and effect its corporate existence and take all reasonable action to
maintain all material rights, material privileges, franchises, copyrights,
trademarks and trade names necessary or desirable in the normal conduct of its
business except for rights, privileges, franchises, copyrights, trademarks and
tradenames the loss of which would not in the aggregate have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole, and except as
otherwise permitted by Sections 6.04 and 6.05; and comply with all applicable
Requirements of Law and Contractual Obligations except to the extent that the
failure to comply therewith would not, in the aggregate, have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
SECTION 5.05. Maintenance of Property; Insurance. (a) Keep all
property useful and necessary in its business in good working order and
condition (ordinary wear and tear excepted); and
(b) Maintain with financially sound and reputable insurance
companies (x) insurance on all its property in at least such amounts and with
only such deductibles as are usually maintained by, and against at least such
risks (but including, in any event, public liability insurance) as are usually
insured against in the same general area, by companies engaged in the same or a
similar business and (y) flood insurance, if required, and furnish to each
Lender, (i) annually, a schedule disclosing all insurance against products
liability risk maintained by the Company and its Subsidiaries pursuant to this
Section 5.05(b) or otherwise and (ii) upon written request of any Lender, full
information as to the insurance carried; provided that the Company may implement
programs of self insurance in the ordinary course of business and in accordance
with industry standards for a company of similar size so long as reserves are
maintained in accordance with GAAP for the liabilities associated therewith.
57
SECTION 5.06. Books and Records; Inspection Rights. Keep proper
books of record and account in which full, complete and correct entries in
conformity with all material Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender (including, without limitation, appraisers) upon
reasonable notice (but, with respect to all Lenders, no more frequently than
quarterly unless a Default or Event of Default shall have occurred and be
continuing) during business hours and with a Responsible Officer of the Company
present to visit and inspect any of its properties, conduct examinations of and
monitor the Collateral and examine and, to the extent reasonable, make abstracts
from any of its books and records, and to discuss the business, operations,
properties and financial and other condition of the Company and its Subsidiaries
with officers and employees of the Company and its Subsidiaries and (in
coordination with such officers and employees) with its independent certified
public accountants, for the purpose of verifying the accuracy of the various
reports, including the Borrowing Base computations and supporting documentation,
delivered by the Company or the Guarantors to the Administrative Agent or the
Lenders pursuant to this Agreement or for otherwise ascertaining compliance with
this Agreement.
To the extent required by the Administrative Agent as a result of
any such evaluation, appraisal or monitoring, the Company also agrees to modify
or adjust the computation of the Borrowing Base (which may include maintaining
additional reserves, modifying the advance rates or modifying the eligibility
criteria for the components of the Borrowing Base to the extent reasonably
required by the Administrative Agent). The Credit Parties acknowledge that the
Administrative Agent, after exercising its rights of inspection, may prepare and
distribute to the Lenders certain Reports pertaining to the Credit Parties'
assets for internal use by the Administrative Agent and the Lenders.
SECTION 5.07. Notices. Promptly give notice to the Administrative
Agent and each Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any instrument or
other agreement, guarantee or collateral document of the Company or any of its
Subsidiaries which default or event of default has not been waived and would
have a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, or any other default or event of default under any such instrument,
agreement, guarantee or other collateral document which, assuming for the
purposes of this Section 5.07(b) only that the threshold amount contained in the
proviso to clause (e) of Article VII were $5,000,000, would have constituted a
Default or Event of Default under this Agreement, or (ii) litigation,
investigation or proceeding which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority, or receipt of any notice
of any environmental claim or assessment against the Company or any of its
Subsidiaries by any Governmental Authority, which in any such case would have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole;
(c) of any litigation or proceeding against the Company or any of
its Subsidiaries (i) in which more than $2,000,000 of the amount claimed is not
covered by insurance or (ii) in which injunctive or similar relief is sought
which if obtained would have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole;
(d) of the following events, as soon as practicable after, and in
any event within 30 days after, the Company knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan which
Reportable Event could reasonably result in material liability to the
58
Company and its Subsidiaries taken as a whole or (ii) the institution of
proceedings or the taking of any other action by PBGC, the Company or any
Commonly Controlled Entity to terminate, withdraw or partially withdraw from any
Plan and, with respect to a Multiemployer Plan, the Reorganization or Insolvency
of the Plan, in each of the foregoing cases which could reasonably result in
material liability to the Company and its Subsidiaries taken as a whole, and in
addition to such notice, deliver to the Administrative Agent and each Lender
whichever of the following may be applicable: (A) a certificate of a Responsible
Officer of the Company setting forth details as to such Reportable Event and the
action that the Company or such Commonly Controlled Entity proposes to take with
respect thereto, together with a copy of any notice of such Reportable Event
that may be required to be filed with PBGC or (B) any notice delivered by PBGC
evidencing its intent to institute such proceedings or any notice to PBGC that
such Plan is to be terminated, as the case may be;
(e) of any loss, damage, or destruction to, or of any Lien (other
than Permitted Liens) or claim (including any action or proceeding for the
taking of any material portion of the Collateral or interest therein under power
of eminent domain or by condemnation or similar proceeding) made or asserted
against, the Collateral in an amount of $5,000,000 or more, whether or not
covered by insurance;
(f) of any and all default notices received under or with respect to
any leased location or public warehouse where Collateral with an aggregate value
of $1,000,000 is located (which shall be delivered within ten days after receipt
thereof); and
(g) of a material adverse change known to the Company or its
Subsidiaries in the business, assets, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
Each notice pursuant to this Section 5.07 shall be accompanied by a statement of
a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and (in the cases of clauses (a) through (d)) stating what
action the Company proposes to take with respect thereto.
SECTION 5.08. Environmental Laws. (a) Comply with, and use
reasonable efforts to insure compliance by all tenants and subtenants, if any,
with, all applicable Environmental Laws and obtain and comply with and maintain,
and require that all tenants and subtenants obtain and comply with and maintain,
all licenses, approvals, registrations or permits required by Environmental
Laws, except to the extent that failure to do so would not be reasonably likely
to have a material adverse effect on the business, assets, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries taken
as a whole, or on the validity or enforceability of any of the Credit Documents
or the rights and remedies of the Administrative Agent or the Lenders
thereunder;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions, lawfully required under
applicable Environmental Laws, and promptly comply with all lawful orders and
directives of all Governmental Authorities respecting Environmental Laws, except
to the extent that the same are being contested in good faith by appropriate
proceedings; and
(c) In regard to this Agreement or in any way relating to the
Company or its Subsidiaries or their current or former operations, defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to Hazardous Material or Environmental
Laws, including, without limitation, any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
59
reasonable attorney's and consultant's fees, investigation and laboratory fees,
remediation costs, court costs and litigation expenses, except to the extent
that any of the foregoing arise out of the gross negligence or willful
misconduct of the party seeking indemnification therefor. The agreements in this
Section 5.08(c) shall survive repayment of the Loans and all other amounts
payable hereunder.
SECTION 5.09. Additional Collateral, etc. (a) With respect to any
property acquired after the Closing Date by Holdings, the Company or any
Subsidiary (other than (w) immaterial property, (x) any property described in
paragraph (b) or (c) below, (y) property acquired by any Foreign Subsidiary and
(z) assets acquired pursuant to Section 6.06(j) that are not equity interests
in, or assets held by, a Subsidiary Guarantor) that is intended to be subject to
the security interests created by any of the Security Documents but which is not
so subject thereto, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent reasonably deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in such property, including the filing of UCC
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent.
(b) With respect to any new Subsidiary (other than a Foreign
Subsidiary) created or acquired after the Closing Date by Holdings, the Company
or any Subsidiary, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement as the Administrative
Agent reasonably deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary that is owned by Holdings,
the Company or any Subsidiary, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant owner, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement, (B) to take such actions necessary to cause
the Lien created by the Guarantee and Collateral Agreement to be duly perfected
to the extent required by such agreement in accordance with all applicable
Requirements of Law with respect to such new Subsidiary, including the filing of
UCC financing statements in such jurisdictions as may be reasonably required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit G-3, with
appropriate insertions and attachments, and (iv) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Foreign Subsidiary created or acquired
after the Closing Date by Holdings, the Company or any Subsidiary (other than by
any Foreign Subsidiary), promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent reasonably deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
Holdings, the Company or any Subsidiary (provided that in no event shall more
than 65% of the total outstanding voting Capital Stock of any such new
Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
the relevant owner, and take such other action as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable to perfect the
Administrative Agent's security interest therein, and (iii) if reasonably
requested by the Administrative Agent, deliver to the
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Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) Upon the request of the Administrative Agent, the Company will,
and will cause its Domestic Subsidiaries (other than a Domestic Subsidiary that
is a Subsidiary, directly or indirectly, of a Foreign Subsidiary) to, promptly
grant to the Administrative Agent, within 60 days of such request, security
interests and mortgages in such owned real property of the Company and such
Domestic Subsidiaries as are acquired after the Closing Date by the Company or
such Subsidiary and that, together with any improvements thereon, individually
has a value in excess of $2,500,000, as additional security for the obligations
of the Credit Parties under any Credit Document (unless the subject property is
already mortgaged to a third party to the extent permitted by Section 6.02).
Such mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Administrative Agent and shall
constitute valid and enforceable perfected Liens subject only to Permitted Liens
and such other Liens reasonably acceptable to the Administrative Agent. The
mortgages or instruments related thereto shall be duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Administrative Agent required to be
granted pursuant to the mortgages and all taxes, fees and other charges payable
in connection therewith shall be paid in full. If requested by the
Administrative Agent or the Required Lenders, the Company shall provide a
lender's title policy with respect to each such mortgage paid for by the
Company, issued by a nationally recognized title insurance company, together
with such endorsements, coinsurance and reinsurance as may be reasonably
requested by the Administrative Agent, in form and substance reasonably
acceptable to the Administrative Agent, insuring each mortgage as a first lien
on the relevant mortgaged property and subject only to Liens expressly agreed to
by the Administrative Agent.
SECTION 5.10. Appraisals; Field Examinations. (a) At any time that
the Administrative Agent requests, the Company and the Subsidiaries will provide
the Administrative Agent with appraisals or updates thereof of their Inventory
from an appraiser selected and engaged by the Administrative Agent, and prepared
on a basis reasonably satisfactory to the Administrative Agent, such appraisals
and updates to include, without limitation, information required by applicable
law and regulations; provided, however, that if no Event of Default has occurred
and is continuing, only one such appraisal per calendar year shall be at the
expense of the Credit Parties.
(b) At any time that the Administrative Agent requests, the Company
and the Subsidiaries will provide the Administrative Agent with field
examinations by field examiners selected and engaged by the Administrative Agent
(which may include third-party examiners and employees of the Administrative
Agent), and prepared on a basis reasonably satisfactory to the Administrative
Agent; provided, however, that if no Event of Default has occurred and is
continuing, only one such field examination per calendar year shall be at the
expense of the Credit Parties.
ARTICLE VI
NEGATIVE COVENANTS
The Company hereby agrees that (subject to Section 9.17) it shall
not, and the Company shall not permit any of its Subsidiaries to, directly or
indirectly so long as the Commitments remain in effect or any Loan, Note or LC
Disbursement remains outstanding and unpaid, any amount (unless cash in an
amount equal to such amount has been deposited to a cash collateral account
established by the Administrative Agent) remains available to be drawn under any
Letter of Credit or any other amount is owing to any Lender or the
Administrative Agent hereunder or under any other Credit Document (it being
understood that each of the permitted exceptions to each of the covenants in
this Article VI is in addition
61
to, and not overlapping with, any other of such permitted exceptions except to
the extent expressly provided):
SECTION 6.01. Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) the Indebtedness outstanding on the Closing Date and reflected
on Schedule 6.01(a), including the refinancing of any such Indebtedness on terms
and conditions taken as a whole no less favorable to the Company and its
Subsidiaries or the Lenders;
(b) Indebtedness consisting of the Loans and in connection with the
Letters of Credit and this Agreement;
(c) Indebtedness (i) of the Company to any Subsidiary and (ii) of
any Subsidiary Guarantor to the Company or any other Subsidiary;
(d) Indebtedness consisting of the Senior Subordinated Debt
outstanding on the Closing Date and Indebtedness of the Company in respect of
any Senior Subordinated Debt the net proceeds of which are used to prepay,
redeem, retire or repurchase the outstanding principal amount of the then
outstanding Senior Subordinated Debt (if any) (including any accrued and unpaid
interest and any premiums, fees and expenses, in each case, in connection
therewith);
(e) Indebtedness consisting of the Senior Unsecured Debt outstanding
on the Closing Date and Indebtedness of the Company in respect of any Senior
Unsecured Debt the net proceeds of which are used to prepay, redeem, retire or
repurchase the outstanding principal amount of the then outstanding Senior
Unsecured Debt (if any) (including any accrued and unpaid interest and any
premiums, fees and expenses, in each case, in connection therewith);
(f) (i) Indebtedness of the Company and its Subsidiaries for (A)
industrial revenue bonds or other similar governmental and municipal bonds and
(B) the deferred purchase price of newly acquired property of the Company and
its Subsidiaries (pursuant to purchase money mortgages or otherwise, whether
owed to the seller or otherwise) used in the ordinary course of business of the
Company and its Subsidiaries (provided such financing is entered into within 270
days of the acquisition of such property) in an amount (based on the remaining
balance of the obligations therefor on the books of the Company and its
Subsidiaries) which in the case of preceding clauses (A) and (B) shall not
exceed $25,000,000 in the aggregate at any one time outstanding and (ii)
Indebtedness of the Company and its Subsidiaries in respect of Financing Leases
to the extent Section 6.07 would not be contravened;
(g) Indebtedness of the Company and its Subsidiaries in an aggregate
principal amount not to exceed at any one time outstanding $50,000,000;
(h) Indebtedness in respect of letters of credit or surety bonds
(other than Letters of Credit issued hereunder) in aggregate principal amount
not to exceed at any one time outstanding $30,000,000; provided, that (i) the
Company shall list all such letters of credit and surety bonds on each Borrowing
Base Certificate and (ii) to the extent such letters of credit or surety bonds
are secured by a Lien on Inventory, such Inventory shall not constitute
"Eligible Inventory";
(i) (i) Indebtedness assumed in connection with acquisitions
permitted by Section 6.06(h) (so long as such Indebtedness was not incurred in
anticipation of such acquisitions), (ii) Indebtedness of newly acquired
Subsidiaries acquired in such acquisitions (so long as such Indebtedness was not
incurred in anticipation of such acquisition) and (iii) Indebtedness owed to the
seller in any
62
acquisition permitted by Section 6.06(h) constituting part of the purchase price
thereof, all of which Indebtedness permitted by this Section 6.06(h) shall not
exceed an aggregate principal amount at any one time outstanding of $25,000,000;
(j) Indebtedness in connection with workers' compensation
obligations and general liability exposure of the Company and its Subsidiaries;
(k) subordinated Indebtedness, which subordinated Indebtedness (i)
is subordinated to the Indebtedness hereunder on terms not less favorable to the
Lenders than the subordination provisions of the Senior Subordinated Debt and
(ii) has a final maturity date after the Maturity Date; and
(l) other unsecured Indebtedness; provided that, immediately prior
to and after giving pro forma effect to any incurrence of such Indebtedness, no
Default or Event of Default has occurred and is continuing or would result
therefrom and (i) Availability is greater than $65,000,000 or (ii) (x)
Availability is greater than $50,000,000 (but less than $65,000,000) and (y) the
aggregate principal amount of all Indebtedness incurred in accordance with this
clause (ii) during the term of this Agreement does not exceed $75,000,000 at any
one time outstanding.
SECTION 6.02. Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets, income or profits, whether now owned or
hereafter acquired, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:
(a) Liens for taxes, assessments or other governmental charges not
yet delinquent or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Company or such Subsidiary, as the case may be, in accordance with
GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business in respect of obligations which are not yet due or which are bonded or
which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of the
Company or such Subsidiary, as the case may be, in accordance with GAAP;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements (including, without limitation, reciprocal easement
agreements), rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments, changes, and
other similar encumbrances or title defects incurred, or leases or subleases
granted to others, in the ordinary course of business, which do not in the
aggregate materially detract from the aggregate (i) value of the properties of
the Company and its Subsidiaries, taken as a whole or (ii) materially interfere
with or adversely affect in any material respect the ordinary conduct of the
business of the Company and its Subsidiaries taken as a whole;
(f) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Credit Documents and bankers' liens arising by operation of law;
63
(g) Liens of a collecting bank arising in the ordinary course of
business under Section 4-208 of the UCC in effect in the relevant jurisdiction
covering only the items being collected upon;
(h) Liens on property of the Company or any of its Subsidiaries
created solely for the purpose of securing Indebtedness permitted by Section
6.01(f) or 6.01(i)(i) or (ii) (so long as such Lien was not incurred in
anticipation of the related acquisition), representing or incurred to finance,
refinance or refund the purchase price of property, provided that no such Lien
shall extend to or cover other property of the Company or such Subsidiary other
than the respective property so acquired, and the principal amount of
Indebtedness secured by any such Lien shall at no time exceed the original
purchase price of such property plus any interest on such Indebtedness that is
payable in-kind or accretes to the principal of such Indebtedness;
(i) Liens existing on the Closing Date and described in Schedule
6.02 (including the extension of any Liens listed on such Schedule relating to
any Indebtedness permitted under Section 6.01(a) in connection with any
refinancing of such Indebtedness permitted by such Section), provided that no
such Lien shall extend to or cover other property of the Company or the
respective Subsidiary other than the respective property so encumbered, and the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed the original principal amount of the Indebtedness so secured;
(j) Liens on documents of title and the property covered thereby
(and proceeds (as defined in the UCC) thereof) securing Indebtedness in respect
of Letters of Credit or securing reimbursement obligations in respect of letters
of credit permitted under this Agreement; provided that any Inventory subject to
such Liens (other than Liens permitted by clause (f) of this Section 6.02) shall
be excluded from "Eligible Inventory";
(k) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by any
developer, landlord or other third party on property over which the Company or
any Subsidiary of the Company has easement rights or on any Leased Property and
subordination or similar agreements relating thereto and (ii) any condemnation
or eminent domain proceedings affecting any real property;
(l) Liens in connection with workers' compensation obligations and
general liability exposure of the Company and its Subsidiaries;
(m) Liens on Fee Properties and/or Leased Properties consisting of
(i) any conditions that may be shown by a current, accurate survey or physical
inspection of such Fee Property or Leased Property, (ii) as to Leased Property,
the terms and provisions of the respective lease therefor and any matters
affecting the fee title and any estate superior to the leasehold estate related
thereto, and (iii) title defects, or leases or subleases granted to others,
which are not material to the Fee Properties or Leased Properties, as the case
may be, taken as a whole; and
(n) Liens in connection with Bank Drafts.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Credit Party's (1) Accounts, other
than those permitted under paragraphs (a) and (f) above and (2) Inventory, other
than those permitted under paragraphs (a), (b), (f) and (j) above.
SECTION 6.03. Limitation on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligation except:
64
(a) the Guarantee and Collateral Agreement;
(b) other guarantees by the Company incurred in the ordinary course
of business for an aggregate amount not to exceed $30,000,000 at any one time;
(c) guarantees by the Company or any Subsidiary of obligations of
the Company or any Subsidiary;
(d) Contingent Obligations existing on the Closing Date and
described in Schedule 6.03(d);
(e) guarantees of obligations to third parties in connection with
relocation of employees of the Company or any of its Subsidiaries, in an amount
which, together with all loans and advances made pursuant to Section 6.06(f),
shall not exceed $4,000,000 at any time outstanding;
(f) Contingent Obligations in connection with workers' compensation
obligations and general liability exposure of the Company and its Subsidiaries;
(g) guarantees of the Senior Unsecured Debt issued by Subsidiaries
of the Company which are also parties to the Guarantee and Collateral Agreement;
(h) subordinated guarantees of the Senior Subordinated Debt issued
by Subsidiaries of the Company which are also parties to the Guarantee and
Collateral Agreement; provided such subordinated guarantees are subordinated to
the Guarantee and Collateral Agreement on the same basis as the Senior
Subordinated Debt is subordinated to the Loans;
(i) guarantees by the Company of loans to employees of the Company
and its Subsidiaries, the proceeds of which are used to purchase stock of
Holdings, in an aggregate amount not to exceed, when added to the amount of
loans made by the Company to employees pursuant to Section 6.06(g), at any one
time outstanding, $8,000,000;
(j) guarantees by the Company of loans to employees of the Company
and its Subsidiaries, the proceeds of which are used for travel and other
ordinary expenses for which advances to employees are generally made, in an
aggregate amount not to exceed, when added to the amount of loans made by the
Company to employees pursuant to subsection 6.06(i), at any one time
outstanding, $1,000,000;
(k) other unsecured Contingent Obligations; provided that,
immediately prior to and after giving pro forma effect to any incurrence of such
Contingent Obligations, no Default or Event of Default has occurred and is
continuing or would result therefrom and (i) Availability is greater than
$65,000,000 or (ii) (x) Availability is greater than $50,000,000 (but less than
$65,000,000) and (y) the aggregate principal amount of all Contingent
Obligations incurred in accordance with this clause (ii) during the term of this
Agreement does not exceed $75,000,000 at any one time outstanding; and
(l) Contingent Obligations in connection with Bank Drafts.
SECTION 6.04. Prohibition of Fundamental Changes. Enter into any
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or engage in any type of
business other than of the same general type now conducted by it, except (a) for
the transactions otherwise permitted pursuant to Section 6.05(b) and Section
6.06(h), (b)
65
any Subsidiary of the Company may be merged with and into the Company or a
Subsidiary of the Company, (c) any Subsidiary may be dissolved, provided,
however, that prior to the dissolution of any Subsidiary whose book value
exceeds $100,000, the assets of such Subsidiary are transferred to the Company
or a Wholly-Owned Domestic Subsidiary of the Company subject to the conditions
set forth in Section 6.05(b) and (d) the Company may be reincorporated under the
laws of Delaware, provided that the Administrative Agent, in its sole reasonable
discretion, determines that such reincorporation will not alter the obligations
of any Credit Party under any Credit Document or cause a material impairment of
the value of the Collateral taken as a whole, after giving effect to such
reincorporation.
SECTION 6.05. Prohibition on Sale of Assets. Convey, sell, lease
(other than a sublease of real property), assign, transfer or otherwise dispose
of (including through a transaction of merger or consolidation of any Subsidiary
of the Company) any of its property, business or assets (including, without
limitation, tax benefits and receivables but excluding leasehold interests),
whether now owned or hereafter acquired, except:
(a) for (i) sales or other dispositions of inventory made in the
ordinary course of business, (ii) sales or other dispositions of uneconomic,
obsolete or worn-out property in the ordinary course of business and (iii) any
sale of a store and/or fixtures to a third party pursuant to a sale-leaseback
transaction;
(b) that any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to, or merge with and into, the Company or a Wholly-Owned Subsidiary
of the Company and any Subsidiary of the Company may sell or otherwise dispose
of, or part with control of any or all of, the stock of any Subsidiary to a
Wholly-Owned Subsidiary of the Company, provided that no such transaction may be
effected if it would result in the transfer of any assets of, or any stock of, a
Subsidiary to, or the merger with and into, another Subsidiary all of the
Capital Stock of which owned by the Company or any Subsidiary has not been
pledged to the Administrative Agent and which has not guaranteed the obligations
of the Company under the Notes and this Agreement, and granted liens or security
interests in favor of the Administrative Agent, for the benefit of the Lenders,
on substantially all of its assets to secure such guarantee, pursuant to a
guarantee, security agreement and other documentation reasonably satisfactory to
the Administrative Agent;
(c) leases of Fee Properties and other real property owned in fee
and subleases of Leased Properties;
(d) any condemnation or eminent domain proceedings affecting any
real property;
(e) substantially like-kind exchanges of real property;
(f) for the sale or other disposition of any property the aggregate
amount of the net proceeds received in respect of which shall not exceed
$10,000,000;
(g) for the sale of owned real property and/or fixtures;
(h) for conveyances and transfers specifically permitted under
Section 6.06(j) to joint ventures;
(i) any sale or other disposition of any minority interests in a
joint venture or other Person;
66
(j) any sales at fair market value for cash of Investment Grade
Securities;
(k) the disposition of Capital Stock of Holdings to the holders of
the Exchangeable Notes pursuant to the terms of the Exchangeable Note Indenture
and any other disposition of Capital Stock of Holdings acquired by the Company
pursuant to the Call Agreement; and
(l) any other sales or dispositions; provided that, immediately
prior to and after giving pro forma effect to any such sale or disposition, no
Default or Event of Default has occurred and is continuing or would result
therefrom and Availability is greater than $50,000,000.
SECTION 6.06. Limitation on Investments, Loans and Advances. Make
any advance, loan, extension of credit or capital contribution to, or purchase
any stock, bonds, notes, debentures or other securities of, or make any other
investment in (including, without limitation, any acquisition of all or any
substantial portion of the assets, and any acquisition of a business or a
product line, of other companies, other than the acquisition of inventory in the
ordinary course of business) (each, an "Investment"), any Person, except:
(a) (i) the Company may make loans or advances to any Subsidiary,
and any Subsidiary may make loans or advances to the Company or any other
Subsidiary, to the extent in each case the Indebtedness created thereby is
permitted by Section 6.01(c) and (ii) the Company may make loans or advances to
Holdings to allow Holdings to consummate the Repurchase;
(b) (i) any Subsidiary may make Investments in the Company (by way
of capital contribution or otherwise) and (ii) the Company and any Subsidiary
may make Investments in, or create, any Wholly-Owned Domestic Subsidiary (by way
of capital contribution or otherwise) or make Investments permitted by Section
6.05(b), provided that, in any such case, (x) if stock is issued or otherwise
acquired in connection with such Investment, or if the stock of such Subsidiary
was not previously pledged to the Administrative Agent, such stock is pledged to
the Administrative Agent for the benefit of the Lenders so that 100% of the
Capital Stock of such Subsidiary is pledged to the Administrative Agent and (y)
such Subsidiary guarantees the obligations of the Company under the Notes and
this Agreement, and grants liens or security interests in favor of the
Administrative Agent, for the benefit of the Lenders, on substantially all of
its assets to secure such guarantee, pursuant to a guarantee, a security
agreement and other documentation reasonably satisfactory to the Administrative
Agent;
(c) the Company and its Subsidiaries may make Investments in,
acquire and hold Cash Equivalents and Investment Grade Securities;
(d) the Company or any of its Subsidiaries may make payroll advances
in the ordinary course of business;
(e) the Company or any of its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms
(provided that nothing in this clause (e) shall prevent the Company or any
Subsidiary from offering such concessionary trade terms, or from receiving such
Investments in connection with the bankruptcy or reorganization of their
respective suppliers or customers or the settlement of disputes with such
customers or suppliers arising in the ordinary course of business, as management
deems reasonable in the circumstances);
(f) the Company or any of its Subsidiaries may make relocation and
other loans to officers and employees of the Company or any such Subsidiary (or
to Holdings so that it will make such loans), provided that the aggregate
principal amount of all such loans and advances outstanding at any
67
one time, together with the guarantees of such loans and advances made pursuant
to Section 6.03(e), shall not exceed $4,000,000 at any one time outstanding;
(g) the Company may make loans to employees of the Company and its
Subsidiaries (or to Holdings so that it will make such Loans) the proceeds of
which are used by such employees to purchase stock of Holdings, provided that
the aggregate principal amount of all such loans shall not exceed, together with
any guarantees of loans made pursuant to Section 6.03(i), at any one time
outstanding $8,000,000;
(h) the Company and its Subsidiaries may make additional
Investments; provided that, immediately prior to and after giving pro forma
effect to any such acquisition and the financing thereof, no Default or Event of
Default has occurred and is continuing or would result therefrom and (i)
Availability is greater than $65,000,000 or (ii) (x) Availability is greater
than $50,000,000 (but less than $65,000,000) and (y) the aggregate amount of all
Investments made in accordance with this clause (ii) during the term of this
Agreement does not exceed $75,000,000;
(i) the Company may make loans to employees of the Company and its
Subsidiaries (or to Holdings so that it will make such Loans), the proceeds of
which are used by such employees for travel and other ordinary expenses for
which advances to employees are generally made in an aggregate principal amount
not to exceed, when added to the amount of guarantees made by the Company
pursuant to Section 6.03(j), at any one time outstanding $1,000,000;
(j) the Company or any of its Subsidiaries may make Investments in,
or loans or Investments to, joint ventures or other Persons engaged primarily in
one or more businesses in which the Company and its Subsidiaries are engaged or
directly related thereto in an aggregate amount not to exceed $5,000,000 plus
the sum of (A) any cash amounts dividended or distributed to the Company or any
Subsidiary of the Company after the date hereof by such joint venture or other
Person and (B) any amounts from sales or distributions permitted in Section
6.05(i); and
(k) the Company may acquire Capital Stock of Holdings pursuant to
the Call Agreement or from Holdings for the purpose of delivering such Capital
Stock to the holders of the Exchangeable Notes pursuant to the terms of the
Exchangeable Note Indenture.
SECTION 6.07. Financial Covenant. As of the end of any fiscal
quarter of the Company during which Availability has, at any day during such
fiscal quarter, been less than $50,000,000, permit the Fixed Charge Coverage
Ratio to be less than 1.00 to 1.00.
SECTION 6.08. Limitation on Dividends. Declare any dividends on any
shares of any class of stock, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
retirement or other acquisition of any shares of any class of stock, or any
warrants or options to purchase such stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Company or
any of its Subsidiaries; except that:
(a) Subsidiaries may pay dividends to the Company or to Subsidiaries
which are directly or indirectly wholly owned by the Company;
(b) the Company may pay or make dividends or distributions to any
holder of its Capital Stock in the form of additional shares of Capital Stock of
the same class and type; provided such shares of Capital Stock are pledged to
the Administrative Agent for the benefit of the Lenders;
68
(c) the Company may pay dividends or make other distributions:
(i) to Holdings in amounts equal to amounts required for
Holdings to pay franchise taxes and other fees required to maintain its
corporate existence and provide for other operating costs;
(ii) to Holdings in amounts equal to amounts required for
Holdings to pay Federal, state and local income taxes to the extent such
income taxes are attributable to the income of the Company and its
Subsidiaries;
(iii) to Holdings in amounts equal to amounts expended by
Holdings to repurchase Capital Stock of Holdings owned by former employees
of the Company or its Subsidiaries or their assigns, estates and heirs,
provided that the aggregate amount paid, loaned or advanced to Holdings
pursuant to this clause (iii) shall not, in the aggregate, exceed the sum
of $2,500,000 plus any amounts contributed by Holdings to the Company as a
result of resales of such repurchased shares of Capital Stock;
(iv) to Holdings to allow Holdings to make loans in the nature
of those permitted under Sections 6.06(f), (g) and (i);
(v) to allow Holdings to consummate the Repurchase; and
(vi) to Holdings to allow Holdings to repurchase or redeem
Capital Stock of Holdings with an aggregate value of up to $25,000,000 on
or after the Closing Date so long as (i) after giving effect to such
repurchase or redemption, Availability is at least $55,000,000 and (ii)
immediately prior to and after giving effect to Holdings' delivering
notice of such repurchase or redemption (which notice shall be no earlier
than 30 days prior to such repurchase or redemption) of Capital Stock of
Holdings to the holders thereof, no Default or Event of Default shall have
occurred and be continuing; and
(d) the Company may enter into the Call Agreement and perform its
obligations thereunder, including the payment of the premium in respect of the
call option granted thereunder;
provided that the Company will not, and will not permit any of its Subsidiaries
to enter into or be party to, or make any payment under, any Synthetic Purchase
Agreement (other than the Call Agreement).
SECTION 6.09. Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate except
for transactions which are otherwise permitted under this Agreement and which
are in the ordinary course of the Company's or a Subsidiary's business and which
are upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than it would obtain in a hypothetical comparable arm's length
transaction with a Person not an Affiliate; provided, however, that nothing in
this Section 6.09 shall prohibit the Company or any of its Subsidiaries from
engaging in the following transactions: (i) the performance of the Company's or
such Subsidiary's obligations under any employment contract, collective
bargaining agreement, employee benefit plan, related trust agreement or any
other similar arrangement heretofore or hereafter entered into in the ordinary
course, (ii) payment of compensation to employees, officers, directors or
consultants in the ordinary course of business, (iii) maintenance of benefit
programs or arrangements for employees, officers or directors, including,
without limitation, vacation plans, health and life insurance plans, deferred
compensation plans, and retirement or savings plans and similar plans and (iv)
the provision of services and the performance of obligations
69
contemplated to be provided and performed by the Company under the PartsAmerica
Services Agreement.
SECTION 6.10. Prepayment and Amendments of Material Indebtedness.
(a) Optionally prepay, optionally retire, optionally redeem, optionally
purchase, optionally defease or optionally exchange any Senior Subordinated Debt
or the Senior Unsecured Debt (other than the refinancings of the Senior
Subordinated Debt or the Senior Unsecured Debt contemplated in the definitions
thereof) or pay any interest on the Senior Subordinated Debt or on the Senior
Unsecured Debt in cash if such interest may be paid by the issuance of
additional Senior Subordinated Debt or additional Senior Unsecured Debt,
respectively; provided, however, the Company may optionally repurchase or redeem
at any time in part or in full the Senior Subordinated Debt or the Senior
Unsecured Debt plus any accrued and unpaid interest and premiums thereon with
(i) the proceeds from an issuance of Capital Stock or (ii) at any time, so long
as (x) after giving effect to such repurchase or redemption, Availability is at
least $75,000,000 and (y) immediately prior to and after giving effect to the
Company's delivering notice of such repurchase or redemption to the holders of
such Indebtedness, no Default or Event of Default shall have occurred and be
continuing, or (b) amend, supplement or otherwise modify any documentation
governing any Senior Subordinated Debt or any Senior Unsecured Debt in a manner
adverse to the Lenders (other than (i) amendments to such Senior Subordinated
Debt or the Senior Unsecured Debt which reduce the interest rate or extend the
maturity thereof and (ii) waivers of compliance by the Company with any of the
terms or conditions of such Senior Subordinated Debt or the Senior Unsecured
Debt (except those terms or conditions which by their terms are for the benefit
of the Lenders).
SECTION 6.11. Changes in Fiscal Year. Permit the fiscal year of the
Company to end on a day other than the Sunday closest to January 31.
SECTION 6.12. Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Company is engaged on the Closing Date or which are directly
related thereto.
SECTION 6.13. Limitation on Swap Agreements. Enter into, create,
incur, assume or suffer to exist any Swap Agreements or obligations in respect
thereof except for (a) the Call Agreement and (b) in the ordinary course of
business for non-speculative purposes.
ARTICLE VII
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following events:
(a) The Company shall fail to (i) pay any principal of any Loan or
Note when due in accordance with the terms hereof or thereof or to reimburse any
Issuing Bank in accordance with Section 2.06 or (ii) pay any interest on any
Loan or Note or any other amount payable hereunder within five days after any
such interest or other amount becomes due in accordance with the terms thereof
or hereof; or
(b) Any representation or warranty made or deemed made by any Credit
Party in any Credit Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) (i) The Company shall default in the observance or performance
of any agreement contained in Section 5.07(a) or Article VI of this Agreement,
or Sections 6.9 and 6.11 of the Guarantee and Collateral Agreement; (ii)
Holdings shall default in the observance or performance of any agreement
contained in Section 6.11 of the Guarantee and Collateral Agreement or (iii) any
Subsidiary
70
shall default in the observance or performance of corresponding provisions of
the Guarantee and Collateral Agreement; or
(d) Any Credit Party shall default in the observance or performance
of any other agreement contained in any Credit Document and such default shall
continue unremedied for a period of (i) three days if such breach relates to
terms or provisions of Section 5.02 or (ii) 30 days, with respect to any other
Section of this Agreement; or
(e) Holdings, the Company or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on or other amounts in
respect of any Indebtedness (other than the Loans and the other Obligations
hereunder and any inter-company debt) or Swap Agreement or in the payment of any
Contingent Obligation, beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness, Swap Agreement or
Contingent Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness, Swap Agreement or Contingent Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Contingent Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, such Indebtedness to become due prior to its stated
maturity, any applicable grace period having expired, or such Contingent
Obligation to become payable, any applicable grace period having expired (it
being understood that a grace period that begins upon the giving of notice shall
be considered an applicable grace period and shall not be considered expired
until the notice has been given and the grace period has run); in each case,
provided that the aggregate principal amount of all such Indebtedness, Swap
Agreements and Contingent Obligations under which a payment default exists as in
(a) above or which would then become due or payable equals or exceeds
$10,000,000; or
(f) (i) The Company or any of its Subsidiaries or Holdings shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or the
Company or any of its Subsidiaries or Holdings shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Company or any of its Subsidiaries or Holdings any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Company or any of its Subsidiaries or
Holdings any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Company or any
of its Subsidiaries or Holdings shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Company or any of its
Subsidiaries or Holdings shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan
which is not otherwise exempted, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any
71
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is likely to result in the termination of such Single
Employer Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Company or any
Commonly Controlled Entity shall incur any material liability in connection with
a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan;
and in each case in clauses (i) through (v) above, such event or condition,
together with all other such events or conditions relating to a Plan, if any,
would be reasonably likely to subject the Company or any of its Subsidiaries to
any tax, penalty or other liabilities in the aggregate material in relation to
the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole; or
(h) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability (not
paid or reserved for or covered by insurance or indemnities to the extent the
Company, in its reasonable good faith judgment, believes that such judgment or
decree will be paid when due by the parties providing such indemnities) of
$10,000,000 or more and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within the time required by
the terms of such judgment; or
(i) Any Credit Document shall cease, for any reason, to be in full
force and effect or any Credit Party or any of its Subsidiaries shall so assert
in writing, or any Security Document shall cease to be effective to grant a
perfected Lien on the Collateral described therein with the priority purported
to be created thereby (other than as a result of any action or inaction on the
part of the Administrative Agent or the Lenders), subject to such exceptions as
may be permitted therein, and such condition shall continue unremedied for 30
days after notice thereof to the Company by the Administrative Agent or any
Lender; or
(j) There shall have occurred (1) a Change of Control, (2) a "change
of control" under the Senior Subordinated Note Indenture or (3) a "fundamental
change" under the Exchangeable Note Indenture; or
(k) Holdings shall engage in any business or activity other than (i)
owning the Capital Stock of the Company and activities reasonably incidental
thereto, (ii) incurring indebtedness and guarantees, (iii) making loans to
employees of the Company and its Subsidiaries of the nature of those permitted
by Sections 6.06(f), (g) and (i) or (iv) entering into and performing its
obligations in respect of the Warrant Agreement and the Call Agreement; or
(l) (i) There shall have occurred any amendment, supplement or other
modification of any of the Senior Subordinated Debt or the Senior Unsecured
Debt, or the documents governing such Senior Subordinated Debt or Senior
Unsecured Debt, which in any such case shall not have been consented to in
advance in writing by the Administrative Agent and the Required Lenders, except
(A) as otherwise expressly permitted by Section 6.10 or (B) to the extent such
amendment, supplement or modification gives effect to any prepayment, retirement
or redemption of Senior Subordinated Debt or Senior Unsecured Debt expressly
permitted by this Agreement or (ii) the subordination provisions of any document
governing any Senior Subordinated Debt shall cease, for any reason, to be valid
or any Credit Party or any of its Subsidiaries shall so assert in writing;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Company,
automatically (i) the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement, the Notes and the other Credit Documents shall immediately become due
and payable, and (ii) all obligations of the Company in respect of the Letters
of Credit, although contingent and unmatured, shall become immediately due and
payable and each Issuing Bank's obligations to issue the Letters of
72
Credit shall immediately terminate and (b) if such event is any other Event of
Default, so long as any such Event of Default shall be continuing, either or
both of the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Company, declare the
Commitments and each Issuing Bank's obligations to issue the Letters of Credit
to be terminated forthwith, whereupon the Commitments and such obligations shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice of default to the Company, (A) declare all
or a portion of the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable, and (B)
declare all or a portion of the obligations of the Company in respect of the
Letters of Credit, although contingent and unmatured, to be due and payable
forthwith, whereupon the same shall immediately become due and payable and/or
demand that the Company discharge any or all of the obligations supported by the
Letters of Credit by paying or prepaying any amount due or to become due in
respect of such obligations. All payments under this Article VII on account of
undrawn Letters of Credit shall be made by the Company directly to a cash
collateral account established by the Administrative Agent for such purpose for
application to the Company's reimbursement obligations under Section 2.06 as
drafts are presented under the Letters of Credit, with the balance, if any, to
be applied to the Company's obligations under this Agreement and the Notes as
the Administrative Agent shall determine with the approval of the Required
Lenders. Except as expressly provided above in this Article VII, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders and each Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf, including execution of the other
Credit Documents, and to exercise such powers as are delegated to the
Administrative Agent by the terms of the Credit Documents, together with such
actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Credit Parties or any Subsidiary of a
Credit Party or other Affiliate thereof as if it were not the Administrative
Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Credit Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Credit Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Credit Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Credit Party or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross
73
negligence or wilful misconduct. The Administrative Agent shall be deemed not to
have knowledge of any Default unless and until written notice thereof is given
to the Administrative Agent by the Company or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with any
Credit Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection with any Credit Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Credit Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Credit Document or any other agreement,
instrument or document, (v) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral, or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere in any Credit Document, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Company), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, each Issuing Bank and the Company.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Company, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and each Issuing Bank, appoint a successor Administrative Agent which
shall be a commercial bank or an Affiliate of any such commercial bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Company to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Company and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate,
74
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Credit Document or related agreement or any
document furnished hereunder or thereunder.
Each Lender hereby agrees that (a) it has requested a copy of each
Report prepared by or on behalf of the Administrative Agent; (b) the
Administrative Agent (i) makes no representation or warranty, express or
implied, as to the completeness or accuracy of any Report or any of the
information contained therein or any inaccuracy or omission contained in or
relating to a Report and (ii) shall not be liable for any information contained
in any Report; (c) the Reports are not comprehensive audits or examinations, and
that any Person performing any field examination will inspect only specific
information regarding the Credit Parties and will rely significantly upon the
Credit Parties' books and records, as well as on representations of the Credit
Parties' personnel and that the Administrative Agent undertakes no obligation to
update, correct or supplement the Reports; (d) it will keep all Reports
confidential and strictly for its internal use, not share the Report with any
Credit Party or any other Person except as otherwise permitted pursuant to this
Agreement; and (e) without limiting the generality of any other indemnification
provision contained in this Agreement, it will pay and protect, and indemnify,
defend, and hold the Administrative Agent and any such other Person preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including reasonable attorney fees) incurred
by as the direct or indirect result of any third parties who might obtain all or
part of any Report through the indemnifying Lender.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:
(i) if to any Credit Party, to the Company at:
CSK Auto, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
75
(ii) if to the Administrative Agent, JPMorgan Chase Bank, as
an Issuing Bank, or the Swingline Lender, to JPMorgan Chase Bank, N.A. at:
JPMorgan Chase Bank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Director
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
JPMorgan Chase Bank, N.A.
Loan and Agency Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Account Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to any other Lender or Issuing Bank, to it at its
address or facsimile number set forth in its Administrative Questionnaire.
All such notices and other communications (i) sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received or (ii) sent by facsimile shall be
deemed to have been given when sent, provided that if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications (including e-mail and
internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Company (on behalf of the
Credit Parties) may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. All such notices and other
communications (i) sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if not given during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient, and (ii) posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (b)(i) of notification that such notice or
communication is available and identifying the website address therefor.
(c) Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, any Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Credit Document shall operate as a waiver
thereof, nor shall any single or partial exercise
76
of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent, each Issuing Bank and the Lenders hereunder and under any
other Credit Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any
Credit Document or consent to any departure by any Credit Party therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, any Lender or any Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Credit Document nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Company and the Required Lenders or, (ii) in the case of any
other Credit Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Credit Party or Credit Parties that are
parties thereto, with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce or forgive the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive
any interest or fees payable hereunder, without the written consent of each
Lender directly affected thereby, (iii) postpone any scheduled date of payment
of the principal amount of any Loan or LC Disbursement, or any date for the
payment of any interest, fees or other Obligations payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
directly affected thereby, (iv) change Section 2.18(b) or (d) in a manner that
would alter the manner in which payments are shared, without the written consent
of each Lender, (v) increase the advance rates set forth in the definitions of
Availability Inventory or Available Receivables or add new categories of
eligible assets, without the written consent of no less than 66 2/3% of the
Revolving Lenders, (vi) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Credit Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender, (vii) release any Guarantor from its obligation under the Guarantee
and Collateral Agreement (except as otherwise permitted herein or in the other
Credit Documents), without the written consent of each Lender, or (viii) except
as provided in clause (c) of this Section or in any Security Document, release
all or substantially all of the Collateral, without the written consent of each
Lender; provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, any Issuing Bank or the
Swingline Lender hereunder without the prior written consent of the
Administrative Agent, such Issuing Bank or the Swingline Lender, as the case may
be. The Administrative Agent may also amend the Commitment Schedule to reflect
assignments entered into pursuant to Section 9.04
(c) The Lenders hereby irrevocably authorize the Administrative
Agent, at its option and in its sole discretion, to release any Liens granted to
the Administrative Agent by the Credit Parties on any Collateral (i) upon the
termination of the all Commitments, payment and satisfaction in full in cash of
all Secured Obligations (other than Unliquidated Obligations), and the cash
collateralization of all Unliquidated Obligations in a manner satisfactory to
each affected Lender, (ii) constituting property being sold or disposed of if
the Credit Party disposing of such property certifies to the Administrative
Agent that the sale or disposition is made in compliance with the terms of this
Agreement (and the Administrative Agent may rely conclusively on any such
certificate, without further inquiry), (iii) constituting property leased to a
Credit Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement, or (iv) as required to effect any sale or other
disposition of
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such Collateral in connection with any exercise of remedies of the
Administrative Agent and the Lenders pursuant to Article VII. Except as provided
in the preceding sentence, the Administrative Agent will not release any Liens
on Collateral without the prior written authorization of the Required Lenders;
provided that, the Administrative Agent may in its discretion, release its Liens
on Collateral valued in the aggregate not in excess of $1,000,000 during any
calendar year without the prior written authorization of the Required Lenders.
Any such release shall not in any manner discharge, affect, or impair the
Obligations or any Liens (other than those expressly being released) upon (or
obligations of the Credit Parties in respect of) all interests retained by the
Credit Parties, including the proceeds of any sale, all of which shall continue
to constitute part of the Collateral.
(d) If, in connection with any proposed amendment, waiver or consent
requiring the consent of "each Lender" or "each Lender affected thereby," the
consent of the Required Lenders is obtained, but the consent of other necessary
Lenders is not obtained (any such Lender whose consent is necessary but not
obtained being referred to herein as a "Non-Consenting Lender"), then the
Company may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Company and the
Administrative Agent shall agree, as of such date, to purchase for cash the
Loans and other Obligations due to the Non-Consenting Lender pursuant to an
Assignment and Assumption and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be
terminated as of such date and to comply with the requirements of clause (b) of
Section 9.04, and (ii) the Company shall pay to such Non-Consenting Lender in
same day funds on the day of such replacement (1) all interest, fees and other
amounts then accrued but unpaid to such Non-Consenting Lender by the Company
hereunder to and including the date of termination, including without limitation
payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2)
an amount, if any, equal to the payment which would have been due to such Lender
on the day of such replacement under Section 2.16 had the Loans of such
Non-Consenting Lender been prepaid on such date rather than sold to the
replacement Lender.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) Except as
otherwise provided herein, the Company shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication and distribution
(including, without limitation, via the internet or through a service such as
Intralinks) of the credit facilities provided for herein, the preparation and
administration of the Credit Documents or any amendments, modifications or
waivers of the provisions of the Credit Documents (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by any Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, any Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Issuing Bank or any Lender, in connection with the enforcement, collection or
protection of its rights in connection with the Credit Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit. Except as otherwise provided herein, expenses being
reimbursed by the Company under this Section include, without limiting the
generality of the foregoing, costs and expenses incurred in connection with:
(i) appraisals;
(ii) field examinations and the preparation of Reports based
on the fees charged by a third party retained by the Administrative Agent
or the internally allocated fees for
78
each Person employed by the Administrative Agent with respect to each
field examination, together with the reasonable fees and expenses
associated with collateral monitoring services performed by the
Specialized Due Diligence Group and Investment Bank ABL Portfolio
Management Group of the Administrative Agent (and the Company agrees to
modify or adjust the computation of the Borrowing Base - which may include
maintaining additional Reserves, modifying the advance rates or modifying
the eligibility criteria for the components of the Borrowing Base - to the
extent required by the Administrative Agent as a result of any such
evaluation, appraisal or monitoring);
(iii) lien and title searches and title insurance;
(iv) taxes, fees and other charges for recording the
Mortgages, filing financing statements and continuations, and other
actions to perfect, protect, and continue the Administrative Agent's
Liens;
(v) sums paid or incurred to take any action required of any
Credit Party under the Credit Documents that such Credit Party fails to
pay or take; and
(vi) forwarding loan proceeds, collecting checks and other
items of payment, and establishing and maintaining the accounts and lock
boxes, and costs and expenses of preserving and protecting the Collateral.
All of the foregoing costs and expenses may be charged to the
Company as Revolving Loans or to another deposit account, all as described in
Section 2.18(c). Notwithstanding anything to the contrary, the Company shall not
be required to reimburse the fees and expenses of more than one firm of legal
counsel in each jurisdiction.
(b) The Company shall indemnify the Administrative Agent, each
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, penalties,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of the Credit Documents or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by any Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, penalties,
liabilities or related expenses (i) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of any Indemnitee or (ii) relate to disputes
between the Lead Arranger, the Administrative Agent and/or the Lenders and/or
their respective affiliates.
(c) To the extent that the Company fails to pay any amount required
to be paid by it to the Administrative Agent, any Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, each Issuing Bank or the
79
Swingline Lender, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, penalty, liability or related expense, as
the case may be, was incurred by or asserted against the Administrative Agent,
any Issuing Bank or the Swingline Lender in its capacity as such.
(d) To the extent permitted by applicable law, no Credit Party shall
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of any Issuing Bank that issues any Letter of Credit), except that (i)
the Company may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Company without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, each Issuing Bank and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
(A) the Company, provided that no consent of the
Company shall be required for an assignment to a
Lender, an Affiliate of a Lender, an Approved Fund
or, if an Event of Default has occurred and is
continuing, any other assignee;
(B) the Administrative Agent; and
(C) each Issuing Bank.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or
an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's
Commitment or Loans of any Class, the amount of
the Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of
the date the Assignment and Assumption with
respect to such assignment is
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delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Company
and the Administrative Agent otherwise consent,
provided that no such consent of the Company shall
be required if an Event of Default has occurred
and is continuing;
(B) each partial assignment shall be made as an
assignment of a proportionate part of all the
assigning Lender's rights and obligations under
this Agreement;
(C) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and
recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an
Administrative Questionnaire.
For the purposes of this Section 9.04(b), the term "Approved Fund"
has the following meaning:
"Approved Fund" means any Person (other than a natural person) that
is engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Company, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and the Company, the
Administrative Agent, each Issuing Bank and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by
the Company, each Issuing Bank and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the assignee's
completed Administrative
81
Questionnaire (unless the assignee shall already be a Lender hereunder),
the processing and recordation fee referred to in paragraph (b) of this
Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment
and Assumption and record the information contained therein in the
Register; provided that if either the assigning Lender or the assignee
shall have failed to make any payment required to be made by it pursuant
to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the
Administrative Agent shall have no obligation to accept such Assignment
and Assumption and record the information therein in the Register unless
and until such payment shall have been made in full, together with all
accrued interest thereon. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(c) (i) Any Lender may, without the consent of the Company, the
Administrative Agent, any Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Company, the
Administrative Agent, each Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Company agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.15 or 2.17 than the applicable Lender
would have been entitled to receive with respect to the participation sold
to such Participant, unless the sale of the participation to such
Participant is made with the Company's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not
be entitled to the benefits of Section 2.17 unless the Company is notified
of the participation sold to such Participant and such Participant agrees,
for the benefit of the Company, to comply with Section 2.17(e) as though
it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations
and warranties made by the Credit Parties in the Credit Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Credit Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Credit Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative
82
Agent, any Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Credit Documents and any separate letter agreements with respect to
fees payable to the Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of any Credit Document
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions thereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Company against any of and all the Secured Obligations held by such Lender,
irrespective of whether or not such Lender shall have made any demand under the
Credit Documents and although such obligations may be unmatured. The applicable
Lender shall notify the Company and the Administrative Agent of such set-off or
application, provided that any failure to give or any delay in giving such
notice shall not affect the validity of any such set-off or application under
this Section. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) The Credit Documents (other than those containing a contrary
express choice of law provision) shall be governed by and construed in
accordance with the laws of the State of New York, but giving effect to federal
laws applicable to national banks.
(b) Each Credit Party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
United States of America Federal or New York State court sitting in New York,
New York in any action or proceeding arising out of or relating to any Credit
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be
83
heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement or any other Credit Document shall affect any
right that the Administrative Agent, any Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Credit Document against any Credit Party or its properties in the
courts of any jurisdiction.
(c) Each Credit Party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Credit
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Credit Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent,
each Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by Requirement of Law or by any subpoena or similar legal
process, (d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or any other Credit Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Credit Parties and their obligations, (g) with the consent of the Company or
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, any
84
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Company. For the purposes of this Section, "Information" means all
information received from the Company relating to the Company or its business,
other than any such information that is available to the Administrative Agent,
any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
the Company; provided that, in the case of information received from the Company
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law.
The respective obligations of the Lenders hereunder are several and not joint
and the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. Each Lender hereby represents that it is not relying on or looking to
any margin stock for the repayment of the Borrowings provided for herein.
Anything contained in this Agreement to the contrary notwithstanding, neither
any Issuing Bank nor any Lender shall be obligated to extend credit to the
Company in violation of any Requirement of Law.
SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act") hereby notifies the Company that pursuant to
the requirements of the Act, it is required to obtain, verify and record
information that identifies the Company, which information includes the name and
address of the Company and other information that will allow such Lender to
identify the Company in accordance with the Act.
SECTION 9.15. Disclosure. Each Credit Party and each Lender hereby
acknowledges and agrees that the Administrative Agent and/or its Affiliates from
time to time may hold investments in, make other loans to or have other
financial or advisory relationships with any of the Credit Parties and their
respective Affiliates.
SECTION 9.16. Appointment for Perfection. Each Lender hereby
appoints each other Lender as its agent for the purpose of perfecting Liens, for
the benefit of the Administrative Agent and the Lenders, in assets which, in
accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession. Should any Lender (other than the Administrative
Agent) obtain possession of any such Collateral, such Lender shall notify the
Administrative Agent thereof, and, promptly upon the Administrative Agent's
request therefor shall deliver such Collateral to the Administrative Agent or
otherwise deal with such Collateral in accordance with the Administrative
Agent's instructions.
SECTION 9.17. Call Agreement and Exchangeable Note Indenture.
Notwithstanding anything in any Credit Document to the contrary, the
transactions contemplated by the Call Agreement and the Exchangeable Note
Indenture shall be permitted.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
CSK AUTO, INC.
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer and
Treasurer
JPMORGAN CHASE BANK, N.A., individually,
as Administrative Agent, an Issuing Bank
and Swingline Lender
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director