Exhibit 10
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RESTATED CREDIT AGREEMENT
dated as of August 15, 1997,
Among
FURNISHINGS INTERNATIONAL INC.,
LIFESTYLE FURNISHINGS INTERNATIONAL LTD.,
THE SUBSIDIARY BORROWERS NAMED HEREIN,
THE LENDERS NAMED HEREIN
and
THE CHASE MANHATTAN BANK,
as Swingline Lender, Administrative Agent and
Collateral Agent
THE FIRST NATIONAL BANK OF CHICAGO,
as Issuing Bank and as Co-Agent
and
CIBC, as Co-Agent
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms...................................................2
SECTION 1.02. Terms Generally................................................26
ARTICLE II
The Credits
SECTION 2.01. Commitments....................................................26
SECTION 2.02. Loans..........................................................26
SECTION 2.03. Borrowing Procedure............................................28
SECTION 2.04. Evidence of Debt; Repayment of Loans...........................28
SECTION 2.05. Fees...........................................................29
SECTION 2.06. Interest on Loans..............................................30
SECTION 2.07. Default Interest...............................................30
SECTION 2.08. Alternate Rate of Interest.....................................30
SECTION 2.09. Termination and Reduction of Commitments.......................31
SECTION 2.10. Conversion and Continuation of Borrowings......................31
SECTION 2.11. [Intentionally Omitted]........................................33
SECTION 2.12. Optional Prepayment............................................33
SECTION 2.13. Mandatory Prepayments..........................................33
SECTION 2.14. Reserve Requirements; Change in Circumstances..................34
SECTION 2.15. Change in Legality.............................................35
SECTION 2.16. Indemnity......................................................36
SECTION 2.17. Pro Rata Treatment.............................................37
SECTION 2.18. Sharing of Setoffs.............................................37
SECTION 2.19. Payments.......................................................38
SECTION 2.20. Taxes..........................................................38
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty
to Mitigate..................................................40
SECTION 2.22. Swingline Loans................................................42
SECTION 2.23. Letters of Credit..............................................43
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers...........................................48
SECTION 3.02. Authorization..................................................48
SECTION 3.03. Enforceability.................................................49
SECTION 3.04. Governmental Approvals.........................................49
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SECTION 3.05. Financial Statements...........................................49
SECTION 3.06. No Material Adverse Change.....................................49
SECTION 3.07. Title to Properties; Possession Under Leases...................49
SECTION 3.08. Subsidiaries...................................................50
SECTION 3.09. Litigation; Compliance with Laws...............................50
SECTION 3.10. Agreements.....................................................51
SECTION 3.11. Federal Reserve Regulations....................................51
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.....51
SECTION 3.13. Use of Proceeds................................................51
SECTION 3.14. Tax Returns....................................................51
SECTION 3.15. No Material Misstatements......................................51
SECTION 3.16. Employee Benefit Plans.........................................52
SECTION 3.17. Environmental Matters..........................................52
SECTION 3.18. Insurance......................................................53
SECTION 3.19. Security Documents.............................................53
SECTION 3.20. Location of Real Property and Leased Premises..................54
SECTION 3.21. Labor Matters..................................................54
SECTION 3.22. Solvency.......................................................54
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events..............................................54
SECTION 4.02. Restatement Credit Event.......................................55
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties; Compliance with Laws.....58
SECTION 5.02. Insurance......................................................58
SECTION 5.03. Obligations and Taxes..........................................60
SECTION 5.04. Financial Statements, Reports, etc.............................60
SECTION 5.05. Litigation and Other Notices...................................61
SECTION 5.06. Employee Benefits..............................................61
SECTION 5.07. Maintaining Records; Access to Properties and Inspections......62
SECTION 5.08. Use of Proceeds................................................62
SECTION 5.09. Compliance with Environmental Laws.............................62
SECTION 5.10. Preparation of Environmental Reports...........................62
SECTION 5.11. Further Assurances.............................................62
SECTION 5.12. Subsidiaries...................................................63
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness...................................................63
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SECTION 6.02. Liens..........................................................65
SECTION 6.03. Sale and Lease-Back Transactions...............................67
SECTION 6.04. Investments, Loans and Advances................................67
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions......69
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends................................71
SECTION 6.07. Transactions with Affiliates...................................72
SECTION 6.08. Other Indebtedness and Agreements..............................72
SECTION 6.09. Interest Coverage Ratio........................................73
SECTION 6.10. Total Debt Ratio...............................................74
SECTION 6.11. Capital Expenditures...........................................74
SECTION 6.12. Bank Accounts..................................................74
SECTION 6.13. Business of Holdings, Borrowers and Subsidiaries...............74
SECTION 6.14. Fiscal Year....................................................75
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent and the Collateral Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices........................................................80
SECTION 9.02. Survival of Agreement..........................................80
SECTION 9.03. Binding Effect.................................................81
SECTION 9.04. Successors and Assigns.........................................81
SECTION 9.05. Expenses; Indemnity............................................84
SECTION 9.06. Right of Setoff................................................85
SECTION 9.07. Applicable Law.................................................85
SECTION 9.08. Waivers; Amendment.............................................85
SECTION 9.09. Interest Rate Limitation.......................................86
SECTION 9.10. Entire Agreement...............................................87
SECTION 9.11. WAIVER OF JURY TRIAL...........................................87
SECTION 9.12. Severability...................................................87
SECTION 9.13. Counterparts...................................................87
SECTION 9.14. Headings.......................................................88
SECTION 9.15. Jurisdiction; Consent to Service of Process....................88
SECTION 9.16. Confidentiality................................................88
SECTION 9.17. Obligations Joint and Several..................................89
SECTION 9.18. Replacement of Existing Credit Agreement.......................80
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Exhibits and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E Form of Deed of Trust
Exhibit F Form of Holdings Guarantee Agreement
Exhibit G Form of Pledge Agreement
Exhibit H Form of Security Agreement
Exhibit I Form of Subsidiary Guarantee Agreement
Exhibit J Form of Opinion of Borrower's Counsel
Exhibit K Form of Confidentiality Agreement
Exhibit L Form of Subordination, Nondisturbance and Attornment Agreement
Exhibit M Form of Note
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Schedule 1 Subsidiary Borrowers
Schedule 1.01(a) Existing Account Parties
Schedule 1.01(b) Existing Letters of Credit
Schedule 1.01(c) Mortgaged Properties
Schedule 1.01(d) Specified HFG Assets
Schedule 1.01(e) Specified HFG Companies
Schedule 2.01 Commitments
Schedule 3.07(b) Possession under Leases
Schedule 3.07(c) Condemnation Proceedings
Schedule 3.07(d) Rights of First Refusal, Options and Other Rights
Regarding Interests in Mortgaged Properties
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.19(d) Mortgage Filing Offices
Schedule 3.20(a) Owned Real Property
Schedule 3.20(b) Leased Real Property
Schedule 3.21 Labor Matters
Schedule 6.01(a) Indebtedness
Schedule 6.02(a) Liens
Schedule 6.04(m) Current Investments, Loans and Advances
Schedule 6.04(n) Customer Investments, Loans and Advances
Schedule 6.04(o) Supplier Loans and Advances
Schedule 6.07 Transactions with Affiliates
RESTATED CREDIT AGREEMENT dated as of August 15,
1997, among LIFESTYLE FURNISHINGS INTERNATIONAL LTD., a
Delaware corporation (the "Parent Borrower"); each
subsidiary of the Parent Borrower listed on Schedule 1
hereto (each, a "Subsidiary Borrower" and collectively,
the "Subsidiary Borrowers"; the Parent Borrower and the
Subsidiary Borrowers are collectively referred to
herein as the "Borrowers"); FURNISHINGS INTERNATIONAL
INC., a Delaware corporation ("Holdings"); the Lenders
(as defined in Article I); THE CHASE MANHATTAN BANK, a
New York banking corporation, as swingline lender (in
such capacity, the "Swingline Lender"), as
administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent (in
such capacity, the "Collateral Agent") for the Lenders;
THE FIRST NATIONAL BANK OF CHICAGO, as issuing bank (in
such capacity, the "Issuing Bank") and as Co-Agent; and
CIBC, as Co-Agent.
Pursuant to the Acquisition Agreement dated as of March 29, 1996, as
amended (the "Acquisition Agreement"), between Holdings and Masco
Corporation, a Delaware corporation ("Masco"), effective as of August 5, 1996
(the "Acquisition Date"), (a) Holdings acquired from Masco all the capital
stock of each of the Subsidiary Borrowers, (b) Holdings acquired through
merger the Specified HFG Companies (such term and each other capitalized term
used but not defined herein having the meaning given it in Article I), with
Holdings as the surviving corporation, and (c) all outstanding intercompany
Indebtedness of the Subsidiary Borrowers, the Specified HFG Companies and
their respective subsidiaries owed to Masco as of the Acquisition Date was
repaid in full (collectively, the "Acquisition").
In connection with the Acquisition, (a) 399 Venture Partners Inc., a
Delaware corporation ("399 Venture Partners"), together with certain
institutional investors and members of management, made a cash capital
contribution to Holdings in an aggregate amount of approximately $65,300,000
(the "Equity Contribution"), (b) Holdings contributed to the Parent Borrower
(which, in turn, contributed to LHL) all the capital stock of each of the
Subsidiary Borrowers (other than LHL), all the capital stock of the companies
referred to in Section 5.12 and the Specified HFG Assets, (c) the Parent
Borrower issued the Subordinated Notes in a public offering, (d) Holdings,
the Receivables Subsidiary and certain other Subsidiaries entered into the
Receivables Financing and (e) the Lenders made certain loans and extensions
of credit to the Borrowers in the form of (i) Tranche A Term Loans, in an
aggregate principal amount of $125,000,000, (ii) Tranche B Term Loans, in an
aggregate principal amount of $175,000,000, and (iii) a revolving credit
facility, in an aggregate principal amount at any time outstanding not in
excess of $150,000,000 pursuant to the terms of a Credit Agreement dated as
of August 5, 1996, among the Borrowers, Holdings, the Lenders, the
Administrative Agent, the Collateral Agent and Chase Manhattan Bank, as
issuing bank, as amended by the First Amendment dated as of January 30, 1997
(as so amended, the "Existing Credit Agreement"). In addition, pursuant to
the Existing Credit Agreement, the Swingline Lender agreed to extend credit
in the form of Swingline Loans in an aggregate principal amount at any time
outstanding not in excess of $25,000,000, and the original issuing bank
thereunder agreed to issue letters of credit, in an aggregate face amount
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at any time outstanding not in excess of $50,000,000, to support payment
obligations incurred in the ordinary course of business by the Borrowers and
the Subsidiaries.
The parties hereto wish to replace the Existing Credit Agreement with
this Restated Credit Agreement (the "Restated Credit Agreement") (a) to
replace the existing Tranche A Term Loans and Tranche B Term Loans and
revolving credit facility with a single revolving credit facility in an
aggregate principal amount at any time outstanding not in excess of
$400,000,000, (b) to reduce the applicable interest rates and other charges
payable under the Existing Credit Agreement, (c) to appoint The First
National Bank of Chicago as Issuing Bank and permit the issuance of
electronic and foreign-currency-denominated letters of credit and (d) to
modify certain covenants and make certain other changes as set forth herein.
For administrative convenience, and in order to reduce associated expenses,
the parties hereto have agreed to draft the Restated Credit Agreement as an
amendment and restatement of the Existing Credit Agreement. Accordingly, the
parties hereto agree that the Existing Credit Agreement is hereby amended and
restated in its entirety as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Restated Credit Agreement,
the following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"Acquired Entity" shall mean the assets, in the case of an acquisition of
assets, or the capital stock or other equity interests (or, if the context
requires, the person that is the issuer of such capital stock or other equity
interests), in the case of an acquisition of capital stock or other equity
interests, acquired by any Borrower or any Subsidiary Guarantor pursuant to a
Permitted Acquisition.
"Adjusted LIBO Rate" shall mean, 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 the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such term
in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A.
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"Affiliate" shall mean, when used 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" shall mean the aggregate amount of the
Lenders' Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) 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%. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective
Rate for any reason, including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the terms of the
definition thereof, the Alternate Base Rate shall be determined without
regard to clause (b) of the immediately preceding sentence, until the
circumstances giving rise to such inability no longer exist. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective on the effective date of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively. The
term "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime
Rate shall be effective on the date such change is publicly announced as
being effective. The term "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published 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 of the quotations for the day for
such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Alternate Currency" shall mean any currency (other than dollars)
approved by the Issuing Bank as an "Alternate Currency" hereunder.
"Alternate Currency Letter of Credit" shall mean a Letter of Credit that
provides for payments of drawings thereunder in an Alternate Currency.
"Applicable Percentage" shall mean, for any day, with respect to (a) any
Eurodollar Loan, (b) any ABR Loan or (c) the Commitment Fees, as the case may
be, the applicable percentage set forth below under the caption (i)
"Eurodollar Spread", (ii) "ABR Spread" or (iii) "Commitment Fees",
respectively, based upon the Total Debt Ratio as of the last day of the
Parent Borrower's most recently ended fiscal quarter:
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Total Debt Eurodollar ABR Commitment
Ratio Spread Spread Fees
---------- ---------- ------ ----------
Category 1
Greater than 4.00 to 1.0 1.125% 0.125% .25%
Category 2
Less than or equal to 4.00 to
1.0, but greater than 3.50 to
1.0 1.00% 0.0% .25%
Category 3
Less than or equal to 3.50 to
1.0, but greater than 3.25 to
1.0 .875% 0.0% .225%
Category 4
Less than or equal to 3.25 to
1.0, but greater than 3.00 to
1.0 .75% 0.0% .20%
Category 5
Less than or equal to 3.00 to
1.0, but greater than 2.50 to
1.0 .625% 0.0% .1875%
Category 6
Less than or equal to 2.50 to
1.0, but greater than 2.25 to
1.0 .50% 0.0% .15%
Category 7
Less than or equal to 2.25 to
1.0 .375% 0.0% .125%
Each change in the Applicable Percentage resulting from a change in the
Total Debt Ratio shall be effective with respect to all Loans and all Letters
of Credit outstanding and Commitment Fees on and after the date of delivery
to the Administrative Agent of the certificate required by Section 5.04(c)
(which shall include attached thereto the financial statements and
certificates required by Section 5.04(a) or (b)) indicating such change until
the date immediately preceding the next date of delivery of such certificate
indicating another such change. Notwithstanding the foregoing, (a) at any
time prior to December 31, 1997, the Total Debt Ratio shall be deemed to be
not less than that relating to Category 4 for purposes of determining the
Applicable Percentage and (b) (i) at any time during which the Parent
Borrower has failed to deliver such certificate required by Section 5.04(c)
and the financial statements and certificates required by Section 5.04(a) or
(b), as applicable, or (ii) at any time after the occurrence and during the
continuance of an Event of Default, the Total Debt Ratio shall be deemed to
be in Category 1 for purposes of determining the Applicable Percentage.
5
"Asset Sale" shall mean the sale, transfer or other disposition (by way
of merger or otherwise) by any Loan Party or any of the Subsidiaries to any
person other than any Loan Party or any of the Subsidiaries of (a) any
Capital Stock of any of the Subsidiaries or (b) any other assets of any Loan
Party or any of the Subsidiaries, provided that none of (i) any asset sale or
series of substantially related asset sales described in clause (b) above for
consideration, at fair market value, of less than $100,000, (ii) any sale of
accounts receivable (or any related assets) under any Permitted Receivables
Financing, (iii) any Equity Issuance or (iv) any sale, transfer or other
disposition of assets pursuant to Section 6.05(a), (b), (c), (d), (e), (g),
(h), (i) or (j) shall be deemed an "Asset Sale" for purposes of this Restated
Credit Agreement.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by
the Administrative Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" shall mean Loans of a single Type made by the Lenders on a
single date and as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by the Borrowers in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C.
"Business Day" shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
provided, however, that 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.
"Capital Expenditures" shall mean, for any period, without duplication,
the sum of the aggregate of all expenditures (whether paid in cash or other
consideration) by Holdings, the Parent Borrower and the Subsidiaries during
such period that, in accordance with GAAP, are or should be included in
"additions to property, plant or equipment" or similar items reflected in the
consolidated statement of cash flows of Holdings, the Parent Borrower and the
Subsidiaries for such period; provided, however, that Capital Expenditures
shall not include (i) expenditures relating to the development, purchase or
acquisition of sample fabric books, (ii) expenditures of proceeds of
insurance settlements, condemnation awards and other settlements in respect
of lost, destroyed, damaged or condemned assets, equipment or other property
to the extent such expenditures are made to replace or repair such lost,
destroyed, damaged or condemned assets, equipment or other property or
otherwise to acquire assets or properties useful in the business of the Loan
Parties and the Subsidiaries within 12 months of receipt of such proceeds,
(iii) with respect to any person, expenditures that are accounted for as
capital expenditures of such person and that actually are paid for by a third
party and for which neither such person nor any subsidiary of such person has
provided or is required to provide or incur, directly or indirectly, any
consideration or obligation to such third party or (iv) expenditures
constituting Permitted Acquisitions.
6
"Capital Lease Obligations" of any person shall mean an obligation of
such person that is required to be classified and accounted for as a capital
lease for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined
in accordance with GAAP.
"Capital Stock" shall mean, with respect to any person, any and all
shares, interests, rights to purchase, warrants, options, participation or
other equivalents of or interests in (however designated) equity of such
person, including any preferred stock, any limited or general partnership
interest and any limited liability company membership interest, but excluding
any debt securities convertible into such equity. For purposes of clauses
(a)(i) and (a)(ii) of the definition of the term "Change in Control" and the
definition of the term "Equity Issuance", Capital Stock of Holdings shall be
deemed to exclude the Class D Common Stock of Holdings.
"Casualty" shall have the meaning assigned to such term in the Mortgages.
A "Change in Control" shall be deemed to have occurred if:
(a) prior to an Initial Public Offering:
(i) immediately after giving effect to any transfer by
any 399 Investor of any shares of Capital Stock or
Debentures of Holdings or any issuance of additional shares
of Capital Stock of Holdings, the 399 Investors shall cease
to own shares of Capital Stock and Debentures of Holdings,
beneficially and of record, having an aggregate value
(determined as used herein by reference to (A) in the case
of common stock and convertible preferred stock, the greater
of the fair market value thereof and the original purchase
price thereof (it being understood that the original
purchase price for all the common stock and convertible
preferred stock of Holdings as of the Acquisition Date was
$5,000,000), (B) in the case of any other preferred stock,
the stated value thereof plus any accrued but unpaid
dividends thereon, and (C) in the case of Debentures, the
aggregate principal amount thereof plus any accrued but
unpaid interest thereon) at least equal to the lesser of
(x) $35 million and (y) 24% of the aggregate value of all
outstanding Capital Stock and Debentures of Holdings
(excluding any such outstanding Capital Stock or Debentures
then owned by the Management Investors);
(ii) immediately after giving effect to any transfer by
any Masco Investor of any shares of Capital Stock or
Debentures of Holdings or any issuance of additional shares
of Capital Stock of Holdings, the Masco Investors shall
cease to own shares of Capital Stock and Debentures of
Holdings, beneficially and of record, having an aggregate
value (determined as provided in clause (i) above) at least
equal to the lesser of (x) $30 million and (y) 21% of the
aggregate value of all outstanding Capital Stock and
Debentures of Holdings (excluding any such outstanding
Capital Stock or Debentures then owned by the Management
Investors);
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(iii) except in the case of any vacancy for 30 days or
less resulting from the death or resignation of any director
of Holdings, seats on the Board of Directors of Holdings
having more than 36% of the total voting power of the Board
of Directors of Holdings shall at any time be occupied by
persons who were neither (A) nominated by 399 Venture
Partners, acting on behalf of the Institutional Investors as
authorized by the Stockholders' Agreement, or by the
Nominating Committee of Holdings nor (B) appointed by
directors so nominated;
(iv) except in the case of any vacancy for 30 days or
less resulting from the death or resignation of any director
of Holdings, seats on the Nominating Committee of Holdings
having more than one-third of the total voting power of such
Nominating Committee shall at any time be occupied by
persons who were neither (A) directors nominated by 399
Venture Partners, acting on behalf of the Institutional
Investors as authorize by the Stockholders' Agreement, or by
such Nominating Committee nor (B) appointed by directors so
nominated; or
(v) 399 Venture Partners shall at any time cease to
have the right, through the ownership of voting securities,
by contract or otherwise (which may be a contractual right,
exercisable upon 399 Venture Partners's determination on
behalf of the Institutional Investors, that the
Institutional Investors may do so in compliance with
applicable law or regulation), to elect directors of
Holdings having a majority of the total voting power of the
Board of Directors of Holdings;
(b) following an Initial Public Offering:
(i) the 399 Investors shall cease to own at any time,
beneficially and of record, (A) at least 13% of the
outstanding common stock of Holdings and (B) at least 13% of
the combined voting power of all classes of Capital Stock of
Holdings;
(ii) the Masco Investors shall cease to own at any
time, beneficially and of record, (A) at least 12% of the
outstanding common stock of Holdings and (B) at least 12% of
the combined voting power of all classes of Capital Stock of
Holdings;
(iii) during any period of two consecutive years
beginning after the Acquisition Date, individuals who at the
beginning of such period constituted the Board of Directors
of Holdings (together with any new directors whose election
was approved by a majority of the directors then in office
who were either directors at the beginning of such period or
whose election was previously so approved) cease for any
reason to have a majority of the total voting power of the
Board of Directors of Holdings; or
(iv) any person or group (within the meaning of
Rule 13d-5 of the Securities Exchange Act of 1934 as in
effect on the date hereof) (other than the
8
399 Investors, the Masco Investors and the Management Investors)
shall own directly or indirectly, beneficially or of record, at any
time a percentage of the outstanding shares of common stock of
Holdings or of the combined voting power of all classes of Capital
Stock of Holdings, in either case in excess of the percentage then
owned, beneficially and of record, by the 399 Investors, the Masco
Investors and the Management Investors collectively;
(c) any change in control (or similar event, however
denominated) with respect to Holdings or the Parent Borrower
shall occur under and as defined in (i) the Masco Notes, (ii) the
Subordinated Notes, (iii) the Debentures, (iv) any class of
preferred stock of Holdings or (v) any other agreement or
instrument evidencing Indebtedness of Holdings, the Parent
Borrower or any of the Subsidiaries having, in the case of clause
(v), an aggregate principal amount in excess of $30,000,000;
(d) Holdings shall cease to own and control, directly,
beneficially and of record, 100% of the outstanding Capital Stock
of the Parent Borrower, free and clear of all Liens (other than
Liens under the Loan Documents); or
(e) the Parent Borrower shall cease to own and control,
directly or indirectly through one or more wholly owned
Subsidiaries, beneficially and of record, 100% of the outstanding
Capital Stock of each Subsidiary Borrower, free and clear of all
Liens (other than Liens under the Loan Documents), other than any
Subsidiary Borrower all the Capital Stock of which has been sold
in a transaction permitted by Section 6.05.
"Citicorp" shall mean Citicorp, a Delaware corporation.
"Class D Common Stock" shall mean the Class D Common Stock of Holdings
the dividends, voting and other rights of which are designed to track the
performance of ▇▇▇▇▇▇▇.
"Code" shall mean the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended from time to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall also include the Mortgaged Properties.
"Collateral Release Date" shall mean the first date on which any of the
following shall occur:
(a) the Parent Borrower's (i) senior unsecured rating is
either BBB- or better from S&P or Baa3 or better from ▇▇▇▇▇'▇ or
(ii) senior subordinated rating is either BB or better from S&P
or Ba2 or better from ▇▇▇▇▇'▇;
(b) the Total Debt Ratio is less than or equal to 2.50 to
1.00 as at the end of each fiscal quarter for four consecutive
fiscal quarters; or
(c) the Total Debt Ratio is less than or equal to 2.50 to
1.00 as of such date and the Parent Borrower (on behalf of the
Borrowers) has delivered a notice to the
9
Administrative Agent that it has elected to become subject to the more
restrictive Total Debt Ratio covenant referred to in Section 6.10(b) for the
remaining term of this Restated Credit Agreement.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender to make Loans hereunder and participate in Letters of Credit and
Swingline Loans in an aggregate amount at any time outstanding not in excess
of the amount opposite the name of such Lender in Schedule 2.01, or the
amount in the Assignment and Acceptance pursuant to which such Lender assumed
its Commitment, as applicable, as such amount 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.
"Commitment Fee" shall have the meaning assigned to such term in Section
2.05(a).
"Commitment Letter" shall mean the Commitment Letter dated July 21, 1997,
among Holdings, the Borrower, The Chase Manhattan Bank and Chase Securities
Inc.
"Condemnation" shall have the meaning assigned to such term in the
Mortgages.
"Condemnation Proceeds" shall have the meaning assigned to such term in
the Mortgages.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Parent Borrower dated July 1997.
"Consolidated Current Assets" shall mean, at any date of determination,
all assets (other than cash and cash-equivalents) that would, in accordance
with GAAP, be classified on a consolidated balance sheet of Holdings, the
Parent Borrower and the Subsidiaries as current assets at such date of
determination.
"Consolidated Current Liabilities" shall mean, at any date of
determination, all liabilities (other than the current portion of long-term
Indebtedness) that would, in accordance with GAAP, be classified on a
consolidated balance sheet of Holdings, the Parent Borrower and the
Subsidiaries as current liabilities at such date of determination.
"Consolidated EBITDA" shall mean, for any period, the Consolidated Net
Income for such period, plus, without duplication, to the extent deducted in
computing Consolidated Net Income, the sum of (a) income tax expense, (b)
interest expense (including interest-equivalent costs associated with any
Permitted Receivables Financing, whether accounted for as interest expense or
loss on the sale of receivables), (c) depreciation and amortization expense,
including amortization of sample fabric books, (d) any extraordinary losses,
(e) any non-cash charges or non-cash losses and (f) cash restructuring
charges minus, without duplication, to the extent added in computing such
Consolidated Net Income, (i) any extraordinary gains and (ii) any non-cash
income or any non-cash gains, all as determined on a consolidated basis with
respect to Holdings, the Parent Borrower and the Subsidiaries in accordance
with GAAP. Notwithstanding anything herein to the contrary, the aggregate
amount of cash restructuring charges added back to Consolidated Net Income in
the determination of Consolidated EBITDA for any period shall not exceed
$3,500,000.
"Consolidated Interest Expense" shall mean, for any period, the gross
interest expense accrued or paid by the Parent Borrower and the Subsidiaries
during such period, as determined
10
on a consolidated basis in accordance with GAAP, plus interest-equivalent
costs associated with any Permitted Receivables Financing, whether accounted
for as interest expense or loss on the sale of receivables, provided that for
purposes of this Restated Credit Agreement, "Consolidated Interest Expense"
shall not include (i) the Fees or expenses, or any amortization or write-offs
thereof, relating to the Transactions or the prior transactions under the
Existing Credit Agreement and (ii) penalties and premiums associated with any
prepayment of Indebtedness.
"Consolidated Net Income" shall mean, for any period, net income or loss
of Holdings, the Parent Borrower and the Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, provided that
there shall be excluded (a) the net income (or loss) of any person in which
any other person (other than Holdings, the Parent Borrower, any wholly owned
Subsidiary or any director holding qualifying shares or any Nominee
Shareholder) has an equity interest, except that (i) Holdings's, the Parent
Borrower's or such Subsidiary's equity in the net income of any such person
shall be included in determining Consolidated Net Income to the extent of the
amount of dividends, other distributions or payments in respect of loans
actually paid to Holdings, the Parent Borrower or any of the Subsidiaries, as
the case may be, by such person during such period, provided that if the
ownership of such equity interest by such other person is required by local
ownership laws in any foreign country, Holdings's, the Parent Borrower's or
such Subsidiary's equity in the net income of any such person shall be
included in determining Consolidated Net Income to the extent that cash could
have been distributed by such person during such period to Holdings, the
Parent Borrower or such Subsidiary, as the case may be, as a dividend and
(ii) Holdings's or the Parent Borrower's equity in a net loss of any such
person for such period shall be included in determining Consolidated Net
Income, (b) the net income (or loss) of any person for any period prior to
the date it becomes a Subsidiary or is merged into or consolidated with
Holdings, the Parent Borrower or any of the Subsidiaries or the date that
person's assets are acquired by Holdings, the Parent Borrower or any of the
Subsidiaries, (c) any after tax gains or losses attributable to sales of
assets out of the ordinary course of business, (d) any interest expense of
Holdings in respect of the Masco Notes or the Debentures and (e) the Fees or
expenses, or any amortization or write-offs thereof, relating to the
Transactions or the prior transactions under the Existing Credit Agreement.
"Consolidated Working Capital" shall mean, at any date of determination,
Consolidated Current Assets at such date of determination minus Consolidated
Current Liabilities at such date of determination.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"Credit Exposure" shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Loans made by such
Lender, plus the aggregate amount at such time of such Lender's L/C Exposure,
plus the aggregate amount at such time of such Lender's Swingline Exposure.
"Debentures" shall mean any debentures issued by Holdings in exchange for
shares of Preferred Stock of Holdings.
11
"Default" shall mean any event or condition that upon notice, lapse of
time or both would constitute an Event of Default.
"Disqualified Stock" shall mean, with respect to any person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of
the holder thereof, in whole or in part, in each case on or prior to
ninety-one days after the Maturity Date. Disqualified Stock shall not
include (i) Preferred Stock of Holdings or (ii) any Capital Stock that is not
otherwise Disqualified Stock if by its terms the holders thereof have the
right to require the issuer to repurchase such stock upon a change of control.
"dollars" or "$" shall mean lawful money of the United States of America.
"Dollar Equivalent" shall mean, on or as of any particular date with
respect to an amount in an Alternate Currency, the amount in dollars, as
conclusively determined by the Issuing Bank, that is required for the Issuing
Bank to purchase such Alternate Currency amount as of such date on the basis
of the spot exchange rate therefor in the interbank currency market where the
foreign currency and exchange operations of the Issuing Bank are customarily
conducted with respect to such Alternate Currency.
"Domestic Subsidiary" shall mean any Subsidiary incorporated or organized
under the laws of the United States of America, any State thereof or the
District of Columbia.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
judicial or other proceeding by any other person for damages, injunctive or
equitable relief, personal injury (including sickness, disease or death),
Remedial Action costs, property damage, natural resource damages, nuisance,
pollution, any adverse effect on the environment caused by any Hazardous
Material, or for fines, penalties or restrictions, resulting from or based
upon (a) the existence, or the continuation of the existence, of a Release
(including sudden or non-sudden, accidental or non-accidental Releases), (b)
exposure to any Hazardous Material, (c) the presence, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material or
(d) the violation or alleged violation of any Environmental Law or
Environmental Permit.
"Environmental Law" shall mean any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions or binding agreements issued, promulgated or entered
into by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the management, Release or
threatened Release of any Hazardous Material or to health and safety matters
relating to Hazardous Materials, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq.
(collectively "CERCLA"), the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C.
12
Sections 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. Sections 1251 et seq., the Clean
Air Act of 1970, as amended 42 U.S.C. Sections 7401 et seq., the Toxic
Substances Control Act of 1976, 15 U.S.C. Sections 2601 et seq., the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Sections
651 et seq. (to the extent it regulates occupational exposure to Hazardous
Material), the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. Sections 11001 et seq., the Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. Sections 300(f) et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 5101 et seq., and any similar or
implementing state or local law, and all amendments or regulations
promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance or filing required by or from any Governmental
Authority pursuant to any Environmental Law.
"Equity Issuance" shall mean any issuance or sale by Holdings of any
shares of Capital Stock of Holdings, except for (a) any issuance or sale to
the Parent Borrower or any Subsidiary, (b) sales or issuances of Capital
Stock to management or key employees of Holdings, the Parent Borrower or any
Subsidiary under any employee stock option, stock purchase, stock grant or
other similar incentive or employee benefit plan in existence from time to
time or (c) issuances of Capital Stock by Holdings upon the conversion,
exercise or exchange of any class or series of Holdings' Capital Stock
pursuant to the terms thereof as set forth in the Certificate of
Incorporation of Holdings as the same may be in effect at such time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
and the rules and regulations promulgated thereunder, as the same may be
amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with any Loan Party, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section
307 of ERISA; (c) the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (d) the filing pursuant to Section 412(d) of
the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (e) the incurrence of any
liability under Title IV of ERISA with respect to the termination of any Plan
or the withdrawal or partial withdrawal of any Loan Party or any of its ERISA
Affiliates from any Plan or Multiemployer Plan; (f) the receipt by any Loan
Party or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to the intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (g) the receipt by any Loan Party or any
ERISA Affiliate of any notice concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA;
(h) the occurrence of a "prohibited transaction" with respect to which any
Loan Party or any of its Subsidiaries is a "disqualified person" (within the
meaning of Section 4975 of the Code) or with respect to which any Loan Party
or any such Subsidiary could otherwise be liable; and (i) any other event or
condition with respect to a Plan or Multiemployer Plan or any
13
plan subject to Title IV of ERISA maintained, or contributed to, by any ERISA
Affiliate that could reasonably be expected to result in liability of any
Loan Party.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Exchange Rate Protection Agreement" shall mean any currency hedging
agreement or arrangement designed to protect the Borrowers against
fluctuations in currency exchange rates and not for speculation.
"Excluded Taxes" shall have the meaning assigned to such term in Section
2.20.
"Existing Account Parties" shall mean the Existing Account Parties, other
than the Borrowers, set forth on Schedule 1.01(a).
"Existing Letter of Credit" shall mean each letter of credit that (a) was
issued under the Existing Credit Agreement for the account of the Borrowers
or any Existing Account Party, (b) is outstanding on the Restatement
Effective Date and (c) is listed on Schedule 1.01(b).
"Fees" shall mean the Commitment Fees, the Administrative Agent Fees, the
L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer or controller of such
corporation.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis. All accounting terms shall be interpreted and all
accounting determinations hereunder shall be made in accordance with Section
1.02.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in
any manner, whether directly or indirectly, and including any obligation of
such person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment of
such Indebtedness or (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The amount of any Guarantee of
any guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of
14
the primary obligation in respect of which such Guarantee is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to
the terms of the instrument embodying such Guarantee, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Parent Borrower in good
faith.
"Guarantee Agreements" shall mean the Holdings Guarantee Agreement and
the Subsidiary Guarantee Agreement.
"Guarantors" shall mean Holdings and the Subsidiary Guarantors.
"Hazardous Materials" shall mean all explosive or radioactive substances
or wastes, hazardous or toxic substances or wastes, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls ("PCBs") or PCB-containing materials or equipment,
radon gas and all other substances, pollutants, solid, liquid or gaseous
wastes of any nature regulated pursuant to any Environmental Law.
"Holdings Guarantee Agreement" shall mean the Amended and Restated
Holdings Guarantee Agreement, substantially in the form of Exhibit H, made by
Holdings in favor of the Collateral Agent for the benefit of the Secured
Parties.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person upon which interest charges are customarily paid
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (d) all obligations of such person under
conditional sale or other title retention agreements relating to property or
assets purchased by such person, (e) all obligations of such person issued or
assumed as the deferred purchase price of property or services (excluding
trade accounts payable and accrued obligations incurred in the ordinary
course of business), (f) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed;
provided, however, that the amount of Indebtedness of such person shall be
the lesser of (i) the fair market value of such asset at such date of
determination and (ii) the amount of such Indebtedness, (g) all Guarantees by
such person of Indebtedness of others, (h) all Capital Lease Obligations of
such person, (i) all obligations of such person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest
or exchange rate hedging arrangements and (j) all obligations of such person
as an account party in respect of letters of credit and bankers' acceptances.
The Indebtedness of any person shall include the Indebtedness of any
partnership in which such person is a general partner, other than to the
extent that the instrument or agreement evidencing such Indebtedness
expressly limits the liability of such person in respect thereof.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form
of Exhibit D, among the Borrowers, the Subsidiary Guarantors and the
Collateral Agent.
15
"Initial Public Offering" shall mean a fully distributed initial public
offering of common stock of Holdings pursuant to an effective registration
statement under the Securities Act of 1933.
"Institutional Investors" shall mean 399 Venture Partners and certain
other institutional investors.
"Insurance Proceeds" shall have the meaning assigned to such term in the
Mortgages.
"Intercompany Indebtedness" shall mean any Indebtedness of (a) any Loan
Party or (b) any of the Subsidiaries, that, in any such case, is owing to any
Loan Party.
"Interest Coverage Ratio" shall have the meaning assigned to such term in
Section 6.09.
"Interest Payment Date" shall mean, with respect to any 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 that would have been an Interest
Payment Date had successive Interest Periods of three months' duration been
applicable to such Borrowing, and, in addition, the date of any prepayment of
a Eurodollar Borrowing or conversion of such Borrowing to a Borrowing of a
different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last day) in the calendar month that is 1, 2, 3 or 6 months thereafter (or 9
or 12 months if such 9- or 12-month period is consented to by each Lender),
as the applicable Borrower may elect and (b) as to any ABR Borrowing, the
period commencing on the date of such Borrowing and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December 31 and
(ii) the Maturity Date; provided, however, that 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. Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such
Interest Period.
"Interest Rate Protection Agreement" shall mean any interest rate hedging
agreement or arrangement designed to protect the Borrowers against
fluctuations in interest rates and not for speculation.
"Issuing Bank" shall mean, as the context may require, (a)(i) with
respect to Letters of Credit issued pursuant to this Restated Credit
Agreement, The First National Bank of Chicago or any successor appointed
pursuant to Section 2.23(i), and (ii) with respect to each Existing Letter of
Credit, The Chase Manhattan Bank Delaware or (b) collectively, all the
foregoing.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"Joint Venture" shall mean any person of which securities or other
ownership interests representing at least 20% but no greater than 50% of the
equity or ordinary voting power are owned, controlled or held by Holdings,
the Parent Borrower or any Subsidiary, provided that
16
neither ▇▇▇▇▇ ▇▇▇▇ Universal Flooring Co. Ltd. nor ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Product
Co. Ltd. shall be deemed a "Joint Venture" for purposes of this Restated
Credit Agreement.
"L/C Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.
"L/C Commitment Letter" shall mean the letter dated August 8, 1997,
between the Parent Borrower and The First National Bank of Chicago, as
Issuing Bank.
"L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Lender at any time shall
mean its Pro Rata Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.05(c).
"Lenders" shall mean (a) the financial institutions listed on Schedule
2.01 (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance. Unless the context clearly indicates otherwise, the term
"Lenders" shall include the Swingline Lender.
"Letter of Credit" shall mean (a) any letter of credit issued pursuant to
Section 2.23 and (b) any Existing Letter of Credit.
"LHL" shall mean LIFESTYLE HOLDINGS LTD., a Delaware corporation and a
wholly owned subsidiary of the Parent Borrower.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate 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 the Telerate 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 so 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 approximately equal in principal amount to
the Administrative Agent's portion of such Eurodollar Borrowing and for a
maturity comparable to such Interest Period are offered to 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" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a
17
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 and (c)
in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loan Documents" shall mean this Restated Credit Agreement, the Letters
of Credit, the Guarantee Agreements, the Security Documents and the
Indemnity, Subrogation and Contribution Agreement.
"Loan Parties" shall mean the Borrowers and the Guarantors.
"Loans" shall mean the loans made by the Lenders to the Borrowers
pursuant to Section 2.01. Each Loan shall be a Eurodollar Loan or an ABR
Loan.
"Management Agreement" shall mean the Management Agreement dated as of
August 5, 1996, between Holdings and the Parent Borrower, as the same may be
amended, supplemented or otherwise renewed or replaced from time to time in
accordance with the terms thereof and hereof.
"Management Investors" shall mean any officers or employees of Holdings,
the Parent Borrower or the Subsidiaries who own or acquire Capital Stock of
Holdings on or after the Acquisition Date and any of their Permitted
Transferees.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Masco" shall mean Masco Corporation, a Delaware corporation.
"Masco Investors" shall mean Masco and its Permitted Transferees.
"Masco Notes" shall mean the senior pay-in-kind notes of Holdings issued
to Masco on the Acquisition Date in the original principal amount of
$285,000,000 as heretofore or hereafter amended, restated, supplemented or
replaced, and any additional senior pay-in-kind notes or other instruments
issued pursuant to the terms thereof or in substitution thereof.
"Master Servicer" shall mean LFI Servicing Corporation or any successor
thereto or other special purpose wholly owned Subsidiary formed for purposes
of acting as a master servicer under any Permitted Receivables Financing.
"Material Adverse Effect" shall mean (a) a materially adverse effect on
the business, assets, operations, properties or financial condition of
Holdings, the Parent Borrower and the Subsidiaries, taken as a whole, (b)
material impairment of the ability of the Loan Parties to perform their
obligations under the Loan Documents or (c) material impairment of the rights
of or remedies available to the Lenders under any Loan Document.
"Maturity Date" shall mean August 15, 2003.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Mortgaged Properties" shall mean the owned real properties of the Loan
Parties specified on Schedule 1.01(c).
18
"Mortgages" shall mean the mortgages, deeds of trust, assignments of
leases and rents, modifications and other security documents, and amendments
dated the date hereof and delivered pursuant to clause (i) of Section
4.02(j), or any such mortgages, deeds of trust, assignments of leases and
rents, modifications and other security documents delivered pursuant to
Section 5.11, each (other than the amendments dated the date hereof)
substantially in the form of Exhibit E.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which any Loan Party is obligated to
contribute.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
cash proceeds thereof (including cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring person of
Indebtedness or other obligations relating to the properties or assets that
are subject to the Asset Sale or received in any other non-cash form
(collectively, "Deferred Cash")) net of (i) costs of sale (including payment
of legal, title and recording tax expenses, commissions and other fees
directly incurred in connection therewith and the outstanding principal
amount of, premium or penalty, if any, interest and other amounts on any
Indebtedness (other than Loans) required to be repaid under the terms thereof
or by applicable law as a result of such Asset Sale), (ii) taxes paid or
payable in the year such Asset Sale occurs or in the following year as a
result thereof, (iii) amounts (A) provided as a reserve, in accordance with
GAAP, against any liabilities under any indemnification obligations
associated with such Asset Sale or (B) held in escrow pursuant to an
agreement relating to such Asset Sale (provided that, to the extent and at
the time any such amounts are released from such reserve or escrow, such
amounts shall constitute Net Cash Proceeds (net of any taxes paid or
payable)) and (iv) payments to holders of minority interests in the asset
subject to such Asset Sale or in the entity selling the asset and (b) with
respect to any Equity Issuance or any issuance or other disposition of
Indebtedness for borrowed money, the cash proceeds thereof (including
Deferred Cash) net of underwriting discounts and commissions or placement
fees, attorneys' fees, accountants' fees, filing and registration fees,
trustee fees and other fees and expenses directly incurred in connection
therewith net of any taxes paid or payable as a result thereof.
"90%-Owned Foreign Subsidiary" shall mean a Foreign Subsidiary of which
securities or other ownership interests representing at least 90% of the
equity or at least 90% of the ordinary voting power are, at the time any
determination is being made, owned, controlled or held by the Parent Borrower
or any wholly owned Subsidiary or any director holding qualifying shares or
any Nominee Shareholders.
"Nominee Shareholder" shall mean any person holding shares of any person
for the benefit of the Parent Borrower or any wholly owned Subsidiary to the
extent (a) required by applicable law or (b) in the case of any Foreign
Subsidiary, advisable for legal, tax, accounting or other similar reasons,
with the consent of the Administrative Agent.
"Obligations" shall mean (a) the due and punctual payment of (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each payment required to be made by any Borrower under this Restated Credit
Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of
19
disbursements, interest thereon and obligations to provide cash collateral
and (iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or
otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding), of the Loan Parties to
the Secured Parties under this Restated Credit Agreement and the other Loan
Documents, (b) the due and punctual performance of all covenants, agreements,
obligations and liabilities of the Borrowers under or pursuant to this
Restated Credit Agreement or the other Loan Documents and (c) all obligations
of the Borrowers, monetary or otherwise, under each Exchange Rate Protection
Agreement and each Interest Rate Protection Agreement entered into with a
counterparty that was a Lender (or any Affiliate of a Lender) at the time
such Exchange Rate Protection Agreement and such Interest Rate Protection
Agreement was entered into.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the Security Agreement.
"Permitted Acquisition" shall mean any acquisition of an Acquired Entity
in which any Borrower or any Subsidiary Guarantor is (a) in the case of an
asset or stock purchase, the purchaser of assets or stock, or (b) in the case
of a merger or consolidation, the surviving entity or the owner of all the
capital stock of the surviving or resulting entity, so long as (a) such
acquisition was not preceded by an unsolicited tender offer for such Acquired
Entity by the Borrowers or any Subsidiary, (b) after giving effect to such
acquisition, (i) the Parent Borrower shall be in compliance, on a pro forma
basis, with all covenants set forth in this Restated Credit Agreement,
including the covenants contained in Sections 6.09 and 6.10 (it being
understood that any such acquisition that occurs prior to September 30, 1997,
shall be deemed to occur on September 30, 1997, for purposes of testing such
compliance), which shall be recomputed as at the last day of the most
recently ended fiscal quarter of the Parent Borrower as if such acquisition
had occurred on the first day of each relevant period for purposes of testing
such compliance, and the Parent Borrower shall have delivered to the
Administrative Agent an officers' certificate to such effect for any
acquisition in excess of $10,000,000, and (ii) on the date of such
acquisition and immediately after giving effect thereto (including the effect
of any Indebtedness incurred or assumed thereby), no Default or Event of
Default shall have occurred and be continuing and (c) in the case of an asset
acquisition, such assets are to be used, and in the case of an acquisition of
capital stock or other equity interests, the person so acquired is engaged
in, a similar or a reasonably related line of business or lines of business.
"Permitted Encumbrances" shall have the meaning assigned to such term in
the Mortgages.
"Permitted Foreign Indebtedness" shall mean Indebtedness under each loan
facility permitting borrowings by or letters of credit issued on behalf of a
Foreign Subsidiary, which may be supported by an unsecured Guarantee of any
Loan Party, a letter of credit issued for the account of any Loan Party or a
pledge of or a security interest in any assets of such Foreign Subsidiary.
"Permitted Foreign Investments" shall mean (a) any investments in, or
loans or advances to, any Foreign Subsidiary by the Parent Borrower or any
Domestic Subsidiary or
20
(b) any letters of credit or Guarantees to support Permitted Foreign
Indebtedness issued by or for the account of the Parent Borrower or any
Domestic Subsidiary. For purposes of determining the amount of any Permitted
Foreign Investment outstanding at any time, (i) the amount of any investment,
loan or advance made pursuant to clause (a) above shall equal the aggregate
amount of the consideration (whether in cash or property, valued at the time
each such investment, loan or advance is made) paid for such investment, loan
or advance (net of any return of capital or principal of (but not dividends
or interest on) such investment, loan or advance) and (ii) the amount of any
Permitted Foreign Investment pursuant to clause (b) above shall be the face
amount of any such letter of credit or Guarantee.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the
United States of America), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or
from Moody's;
(c) investments in (i) certificates of deposit, banker's
acceptances and time deposits maturing within one year from the
date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof that has a
combined capital and surplus profits of not less than
$250,000,000 or (ii) Eurocurrency time deposits maturing within
360 days from the date of acquisition thereof with any branch or
office of (A) any commercial bank organized under the laws of a
country that is a member of the Organization for Economic
Cooperation and Development, and comparable in credit quality to
the investments permitted under the preceding clause (i), or (B)
any Lender;
(d) repurchase obligations with a term of not more than 30
days for, and secured by, underlying securities of the types
described in clause (a) above entered into with a bank meeting
the qualifications described in clause (c) above;
(e) investments in securities with maturities of six months
or less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or "A-1" by Moody's;
(f) investments in money market funds complying with the
risk limiting conditions of Rule 2a-7 (or any successor rule) of
the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended;
(g) in the case of any Foreign Subsidiary, investments
comparable in credit quality and tenor to those referred to above
and customarily used by corporations for cash management purposes
in any jurisdiction outside the United States of America; and
21
(h) other investment instruments approved in writing by the
Required Lenders.
"Permitted Receivables Financing" shall mean (a) the Receivables
Financing, (b) any factoring or similar arrangement entered into by Holdings
or any Borrower from time to time and (c) any subsequent financing secured
substantially by receivables (and related assets) originated by Holdings
and/or any Borrower in any amount, provided that such financing is
non-recourse to the Parent Borrower and its Subsidiaries (other than any
Receivables Subsidiary or any Acquired Entity) except to a limited extent
customary for such financings.
"Permitted Transferee" shall mean (a) with respect to 399 Venture
Partners, (i) Citicorp or any direct or indirect wholly owned subsidiary of
Citicorp, and (ii) any officer, director or employee of 399 Venture Partners,
Citicorp or any wholly owned subsidiary of Citicorp; (b) with respect to
Masco, any direct or indirect majority owned subsidiary of Masco (provided
Masco Controls such subsidiary); and (c) with respect to any officer,
director or employee of Holdings, the Parent Borrower, any of the
Subsidiaries, 399 Venture Partners or Citicorp or any wholly owned subsidiary
of Citicorp, (i) any spouse, parent or lineal descendant (including by
adoption and stepchildren) of such officer, director or employee and (ii) any
trust, corporation or partnership a majority in interest of the
beneficiaries, stockholders or partners of which consists of such employees,
officers or directors or one or more of the persons described in clause
(c)(i).
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency
or political subdivision thereof.
"Plan" shall mean 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 307 of ERISA, and in respect of which any Loan
Party 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.
"Pledge Agreement" shall mean the Amended and Restated Pledge Agreement,
substantially in the form of Exhibit G, among Holdings, the Borrowers, the
Subsidiaries party thereto and the Collateral Agent for the benefit of the
Secured Parties.
"Preferred Stock" shall mean the preferred stock of Holdings.
"Pro Rata Percentage" of any Lender at any time shall mean the percentage
of the Total Commitment represented by such Lender's Commitment.
"Properties" shall have the meaning given such term in Section 3.17.
"Receivables Financing" shall mean (a) the sale by Holdings and certain
of the Subsidiaries of accounts receivable to the Receivables Subsidiary
pursuant to the Receivables Sale Agreement, (b) the sale of such accounts
receivable (or participation interests therein) by the Receivables Subsidiary
pursuant to the Receivables Pooling Agreement and (c) the servicing of such
accounts receivable pursuant to the Receivables Servicing Agreement.
"Receivables Pooling Agreement" shall mean the Pooling Agreement relating
to the Receivables Financing, among the Receivables Subsidiary, the Master
Servicer and the Receivables Trustee, as amended, restated, supplemented or
replaced from time to time.
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"Receivables Sale Agreement" shall mean the Receivables Sale Agreement
relating to the Receivables Financing, among the Receivables Subsidiary,
Holdings and the Subsidiaries party thereto, as amended, restated,
supplemented or replaced from time to time.
"Receivables Servicing Agreement" shall mean the Master Servicing
Agreement relating to the Receivables Financing, among the Receivables
Subsidiary, the Master Servicer, Holdings, the Subsidiaries party thereto and
the Receivables Trustee, as amended, restated, supplemented or replaced from
time to time.
"Receivables Subsidiary" shall mean LFI Receivables Corporation or any
successor thereto or other bankruptcy-remote, special-purpose wholly owned
Subsidiary formed for purposes of a Permitted Receivables Financing.
"Receivables Trustee" shall mean the trustee on behalf of the holders of
participation interests in the receivables sold pursuant to the Permitted
Receivables Financing.
"Refinancing Indebtedness" shall have the meaning given such term is
Section 6.01(r).
"Register" shall have the meaning given such term in Section 9.04(d).
"Regulation G" shall mean Regulation G of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i)
cleanup, remove, treat, ▇▇▇▇▇ or in any other way address any Hazardous
Material in the environment; (ii) prevent the Release or threat of Release,
or minimize the further Release of any Hazardous Material so it does not
migrate or endanger or threaten to endanger public health, welfare or the
environment; or (iii) perform studies and investigations in connection with,
or as a precondition to, (i) or (ii) above.
"Required Lenders" shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), L/C Exposures, Swingline Exposures and unused
Commitments representing more than 50% of the sum of all Loans outstanding
(excluding Swingline Loans), the L/C Exposure, the Swingline Exposure and
unused Total Commitments at such time.
"Responsible Officer" of any corporation shall mean any executive officer
or Financial Officer of such corporation and any other officer or similar
official thereof responsible for the administration of the obligations of
such corporation in respect of this Restated Credit Agreement.
23
"Restatement Effective Date" shall have the meaning assigned to such
term in Section 4.02.
"Restricted Payment" shall mean, without duplication, (a) all
investments, loans or advances made by the Parent Borrower or any Subsidiary
in or to Holdings, other than those specifically permitted by Section
6.04(b)(i), (ii), (iii) and (iv); (b) all dividends, distributions and
repurchases of stock by the Parent Borrower or any Subsidiary, other than
those specifically permitted by Section 6.06(a)(i) through 6.06(a)(iii)
(other than any such payment or distribution that is made under Section
6.06(a)(ii) in reliance on Section 6.04(b)(v)); and (c) all payments by the
Parent Borrower or any Subsidiary that would be prohibited by Section 6.08
but for the exception in Section 6.08(b)(ii).
"Restricted Payments Basket" shall mean a cumulative amount equal to (a)
the sum of:
(i) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the Acquisition
Date to the end of the most recent fiscal quarter for which
financial statements have been delivered pursuant to and in
accordance with Section 5.04 (or, in the event that such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit); plus
(ii) the aggregate Net Cash Proceeds received by the Parent
Borrower or any Subsidiary as capital contributions or from the
issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Acquisition Date (other than an issuance
or sale to a Subsidiary or an employee stock ownership plan or
other trust established by the Parent Borrower or any Subsidiary
to the extent the purchase by such plan or trust is financed by
Indebtedness of such plan or trust and for which the Parent
Borrower or Subsidiary is liable, directly or indirectly, as a
guarantor or otherwise (including by the making of cash
contributions to such plan or trust which are used to pay
interest or principal on such Indebtedness)); plus
(iii) upon any Restricted Payment Election under
Section 6.05(f), up to 50% of the Net Cash Proceeds received by
the Parent Borrower or any Subsidiary from Asset Sales not
prohibited by this Restated Credit Agreement, subject to the
requirements of Section 6.05(f),
minus (b) the cumulative amount, without duplication, of all Restricted
Payments made by the Borrowers during the period (treated as one accounting
period) subsequent to the Acquisition Date.
"S&P" shall mean Standard and Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc., and its successors.
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
"Security Agreement" shall mean the Amended and Restated Security
Agreement, substantially in the form of Exhibit H, among Holdings, the
Borrowers, the Subsidiaries party thereto and the Collateral Agent for the
benefit of the Secured Parties.
"Security Documents" shall mean the Mortgages, the Security Agreement,
the Pledge Agreement and each of the security agreements, mortgages and other
instruments and
24
documents executed and delivered pursuant to any of the foregoing or
pursuant to Section 5.11.
"Significant Foreign Subsidiary" shall mean, at any date of
determination, a Foreign Subsidiary with respect to which the sum of (a) such
Foreign Subsidiary's net worth, as determined in accordance with GAAP plus
(b) the aggregate amount of outstanding advances to such Foreign Subsidiary
from Holdings, the Parent Borrower or any Subsidiary as of the last day of
the most recent fiscal period for which financial statements have been
delivered pursuant to Section 5.04(a) or (b) is equal to or greater than
$4,000,000.
"▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇ Upholstered Furniture Corporation, a
Delaware corporation and a wholly owned subsidiary of Holdings.
"Specified HFG Assets" shall mean the assets of the Specified HFG
Companies set forth on Schedule 1.01(d).
"Specified HFG Companies" shall mean the corporations set forth on
Schedule 1.01(e).
"Statutory Reserves" shall mean 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 or successor banking authority to which the
Administrative Agent is subject with respect to the Adjusted LIBO Rate for
Eurocurrency Liabilities (as defined 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 Liabilities
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. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Stockholders' Agreement" shall mean the Stockholders' Agreement dated as
of the Acquisition Date hereof, among Holdings, Masco, the Institutional
Investors and the Management Investors, as the same may be amended, restated,
supplemented or otherwise renewed or replaced from time to time in accordance
with the terms thereof and hereof.
"Subordinated Notes" shall mean the 10-7/8% Senior Subordinated Notes due
2006 issued on the Acquisition Date in the aggregate principal amount of
$200,000,000 and shall include any substantially identical notes issued in
exchange therefor after the Acquisition Date, pursuant to the indenture
governing such notes.
"subsidiary" shall mean, with respect to any person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held, or (b) that is, at
the time any determination is made, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent, provided that the term "subsidiary", when used in
respect of Holdings, the Parent Borrower or any of its subsidiaries,
25
shall not include any foreign joint venture in which Holdings, the Parent
Borrower or any such subsidiary owns less than or equal to 50% of the equity
interest in such joint venture.
"Subsidiary" shall mean any subsidiary of the Parent Borrower.
"Subsidiary Guarantee Agreement" shall mean the Amended and Restated
Subsidiary Guarantee Agreement, substantially in the form of Exhibit I, made
by the Subsidiary Guarantors in favor of the Collateral Agent for the benefit
of the Secured Parties.
"Subsidiary Guarantor" shall mean each Subsidiary that is or becomes a
party to a Subsidiary Guarantee Agreement.
"Swingline Commitment" shall mean the commitment of the Swingline Lender
to make loans pursuant to Section 2.22, as the same may be reduced from time
to time pursuant to Section 2.09 .
"Swingline Exposure" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline
Exposure of any Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.
"Swingline Loan" shall mean any loan made by the Swingline Lender
pursuant to Section 2.22(a).
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement dated as of
the Acquisition Date, among Holdings, the Parent Borrower, the Receivables
Subsidiary and ▇▇▇▇▇▇▇, as the same may be amended, restated, supplemented or
otherwise renewed or replaced from time to time in accordance with the terms
thereof and hereof.
"399 Investors" shall mean 399 Venture Partners and its Permitted
Transferees.
"Total Commitment" shall mean, at any time, the aggregate amount of the
Lenders' Commitments, as in effect at such time.
"Total Debt" shall mean, at any time, all Indebtedness of the Parent
Borrower and its Subsidiaries of the type referred to in clauses (a), (b),
(c), (e), (h) and (j) (provided that obligations in respect of letters of
credit shall not be included in Total Debt except to the extent of any
unreimbursed drawings thereunder) of the definition of the term
"Indebtedness".
"Total Debt Ratio" shall mean, as of any date, the ratio of (a) Total
Debt as of the last day of the fiscal quarter most recently ended as of such
date to (b) Consolidated EBITDA for the period of four fiscal quarters most
recently ended as of such date.
"Tranche A Term Loans" shall have the meaning assigned to such term in
the preamble to this Restated Credit Agreement.
"Tranche B Term Loans" shall have the meaning assigned to such term in
the preamble to this Restated Credit Agreement.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
26
"Transition Services Agreement" shall mean the Transition Services
Agreement dated as of the Acquisition Date, between Holdings and Masco, as
amended, supplemented or otherwise renewed or replaced from time to time in
accordance with the terms thereof and hereof.
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall
include the Adjusted LIBO Rate and the Alternate Base Rate.
"wholly owned subsidiary" of any person shall mean a subsidiary of such
person of which securities or other ownership interests representing 100% of
the equity or 100% of the ordinary voting power or 100% of the general
partnership interests are, at the time any determination is being made,
owned, controlled or held by such person or one or more wholly owned
subsidiaries of such person or by any director holding qualifying shares or
any Nominee Shareholder. The term "wholly owned", when used to modify the
term "Subsidiary" or "Domestic Subsidiary", shall have a correlative meaning.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both 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". All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Restated Credit Agreement unless the context
shall otherwise require. Except as otherwise expressly provided herein, (a)
any reference in this Restated Credit Agreement to any Loan Document shall
mean such document as amended, restated, supplemented or otherwise modified
from time to time, (b) all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time;
provided, however, that for purposes of determining compliance with the
covenants contained in Article VI, all accounting terms herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP as in effect on the date of this Restated Credit
Agreement and applied on a basis consistent with the application used in the
financial statements referred to in Section 3.05(a) and (c) (i) all
references herein to Holdings on an unconsolidated basis shall be deemed to
exclude any investment by Holdings in any of its subsidiaries and (ii) all
financial terms and all financial statements with respect to Holdings, the
Parent Borrower and the Subsidiaries on a consolidated basis shall exclude
▇▇▇▇▇▇▇.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Loans to the Borrowers, at any
time and from time to time on or after the date hereof, and until the earlier
of the Maturity Date and the termination of the Commitment of
27
such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) such Lender's
Credit Exposure exceeding (ii) such Lender's Commitment. Within the limits
set forth in the immediately preceding sentence and subject to the terms,
conditions and limitations set forth herein, the Borrowers may borrow, pay or
prepay and reborrow Loans.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall
be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their respective Commitments; provided, however,
that the failure of any Lender to make any Loan shall not in itself relieve
any other Lender of its obligation to lend hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other
Lender to make any Loan required to be made by such other Lender). Except
for Loans deemed made pursuant to Section 2.02(f) and Swingline Loans, the
Loans comprising any Borrowing shall be in an aggregate principal amount that
is (i) not less than $5,000,000 (in the case of Eurodollar Borrowings) and
$1,000,000 (in the case of ABR Borrowings) and, in each case, in an integral
multiple of $1,000,000 or (ii) equal to the remaining available balance of
the applicable Commitment.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the applicable Borrower may
request pursuant to Section 2.03. Each Lender may at its option 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 Borrowers to repay such Loan in
accordance with the terms of this Restated Credit Agreement. Borrowings of
more than one Type may be outstanding at the same time; provided, however,
that the Borrowers shall not be entitled to request any Borrowing that, if
made, would result in more than twelve Eurodollar Borrowings outstanding
hereunder at any time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in
New York City as the Administrative Agent may designate not later than 12:00
(noon), New York City time, and the Administrative Agent shall by 1:00 p.m.,
New York City time, credit the amounts so received to an account in the name
of the Parent Borrower (acting as agent for and on behalf of itself and the
Subsidiary Borrowers), maintained with the Administrative Agent and
designated in the applicable Borrowing Request or, if a Borrowing shall not
occur on such date because any condition precedent herein specified shall not
have been met, return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing
in accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on
such date a corresponding amount. If the Administrative Agent shall have so
made funds available then, to the extent that such Lender shall not have made
such portion available to the Administrative Agent, such Lender and the
Borrowers severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
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from the date such amount is made available to the Borrowers until the date
such amount is repaid to the Administrative Agent at (i) in the case of the
Borrowers, the interest rate applicable at the time to the Loans comprising
such Borrowing and (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent manifest error). If such
Lender shall repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Restated Credit Agreement.
(e) Notwithstanding any other provision of this Restated Credit
Agreement, the Borrowers shall not be entitled to request any Borrowing if
the Interest Period requested with respect thereto would end after the
Maturity Date.
(f) If the Issuing Bank shall not have received from the Borrowers the
payment required to be made by Section 2.23(e) within the time specified in
such Section, the Issuing Bank will promptly notify the Administrative Agent
of the L/C Disbursement and the Administrative Agent will promptly notify
each Lender of such L/C Disbursement and its Pro Rata Percentage thereof.
Each Lender shall pay by wire transfer of immediately available funds to the
Administrative Agent not later than 2:00 p.m., New York City time, on such
date (or, if such Lender shall have received such notice later than 12:00
(noon), New York City time, on any day, not later than 10:00 a.m., New York
City time, on the immediately following Business Day), an amount equal to
such Lender's Pro Rata Percentage of such L/C Disbursement (it being
understood that such amount shall be deemed to constitute an ABR Loan of such
Lender and such payment shall be deemed to have reduced the L/C Exposure),
and the Administrative Agent will promptly pay to the Issuing Bank amounts so
received by it from the Lenders. The Administrative Agent will promptly pay
to the Issuing Bank any amounts received by it from the Borrowers pursuant to
Section 2.23(e) prior to the time that any Lender makes any payment pursuant
to this paragraph (f); any such amounts received by the Administrative Agent
thereafter will be promptly remitted by the Administrative Agent to the
Lenders that shall have made such payments and to the Issuing Bank, as their
interests may appear. If any Lender shall not have made its Pro Rata
Percentage of such L/C Disbursement available to the Administrative Agent as
provided above, such Lender and the Borrowers severally agree to pay interest
on such amount, for each day from and including the date such amount is
required to be paid in accordance with this paragraph to but excluding the
date such amount is paid, to the Administrative Agent for the account of the
Issuing Bank at (i) in the case of the Borrowers, a rate per annum equal to
the interest rate applicable to Loans pursuant to Section 2.06(a), and (ii)
in the case of such Lender, for the first such day, the Federal Funds
Effective Rate, and for each day thereafter, the Alternate Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing
(other than a Swingline Loan or a deemed Borrowing pursuant to Section
2.02(f), as to which this Section 2.03 shall not apply), the applicable
Borrower shall notify the Administrative Agent by telephone of its intent to
request a Borrowing and shall hand deliver or telecopy to the Administrative
Agent a duly completed Borrowing Request (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days
before a proposed Borrowing, and (b) in the case of an ABR Borrowing, not
later than 12:00 noon, New York City time, one Business Day before a proposed
Borrowing. Each Borrowing Request shall be irrevocable, shall be signed by
or on behalf of the applicable Borrower and shall specify the following
information: (i) whether the Borrowing then being requested is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing
(which shall be a Business Day), (iii) the number and location of the account
to which funds are to be
29
disbursed (which shall be an account that complies with the requirements of
Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if such
Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto; provided, however, that, notwithstanding any contrary specification
in any Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall
be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the applicable Borrower shall
be deemed to have selected an Interest Period of one month's duration. The
Administrative Agent shall promptly advise the applicable Lenders of any
notice given pursuant to this Section 2.03 (and the contents thereof), and of
each Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrowers,
jointly and severally, unconditionally promise to pay to the Administrative
Agent for the account of each Lender (i) the then unpaid principal amount of
each Swingline Loan, on the last day of the Interest Period applicable to
such Loan or, if earlier, on the Maturity Date, and (iii) the then unpaid
principal amount of each Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid such Lender
from time to time under this Restated Credit Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the 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 Borrowers to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from the Borrowers or any Guarantor and each
Lender's share thereof. Notwithstanding any other provision of this Restated
Credit Agreement, it is understood and agreed that each Loan made hereunder
shall be deemed made for the account of all the Borrowers, jointly and
severally, and the Administrative Agent and the Lenders shall not have any
obligation to maintain any accounts with respect to any Borrowing (or any
portion thereof) made by any individual Borrower.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts
of the obligations therein recorded; provided, however, 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 obligations of the Borrowers to
repay the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Restated Credit
Agreement, in the event any Lender shall request and receive a promissory
note payable to such Lender and its registered assigns, the interests
represented by such note shall at all times (including after any assignment
of all or part of such interests pursuant to Section 9.04) be represented by
one or more promissory notes payable to the payee named therein or its
registered assigns.
SECTION 2.05. Fees. (a) The Borrowers agree to pay to the
Administrative Agent (for the benefit of each Lender), on the last day of
March, June, September and December in each year, on each date on which the
Commitment of such Lender shall expire or be terminated or reduced as
provided herein and on the Maturity Date, a commitment fee (a "Commitment
Fee") on the average daily unused amount of the Commitment of such Lender
30
(other than the Swingline Commitment) during the preceding quarter (or
applicable shorter period) at a rate per annum equal to the Applicable
Percentage. All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. The Commitment Fee due to each
Lender shall commence to accrue on the Restatement Effective Date and shall
cease to accrue on the date on which the Commitment of such Lender shall
expire or be terminated as provided herein or on the Maturity Date. For
purposes of calculating Commitment Fees only, no portion of the Commitments
shall be deemed utilized under Section 2.17 as a result of outstanding
Swingline Loans.
(b) The Borrowers agree to pay to the Administrative Agent, for its own
account, the administration fee set forth in the Commitment Letter at the
times and in the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrowers agree to pay (i) to the Administrative Agent (for the
benefit of each Lender), on the last day of March, June, September and
December of each year, on the date on which the Commitment of such Lender
shall be terminated as provided herein and on the Maturity Date, a fee (an
"L/C Participation Fee") calculated on such Lender's Pro Rata Percentage of
the average daily aggregate L/C Exposure (excluding the portion thereof
attributable to unreimbursed L/C Disbursements) during the preceding quarter
(or applicable shorter period) at a rate equal to the Applicable Percentage
from time to time used to determine the interest rate on Revolving Credit
Borrowings comprised of Eurodollar Loans pursuant to Section 2.06, and (ii)
to the Issuing Bank with respect to each Letter of Credit the fronting fees,
payable on the last day of March, June, September and December of each year,
the date on which the Commitment shall be terminated as provided herein and
on the Maturity Date, set forth in the L/C Commitment Letter plus, in
connection with the issuance, amendment or transfer of any Letter of Credit
or any L/C Disbursement, the agreed-upon documentary and processing charges
as set forth in the L/C Commitment Letter (collectively, the "Issuing Bank
Fees"). All L/C Participation Fees and Issuing Bank Fees shall be computed
on the basis of the actual number of days elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly
to the Issuing Bank, and except as set forth in the Commitment Letter.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing, including each
Swingline Loan, shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be,
when the Alternate Base Rate is determined by reference to the Prime Rate and
over a year of 360 days at all other times) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Percentage with respect to ABR Loans
in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Percentage with respect to Eurodollar Loans in effect
from time to time.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Restated
Credit Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate
for each Interest Period or day within an Interest
31
Period, as the case may be, shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrowers shall default in the
payment of the principal of, or interest on, any Loan or any other amount
becoming due hereunder, by acceleration or otherwise, or under any other Loan
Document, the Borrowers agree to pay on demand from time to time interest, to
the extent permitted by law, on such defaulted amount to but excluding the
date of actual payment (after as well as before judgment) (a) in the case of
overdue principal, at the rate otherwise applicable to such Loan pursuant to
Section 2.06 plus 2.00% per annum and (b) in all other cases, at a rate per
annum (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as the case may be, when the Alternate Base Rate
determined by reference to the Prime Rate and over a year of 360 days at all
other times) equal to the sum of the Alternate Base Rate plus 2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on or before the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent shall have determined, or shall have been advised by the
Required Lenders or the applicable Lender required to make a Eurodollar Loan,
that dollar deposits in the principal amounts of the Loans comprising such
Borrowing are not generally available in the London interbank market, or that
the rates at which such dollar deposits are being offered will not adequately
and fairly reflect the cost to any Lender of making or maintaining its
Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent
shall, as soon as practicable thereafter, give written or telecopy notice of
such determination to the Borrowers and the Lenders. In the event of any
such determination, until the Administrative Agent shall have advised the
Borrowers and the Lenders that the circumstances giving rise to such notice
no longer exist, any request by the Borrowers for a Eurodollar Borrowing
pursuant to Section 2.03 or 2.10 shall be deemed to be a request for an ABR
Borrowing, provided that if the circumstances giving rise to such
determination do not affect all the Lenders, then requests by the Borrowers
for Eurodollar Borrowings may be made to Lenders that are not affected
thereby and such unaffected Lender shall remain obligated to make the
Eurodollar Loan contained in such request on the terms and subject to the
conditions set forth in this Restated Credit Agreement. Each determination
by the Administrative Agent hereunder shall be conclusive absent manifest
error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The
Commitments, the Swingline Commitment and the L/C Commitment shall
automatically terminate on the Maturity Date. Notwithstanding the foregoing,
all the Commitments shall automatically terminate at 5:00 p.m., New York City
time, on September 30, 1997, if the Restatement Effective Date shall not have
occurred by such time.
(b) Upon at least three Business Days' prior irrevocable notice to the
Administrative Agent given by telephone (promptly confirmed by written or
telecopy notice), the Borrowers may at any time in whole permanently
terminate, or from time to time in part permanently reduce the Commitments;
provided, however, that (i) each partial reduction of the Commitments shall
be in an integral multiple of $1,000,000 and in a minimum amount of
$5,000,000 and (ii) the Total Commitment shall not be reduced to an amount
that is less than the Aggregate Credit Exposure at the time.
(c) On or prior to August 15, 2002, the Borrowers shall permanently
reduce the Total Commitments to an aggregate amount not greater than
$325,000,000.
32
(d) Not less than one year following receipt by the Parent Borrower or
any Subsidiary of any Net Cash Proceeds from any Asset Sale, the Borrowers
shall permanently reduce the Commitments by an amount equal to 50% of such
Net Cash Proceeds, but only as and to the extent provided in Section 6.05(f).
(e) Each reduction in the Total Commitment hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments.
The Borrowers shall pay to the Administrative Agent for the account of the
applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to but excluding the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The applicable
Borrower shall have the right at any time upon prior irrevocable notice to
the Administrative Agent given by telephone (promptly confirmed by written or
telecopy notice) (a) not later than 12:00 (noon), New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 11:00 a.m., New York City time, three
Business Days prior to conversion or continuation, to convert any ABR
Borrowing into a Eurodollar Borrowing or to continue any Eurodollar Borrowing
as a Eurodollar Borrowing for an additional Interest Period, and (c) not
later than 11:00 a.m., New York City time, three Business Days prior to
conversion, to convert the Interest Period with respect to any Eurodollar
Borrowing to another permissible Interest Period, subject in each case to the
following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued
Borrowing;
(ii) if less than all the outstanding principal amount of
any Borrowing shall be converted or continued, then each
resulting Borrowing shall satisfy the limitations specified in
Sections 2.02(a) and 2.02(b) regarding the principal amount and
maximum number of Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and
the Administrative Agent by recording for the account of such
Lender the new Loan of such Lender resulting from such conversion
and reducing the Loan (or portion thereof) of such Lender being
converted by an equivalent principal amount; accrued interest on
any Eurodollar Loan (or portion thereof) being converted shall be
paid by the Borrowers at the time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time
other than the end of the Interest Period applicable thereto, the
Borrowers shall pay, upon demand, any amounts due to the Lenders
pursuant to Section 2.16;
(v) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or
continued as a Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by reason
of the immediately preceding clause shall be automatically
converted at the end of the Interest Period in effect for such
Borrowing into an ABR Borrowing; and
33
(vii) upon notice to the Borrowers from the Administrative
Agent given at the request of the Required Lenders, after the
occurrence and during the continuance of a Default or Event of
Default, no outstanding Loan may be converted into, or continued
as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Restated Credit Agreement and specify (i) the identity and
amount of the Borrowing that the applicable Borrower requests be converted or
continued, (ii) whether such Borrowing is to be converted to or continued as
a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and
(iv) if such Borrowing is to be converted to or continued as a Eurodollar
Borrowing, the Interest Period with respect thereto. If no Interest Period
is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the applicable Borrower shall be
deemed to have selected an Interest Period of one month's duration. The
Administrative Agent shall advise the Lenders of any notice given pursuant to
this Section 2.10 and of each Lender's portion of any converted or continued
Borrowing. If the applicable Borrower shall not have given notice in
accordance with this Section 2.10 to continue any Eurodollar Borrowing into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such Borrowing
shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be converted into an ABR
Borrowing.
SECTION 2.11. [Intentionally Omitted].
SECTION 2.12. Optional Prepayment. (a) The Borrowers shall have the
right at any time and from time to time to prepay any Borrowing, in whole or
in part, upon at least one Business Day's prior notice (in the case of an ABR
Borrowing) and three Business Days' prior notice (in the case of a Eurodollar
Borrowing) to the Administrative Agent given by telephone (promptly confirmed
by written or telecopy notice) before 11:00 a.m., New York City time;
provided, however, that each partial prepayment shall be in an amount that is
an integral multiple of $1,000,000 and not less than $5,000,000 (in the case
of repayments of Eurodollar Borrowings) and $1,000,000 (in the case of
repayments of ABR Borrowings).
(b) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the Borrowers to prepay such Borrowing by the
amount stated therein on the date stated therein. All prepayments under this
Section 2.12 shall be subject to Section 2.16 but otherwise without premium
or penalty. All prepayments of Eurodollar Borrowings under this Section 2.12
shall be accompanied by accrued interest on the principal amount being
prepaid to the date of payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any
termination of all the Commitments, the Borrowers shall repay or prepay all
outstanding Borrowings and all outstanding Swingline Loans on the date of
such termination. In the event of any partial reduction of the Commitments,
then (i) at or prior to the effective date of such reduction, the
Administrative Agent shall notify the Borrowers and the Lenders of the
Aggregate Credit Exposure after giving effect thereto and (ii) if the
Aggregate Credit Exposure would exceed the Total Commitment after giving
effect to such reduction or termination, then the Borrowers shall, on the
date of such reduction or termination, repay or prepay Borrowings or
Swingline Loans (or a combination thereof) in an amount sufficient to
eliminate such excess. If following any reduction of the Total Commitment and
any payments required pursuant to this
34
Section 2.13(a), the Total Commitment is less than the aggregate L/C
Exposure, the Borrowers shall, on the date of such reduction, provide cash
collateral, in accordance with Section 2.23(j), in an amount equal to the
amount by which the aggregate L/C Exposure exceeds the Total Commitment upon
such date of reduction.
(b) The Borrowers shall deliver to the Administrative Agent, at the time
of each prepayment required under this Section 2.13, (i) a certificate signed
by a Financial Officer of the Parent Borrower setting forth in reasonable
detail the calculation of the amount of such prepayment and (ii) to the
extent reasonably practicable, at least three days prior written notice of
such prepayment. Each notice of prepayment shall specify the prepayment
date, the Type of each Loan being prepaid, the principal amount of each Loan
(or portion thereof) to be prepaid and the amount, if any, to be deposited in
the Prepayment Account. All prepayments of Borrowings under this Section
2.13 shall be subject to Section 2.13(c) and Section 2.16, but shall
otherwise be without premium or penalty. All prepayments of Eurodollar
Borrowings under this Section 2.13 shall be accompanied by accrued interest
on the principal amount being prepaid to the date of payment.
(c) Amounts to be applied pursuant to this Section 2.13 to the prepayment
of Loans shall be applied, as applicable, first to reduce outstanding ABR
Loans. Any amounts remaining after each such application shall, at the
option of the Parent Borrower, be applied to prepay Eurodollar Loans,
immediately and/or shall be deposited in the Prepayment Account (as defined
below). The Administrative Agent shall apply any cash deposited in the
Prepayment Account to prepay Eurodollar Loans, in each case on the last day
of their respective Interest Periods (or, at the direction of the Parent
Borrower, on any earlier date) until all outstanding Loans have been prepaid
or until all the allocable cash on deposit with respect to such Loans has
been exhausted. For purposes of this Restated Credit Agreement, the term
"Prepayment Account" shall mean an account established by the Parent Borrower
with the Administrative Agent and over which the Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal for application in accordance with this paragraph (c). The
Administrative Agent will, at the request of the Parent Borrower, invest
amounts on deposit in the Prepayment Account in Permitted Investments that
mature prior to the last day of the applicable Interest Periods of the
Eurodollar Borrowings to be prepaid; provided, however, that (i) the
Administrative Agent shall not be required to make any investment that, in
its sole judgment, would require or cause the Administrative Agent to be in,
or would result in any, violation of any law, statute, rule or regulation and
(ii) the Administrative Agent shall have no obligation to invest amounts on
deposit in the Prepayment Account if a Default or Event of Default shall have
occurred and be continuing. The Administrative Agent shall provide to the
Parent Borrower statements with regard to the Prepayment Account in
accordance with the Administrative Agent's customary practice. The Borrowers
shall indemnify the Administrative Agent for any losses relating to the
investments so that the amount available to prepay Eurodollar Borrowings on
the last day of the applicable Interest Period is not less than the amount
that would have been available had no investments been made pursuant hereto.
Other than any interest earned on such investments, the Prepayment Account
shall not bear interest. Interest or profits, if any, on such investments
shall be deposited in the Prepayment Account and reinvested and disbursed as
specified above. If the maturity of the Loans has been accelerated pursuant
to Article VII, the Administrative Agent may, in its sole discretion, apply
all amounts on deposit in the Prepayment Account to satisfy any of the
Obligations. The Borrowers hereby grant to the Administrative Agent, for its
benefit and the benefit of the Issuing Bank, the Swingline Lender and the
Lenders, a security interest in the Prepayment Account to secure the
Obligations.
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SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Restated Credit Agreement, if
after the date of this Restated Credit Agreement any change in applicable law
or regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law) shall change the basis of
taxation of payments to any Lender or the Issuing Bank of the principal of or
interest on any Eurodollar Loan made by such Lender or any Fees or other
amounts payable hereunder (other than changes in respect of Excluded Taxes
and taxes described in Section 2.20), or shall 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 or
the issuance of Letters of Credit by the Issuing Bank (except any such
reserve requirement which is reflected in the Adjusted LIBO Rate) or shall
impose on such Lender or the Issuing Bank or the London interbank market any
other condition affecting this Restated Credit 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 increase the cost to any
Lender or the Issuing Bank of issuing or maintaining any Letter of Credit or
purchasing or maintaining a participation therein or to reduce the amount of
any sum received or receivable by such Lender or the Issuing Bank hereunder
(whether of principal, interest or otherwise), in each case by an amount
deemed by such Lender or the Issuing Bank, as the case may be, to be
material, then the Borrowers agree to pay to such Lender or the Issuing Bank,
as the case may be, upon demand such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change after the date hereof in any such
law, rule, regulation or guideline (whether such law, rule, regulation or
guideline has been adopted) or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or the Issuing Bank or any Lender's or the Issuing Bank's
holding company with any request or directive regarding capital adequacy
issued or adopted after the date hereof (whether or not having the force of
law) of any Governmental Authority has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Restated Credit Agreement or the Loans made or
participations in Letters of Credit purchased by such Lender pursuant hereto
or the Letters of Credit issued by the Issuing Bank pursuant hereto to a
level below that which such Lender or the Issuing Bank or such Lender's or
the Issuing Bank's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or
the Issuing Bank's holding company with respect to capital adequacy) by an
amount deemed by such Lender or the Issuing Bank to be material, then from
time to time the Borrowers agree to pay to such Lender or the Issuing Bank,
as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth (i) the
amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as applicable, as specified in paragraph (a) or (b)
above and (ii) a reasonably detailed explanation of the calculation of such
amount or amounts shall be delivered to the Borrowers and shall be conclusive
absent manifest error. The Borrowers shall pay such Lender or the Issuing
Bank
36
the amount shown as due on any such certificate delivered by it within 10
days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received
or receivable or reduction in return on capital shall not constitute a waiver
of such Lender's or the Issuing Bank's right to demand such compensation,
provided that the Borrowers shall not be required to compensate a Lender or
the 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
the Issuing Bank, as the case may be, notifies the Parent Borrower of the
event giving rise to such increased costs or reductions and of such Lender's
or the Issuing Bank's intention to claim compensation therefor. The
protection of this Section shall be available to each Lender and the Issuing
Bank regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition that shall have occurred or been imposed; provided, however, that
the Borrowers shall be entitled to reimbursement of any compensation paid to
any Lender or the Issuing Bank under this Section for costs that are
ultimately reimbursed or credited to such Lender or the Issuing Bank.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other
provision of this Restated Credit Agreement, if, after the date hereof, any
change in any law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any
Eurodollar Loan or to give effect to its obligations as contemplated hereby
with respect to any Eurodollar Loan, then, by written notice to the Borrowers
and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by
such Lender hereunder (or be continued for additional Interest
Periods and ABR Loans will not thereafter (for such duration) be
converted into Eurodollar Loans), whereupon any request for a
Eurodollar Borrowing (or to convert an ABR Borrowing to a
Eurodollar Borrowing or to continue a Eurodollar Borrowing for an
additional Interest Period) shall, as to such Lender only, be
deemed a request for an ABR Loan (or to convert a Eurodollar Loan
into an ABR Loan, as the case may be), unless such declaration
shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all
such Eurodollar Loans shall be automatically converted to ABR
Loans as of the effective date of such notice as provided in
paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting
from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrowers by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the
date of receipt by the Borrowers.
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SECTION 2.16. Indemnity. The Borrowers jointly and severally shall
indemnify each Lender against any loss or expense that such Lender may
reasonably sustain or incur as a consequence of (a) any event, other than a
default by such Lender in the performance of its obligations hereunder or a
suspension or limitation under Section 2.08 of the right to select a
Eurodollar Loan, which results in (i) such Lender receiving or being deemed
to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor (it being
understood that amounts held in the Prepayments Account shall not be deemed
received by any Lender for purposes of this Section), (ii) the conversion of
any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day
of the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be
made by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the applicable Borrower hereunder (any of
the events referred to in this clause (a) being called a "Breakage Event") or
(b) any default in the making of any payment or prepayment of Eurodollar
Loans required to be made hereunder. In the case of any Breakage Event, such
loss shall be an amount equal to the excess, as reasonably determined by such
Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is
the subject of such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in effect (or that
would have been in effect) for such Loan over (ii) the amount of interest
that would be realized by such Lender in redeploying the funds released or
not utilized by reason of such Breakage Event for such period. A certificate
of any Lender (i) setting forth any amount or amounts which such Lender is
entitled to receive pursuant to this Section 2.16 and (ii) a reasonably
detailed explanation of the calculation of such amount or amounts shall be
delivered to the Borrowers and shall be conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as provided below in this
Section 2.17 with respect to Swingline Loans and as required under Section
2.15, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the
Commitment Fees, each reduction of the Commitments and each conversion of any
Borrowing to or continuation of any Borrowing as a Borrowing of any Type
shall be allocated pro rata among the Lenders, in the case of principal and
interest payments, in accordance with their respective applicable outstanding
Loans and, in the case of all other payments, the Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). For purposes of
determining the available Commitments of the Lenders at any time, each
outstanding Swingline Loan shall be deemed to have utilized the Commitments
of the Lenders (including those Lenders which shall not have made Swingline
Loans) pro rata in accordance with such Lender's respective Commitment. Each
Lender agrees that in computing such Lender's portion of any Borrowing to be
made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole
dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrowers or any other Loan Party, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary)
in respect of any Loan or Loans or L/C Disbursement as a result of which the
unpaid principal portion of its Loans and participations or other interests
of a type permitted to be held by such Lender in L/C
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Disbursements shall be proportionately less than the unpaid principal portion
of the Loans and participations or interests in L/C Disbursements of any
other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation or interest in the Loans and
participations or interests in L/C Disbursements, as the case may be, of such
other Lender, so that the aggregate unpaid principal amount of the Loans and
participations or interests in L/C Disbursements and participations or
interests in Loans and participations or interests in L/C Disbursements held
by each Lender shall be in the same proportion to the aggregate unpaid
principal amount of all Loans and participations or interests in L/C
Disbursements then outstanding as the principal amount of its Loans and
participations or interests in L/C Disbursements prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal
amount of all Loans and participations or interests in L/C Disbursements
outstanding prior to such exercise of banker's lien, setoff or counterclaim
or other event; provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.18 and the payment
giving rise thereto shall thereafter be recovered, such purchase or purchases
or adjustments shall be rescinded to the extent of such recovery and the
purchase price or prices or adjustment restored without interest. The
Borrowers and Holdings expressly consent to the foregoing arrangements and
agree that any Lender holding a participation or interest in a Loan or L/C
Disbursement deemed to have been so purchased may exercise any and all rights
of banker's lien, setoff or counterclaim with respect to any and all moneys
owing by the Borrowers and Holdings to such Lender by reason thereof as fully
as if such Lender had made a Loan directly to the Borrowers in the amount of
such participation.
SECTION 2.19. Payments. (a) The Borrowers shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement
or any Fees or other amounts) hereunder and under any other Loan Document not
later than 12:00 (noon), New York City time, on the date when due in
immediately available dollars, without setoff or counterclaim. Each such
payment (other than (i) Issuing Bank Fees, which shall be paid directly to
the Issuing Bank, (ii) principal of and interest on Swingline Loans, which
shall be paid directly to the Swingline Lender except as otherwise provided
in Section 2.22(e) and (iii) other payments that are specifically required to
be paid directly to a Lender) shall be made to the Administrative Agent at
its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation
of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on behalf of the
Borrowers or any Loan Party hereunder and under any other Loan Document shall
be made, in accordance with Section 2.19, free and clear of and without
deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all interests, penalties or similar
liabilities with respect thereto, excluding (i) taxes, levies, imposts,
deductions, charges and withholdings imposed on the net income or net profits
of the Administrative Agent, any Lender or the Issuing Bank (or any
transferee or assignee thereof, including a participation holder (any such
entity a "Transferee")), however denominated, and all interest, penalties or
similar liabilities with respect thereto, and (ii) franchise taxes, levies,
imposts, deductions, charges and withholdings based or imposed on the net
income or net profits or in lieu of net income or net profits of the
Administrative Agent, any Lender or the Issuing Bank (or Transferee) and all
interest, penalties or similar liabilities with respect thereto, (the taxes,
39
levies, imposts, deductions, charges and withholdings and other liabilities
referred to in the foregoing clauses (i) and (ii) individually or
collectively being called "Excluded Taxes"), in each case imposed (a) by the
U.S. or any political subdivision or taxing authority thereof or therein; (b)
by any jurisdiction under the laws of which the Administrative Agent, such
Lender or the Issuing Bank (or Transferee) or its lending office or office
through which it is issuing any Letter of Credit is organized or in which its
lending office or office through which it is issuing any Letter of Credit is
located, managed or controlled or in which its principal office is located or
any political subdivision or taxing authority thereof or therein; or (c) by
reason of any connection between the jurisdiction imposing such tax and the
Administrative Agent, such Lender, the Issuing Bank, such Transferee, such
lending office or office through which it is issuing any Letter of Credit,
other than a connection arising solely from this Restated Credit Agreement or
any transaction hereunder (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities, collectively or
individually, being called "Taxes"). If the Borrowers or any Loan Party
shall be required to deduct any Taxes from or in respect of any sum payable
hereunder or under any other Loan Document to the Administrative Agent, any
Lender or the Issuing Bank (or any Transferee), (i) the sum payable shall be
increased by the amount (an "additional amount") necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.20) the Administrative Agent, such Lender
or the Issuing Bank (or Transferee), as the case may be, shall receive an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrowers or such Loan Party shall make such deductions and
(iii) the Borrowers or such Loan Party shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers agree to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (including mortgage recording taxes and similar fees) that arise from
any payment made hereunder or under any other Loan Document or from the
execution, delivery or registration of, or otherwise solely with respect to,
this Restated Credit Agreement or any other Loan Document ("Other Taxes").
(c) The Borrowers shall indemnify the Administrative Agent, each Lender
and the Issuing Bank (or Transferee) for the full amount of Taxes and Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank (or
Transferee), as the case may be, and any liability (including penalties,
interest and expenses (including reasonable attorney's fees and expenses)
other than those resulting solely from a failure by the Administrative Agent,
such Lender or the Issuing Bank (or Transferee), as the case may be, to pay
any Taxes or Other Taxes which it is required to pay and for which it
received an indemnity payment) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted
by the relevant Governmental Authority. A certificate as to the amount of
such payment or liability prepared by the Administrative Agent, a Lender or
the Issuing Bank (or Transferee), or the Administrative Agent on its behalf,
absent manifest error, shall be final, conclusive and binding for all
purposes. Such indemnification shall be made within 30 days after the date
the Administrative Agent, any Lender or the Issuing Bank (or Transferee), as
the case may be, makes written demand therefor. If the Administrative Agent,
any Lender or the Issuing Bank (or
40
any Transferee) shall become aware that it is entitled to receive a refund or
other tax credit or benefit in respect of any Taxes or Other Taxes (including
any Taxes or Other Taxes that were not correctly or legally asserted by the
relevant Government Authority), it shall promptly notify the Borrowers
thereof and, in the case of a refund, shall within 30 days after receipt of a
request by the Borrowers, apply for such refund at the Borrowers' expense.
If the Administrative Agent, any Lender or the Issuing Bank (or any
Transferee) receives a refund or other tax credit or benefit in respect of
any Taxes or Other Taxes (including any Taxes or Other Taxes that were not
correctly or legally asserted by the relevant Government Authority) for which
the Administrative Agent, such Lender or the Issuing Bank (or such
Transferee) has received payment from the Borrowers hereunder, it shall
promptly notify the Borrowers thereof and shall promptly repay such refund
or, in the case of a tax credit or other benefit shall repay the amount of
the tax credit or benefit received promptly following the date on which such
tax credit or other benefit is offset against such party's tax liability, in
each case to the Borrowers without interest and net of any expenses incurred,
except to the extent interest shall have explicitly accompanied such refund
or other tax credit or benefit, provided that the Borrowers, upon the request
of such Lender, the Issuing Bank or the Administrative Agent, agree to return
the amount of such refund or other tax benefit or credit (plus any penalties,
interest or other charges required to be paid) to such Lender, the Issuing
Bank or the Administrative Agent in the event such Lender, the Issuing Bank
or the Administrative Agent is required to repay such amount to the relevant
taxing authority.
(d) As soon as practicable after the date of any payment of Taxes or
Other Taxes by the Borrowers or any other Loan Party to the relevant
Governmental Authority, the Borrowers or such other Loan Party will deliver
to the Administrative Agent, at its address referred to in Section 9.01, the
original or a certified copy of any receipt issued by such Governmental
Authority or other proof reasonably acceptable to the indemnified party
evidencing payment thereof.
(e) Each Lender (or Transferee) or successor Issuing Bank that is
organized under the laws of a jurisdiction other than the United States, any
State thereof or the District of Columbia (a "Non-U.S. Lender") shall deliver
to the Borrowers and the Administrative Agent two copies of either United
States Internal Revenue Service Form 1001 or Form 4224, or, in the case of a
Non-U.S. 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
interest", a Form W-8, or any subsequent versions thereof or successors
thereto (and, if such Non-U.S. Lender delivers a Form W-8, a certificate
representing that such Non-U.S. Lender is not a bank for purposes of Section
881(c) of the Code), is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrowers and is not a controlled
foreign corporation related to the Borrowers (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments of interest by the Borrowers under this
Restated Credit Agreement and the other Loan Documents, provided, that if
such Non-U.S. Lender is a bank for purposes of Section 881(c) of the Code,
such Non-U.S. Lender shall make whole the Borrowers for reliance on such
certificate. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Restated Credit Agreement (or, in
the case of a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder) and on or
before the date, if any, such Non-U.S. Lender changes its applicable lending
office by designating a different lending office (a "New Lending Office").
In addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Notwithstanding any other provision of this Section 2.20(e), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.20(e) that such Non-U.S. Lender is not legally able to deliver.
(f) The Borrowers shall not be required to indemnify any Non-U.S. Lender
or to pay any additional amounts to any Non-U.S. Lender, in respect of United
States Federal
41
withholding tax pursuant to paragraph (a) or (c) above to the extent that (i)
the obligation to withhold amounts with respect to United States Federal
withholding tax existed on the date such Non-U.S. Lender became a party to
this Restated Credit Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a
Transferee hereunder) or, with respect to payments to a New Lending Office,
the date such Non-U.S. Lender designated such New Lending Office with respect
to a Loan; provided, however, that this paragraph (f) shall not apply (x) to
any Transferee or New Lending Office that becomes a Transferee or New Lending
Office as a result of an assignment, participation, transfer or designation
made at the request of the Borrowers and (y) to the extent the indemnity
payment or additional amounts any Transferee, or any Lender (or Transferee),
acting through a New Lending Office, would be entitled to receive (without
regard to this paragraph (f)) do not exceed the indemnity payment or
additional amounts that the person making the assignment, participation or
transfer to such Transferee, or Lender (or Transferee) making the designation
of such New Lending Office, would have been entitled to receive in the
absence of such assignment, participation, transfer or designation or (ii)
the obligation to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Lender to comply with the provisions of paragraph
(e) above.
(g) Nothing contained in this Section 2.20 shall require any Lender or
the Issuing Bank (or any Transferee) or the Administrative Agent to make
available any of its tax returns (or any other information that it deems to
be confidential or proprietary).
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. (a) In the event (i) any Lender or the Issuing Bank
delivers a certificate requesting compensation pursuant to Section 2.14, (ii)
any Lender or the Issuing Bank delivers a notice described in Section 2.15 or
the Administrative Agent delivers a notice described in Section 2.08, (iii)
the Borrowers are required to pay any additional amount or indemnification
payment to any Lender or the Issuing Bank or any Governmental Authority on
account of any Lender or the Issuing Bank pursuant to Section 2.20 or (iv)
any Lender or the Issuing Bank shall refuse to consent to a proposed change,
waiver, discharge, termination or assignment that requires such Lender's or
the Issuing Bank's consent and that has been approved by the Required Lenders
as provided in Section 9.08(c), the Borrowers may, at their sole expense and
effort (including with respect to the processing and recordation fee referred
to in Section 9.04(b)), upon notice to such Lender or the Issuing Bank and
the Administrative Agent, require such Lender or the Issuing Bank to transfer
and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Restated Credit Agreement to one or more assignees
that shall assume such assigned obligations (any of which assignees may be
another Lender, if one or more Lenders accept such assignment), provided that
(A) such assignment shall not conflict with any law, rule, regulation or
order of any court or other Governmental Authority having jurisdiction, (B)
the Borrowers shall have received the prior written consent of the
Administrative Agent (and, if a Commitment is being assigned, of the Issuing
Bank and the Swingline Lender), which consents shall not unreasonably be
withheld, (C) the Borrowers or such assignee or assignees shall have paid to
the affected Lender or the Issuing Bank in immediately available funds an
amount equal to the sum of the principal of, and interest accrued to the date
of such payment on, the outstanding Loans or L/C Disbursements of such Lender
or the Issuing Bank, respectively, plus all Fees and other amounts accrued
for the account of such Lender or the Issuing Bank hereunder (including any
amounts then due pursuant to requests or notices previously provided under
Section 2.14 and Section 2.16), and (D) in the case of any refusal to consent
contemplated by clause (iv) above, such assignment is also made in accordance
with Section 9.08(c) and provided further that, if prior to any such
42
transfer and assignment the circumstances or event that resulted in such
Lender's or the Issuing Bank's claim for compensation under Section 2.14 or
notice under Section 2.08 or 2.15 or the amounts paid pursuant to Section
2.20, as the case may be, cease to cause such Lender or the Issuing Bank to
suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified
in Section 2.08 or 2.15, or cease to result in amounts being payable under
Section 2.20, as the case may be (including as a result of any action taken
by such Lender or the Issuing Bank pursuant to paragraph (b) below), or if
such Lender or the Issuing Bank shall waive its right to claim further
compensation under Section 2.14 in respect of such circumstances or event or
shall withdraw its notice under Section 2.08 or 2.15 or shall waive its
right to further payments under Section 2.20 in respect of such circumstances
or event, or shall grant the consent or waiver requested pursuant to Section
9.04(i) or 9.08(b) as the case may be, then such Lender or the Issuing Bank
shall not thereafter be required to make any such transfer and assignment
hereunder.
(b) If (i) any Lender or the Issuing Bank shall request compensation
under Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.15 or the Administrative Agent delivers a notice
described in Section 2.08 or (iii) the Borrowers are required to pay any
additional amount or an indemnification payment to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing
Bank, pursuant to Section 2.20, then such Lender or the Issuing Bank upon the
request of the Borrowers shall use reasonable efforts (which shall not
require such Lender or the Issuing Bank to incur an unreimbursed loss or
unreimbursed cost or expense or otherwise take any action inconsistent with
its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be significant) (A) to file any
certificate or document reasonably requested in writing by the Borrowers or
(B) to assign its rights and delegate and transfer its obligations hereunder
to another of its offices, branches or affiliates, if such filing or
assignment would reduce its claims for compensation under Section 2.14 or
enable it to withdraw its notice pursuant to Section 2.15 or Section 2.08 or
would reduce amounts payable pursuant to Section 2.20, as the case may be, in
the future. The Borrowers hereby agree to pay all reasonable costs and
expenses incurred by any Lender or the Issuing Bank in connection with any
such filing or assignment, delegation and transfer.
SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to
the terms and conditions and relying upon the representations and warranties
herein set forth, the Swingline Lender agrees to make loans to any Borrower
at any time and from time to time on and after the Restatement Effective Date
and until the earlier of the Maturity Date and the termination of the
Commitments in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of all Swingline Loans exceeding $25,000,000 in the
aggregate or (ii) the Aggregate Credit Exposure, after giving effect to any
Swingline Loan, exceeding the Total Commitment. Each Swingline Loan shall be
in a principal amount that is an integral multiple of $500,000 or such lesser
amount necessary to reimburse a Letter of Credit pursuant to Section 2.23(e).
The Swingline Commitment may be terminated or reduced from time to time as
provided herein. Within the foregoing limits, the Borrowers may borrow, pay
or prepay and reborrow Swingline Loans hereunder, subject to the terms,
conditions and limitations set forth herein.
(b) Swingline Loans. The applicable Borrower shall notify the
Administrative Agent by telecopy, or by telephone (confirmed by telecopy),
not later than 2:00 p.m., New York City time, on the day of a proposed
Swingline Loan. Such notice shall be delivered on a Business Day, shall be
irrevocable and shall refer to this Restated Credit Agreement and shall
specify
43
the requested date (which shall be a Business Day) and amount of such
Swingline Loan. The Administrative Agent will promptly advise the Swingline
Lender of any notice received from any Borrower pursuant to this paragraph
(b). The Swingline Lender shall make each Swingline Loan available to the
applicable Borrower by means of a credit to the general deposit account of
the Parent Borrower (acting as agent for and on behalf of itself and the
Subsidiary Borrowers) with the Swingline Lender by 3:00 p.m. on the date such
Swingline Loan is so requested.
(c) Prepayment. The Borrowers shall have the right at any time and from
time to time to prepay any Swingline Loan, in whole or in part, upon giving
notice to the Swingline Lender and the Administrative Agent by telephone
(promptly confirmed by written or telecopy notice) before 12:00 (noon), New
York City time on the date of prepayment.
(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to
the provisions of Section 2.07, shall bear interest as provided in Section
2.06(a) and (c).
(e) Participations. The Swingline Lender may by written notice given to
the Administrative Agent not later than 10:00 a.m., New York City time, on
any Business Day require the 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 Lenders
will participate. The Administrative Agent will, promptly upon receipt of
such notice, give notice to each Lender, specifying in such notice such
Lender's Pro Rata Percentage of such Swingline Loan or Loans. In furtherance
of the foregoing, each 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 Pro Rata Percentage of
such Swingline Loan or Loans. Each 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 an Event of Default, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Each
Lender shall comply with its obligation under this paragraph by wire transfer
of immediately available funds, in the same manner as provided in Section
2.02(c) with respect to Loans made by such Lender (and Section 2.02(c) 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 Lenders. The Administrative Agent shall notify
the Parent Borrower 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 Lender. Any amounts received by the Swingline Lender from any
Borrower (or other party on behalf of any Borrower) 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 Lenders that shall have
made their payments pursuant to this paragraph and to the Swingline Lender,
as their interests may appear. The purchase of participations in a Swingline
Loan pursuant to this paragraph shall not relieve the Borrowers (or other
party liable for obligations of the Borrowers) of any default in the payment
thereof.
SECTION 2.23. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, (i) each of the Existing Letters of Credit
shall, upon the initial funding of Loans on the Restatement Effective Date
and without any further action on the part of the Issuing Bank or any other
person, be deemed for all purposes (other than with respect to
44
issuance fees to the extent previously paid in connection with the original
issuance of such Existing Letter of Credit) to be a Letter of Credit
hereunder and (ii) any Borrower may request the issuance of a Letter of
Credit for its own account or the account of any Subsidiary (provided that a
Borrower shall be a co-applicant and co-obligor with respect to each Letter
of Credit issued for the account of or in favor of any such Subsidiary), in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank
(which may include electronic transmission, pursuant to negotiated
arrangements between the Borrowers and the Issuing Bank), at any time and
from time to time while the Commitments remain in effect. This Section shall
not be construed to impose an obligation upon the Issuing Bank to issue any
Letter of Credit that is inconsistent with the terms and conditions of this
Restated Credit Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), a Borrower shall hand
deliver or telecopy (or transmit by electronic transmission, pursuant to
negotiated arrangements between the Borrowers and the Issuing Bank) to the
Issuing Bank and the Administrative Agent (at least one Business Day in
advance of 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, the date of issuance,
amendment, renewal or extension, the date on which such Letter of Credit is
to expire (which shall comply with paragraph (c) below), 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 such Letter of Credit, and
all such information shall be included on the Issuing Bank's standard form of
application and reimbursement agreement, provided, however, that to the
extent of any inconsistency between the provisions of such standard forms and
the provisions of this Restated Credit Agreement, the latter shall govern in
all respects. The Issuing Bank shall provide to the Administrative Agent on
a weekly basis and on the last day of each March, June, September and
December, a report describing any issuances, disbursements or other activity
with respect to all outstanding Letters of Credit for the period through, but
not including, the last day of such March, June, September or December, as
the case may be. 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 Borrowers shall be deemed to represent and warrant that,
after giving effect to such issuance, amendment, renewal or extension (i) the
L/C Exposure shall not exceed $50,000,000 and (ii) the Aggregate Credit
Exposure shall not exceed the Total Commitment. If the Administrative Agent
determines that, after giving effect to the issuance, amendment, renewal or
extension of any Letter of Credit, that the Aggregate Credit Exposure shall
exceed the Total Commitment, it shall promptly provide the Issuing Bank
written notice to such effect. Each Letter of Credit shall provide for
payments of drawings in dollars or an Alternate Currency.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance
of such Letter of Credit and the date that is five Business Days prior to the
Maturity Date, unless such Letter of Credit expires by its terms on an
earlier date. Each Letter of Credit may, upon the request of the applicable
Borrower, include a provision whereby such Letter of Credit shall be renewed
automatically for additional consecutive periods of 12 months or less (but
not beyond the date that is five Business Days prior to the Maturity Date)
unless the Issuing Bank notifies the beneficiary thereof at least 30 days
prior to the then-applicable expiration date that such Letter of Credit will
not be renewed.
45
(d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each such Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit
equal to such Lender's Pro Rata Percentage of the aggregate amount available
to be drawn under such Letter of Credit, effective upon the issuance of such
Letter of Credit. In addition, the Issuing Bank hereby grants to each
Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in each Existing Letter of Credit equal to such Lender's Pro
Rata Percentage of the face amount of such Existing Letter of Credit,
effective on the Restatement Effective Date. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender's Pro Rata Percentage of each L/C Disbursement
made by the Issuing Bank and not reimbursed by the Borrowers (or, if
applicable, another party pursuant to its obligations under any other Loan
Document) forthwith on the date due as provided in Section 2.02(f). Each
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 the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, the Borrowers shall pay to the
Administrative Agent an amount equal to such L/C Disbursement not later than
3:00 p.m. on the day that the Borrowers shall have received notice from the
Issuing Bank that payment of such draft will be made (it being understood
that such L/C Disbursement will be made prior to or promptly after the
delivery of such notice), or, if the Borrowers shall have received such
notice later than 3:00 p.m., New York City time, on any Business Day, not
later than 1:00 p.m., New York City time, on the immediately following
Business Day.
(f) Obligations Absolute. The Borrowers' obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Restated Credit Agreement, under any and all
circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any
Loan Document;
(iii) the existence of any claim, setoff, defense or other
right that the Borrowers, any other party guaranteeing, or
otherwise obligated with, the Borrowers, any Subsidiary or other
Affiliate thereof or any other person may at any time have
against the beneficiary under any Letter of Credit, the Issuing
Bank, the Administrative Agent or any Lender or any other person,
whether in connection with this Restated Credit Agreement, any
other Loan Document or any other related or unrelated agreement
or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or
inaccurate in any respect;
46
(v) payment by the 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; and
(vi) any other act or omission to act or delay of any kind
of the Issuing Bank, the Lenders, the Administrative Agent or any
other person or 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 the Borrowers' obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrowers hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse or release any claims of Borrowers
against the Issuing Bank, the Lenders, the Administrative Agent or any other
person for any gross negligence or wilful misconduct or to excuse or release
the Issuing Bank from liability to the Borrowers to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrowers to the extent permitted by applicable law)
suffered by the Borrowers that are caused by the Issuing Bank's gross
negligence or wilful misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof.
It is understood that the Issuing Bank may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary and, in making any
payment under any Letter of Credit (i) the Issuing Bank's exclusive reliance
on the documents presented to it under such Letter of Credit as to any and
all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
order, and whether or not any other statement or any other document presented
pursuant to such Letter of Credit proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any respect whatsoever
and (ii) any noncompliance in any immaterial respect of the documents
presented under such Letter of Credit with the terms thereof shall, in each
case, be deemed not to constitute wilful misconduct or gross negligence of
the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand
for payment under a Letter of Credit. The Issuing Bank shall as promptly as
possible give telephonic notification, confirmed by telecopy, to the
Administrative Agent and the Borrowers of such demand for payment and whether
and when the Issuing Bank has made or will make an L/C Disbursement
thereunder, provided that any failure to give or delay in giving such notice
shall not relieve the Borrowers of their obligation to reimburse the Issuing
Bank and the Lenders with respect to any such L/C Disbursement. The
Administrative Agent shall promptly give each Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrowers
shall reimburse such L/C Disbursement in full on such date, the unpaid amount
thereof shall bear interest for the account of the Issuing Bank, for each day
from and including the date of such L/C Disbursement, to but excluding the
earlier of the date of payment by the Borrowers or the date on which interest
shall commence
47
to accrue thereon as provided in Section 2.02(f), at the rate per annum that
would apply to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 60 days' prior written notice to the
Administrative Agent, the Lenders and the Borrowers, and may be removed at
any time by the Parent Borrower by notice to the Issuing Bank, the
Administrative Agent and the Lenders. Subject to the last sentence of this
clause (i), upon the acceptance of any appointment as the Issuing Bank
hereunder by a Lender that shall agree to serve as successor Issuing Bank,
such successor shall succeed to and become vested with all the interests,
rights and obligations of the retiring Issuing Bank and the retiring Issuing
Bank shall be discharged from its obligations to issue additional Letters of
Credit hereunder. At the time such removal or resignation shall become
effective, the Borrowers shall pay all accrued and unpaid fees pursuant to
Section 2.05(c)(ii). The acceptance of any appointment as the Issuing Bank
hereunder by a successor Lender shall be evidenced by an agreement entered
into by such successor, in a form satisfactory to the Borrowers and the
Administrative Agent, and, from and after the effective date of such
agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Restated Credit Agreement
and the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the resignation
or removal of the Issuing Bank hereunder, the retiring Issuing Bank shall
remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Restated Credit Agreement and the
other Loan Documents with respect to Letters of Credit issued by it prior to
such resignation or removal, but shall not be required to issue additional
Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrowers shall, on the Business Day they receive notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Lenders holding participations in outstanding
Letters of Credit representing greater than 50% of the aggregate undrawn
amount of all outstanding Letters of Credit) thereof and of the amount of the
L/C Exposure at such time, deposit in an account with the Collateral Agent,
for the benefit of the Lenders, an amount in cash equal to the L/C Exposure
as of such date. Such deposit shall be held by the Collateral Agent as
collateral for the payment and performance of the Obligations. The
Collateral Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits in Permitted Investments, which
investments shall be made at the option and sole discretion of the Collateral
Agent, such deposits shall not bear interest. Interest or profits, if any,
on such investments shall accumulate in such account. Moneys in such account
shall (i) be applied by the Administrative Agent to reimburse the Issuing
Bank for L/C Disbursements for which it has not been reimbursed, (ii) be held
for the satisfaction of the reimbursement obligations of the Borrowers for
the L/C Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit), be applied to satisfy
the Obligations. If the Borrowers are 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
Borrowers within three Business Days after all Events of Default have been
cured or waived. If the Borrowers are required to provide an amount of cash
collateral hereunder pursuant to Section 2.13(a), such amount shall be
returned to the Borrowers from time to time to the extent that the amount of
such cash collateral held by the Collateral Agent
48
exceeds the excess, if any, of the aggregate L/C Exposure over the Total
Commitment, provided that such return shall not be required at any time that
an Event of Default has occurred and is continuing.
(k) Alternate Currency Letter of Credit. In the event that an Alternate
Currency Letter of Credit is issued, the following provisions shall apply:
(i) such Alternate Currency Letter of Credit shall
constitute a Letter of Credit for all purposes of this Restated
Credit Agreement and the other Loan Documents;
(ii) for purposes of determining the L/C Exposure for any
purpose other than expressly provided below, the amount of such
Letter of Credit and of any unreimbursed L/C Disbursements in
respect thereof shall be, as of any date of determination, the
Dollar Equivalent of the Alternate Currency amount determined at
least every 30 days or more frequently at the Administrative
Agent's request;
(iii) for purposes of calculating Commitment Fees, L/C
Participation Fees and fronting fees payable to the Issuing Bank,
the amount of such Letter of Credit and of any unreimbursed L/C
Disbursements in respect thereof shall be the Dollar Equivalent
of the Alternate Currency amount thereof as of the last Business
Day of each December, March, June and September (or the date on
which such Letter of Credit was issued or such L/C Disbursement
was made, if such date is more recent than such last Business
Day) during the period for which such fees are being calculated;
(iv) the obligation of the Borrowers to reimburse L/C
Disbursements under such Alternate Currency Letter of Credit, and
to pay fees in respect thereof and interest or other amounts
thereon, shall be payable only in dollars and shall not be
discharged by paying an amount in an Alternate Currency. The
obligation of the Borrowers to reimburse any such L/C
Disbursement shall be in an amount of dollars equal to the Dollar
Equivalent of the Alternate Currency amount thereof determined as
of the date on which such L/C Disbursement is made, and any
interest on the unreimbursed amount thereof shall accrue on the
unreimbursed portion of such Dollar Equivalent amount;
(v) the obligation of each Lender with a Commitment to pay
its Pro Rata Percentage of any unreimbursed L/C Disbursement
under such Alternate Currency Letter of Credit shall be payable
only in dollars and shall be in an amount equal to such Pro Rata
Percentage of the Dollar Equivalent amount of such unreimbursed
Letter of Credit Disbursement determined as provided in
clause (iv) above. Under no circumstances shall the provisions
hereof permitting the issuance of Alternate Currency Letters of
Credit be construed, by implication or otherwise, as imposing any
obligation upon any Lender to make any Loan or other payment
under any Loan Document, or to accept any payment from the
Borrowers in respect of any Obligations, in any currency other
than dollars, it being understood that the parties intend all
Obligations to be denominated and payable only in dollars;
(vi) as of the date of issuance of any Alternate Currency
Letter of Credit, the Dollar Equivalent of the L/C Exposure in
respect of all Alternate Currency Letters of Credit shall not
exceed $40,000,000 after giving effect to such issuance.
49
ARTICLE III
Representations and Warranties
Each of Holdings and the Borrowers represents and warrants to the
Administrative Agent, the Collateral Agent, the Issuing Bank and each of the
Lenders that:
SECTION 3.01. Organization; Powers. Each of Holdings, the Borrowers and
the Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry
on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in, and is in good standing in, every jurisdiction
where the nature of its business so requires and (d) has the corporate power
and authority to execute, deliver and perform its obligations under each of
the Loan Documents and each other agreement or instrument contemplated hereby
to which it is or will be a party and, in the case of the Borrowers, to
borrow hereunder, except in each case where the failure to satisfy any of the
above could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.02. Authorization. The execution, delivery and performance by
each Loan Party of each of the Loan Documents to which such Loan Party is a
party, and in the case of Borrowers, the borrowings hereunder (collectively,
the "Transactions") (a) have been duly authorized by all requisite corporate
action on the part of such Loan Party and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, or of the certificate or
articles of incorporation or other constitutive documents or by-laws of
Holdings, any Borrower or any Subsidiary, (B) any order of any Governmental
Authority or (C) any provision of any indenture, agreement or other
instrument to which Holdings, any Borrower or any Subsidiary is a party or by
which any of them or any of their property is or may be bound, (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any
obligation under any such indenture, agreement or other instrument, except
where any such conflict, violation, breach, default or right referred to in
clause (i) or (ii), individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect, or (iii) result in the
creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by Holdings, any Borrower or any
Subsidiary (other than any Lien created hereunder or under the Security
Documents).
SECTION 3.03. Enforceability. This Restated Credit Agreement has been
duly executed and delivered by Holdings and each Borrower and constitutes,
and each other Loan Document when executed and delivered by each Loan Party
thereto will constitute, a legal, valid and binding obligation of such Loan
Party enforceable against such Loan Party in accordance with its respective
terms, subject (a) as to enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally, from time to time in effect and
(b) to general principles of equity (whether enforcement is sought by a
proceeding in equity or at law) .
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions or the
other transactions contemplated hereby, except for (a) the filing of
appropriate Uniform Commercial Code financing statements, (b) recordation of
the Mortgages and related Uniform Commercial Code financing statements, (c)
such as have been made or obtained and are in full force and effect, (d)
filings required
50
pursuant to the Securities Act of 1933, the Securities Act of 1934 or any
state "blue sky" laws in connection with the registration of any securities
to be exchanged for the Masco Notes, (e) filings by Holdings pursuant to the
Small Business Investment Act of 1958, as amended, and (f) such actions,
consents, approvals and filings the failure of which to obtain or make could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.05. Financial Statements. The Parent Borrower has heretofore
furnished to the Lenders the consolidated balance sheets and statements of
income, stockholders' equity and cash flows of the Parent Borrower and its
subsidiaries on a consolidated basis (i) as of and for the fiscal year ended
December 31, 1996, audited by and accompanied by the opinion of Coopers &
▇▇▇▇▇▇▇ LLP, independent public accountants, and (ii) as of and for the two
fiscal quarter period ended June 30, 1997, certified by its chief financial
officer. Such financial statements present fairly the financial condition and
results of operations and cash flows of the Parent Borrower and its
consolidated Subsidiaries as of such dates and for such periods. Such
financial statements were prepared in accordance with GAAP (except for the
absence of footnote disclosure and subject to year-end audit adjustments in
the case of the financial statements referred to in clause (ii)).
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, properties, financial
condition, contingent liabilities or material agreements of Holdings, the
Parent Borrower and the Subsidiaries, taken as a whole, since December 31,
1996.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of
Holdings, the Borrowers and the Subsidiaries has good title to (and with
respect to owned real property good and marketable title to), or valid
leasehold interests in, all its material properties and assets (including all
Mortgaged Properties and all properties listed on Schedules 3.20(a) and
3.20(b)), except where lack of such title or valid leasehold interest does
not materially interfere with its ability to conduct its business as
currently conducted. All interests of such persons in such material
properties and assets are free and clear of Liens, other than Liens expressly
permitted by Section 6.02 and, in addition, with respect to the Mortgaged
Properties, Permitted Encumbrances.
(b) Except as set forth on Schedule 3.07(b), each of Holdings, the
Borrowers and the Subsidiaries has complied with all material obligations
under all material leases to which it is a party and all such leases are in
full force and effect. Each of Holdings, the Borrowers and the Subsidiaries
enjoys peaceful and undisturbed possession under all such material leases,
except where failure to enjoy such possession does not materially interfere
with its ability to conduct its business as currently conducted.
(c) Except as set forth on Schedule 3.07(c), neither Holdings nor any
Borrower has received any notice of, nor has any knowledge of, any pending or
contemplated condemnation proceeding affecting the Mortgaged Properties or
any sale or disposition thereof in lieu of condemnation.
(d) Except as set forth on Schedule 3.07(d), none of Holdings, the
Borrowers or any of the Subsidiaries is obligated under any right of first
refusal, option or other contractual right to sell, assign or otherwise
dispose of any Mortgaged Property or any interest therein.
SECTION 3.08. Subsidiaries. (a) Schedule 3.08 sets forth as of the
Restatement Effective Date a list of all Subsidiaries of the Parent Borrower
and the percentage ownership
51
interest of Holdings, the Parent Borrower and any other person therein. The
shares of Capital Stock or other ownership interests so indicated on Schedule
3.08 are fully paid and non-assessable and are owned, as of the Restatement
Effective Date, by Holdings, the Parent Borrower or a subsidiary of Holdings
or the Parent Borrower, as applicable, directly or indirectly, free and clear
of all Liens (other than Liens permitted under the Loan Documents). Holdings
owns 100% of the issued and outstanding shares of Capital Stock of the Parent
Borrower and the Parent Borrower owns directly or indirectly 100% of the
issued and outstanding shares of Capital Stock of each Subsidiary Borrower.
As of the Restatement Effective Date, the only direct or indirect subsidiary
of Holdings other than the Parent Borrower and the Subsidiaries is ▇▇▇▇▇▇▇.
(b) As of the Restatement Effective Date, none of the Subsidiaries is
subject to a consensual encumbrance or restriction that limits such
Subsidiary's ability to make an Upstream Payment.
(c) Each of ▇▇▇▇▇ Furniture Company, Incorporated, ▇▇▇▇▇ Link
Corporation, Link-▇▇▇▇▇▇ Corporation and ▇▇▇▇▇-▇▇▇▇▇▇ Corporation does not
have assets (other than the rights associated with each such company's name)
in excess of $5,000, does not have any employees and does not conduct any
business.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set
forth on Schedule 3.09, there are no actions, suits or proceedings at law or
in equity or by or before any Governmental Authority now pending or, to the
knowledge of Holdings or any Borrower, threatened against or affecting
Holdings or any Borrower or any Subsidiary or any business, property or
rights of any such person (i) that involve any Loan Document or the
Transactions or (ii) as to which there is a reasonable likelihood of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.
(b) None of Holdings, the Borrowers or any of the Subsidiaries or any of
their respective material properties or assets is in violation of, nor will
the continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning,
building, Environmental Law, ordinance, code or approval or any building
permits) or any restrictions of record or agreements affecting the Mortgaged
Property, or is in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority, where such violation or
default could reasonably be expected to result in a Material Adverse Effect.
(c) None of Holdings, the Borrowers or any of the Subsidiaries is in
violation of any zoning or building law, ordinance, rule, regulation or
restriction affecting a Mortgaged Property or any building permit, including
certificates of occupancy, where such violation could reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.10. Agreements. (a) None of Holdings, the Borrowers or any
of the Subsidiaries is a party to any agreement or instrument or subject to
any corporate restriction that has resulted or could reasonably be expected
to result in a Material Adverse Effect.
(b) None of Holdings, the Borrowers or any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement
or instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which
52
it or any of its properties or assets are bound, where such default could
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of Holdings, the
Borrowers or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used for the purpose of buying or carrying Margin Stock.
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. None of Holdings, the Borrowers or any Subsidiary is (a) an "investment
company" as defined in, or subject to regulation under, the Investment
Company Act of 1940 or (b) a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrowers will use the proceeds of
the Loans and will request the issuance of Letters of Credit (a) to refinance
the loans outstanding under the Existing Credit Agreement, (b) to pay certain
costs, fees and charges in connection with the Transactions and (c) for
ongoing general corporate purposes, including the financing of Permitted
Acquisitions.
SECTION 3.14. Tax Returns. Each of Holdings, the Borrowers and the
Subsidiaries has filed or caused to be filed all Federal, state or other
material tax returns required to have been filed by it and has paid or caused
to be paid all taxes due and payable by it and all assessments received by it
to the extent that such failure to file or nonpayment could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.15. No Material Misstatements. None of (a) the Confidential
Information Memorandum as of the date thereof and the Restatement Effective
Date or (b) any other information, reports, financial statements, exhibits or
schedules, taken as a whole, furnished by or on behalf of Holdings or any
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact
or omitted, omits or will omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they
were, are or will be made, not materially misleading, provided that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, each of Holdings and
the Borrowers represents only that it acted in good faith and utilized
reasonable assumptions and due care in the preparation of such information,
report, financial statement, exhibit or schedule.
SECTION 3.16. Employee Benefit Plans. Except to the extent failure to
comply could not reasonably be expected to result in a Material Adverse
Effect, each of Holdings and the Borrowers is in compliance with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. Neither Holdings nor any Borrower is aware of
any circumstances or event with respect to any employee benefit plan
maintained or contributed to by an ERISA Affiliate that could result in a
liability that could reasonably be expected to have a Material Adverse
Effect. No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events, could reasonably be
expected to result in a Material Adverse Effect.
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SECTION 3.17. Environmental Matters. Except as set forth on Schedule
3.17:
(a) The properties owned or operated by Holdings, the
Borrowers and the Subsidiaries (the "Properties") do not contain
any Hazardous Materials in amounts or concentrations that
(i) constitute or constituted a violation of, (ii) require
Remedial Action under, or (iii) could reasonably be expected to
give rise to liability under, Environmental Laws, which
violations, Remedial Actions and liabilities, in the aggregate,
could reasonably be expected to result in a Material Adverse
Effect;
(b) The Properties and all operations of the Borrowers and
the Subsidiaries are in compliance, and in the last three years
have been in compliance, with all Environmental Laws and all
necessary Environmental Permits have been obtained and are in
effect, except to the extent that such non-compliance or failure
to obtain any necessary permits, in the aggregate, could not be
reasonably expected to result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at,
from, under or proximate to the Properties or otherwise in
connection with the operations of the Borrowers or the
Subsidiaries, which Releases or threatened Releases, in the
aggregate, could reasonably be expected to result in a Material
Adverse Effect;
(d) None of Holdings, the Borrowers or any of the
Subsidiaries has received any notice of an Environmental Claim in
connection with the Properties or the operations of the Borrowers
or the Subsidiaries or with regard to any person whose
liabilities for environmental matters Holdings, the Borrowers or
the Subsidiaries has retained or assumed, in whole or in part,
contractually, by operation of law or otherwise, which, in the
aggregate, could reasonably be expected to result in a Material
Adverse Effect, nor do Holdings, the Borrowers or the
Subsidiaries have reason to believe that any such notice will be
received or is being threatened; and
(e) Hazardous Materials have not been transported from the
Properties, nor have Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of the Properties, in a
manner that could reasonably be expected to give rise to
liability under any Environmental Law, nor have the Borrowers or
the Subsidiaries retained or assumed any liability,
contractually, by operation of law or otherwise, with respect to
the generation, treatment, storage or disposal of Hazardous
Materials, in each case, which transportation, generation,
treatment, storage or disposal, or retention or assumption of
liabilities, in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by or for Holdings, any
Borrower or any Domestic Subsidiary as of the Restatement Effective Date. As
of such date, such insurance is in full force and effect and all premiums
that have become due and payable have been duly paid. Holdings, the
Borrowers and the Subsidiaries have insurance in such amounts and covering
such risks and liabilities as are in accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest in
the Collateral (as defined in the Pledge Agreement) and, when such Collateral
is delivered to the Collateral Agent, the Pledge Agreement shall
54
constitute a fully perfected first priority Lien on, and security interest
in, all right, title and interest of the pledgors thereunder in such
Collateral, in each case prior and superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) owned by the Grantors on the Restatement Effective Date
and, when financing statements in appropriate form are filed in the offices
specified on Schedule 6 to the Perfection Certificate, the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property, as defined in the Security Agreement)
that may be perfected by filing, recording or registering a financing
statement under the Uniform Commercial Code as in effect in the United States
(or any political subdivision thereof) and its territories and possessions,
in each case prior and superior in right to any other Lien on any Collateral
other than Liens expressly permitted by Section 6.02.
(c) The security agreement executed pursuant to the Existing Credit
Agreement and filed in the United States Patent and Trademark Office and the
United States Copyright Office on August 26, 1996, constitutes a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors thereunder in the Patents, Trademarks (other than "intent to
use" Trademark applications) and Copyrights (each, as defined in the Security
Agreement) material to the Borrowers' or Guarantors' business on the
Acquisition Date and in which a security interest may be perfected by filing,
recording or registration of the Security Agreement in the United States
Patent and Trademark Office and the United States Copyright Office, in each
case prior and superior in right to any other person other than Liens
permitted by Section 6.02 (it being understood and agreed that subsequent
recordings in the United States Patent and Trademark Office and the United
States Copyright Office will not be required to perfect a lien on registered
trademarks, trademark applications and copyrights acquired or developed by
the grantors after the Acquisition Date).
(d) The Mortgages, as amended by the amendments thereto on the date
hereof (the "Mortgage Amendments"), are effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable Lien on all of the Loan Parties' right, title and
interest in and to the Mortgaged Properties thereunder and the proceeds
thereof, and when the Mortgage Amendments are filed in the offices specified
on Schedule 3.19(d) and the proper amount of mortgage recording or similar
taxes (if any) are paid and when the financing statements are duly filed in
the appropriate public records, the Mortgages shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Mortgaged Property and the proceeds thereof, in each
case prior and superior in right to any other person other than Permitted
Encumbrances.
SECTION 3.20. Location of Real Property and Leased Premises. (a)
Schedule 3.20(a) lists completely and correctly in all material respects as
of the Restatement Effective Date the address of all real property owned by
Holdings, the Borrowers and the Subsidiaries.
(b) Schedule 3.20(b) lists completely and correctly in all material
respects as of the Restatement Effective Date the address of all real
property leased by Holdings, the Borrowers and the Subsidiaries.
55
SECTION 3.21. Labor Matters. As of the date hereof and the Restatement
Effective Date, there are no strikes or lockouts against Holdings, any
Borrower or any Subsidiary pending or, to the knowledge of Holdings or any
Borrower, threatened. The hours worked by and payments made to employees of
Holdings, the Borrowers and the Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters in any case where a Material Adverse
Effect could reasonably be expected to occur as a result of such violation.
Except as set forth on Schedule 3.21, all payments due from Holdings, any
Borrower or any Subsidiary, or for which any claim may be made against
Holdings, any Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as
a liability on the books of Holdings, such Borrower or such Subsidiary.
SECTION 3.22. Solvency. (a) Immediately following the making of each
Loan made on the Restatement Effective Date and after giving effect to the
application of the proceeds of such Loans, (i) the fair value of the assets
of each Loan Party will exceed its debts and liabilities, subordinated,
contingent or otherwise; (ii) the present fair saleable value of the property
of each Loan Party will be greater than the amount that will be required to
pay the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute
and matured; (iii) each Loan Party will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) each Loan Party will not
have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be
conducted following the Closing Date.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing (other
than (i) any Borrowing made pursuant to Section 2.02(f) or (ii) any
continuation or conversion of a Borrowing pursuant to Section 2.10 into a
Borrowing that does not increase the aggregate principal amount of Loans
outstanding), including each Borrowing of a Swingline Loan and on the date of
each issuance of a Letter of Credit (each such event being called a "Credit
Event"):
(a) The Administrative Agent shall have received a notice
of such Borrowing as required by Section 2.03 (or such notice
shall have been deemed given in accordance with Section 2.03) or,
in the case of the issuance of a Letter of Credit, the Issuing
Bank and the Administrative Agent shall have received a notice
requesting the issuance of such Letter of Credit as required by
Section 2.23(b) or, in the case of the Borrowing of a Swingline
Loan, the Swingline Lender and the Administrative Agent shall
have received a notice requesting such Swingline Loan as required
by Section 2.22(b).
(b) The representations and warranties set forth in
Article III hereof shall be true and correct in all material
respects on and as of the date of such Credit Event with the same
effect as though made on and as of such date, except to the
extent such
56
representations and warranties expressly relate to an earlier date (in
which case such representations and warranties shall have been true and
correct in all material respects on such earlier date).
(c) Each Borrower and each other Loan Party shall be in
compliance with all the terms and provisions set forth herein and
in each other Loan Document on its part to be observed or
performed, and at the time of and immediately after such Credit
Event, no Event of Default or Default shall have occurred and be
continuing.
Each Credit Event shall be deemed to constitute a representation and warranty
by each Borrower and Holdings on the date of such Credit Event as to the
matters specified in paragraphs (b) (except as aforesaid) and (c) of this
Section 4.01.
SECTION 4.02. Restatement Credit Event. On the date this Restated Credit
Agreement becomes effective (the "Restatement Effective Date"):
(a) The Administrative Agent shall have received, on behalf
of itself, the Lenders and the Issuing Bank, a favorable written
opinion of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for Holdings and the
Borrowers, substantially to the effect set forth in Exhibit J,
dated the Restatement Effective Date, addressed to the Issuing
Bank, the Administrative Agent and the Lenders, and covering such
other matters relating to the Loan Documents and the Transactions
as the Administrative Agent shall reasonably request, and
Holdings and the Borrowers hereby request such counsel to deliver
such opinion.
(b) All legal matters incident to this Restated Credit
Agreement, the Borrowings and extensions of credit hereunder and
the other Loan Documents shall be satisfactory to the Lenders, to
the Issuing Bank and to Cravath, Swaine & ▇▇▇▇▇, counsel for the
Administrative Agent.
(c) The Administrative Agent shall have received (i) a
certificate as to the good standing of each Loan Party as of a
recent date, from the Secretary of State of the state of its
organization; (ii) a certificate of the Secretary or Assistant
Secretary of each Loan Party dated the Restatement Effective Date
and certifying (A) that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors of
such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such Loan Party is a
party and, in the case of the Borrowers, the borrowings
hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (B) that
the certificate or articles of incorporation of such Loan Party
have not been amended since the Acquisition Date, (C) that the
by-laws of such Loan Party have not been amended since the
Acquisition Date and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or any
other document delivered in connection therewith on behalf of
such Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (ii) above; and
(iv) such other documents as the Lenders, the Issuing Bank or
Cravath, Swaine & ▇▇▇▇▇, counsel for the Administrative Agent,
may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Restatement Effective Date and signed by a
Financial Officer of Holdings and the
57
Parent Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01.
(e) The Administrative Agent shall have received all Fees
and other amounts due and payable on or prior to the Restatement
Effective Date, including, to the extent invoiced, reimbursement
or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrowers hereunder or under any other
Loan Document.
(f) The Pledge Agreement shall have been duly executed by
the Loan Parties party thereto and delivered to the Collateral
Agent, and all the outstanding Capital Stock of the Borrowers and
the Subsidiaries shall have been duly and validly pledged
thereunder to the Collateral Agent for the ratable benefit of the
Secured Parties and certificates representing such shares,
accompanied by instruments of transfer or stock powers endorsed
in blank, shall be in the actual possession of the Collateral
Agent, provided that (i) neither the Parent Borrower nor any
Domestic Subsidiary shall be required to pledge more than 65% of
the Capital Stock of any Foreign Subsidiary, (ii) no Foreign
Subsidiary shall be required to pledge the Capital Stock of any
of its Foreign Subsidiaries, and (iii) the Capital Stock of the
Receivables Subsidiary and Master Servicer shall not be required
to be pledged.
(g) The Security Agreement shall have been duly executed by
the Loan Parties party thereto and shall have been delivered to
the Collateral Agent and each document (including each Uniform
Commercial Code financing statement) required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Collateral Agent for the benefit of the Secured Parties a valid,
legal and perfected first priority security interest in and lien
on the Collateral described in such agreement, subject to Liens
permitted by Section 6.02, shall have been delivered to the
Collateral Agent.
(h) The Collateral Agent shall have received with respect
to the Existing Credit Agreement the results of a search of the
Uniform Commercial Code (or equivalent filings) filings made with
respect to the Loan Parties in the states (or other
jurisdictions) in which the chief executive office of each such
person is located, any offices of such persons in which records
have been kept relating to Accounts (as defined in the Security
Agreement) and the other jurisdictions in which Uniform
Commercial Code filings (or equivalent filings) are to be made
pursuant to the preceding paragraph, together with copies of the
financing statements (or similar documents) disclosed by such
search, and accompanied by evidence satisfactory to the
Collateral Agent that the Liens indicated in any such financing
statement (or similar document) would be permitted under
Section 6.02 or have been released.
(i) The Collateral Agent shall have received a Perfection
Certificate with respect to the Loan Parties dated the
Restatement Effective Date and duly executed by a Responsible
Officer of Holdings or the Parent Borrower.
(j) (i) Each of the Security Documents, as amended,
relating to each of the Mortgaged Properties shall remain in full
force and effect, (ii) each of such Mortgaged Properties shall
not be subject to any Lien other than those permitted under
Section 6.02 and other than Permitted Encumbrances, and
(iii) each of the amendments to such Security Documents shall
have been filed and recorded in the recording office
58
as specified on Schedule 3.19(d) and, in connection therewith, the
Collateral Agent shall have received evidence satisfactory to it of each
such filing and recordation.
(k) Each of the Holdings Guarantee Agreement and the
Subsidiary Guarantee Agreement shall have been duly executed by
the Loan Parties party thereto and shall have been delivered to
the Collateral Agent.
(l) The Indemnity, Subrogation and Contribution Agreement
shall have been duly executed by the Loan Parties party thereto
and shall have been delivered to the Collateral Agent.
(m) The Administrative Agent shall have received a
certificate as to coverage under the insurance policies required
by Section 5.02 and the applicable provisions of the Security
Documents, each of which shall be endorsed or otherwise amended
to include a "standard" or "New York" lender's loss payable
endorsement (in the case of each property or boiler policy) and
to name the Collateral Agent as additional insured, in form and
substance reasonably satisfactory to the Administrative Agent.
(n) There shall have been no material adverse change in the
business, assets, operations, properties, financial condition,
contingent liabilities, prospects or material agreements of
Holdings, the Parent Borrower and the Subsidiaries, taken as a
whole, since December 31, 1996.
(o) Substantially contemporaneously with the Restatement
Effective Date, the Borrowers shall have repaid in full the
principal of all loans outstanding, interest thereon and other
amounts due and payable under the Existing Credit Agreement and
under each other agreement related thereto, and the
Administrative Agent shall have received duly executed
documentation either evidencing or necessary for the cancelation
of all commitments under the Existing Credit Agreement.
ARTICLE V
Affirmative Covenants
Each of Holdings and the Borrowers covenants and agrees with each Lender
that so long as this Restated Credit Agreement shall remain in effect and
until the Commitments have been terminated and the principal of and interest
on each Loan, all Fees and all other expenses or amounts payable under any
Loan Document have been paid in full and all Letters of Credit have been
canceled or have expired and all amounts drawn thereunder have been
reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, each of Holdings and the Borrowers will, and will cause each of the
Subsidiaries (other than the Receivables Subsidiary and the Master Servicer)
to:
SECTION 5.01. Existence; Businesses and Properties; Compliance with
Laws. (a) Do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence, except as otherwise
expressly permitted under Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and
trade names material to the conduct of its business; comply in all
59
material respects with all applicable laws, rules, regulations (including any
zoning, building, environmental and safety law, ordinance, code or approval
or any building permits or any restrictions of record or agreements affecting
the Mortgaged Properties) and decrees and orders of any Governmental
Authority, whether now in effect or hereafter enacted except where
noncompliance could not reasonably be expected to result in a Material
Adverse Effect or, in the case of the Mortgaged Properties, where
noncompliance with zoning and building laws, rules and regulations, building
permits and certificates of occupancy could not reasonably be expected to
result in a material adverse effect on the business, assets, operations or
financial condition of the person that has title to the Mortgaged Property;
and at all times maintain and preserve all property material to the conduct
of such business and keep such property in good repair, working order and
condition (reasonable wear and tear excepted) and from time to time make, or
cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted in all material
respects at all times.
SECTION 5.02. Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain
such other insurance, to such extent and against such risks, including fire
and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including commercial general liability insurance against claims
for bodily injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by
it; and maintain such other insurance as may be required by law.
(b) Prior to the Collateral Release Date, cause all property and boiler
policies to be endorsed or otherwise amended to include a "standard" or "New
York" lender's loss payable endorsement, in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent, which
endorsement shall provide that, from and after the Restatement Effective
Date, if the insurance carrier shall have received written notice from the
Administrative Agent or the Collateral Agent of the occurrence of an Event of
Default, the insurance carrier shall pay all proceeds otherwise payable to
the Loan Parties under such policies directly to the Collateral Agent; cause
all such policies to provide that none of Holdings, the Borrowers, the
Administrative Agent, the Collateral Agent or any other party shall be a
coinsurer thereunder and to contain a "Replacement Cost Endorsement", without
any deduction for depreciation, and such other provisions as the
Administrative Agent or the Collateral Agent may reasonably require from time
to time to protect their interests; deliver, promptly as available but in no
event later than 120 days after the Restatement Effective Date, original or
certified copies of all such policies to the Collateral Agent; cause each
such policy to provide that it shall not be canceled or not renewed (i) by
reason of nonpayment of premium upon not less than 10 days' prior written
notice thereof by the insurer to the Administrative Agent and the Collateral
Agent (giving the Administrative Agent and the Collateral Agent the right to
cure defaults in the payment of premiums) or (ii) for any other reason upon
not less than 30 days' prior written notice thereof by the insurer to the
Administrative Agent and the Collateral Agent; deliver to the Administrative
Agent and the Collateral Agent, (A) prior to the cancelation, or nonrenewal
of any such policy of insurance, a copy of a renewal or replacement policy
(or other evidence of renewal of a policy previously delivered to the
Administrative Agent and the Collateral Agent) together with evidence
satisfactory to the Administrative Agent and the Collateral Agent of payment
of the premium therefor to the extent due and payable and (B) promptly upon
any modification of any such policy, a copy of such modified policy.
60
(c) Prior to the Collateral Release Date, if at any time the area in
which the Premises (as defined in the Mortgages) are located is designated a
"flood hazard area" in any Flood Insurance Rate Map published by the Federal
Emergency Management Agency (or any successor agency), obtain flood insurance
in such total amount as the Administrative Agent or the Collateral Agent may
from time to time reasonably require, and otherwise comply with the National
Flood Insurance Program as set forth in the Flood Disaster Protection Act of
1973, as it may be amended from time to time.
(d) Prior to the Collateral Release Date, with respect to any Mortgaged
Property, carry and maintain commercial general liability insurance including
the "broad form CGL endorsement" and coverage on an occurrence basis against
claims made for bodily injury, death and property damage and umbrella
liability insurance against such claims, in no event for a combined single
limit of less than $25,000,000, naming the Collateral Agent as an additional
insured, on forms reasonably satisfactory to the Collateral Agent.
(e) Notify the Administrative Agent and, prior to the Collateral Release
Date, the Collateral Agent immediately whenever any separate insurance
concurrent in form or contributing in the event of loss with that required to
be maintained under this Section 5.02 is taken out by Holdings or the
Borrowers; and promptly deliver to the Administrative Agent and, prior to the
Collateral Release Date, the Collateral Agent a duplicate original or
certified copy of such policy or policies.
(f) In connection with the covenants set forth in this Section 5.02, it
is understood and agreed that:
(i) none of the Administrative Agent, the Lenders, the
Issuing Bank, or their respective agents or employees shall be
liable for any loss or damage insured by the insurance policies
required to be maintained under this Section 5.02, it being
understood that (a) the Borrowers and the other Loan Parties
shall look solely to their insurance companies or any other
parties other than the aforesaid parties for the recovery of such
loss or damage and (b) Holdings and the Borrowers shall use
reasonable efforts to cause such insurance policies to waive the
insurer's rights of subrogation against the Administrative Agent,
the Collateral Agent, the Lenders, the Issuing Bank or their
agents or employees. If, however, any such insurance policy does
not provide waiver of subrogation rights against such parties, as
required above, then Holdings and each Borrower hereby agrees, to
the extent permitted by law, to waive its right of recovery, if
any, against the Administrative Agent, the Collateral Agent, the
Lenders, the Issuing Bank and their agents and employees in
respect of any such loss or damage; and
(ii) the designation of any form, type or amount of
insurance coverage by the Administrative Agent or the Collateral
Agent under this Section 5.02 shall in no event be deemed a
representation, warranty or advice by the Administrative Agent or
the Collateral Agent that such insurance is adequate for the
purposes of the business of Holdings, the Borrowers and the
Subsidiaries or the protection of their properties.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other
monetary obligations promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or in respect of its
property, before such taxes, assessments and governmental charges shall
become delinquent or in default, as well as all lawful claims for
61
labor, materials and supplies or otherwise that, if unpaid, might give rise
to a Lien upon such properties or any part thereof; provided, however, that
such payment and discharge shall not be required with respect to (i) any such
tax, assessment, charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings and
Holdings or such Borrower, as applicable, shall have set aside on its books
adequate reserves with respect thereto in accordance with GAAP and such
contest operates to suspend collection of the contested obligation, tax,
assessment or charge and enforcement of a Lien and, in the case of a
Mortgaged Property, there is no risk of forfeiture of such property and (ii)
any Indebtedness or other obligation or any tax, assessment, charge, levy or
claims, the failure to pay and discharge when due which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
SECTION 5.04. Financial Statements, Reports, etc. In the case of
Holdings and the Parent Borrower, furnish to the Administrative Agent and
each Lender:
(a) within 90 days after the end of each fiscal year, its
consolidated balance sheet and related statements of income,
stockholders' equity and cash flows showing the consolidated
financial condition of such Person and its consolidated
subsidiaries as of the close of such fiscal year and the
consolidated results of its operations and the operations of such
subsidiaries during such year (and showing, on a comparative
basis, the figures for the previous year), all audited by Coopers
and ▇▇▇▇▇▇▇ LLP or other independent public accountants of
recognized national standing acceptable to the Required Lenders
and accompanied by an opinion of such accountants (which shall
not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present in all material
respects the financial condition and results of operations of
such Person and its consolidated subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, its unaudited consolidated
balance sheet and related statements of income, stockholders'
equity and cash flows showing the consolidated financial
condition of such Person and its consolidated subsidiaries as of
the close of such fiscal quarter and the consolidated results of
its operations and the operations of such subsidiaries during
such fiscal quarter and the then elapsed portion of the fiscal
year (and showing, on a comparative basis, such information as of
and for the corresponding dates and periods of the preceding
fiscal year), all certified by a Financial Officer of such Person
as fairly presenting in all material respects the consolidated
financial condition and results of operations of such Person and
its consolidated subsidiaries on a consolidated basis in
accordance with GAAP (except for the absence of footnote
disclosure) consistently applied, subject to year-end audit
adjustments;
(c) concurrently with any delivery of financial statements
under subparagraph (a) or (b) above, a certificate of the
Financial Officer certifying such statements and (i) certifying
that no Event of Default or Default has occurred or, if an Event
of Default or Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be
taken with respect thereto, (ii) setting forth computations in
reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the covenants contained in
Sections 6.09, 6.10 and 6.11 and (iii) setting forth any change
in the Applicable Percentage;
62
(d) concurrently with the delivery of financial statements
under subparagraph (a) above, a certificate of the accounting
firm opining on such statements (which certificate may be limited
to accounting matters and disclaim responsibility for legal
interpretations) (i) certifying whether such accounting firm has
become aware of the occurrence of any Event of Default or Default
and (ii) confirming the accuracy of the computations referred to
in clauses (ii) and (iii) of sub-paragraph (c) above;
(e) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and
other materials filed by Holdings, any Borrower or any Subsidiary
with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or
distributed to its shareholders generally, as the case may be;
(f) promptly, from time to time, such other information
regarding the operations, business affairs and financial
condition of Holdings, any Borrower or any Subsidiary, or
compliance with the terms of any Loan Document, or, if available,
such financial statements showing the results of operations of
▇▇▇▇▇▇▇, in each case as the Administrative Agent or any Lender
may reasonably request; and
(g) prior to the beginning of each fiscal year, a copy of
the budget for its consolidated balance sheet and related
statements of income and cash flows for each quarter of such
fiscal year.
SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent, the Issuing Bank and each Lender written notice of the
following promptly after (and, in any event, no later than five days after)
any Responsible Officers of Holdings or the Parent Borrower obtains knowledge
thereof:
(a) any Event of Default or Default, specifying the nature
and extent thereof and the corrective action (if any) taken or
proposed to be taken with respect thereto;
(b) the filing or commencement of, or any written threat or
notice of intention of any person to file or commence, any
action, suit or proceeding, whether at law or in equity or by or
before any Governmental Authority, against Holdings, any Borrower
or any Subsidiary that could reasonably be expected to result in
a Material Adverse Effect; and
(c) any development that has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code to the extent failure to
comply could reasonably be expected to result in a Material Adverse Effect
and (b) furnish to the Administrative Agent promptly, and in any event within
10 days, after any Responsible Officer of Holdings or any Borrower knows or
has reason to know that, any ERISA Event has occurred that, alone or together
with any other ERISA Event, could reasonably be expected to result in
liability of Holdings or the Borrowers in an aggregate amount exceeding
$5,000,000, a statement of a Financial Officer of Holdings or the Parent
Borrower, as applicable, setting forth details as to such ERISA Event and the
action, if any, that Holdings or the Parent Borrower, as applicable, has
taken or proposes to take with respect thereto.
63
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all requirements of law are made in
relation to its business and activities. Each Loan Party and each Subsidiary
(a) will permit any representatives designated by the Administrative Agent or
any Lender to visit and inspect the financial records and the properties of
Holdings, any Borrower or any Subsidiary at reasonable times and as often as
reasonably requested and to make extracts from and copies of such financial
records, and (b) will permit any representatives designated by the
Administrative Agent or any Lender to discuss the affairs, finances and
condition of Holdings, any Borrower or any Subsidiary with the officers
thereof and independent accountants therefor; provided, however, that the
number of visits pursuant to clause (a) above in any year shall not exceed
two, unless (i) a Default or Event of Default shall have occurred and be
continuing or (ii) the Collateral Agent, or the Required Lenders through the
Administrative Agent, determines in good faith that any material event or
material change has occurred with respect to Holdings, the Borrowers and the
Subsidiaries and that as a result of such event or change more frequent
visits are necessary or prudent.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in
Section 3.13.
SECTION 5.09. Compliance with Environmental Laws. Comply, and cause all
lessees and other persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to
its operations and Properties and the operations conducted thereon; obtain
and renew all material Environmental Permits necessary for its Properties;
and conduct any Remedial Action in accordance with Environmental Laws, except
where noncompliance with Environmental Laws and Environmental Permits or the
failure to obtain or renew such Environmental Permits or conduct such
Remedial Action, in the aggregate, could not be reasonably expected to result
in a Material Adverse Effect.
SECTION 5.10. Preparation of Environmental Reports. If a Default caused
by reason of a breach of Section 3.17 or 5.09 relating to the presence of
Hazardous Materials at any Properties shall have occurred and be continuing,
at the request of the Required Lenders through the Administrative Agent,
provide to the Lenders within 90 days after such request, at the expense of
the Borrowers, an environmental site assessment report for the Properties
which are the subject of such Default prepared by an environmental consulting
firm reasonably acceptable to the Administrative Agent and indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance or Remedial Action in connection with such Properties.
SECTION 5.11. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including, prior to the Collateral Release Date, filing
Uniform Commercial Code and other financing statements, mortgages and deeds
of trust) that may be required under applicable law, or that the Required
Lenders, the Administrative Agent or the Collateral Agent may reasonably
request, in order to effectuate the transactions contemplated by the Loan
Documents and, prior to the Collateral Release Date, in order to grant,
preserve, protect and perfect the validity and first priority of the security
interests created or intended to be created by the Security Documents
(subject to Liens permitted by Section 6.02). Holdings and the Borrowers
will cause any subsequently acquired or organized Domestic Subsidiary to
execute a Subsidiary Guarantee Agreement, Indemnity Subrogation and
Contribution Agreement and any
64
applicable Security Document in favor of the Collateral Agent. In addition,
prior to the Collateral Release Date, upon consummation of any acquisition of
any new business unit, except where financing for such acquisition is
obtained through secured financing permitted by Section 6.01, Holdings and
each Borrower will, at its cost and expense, promptly secure the Obligations
by pledging or creating, or causing to be pledged or created, perfected
security interests with respect to all equipment, inventory and other
tangible personal property (other than receivables) so acquired. Such
security interests and Liens will be created under the Security Documents and
other security agreements and other instruments and documents in form and
substance reasonably satisfactory to the Collateral Agent, and Holdings and
each Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions and lien searches) as the
Collateral Agent shall reasonably request to evidence compliance with this
Section. Holdings and each Borrower agree to provide such evidence as the
Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien. Prior to the Collateral
Release Date, each Loan Party agrees promptly to notify the Collateral Agent
if any material portion of the Collateral owned or held by such Loan Party is
damaged or destroyed.
SECTION 5.12. Subsidiaries. In the event that any of ▇▇▇▇▇ Furniture
Company, Incorporated, ▇▇▇▇▇ Link Corporation, Link-▇▇▇▇▇▇ Corporation or
▇▇▇▇▇-▇▇▇▇▇▇ Corporation (a) acquires or otherwise obtains any assets (other
than rights associated with each such company's name) in excess of $5,000,
(b) hires or otherwise retains any employees or (c) conducts any business,
cause such company to become a Subsidiary Guarantor in accordance with
Section 5.11 as if such company were a subsequently acquired or organized
Domestic Subsidiary.
ARTICLE VI
Negative Covenants
Each of Holdings and the Borrowers covenants and agrees with each Lender
that, so long as this Restated Credit Agreement shall remain in effect and
until the Commitments have been terminated and the principal of and interest
on each Loan, all Fees and all other expenses or amounts payable under any
Loan Document have been paid in full and all Letters of Credit have been
canceled or have expired and all amounts drawn thereunder have been
reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, neither Holdings nor the Borrowers will, nor will they cause or
permit any of the Subsidiaries (other than the Receivables Subsidiary and the
Master Servicer, except in the case of Section 6.13) to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness existing on the date hereof and set forth
on Schedule 6.01(a);
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) in the case of Holdings, the Masco Notes and the
Debentures;
(d) (i) in the case of the Parent Borrower, the Subordinated
Notes and (ii) in the case of the Subsidiary Guarantors, the
Guarantees guaranteeing the Subordinated Notes;
65
(e) Permitted Foreign Indebtedness in an aggregate principal
amount at any time outstanding not to exceed $75,000,000 (less,
without duplication, the aggregate amount of Indebtedness of
Foreign Subsidiaries pursuant to Section 6.01(o) outstanding at
such time and the aggregate outstanding amount of Permitted
Foreign Investments made pursuant to Section 6.04(k));
(f) other unsecured or subordinated Indebtedness of any
type, provided that there may not be outstanding at any time more
than $100,000,000 in aggregate principal amount of such
Indebtedness that, by its terms, matures prior to the Maturity
Date;
(g) intercompany loans and advances, letters of credit and
guarantees in support of Indebtedness permitted by Section
6.04(b), (c), (j), (k), (m) and (p);
(h) Indebtedness consisting of purchase money Indebtedness
(including Indebtedness that is in existence with respect to any
asset or other property at the time such asset or other property
is acquired), industrial revenue bonds or Capital Lease
Obligations incurred after the Restatement Effective Date to
finance capital expenditures, provided that the Indebtedness
incurred shall not exceed the purchase price of the assets
financed thereby;
(i) Indebtedness pursuant to Exchange Rate Protection
Agreements and Interest Rate Protection Agreements;
(j) Indebtedness of Holdings, the Parent Borrower and the
Subsidiaries owed to (including obligations in respect of letters
of credit for the benefit of) any person providing worker's
compensation, health, disability or other employee benefits or
property, casualty or liability insurance to Holdings, the Parent
Borrower or any Subsidiary, pursuant to reimbursement or
indemnification obligations to such person, in each case incurred
in the ordinary course of business;
(k) Indebtedness of Holdings, the Parent Borrower or any
Subsidiary in respect of performance bonds, bid bonds, appeal
bonds, surety bonds and similar obligations and trade related
letters of credit, in each case provided in the ordinary course
of business, including those incurred to secure health, safety
and environmental obligations in the ordinary course of business;
(l) Indebtedness that is secured solely by newly acquired
real property or by real property of any Acquired Entity and
which is nonrecourse to the Borrowers and the Guarantors (other
than such Acquired Entity);
(m) Indebtedness issued by Holdings or the Parent Borrower,
in lieu of the payment of cash, in connection with the purchase
or redemption of Capital Stock held by directors, officers,
employees or consultants of Holdings, the Parent Borrower or any
Subsidiary or their Permitted Transferees;
(n) Indebtedness incurred pursuant to any Permitted
Receivables Financing from time to time;
(o) Indebtedness not in excess of $15,000,000, which
Indebtedness is guaranteed by Masco, or with respect to which
Masco has provided credit support, in
66
either case pursuant to the terms of the Acquisition Agreement (the
"Masco Guarantees");
(p) Indebtedness incurred pursuant to any sale and
lease-back transaction permitted by Section 6.03;
(q) secured Indebtedness in addition to that permitted by
clauses (a) through (p) above in an aggregate principal amount
not to exceed $25,000,000 at any time outstanding; and
(r) extensions, renewals or refinancings of Indebtedness
under the above paragraphs so long as, in the case of paragraphs
(c) and (d) above, (A) such Indebtedness ("Refinancing
Indebtedness") is in an aggregate principal amount not greater
than the aggregate principal amount of the Indebtedness being
extended, renewed or refinanced plus the amount of any premiums
required to be paid thereon and fees and expenses associated
therewith, (B) such Refinancing Indebtedness has a final maturity
that is not less than six months after the Maturity Date, (C) the
interest rate applicable to such Refinancing Indebtedness is a
market interest rate (as determined in good faith by the Board of
Directors of the Parent Borrower) as of the time of such
extension, renewal or refinancing, (D) if the Indebtedness being
extended, renewed or refinanced is subordinated to the
Obligations, such Refinancing Indebtedness is subordinated to the
Obligations to the same extent as the Indebtedness being
extended, renewed or refinanced and (E) at the time and after
giving effect to such extension, renewal or refinancing, no
Default or Event of Default shall have occurred and be
continuing.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any
income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of Holdings, the Parent
Borrower and the Subsidiaries existing on the date hereof and set
forth on Schedule 6.02(a), provided that such Liens shall secure
only those obligations which they secure on the date hereof (and
extensions, renewals and refinancings of such obligations
permitted by Section 6.01);
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by Holdings, the Parent Borrower or any
Subsidiary, provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition and
(ii) such Lien does not apply to any other property or assets of
Holdings, any Borrower or any Subsidiary;
(d) Liens for taxes, assessments, governmental charges and
levies not yet due or which are being contested or are unpaid in
compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens arising in the ordinary course
of business and securing obligations that are not due and payable
or which are being contested in compliance with Section 5.03;
67
(f) Liens of landlords or of mortgagees of landlords arising
by operation of law, provided that the (A) rental payments
secured thereby are not yet due and payable and (B) the Borrowers
use reasonable efforts to obtain a consent from such landlord, in
which such landlord or mortgagee acknowledges the Collateral
Agent's first priority security interest in the Inventory (as
defined in the Security Documents) pledged by each Loan Party to
the Collateral Agent and agrees to provide the Collateral Agent
with access to the premises covered by such lease in order to
enforce such security interest;
(g) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security or similar laws or
regulations;
(h) pledges and deposits to secure the performance of bids,
trade contracts (other than for Indebtedness), leases (other than
Capital Lease Obligations), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(i) zoning restrictions, easements, rights-of-way, minor
defects or irregularities in title, restrictions on use of real
property and other similar encumbrances which, in the aggregate,
do not materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the
business of Holdings, the Parent Borrower or the Subsidiaries;
(j) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the
case of improvements, constructed) by Holdings, any Borrower or
any Subsidiary, provided that (i) such security interests secure
Indebtedness permitted by Section 6.01(h), (ii) such security
interests are incurred, and the Indebtedness secured thereby is
created, not later than 120 days after such acquisition (or
construction) or are incurred to extend, renew or refinance such
security interests and Indebtedness incurred within such period,
(iii) the Indebtedness secured thereby does not exceed the lesser
of the cost or the fair market value of such real property,
improvements or equipment at the time of such acquisition (or
construction) and (iv) such security interests do not apply to
any other property or assets of Holdings, any Borrower or any
Subsidiary;
(k) attachment or judgment Liens securing judgments, unless
the aggregate amount of such judgments shall (A) exceed
$10,000,000 (except to the extent the Administrative Agent shall
have received satisfactory evidence that such judgments are
covered by insurance) and (B) remain undischarged for a period of
more than 60 consecutive days during which execution shall not be
effectively stayed;
(l) Liens to secure Capital Lease Obligations, industrial
revenue bonds or Indebtedness permitted by Sections 6.01(h) or
(l), provided that such Liens do not extend to any property or
assets of Holdings, the Parent Borrower or any Subsidiary other
than the property or assets financed thereby;
(m) rights of first offer or refusal relating to interests
in joint ventures;
(n) UCC filings that relate to the preservation of claims in
respect of interests in property subject to operating leases (it
being agreed that the permissiveness of such
68
filing hereunder shall not be considered a waiver of any claim that
the Lenders or the Collateral Agent may have on the property to which
such interest relates);
(o) Liens securing any Indebtedness permitted by
Sections 6.01(l), (p) and (q);
(p) in the case of any Foreign Subsidiary, Liens securing
any Permitted Foreign Indebtedness permitted by Section 6.01(e);
(q) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of custom duties in
connection with the importation of goods in the ordinary course
of business;
(r) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered
into by Holdings, the Parent Borrower or any of the Subsidiaries
in the ordinary course of business;
(s) Liens on accounts receivables financed in connection
with any Permitted Receivables Financing permitted by Section
6.05; and
(t) pledges of any Capital Stock of ▇▇▇▇▇▇▇.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred, provided that
the Parent Borrower and the Subsidiaries may enter into any such transaction
to the extent that the Capital Lease Obligation and Liens associated
therewith would be permitted by Sections 6.01(h), 6.01(l) or 6.02(o).
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or
acquire any Capital Stock, evidences of Indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist
any investment or any other interest in, any other person, except:
(a) investments by Holdings existing on the Closing Date in
the Capital Stock of the Parent Borrower and ▇▇▇▇▇▇▇;
(b) investments, loans or advances made by any Borrower in
or to Holdings, (i) to the extent necessary to enable Holdings to
pay fees and expenses payable under the Transition Services
Agreement (and also to the extent that payment by the Parent
Borrower of the fees and expenses payable pursuant to the
Management Agreement may constitute such investments, loans or
advances), (ii) to the extent necessary to enable Holdings to
make payments consisting of indemnification obligations,
guarantee fees and reimbursement of amounts expended by Masco for
the benefit of the Parent Borrower and the Subsidiaries required
to be made pursuant to the Acquisition Agreement, (iii) to fund
any repurchase, redemption or other payment pursuant to
Section 6.06(a)(iii), (iv) to the extent necessary to cover any
operating expenses of Holdings or (v) for any purpose, with
amounts available under the Restricted Payments Basket, provided
that after giving effect to any investment, loan
69
or advance made pursuant to this paragraph (b), the Parent Borrower
shall be in compliance on a pro forma basis with Sections 6.09 and 6.10.
(c) investments, loans or advances made by Holdings, any
Borrower or any Subsidiary in or to any Borrower or any
Subsidiary Guarantor;
(d) Permitted Investments;
(e) investments by Holdings, any Borrower or any Subsidiary
in (i) the Capital Stock of the Receivables Subsidiary or Master
Servicer and (ii) other interests in the Receivables Subsidiary,
in each case to the extent necessary in connection with or
required by the terms of the Permitted Receivables Financing;
(f) investments consisting of noncash consideration received
in connection with a sale of assets permitted by Section 6.05;
(g) investments arising from transactions by any Loan Party
or any of the Subsidiaries with customers or suppliers (including
Affiliates to the extent permitted by Section 6.07) in the
ordinary course of business, including endorsements of negotiable
instruments and debt obligations and other investments received
in connection with the bankruptcy or reorganization of customers
and suppliers and in settlement of delinquent obligations of, and
other disputes with, customers or suppliers, arising in the
ordinary course of business, and in the exercise of the
reasonable business judgment of such Borrower or such Subsidiary;
(h) advances to employees made to cover payroll, travel and
similar expenses that are expected at the time of such advances
ultimately to be treated as expenses in accordance with GAAP and
that are made in the ordinary course of business, provided that
in the event it is determined that any item with respect to which
any such advance is made will not be treated as such an expense,
this clause (h) shall be inapplicable with respect to such
advances;
(i) loans or advances to employees made in the ordinary
course of business not exceeding $5,000,000 in the aggregate
outstanding at any time;
(j) investments, loans or advances made by any Foreign
Subsidiary in or to any other Foreign Subsidiary;
(k) Permitted Foreign Investments not to exceed $75,000,000
at any time outstanding (less, without duplication, the aggregate
outstanding principal amount of Permitted Foreign Indebtedness
and the aggregate amount of Indebtedness of Foreign Subsidiaries
pursuant to Section 6.01(o) outstanding at such time);
(l) Capital Expenditures and other purchases permitted
hereunder;
(m) investments, loans and advances existing on the date
hereof and as set forth on Schedule 6.04(m) and renewals,
replacements and extensions thereof, provided that the amount of
any such renewed, replaced or extended investment, loan or
advance shall be for an amount no greater than the amount of the
investment, loan or advance being renewed or extended;
70
(n) investments, loans and advances in or to customers and
dealers in the ordinary course of business (including
investments, loans and advances existing on the date hereof and
set forth on Schedule 6.04(n)) not exceeding in the aggregate
$75,000,000 at any time outstanding;
(o) investments, loans and advances in or to suppliers in
the ordinary course of business and investments, loans and
advances in or to Joint Ventures engaged in any related business
(including investments, loans and advances existing on the date
hereof and set forth on Schedule 6.04(o)),not exceeding in the
aggregate $80,000,000 at any time outstanding;
(p) investments, loans and advances in or to a Foreign
Subsidiary originally arising from dividend receivables owed by
such Foreign Subsidiary or any other Foreign Subsidiary (whether
or not thereafter reclassified from a loan or an advance to an
investment or vice versa), provided that there shall be no net
increase in the aggregate amount of cash investments, cash loans
and cash advances to Foreign Subsidiaries as a result of any
investments, loans and advances permitted pursuant to this
Section 6.04(p);
(q) Permitted Acquisitions; and
(r) investments, loans or advances in addition to those
permitted by clauses (a) through (q) above not exceeding in the
aggregate $25,000,000 at any time outstanding.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
Merge into or consolidate with any other person, or permit any other person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or any of
its assets (whether now owned or hereafter acquired) or any Capital Stock of
the Parent Borrower or any Subsidiary, or purchase, lease or otherwise
acquire (in one transaction or a series of transactions) all or any of the
assets of any other person, except that:
(a) any Loan Party and any Subsidiary may purchase and sell
inventory and Permitted Investments and purchase and sell
obsolete, worn out and unused assets and scrap in the ordinary
course of business;
(b) if at the time thereof and immediately after giving
effect thereto no Event of Default or Default shall have occurred
and be continuing, (i) any wholly owned Subsidiary may merge into
the Parent Borrower in a transaction in which the Parent Borrower
is the surviving corporation, (ii) any wholly owned Subsidiary
may merge into or consolidate with any other wholly owned
Domestic Subsidiary in a transaction in which the surviving
entity is a wholly owned Domestic Subsidiary; (iii) any 90%-Owned
Foreign Subsidiary may merge into any other 90%-Owned Foreign
Subsidiary in a transaction in which the surviving entity is a
90%-Owned Foreign Subsidiary and no person other than the Parent
Borrower, a wholly owned Domestic Subsidiary or a 90%-Owned
Foreign Subsidiary receives any consideration (other than
interests in the surviving entity to any applicable minority
interest holder not exceeding the proportionate interests of such
minority interest holder in the applicable Subsidiary) and
(iv) any direct wholly owned subsidiary of any Foreign Subsidiary
may merge into such Foreign Subsidiary or into another direct
wholly owned subsidiary of such
71
Foreign Subsidiary so long as no person other than such Foreign
Subsidiary receives any consideration;
(c) (i) any Loan Party or any Subsidiary may sell, transfer,
lease or otherwise dispose of any of its assets to any Borrower
or any Subsidiary Guarantor, (ii) any 90%-Owned Foreign
Subsidiary may sell, transfer, lease or otherwise dispose of any
of its assets to any 90%-Owned Foreign Subsidiary and (iii) any
direct wholly owned subsidiary of any Foreign Subsidiary may
sell, transfer, lease or otherwise dispose of any of its assets
to such Foreign Subsidiary or another wholly owned subsidiary of
such Foreign Subsidiary;
(d) any Loan Party and any Subsidiary may sell accounts
receivable and related assets pursuant to any Permitted
Receivables Financing in effect from time to time;
(e) any sale and lease-back transaction permitted by Section
6.03 may be effected;
(f) any Loan Party and any Subsidiary may sell other assets
or Capital Stock of any Subsidiary without limitation, so long as
the Net Cash Proceeds received by the Parent Borrower or any
Subsidiary of any such Asset Sale are applied as follows:
(i) at the election of the Parent Borrower (a
"Restricted Payment Election"), up to 50% of such Net Cash
Proceeds may be added to the Restricted Payments Basket, and
used to make Restricted Payments, so long as (A) the
Commitments are permanently reduced, simultaneously with
such election, by an amount equal to an equivalent
percentage of such Net Cash Proceeds pursuant to
Section 2.09(d) and (B) the Total Debt Ratio, on a pro forma
basis after giving effect to such transactions, is less than
or equal to 2.50 to 1.00; or
(ii) to the extent any portion of such Net Cash
Proceeds is not (A) added to the Restricted Payments Basket
and applied to permanently reduce the Commitments pursuant
to paragraph (i) above within one year following the receipt
or (B) used by such Loan Party or Subsidiary within one year
following receipt to purchase (or enter into binding
commitments to purchase) assets used in the business of such
Loan Party or Subsidiary or to make an investment, loan or
advance in or to another Loan Party that within such
one-year period uses the proceeds of such investment to
purchase (or enters into binding commitments to purchase)
assets used in the business of such other Loan Party, an
amount equal to 50% of such unused portion shall be applied
to permanently reduce the Commitments pursuant to
Section 2.09;
(g) any investments, loans or advances permitted by
Section 6.04 may be effected;
(h) any Loan Party or any Subsidiary may lease or sublease
properties in which it has interests or lease or sublease any
other property in the ordinary course of business;
(i) a Foreign Subsidiary may issue its Capital Stock (i) to
the extent it is required to do so pursuant to director
qualification and to local ownership laws in the
72
applicable foreign country and (ii) to the management of such Foreign
Subsidiary under any employee stock option, stock purchase, stock
grant or other similar incentive or employee benefit plan in
existence from time to time; and
(j) Holdings may sell, transfer or otherwise dispose of
(including by means of a dividend) the Capital Stock or assets of
▇▇▇▇▇▇▇;
provided, however, that prior to the Collateral Release Date any sale,
transfer or other disposition of assets or stock otherwise permitted by
Section 6.05 (f) above shall not be permitted unless (A) such sale, transfer
or other disposition is for consideration at least 75% of which is cash and
(B) such consideration is at least equal to the fair market value of the
assets sold, transferred or disposed of (as determined in good faith by the
board of directors of the Parent Borrower).
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) In the case of the Parent Borrower or
any Subsidiary, declare or pay, directly or indirectly, any dividend or make
any other distribution (by reduction of capital or otherwise), whether in
cash, property, securities or a combination thereof, with respect to any
shares of its Capital Stock or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any Subsidiary to purchase
or acquire for value) any shares of any class of its Capital Stock or set
aside any amount for any such purpose; provided, however, that:
(i) any Subsidiary may declare and pay dividends to,
repurchase its Capital Stock from, or make other distributions
to, the Parent Borrower or any wholly owned Subsidiary (or, in
the case of non-wholly owned Subsidiaries, to or from the Parent
Borrower or any Subsidiary and each other owner of Capital Stock
of such Subsidiary on a pro rata basis (or more favorable basis
from the perspective of the Parent Borrower or such Subsidiary)
based on their relative ownership interests);
(ii) the Parent Borrower may declare and pay dividends or
make other distributions to Holdings to the same extent that the
Parent Borrower may loan or advance funds to Holdings pursuant to
Section 6.04(b);
(iii) the Parent Borrower or a Foreign Subsidiary may
purchase or redeem, and the Parent Borrower may make payments of
principal and interest on Indebtedness issued pursuant to
Section 6.01(m) to purchase or redeem, shares of Capital Stock
(or options or warrants in respect of such shares) of Holdings,
the Parent Borrower, or any Subsidiary (including related stock
appreciation rights or similar securities) held by any current or
former director, officer, employee or consultant of the Parent
Borrower or any Subsidiary (or held by their Permitted
Transferees) upon such person's death, disability, retirement or
termination of employment or consulting services or under the
terms of any agreement under which such shares of stock or
related rights or similar securities were issued; and
(iv) the Parent Borrower or any Subsidiary may declare or
pay, directly or indirectly, any other dividend or make any other
distribution not specifically authorized pursuant to the above
paragraphs (i) through (iii) with amounts then available under
the Restricted Payments Basket, provided that after giving effect
to any dividend or distribution made pursuant to this
clause (iv), the Parent Borrower shall be in compliance on a pro
forma basis with Sections 6.09 and 6.10.
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(b) Permit its subsidiaries (other than the Receivables Subsidiary, the
Master Servicer and ▇▇▇▇▇▇▇) to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction
on the ability of any such subsidiary to (i) pay any dividends or make any
other distributions on its Capital Stock or any other equity interest or (ii)
make or repay any loans or advances to the Parent Borrower or the parent of
such subsidiary (subclauses (i) and (ii) are collectively referred to as an
"Upstream Payment") other than encumbrances and restrictions:
(A) pursuant to the Loan Documents;
(B) existing under, or by reason of, applicable law;
(C) contained in any debt instrument relating to (i) a
person acquired after the date hereof, provided that
(x) such instrument was in existence at the time of
such acquisition and was not created in contemplation
of or in connection with such acquisition, (y) the
officers of the Parent Borrower reasonably believe at
the time of such acquisition that the terms of such
instrument will not encumber or restrict the ability of
such acquired person to make an Upstream Payment and
(z) such instrument contains no express encumbrances or
restrictions on the ability of such acquired person to
make an Upstream Payment and (ii) industrial revenue
bonds permitted under Section 6.01(h) or Indebtedness
permitted under Section 6.01(l), provided that such
instrument contains no express encumbrances or
restrictions on the ability of the applicable obligor
thereon to make an Upstream Payment;
(D) contained in or required by Permitted Foreign
Indebtedness; and
(E) contained in agreements for Asset Sales permitted under
Section 6.05.
SECTION 6.07. Transactions with Affiliates. Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates,
except that Holdings, any Borrower or any Subsidiary may engage in any of the
foregoing transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to Holdings, such Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties; provided, however, that the foregoing restriction shall not
apply to (a) any transactions expressly permitted by this Restated Credit
Agreement, including those permitted by Section 6.06 and any Permitted
Receivables Financing, (b) transactions among Foreign Subsidiaries, (c)
transactions pursuant to agreements entered into or in effect on the
Restatement Effective Date and set forth on Schedule 6.07, including
amendments thereto entered into after the Restatement Effective Date,
provided that the terms of any such amendment are not, in the aggregate, less
favorable to the Lenders than the terms of such agreement prior to such
amendment, (d) any transactions among the Loan Parties and (e) transactions
with Affiliates of Citicorp conducted in the normal course of such
Affiliates' banking business.
SECTION 6.08. Other Indebtedness and Agreements. (a) In the case of the
Parent Borrower or any Subsidiary, make any payment or distribution, whether
in cash, property, securities or a combination thereof, other than scheduled
payments of principal and interest as and when due (to the extent not
prohibited by applicable subordination provisions), in respect of, or pay, or
offer or commit to pay, or directly or indirectly redeem, repurchase, retire
or
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otherwise acquire for consideration (or set apart any sum for the aforesaid
purposes), the Subordinated Notes or any other Indebtedness for borrowed
money (other than Intercompany Indebtedness, Indebtedness under Sections
6.01(a), (b), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p) or
(q) or any Refinancing Indebtedness in respect thereof) of any Loan Party or
any Subsidiary.
(b) Notwithstanding anything contained in this Section 6.08 to the
contrary, any payment or distribution that would otherwise be prohibited by
this Section 6.08 may be effected, in whole or in part, with (i) the Net Cash
Proceeds of any public offering of Capital Stock (other than Disqualified
Stock) or (ii) amounts then available under the Restricted Payments Basket,
provided that (A) no Default or Event of Default shall have occurred and be
continuing at the time of any such payment pursuant to this paragraph (b) and
(B) after giving effect to any such payment pursuant to this paragraph (b),
the Parent Borrower shall be in compliance on a pro forma basis with Sections
6.09 and 6.10.
(c) Permit any waiver, supplement, modification, amendment, termination
or release of any indenture, instrument or agreement governing the
Debentures, the Masco Notes or the Subordinated Notes (or any Indebtedness
issued to refinance such Indebtedness in accordance with this Restated Credit
Agreement), to the extent that any such waiver, supplement, modification,
amendment, termination or release would be adverse to the Lenders in any
material respect.
(d) Permit any waiver, supplement, modification, amendment, termination
or release of (i) the certificate of incorporation or by-laws of Holdings,
any Borrower or any Subsidiary, (ii) the Acquisition Agreement, (iii) the
Stockholders' Agreement, (iv) the Management Agreement, (v) the Transition
Services Agreement or (vi) the Tax Sharing Agreement, in each case to the
extent that any such waiver, supplement, modification, amendment, termination
or release would be adverse to the Lenders in any material respect.
SECTION 6.09. Interest Coverage Ratio. Permit the ratio (the "Interest
Coverage Ratio") of (a) Consolidated EBITDA to (b) Consolidated Interest
Expenses for any period of four consecutive fiscal quarters ending on the
last day of any fiscal quarter included in any period set forth below to be
less than the ratio set forth below for such period:
From and Including: To and Including: Interest Coverage Ratio
------------------ ---------------- -----------------------
June 30, 1997 December 30, 1998 2.00 to 1.00
December 31, 1998 December 30, 1999 2.25 to 1.00
December 31, 1999 December 30, 2000 2.50 to 1.00
December 31, 2000 December 30, 2001 2.75 to 1.00
December 31, 2001 3.00 to 1.00
and thereafter
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SECTION 6.10. Total Debt Ratio. Permit the Total Debt Ratio (a) as of the
last day of any fiscal quarter included in any period set forth below to be
in excess of the ratio set forth below for such period:
From and Including: To and Including: Total Debt Ratio
------------------ ---------------- -----------------
June 30, 1997 December 30, 1998 5.00 to 1.00
December 31, 1998 December 30, 1999 4.50 to 1.00
December 31, 1999 4.00 to 1.00
and thereafter
or (b) if the Parent Borrower has made the election referred to in the
definition of the term "Collateral Release Date", as of the last day of any
fiscal quarter ending after the date of such election to be in excess of 3.00
to 1.00.
SECTION 6.11. Capital Expenditures. Incur Capital Expenditures in
excess of $90,000,000 in any fiscal year commencing with the fiscal year
ending December 31, 1997; provided, however, that (a) the amount of permitted
Capital Expenditures in any fiscal year shall be increased by the total
amount of unused permitted Capital Expenditures for the immediately preceding
year (other than amounts referred to in clause (b) of this proviso and less
an amount equal to any unused permitted Capital Expenditures carried forward
to such preceding year pursuant to this proviso) and (b) Holdings, the Parent
Borrower and the Subsidiaries may incur, in the aggregate, an additional
$10,000,000 in each fiscal year of Capital Expenditures in connection with
matters relating to compliance with any Environmental Law or cleanup of any
Hazardous Materials that is not in the ordinary course of business.
SECTION 6.12. Bank Accounts. Establish or maintain any bank account or
similar account with any financial institution that is not a Lender, other
than (a) the accounts specified in Section 2A of the Perfection Certificate,
(b) any deposit account used exclusively for the payment of payroll of any
Loan Party or any Subsidiary, (c) foreign accounts of any Foreign Subsidiary
and (d) other accounts with an aggregate balance of less than $3,000,000.
SECTION 6.13. Business of Holdings, Borrowers and Subsidiaries. Engage
at any time in any business or business activity other than (a) in the case
of the Parent Borrower and the Subsidiaries (other than the Receivables
Subsidiary and the Master Servicer), the business currently conducted by it
and business activities reasonably incidental thereto or related to or
derived from any such business or activities; (b) in the case of Holdings,
(i) the ownership of all the outstanding Capital Stock of the Parent Borrower
and ▇▇▇▇▇▇▇, together with activities directly related thereto, (ii) the
business currently conducted by the Specified HFG Companies and business
activities reasonably incidental thereto or business activities related
thereto or derived therefrom, (iii) performance of its obligations under the
Loan Documents, under intercompany Indebtedness and under all agreements,
Capital Stock and Indebtedness contemplated by the Acquisition Agreement,
(iv) actions required by law to maintain its status as a corporation, (v)
actions incidental to the consummation of the Transactions and (vi) sale and
servicing obligations under any Permitted Receivables Financing; (c) in the
case of the Receivables Subsidiary, the purchase and sale of receivables (or
participation interests therein) in connection with any Permitted Receivables
Financing, together with activities related thereto; and (d) in the case of
the Master Servicer, the servicing obligations under any Permitted
Receivables Financing, together with activities related thereto.
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SECTION 6.14. Fiscal Year. Change the end of its fiscal year from
December 31 to any other date.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events
of Default"):
(a) any representation or warranty made or deemed made by a
Loan Party in or in connection with any Loan Document or the
borrowings or issuances of Letters of Credit hereunder, or any
representation, warranty, statement or information contained in
any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document,
shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan or the reimbursement with respect to any L/C
Disbursement when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or L/C Disbursement or any other amount
(other than an amount referred to in (b) above) due under any
Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of five
Business Days;
(d) default shall be made in the due observance or
performance by Holdings, any Borrower or any Subsidiary of any
covenant, condition or agreement contained in Section 5.01(a),
5.05 or 5.08 or in Article VI;
(e) default shall be made in the due observance or
performance by Holdings, any Borrower or any Subsidiary of any
covenant, condition or agreement contained in any Loan Document
(other than those specified in (b), (c) or (d) above) and such
default shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent or any Lender to the
Borrowers;
(f) (i) Holdings, any Borrower or any Subsidiary shall (A)
fail to pay any principal or interest, regardless of amount, due
in respect of any Indebtedness in a principal amount in excess of
$10,000,000, when and as the same shall become due and payable,
or (B) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of
any failure referred to in this clause (B) is to cause, or to
permit the holder or holders of such Indebtedness or a trustee on
its or their behalf to cause, such Indebtedness to become due
prior to its stated maturity, or (ii) any default or other event
shall have occurred under the Receivables Sale Agreement, the
Receivables Pooling Agreement or any other document governing any
Permitted Receivables Financing if the effect of such default or
other event is to cause, or to permit the holder or holders of
interests in the receivables purchased thereunder or a
77
trustee on its or their behalf to cause, the termination of any
Permitted Receivables Financing;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of Holdings, any
Borrower, any Domestic Subsidiary or any Significant Foreign
Subsidiary, or of a substantial part of the property or assets of
Holdings, any Borrower, any Domestic Subsidiary or any
Significant Foreign Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official
for Holdings, any Borrower, any Domestic Subsidiary or any
Significant Foreign Subsidiary or for a substantial part of the
property or assets of Holdings, any Borrower, any Domestic
Subsidiary or any Significant Foreign Subsidiary or (iii) the
winding-up or liquidation of Holdings, any Borrower, any Domestic
Subsidiary or any Significant Foreign Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing
shall be entered;
(h) Holdings, any Borrower, any Domestic Subsidiary or any
Significant Foreign Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official
for Holdings, any Borrower, any Domestic Subsidiary or any
Significant Foreign Subsidiary or for a substantial part of the
property or assets of Holdings, any Borrower, any Domestic
Subsidiary or any Significant Foreign Subsidiary, (iv) file an
answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting
any of the foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000, which amount is not
covered by insurance (provided that in the event such a judgment
is covered by insurance, the Administrative Agent is provided
with satisfactory evidence that the insurance provider will
provide the coverage relating thereto) shall be rendered against
Holdings, any Borrower, any Subsidiary or any combination thereof
and the same shall remain undischarged for a period of
60 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of Holdings,
any Borrower or any Subsidiary to enforce any such judgment;
(j) an ERISA Event shall have occurred that, in the
reasonable opinion of the Required Lenders, when taken together
with all other such ERISA Events, could reasonably be expected to
result in liability of Holdings or the Borrowers in an aggregate
amount exceeding $10,000,000;
78
(k) prior to the Collateral Release Date, any security
interest purported to be created by any Security Document in any
Collateral having a value, in the aggregate, of more than
$10,000,000 shall cease to be, or shall be asserted by any
Borrower or any other Loan Party not to be, a valid, perfected,
first priority (except as otherwise expressly provided in this
Restated Credit Agreement or such Security Document) security
interest in the securities, assets or properties covered thereby,
except to the extent that any such loss of perfection or priority
results from the failure of the Collateral Agent to maintain
possession of certificates representing securities pledged under
the Pledge Agreement and except to the extent that such loss is
covered by a lender's title insurance policy and the
Administrative Agent is provided with satisfactory evidence that
related insurance provider will provide the coverage relating
thereto;
(l) any Loan Document shall not be for any reason, or shall
be asserted by any Loan Party not to be, in full force and effect
and enforceable in accordance with its terms; or
(m) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to Holdings
or any Borrower described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may
and, at the request of the Required Lenders shall, by written notice to the
Borrowers, take either or both of the following actions, at the same or
different times: (i) terminate forthwith the Commitments and (ii) declare
the Loans then outstanding to be forthwith due and payable in whole or in
part, whereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of Holdings and the Borrowers accrued hereunder and under
any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which
are hereby expressly waived by Holdings and the Borrowers, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in
any event with respect to Holdings or any of the Borrowers described in
paragraph (g) or (h) above, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of Holdings and
the Borrowers accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by
Holdings and the Borrowers, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE VIII
The Administrative Agent and the Collateral Agent
In order to expedite the transactions contemplated by this Restated
Credit Agreement, The Chase Manhattan Bank is hereby appointed to act as
Administrative Agent and Collateral Agent on behalf of the Lenders (for
purposes of this Article VIII, the Administrative Agent and the Collateral
Agent are referred to collectively as the "Agents") and The First National
Bank of Chicago is hereby appointed as the Issuing Bank. The Issuing Bank,
each of the Lenders and each assignee of any such Lender hereby irrevocably
authorize the Agents to take such actions on behalf of such Lender or
assignee or the Issuing Bank and to exercise such
79
powers as are specifically delegated to the Agents by the terms and
provisions hereof and of the other Loan Documents, together with such actions
and powers as are reasonably incidental thereto. The Administrative Agent is
hereby expressly authorized by the Lenders and the Issuing Bank, without
hereby limiting any implied authority, (a) to receive on behalf of the
Lenders and the Issuing Bank all payments of principal of and interest on the
Loans, all payments in respect of L/C Disbursements and all other amounts due
to the Lenders hereunder (other than payments that are specifically required
to be paid directly to a Lender), and promptly to distribute to each Lender
or the Issuing Bank its proper share of each payment so received; (b) to give
notice on behalf of each of the Lenders to Holdings and the Borrowers of any
Event of Default specified in this Restated Credit Agreement of which the
Administrative Agent has actual knowledge acquired in connection with its
agency hereunder; and (c) to receive and distribute to each Lender copies of
all notices, financial statements and other materials delivered by Holdings,
any Borrower or any other Loan Party pursuant to this Restated Credit
Agreement or the other Loan Documents as received by the Administrative
Agent. Without limiting the generality of the foregoing, the Agents are
hereby expressly authorized to execute any and all documents (including
releases) with respect to the Collateral and the rights of the Secured
Parties with respect thereto, as contemplated by and in accordance with the
provisions of this Restated Credit Agreement and the Security Documents.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted
by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or
be required to ascertain or to make any inquiry concerning the performance or
observance by the Borrowers or any other Loan Party of any of the terms,
conditions, covenants or agreements contained in any Loan Document. The
Agents shall not be responsible to the Lenders for the due execution,
genuineness, validity, enforceability or effectiveness of this Restated
Credit Agreement or any other Loan Documents, instruments or agreements. The
Agents shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required
Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on
all the Lenders. Each Agent shall, in the absence of knowledge to the
contrary, be entitled to rely on any instrument or document believed by it in
good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. Neither the Agents nor any of their respective
directors, officers, employees or agents shall have any responsibility to the
Borrowers or any other Loan Party on account of the failure of or delay in
performance or breach by any Lender or the Issuing Bank of any of its
obligations hereunder or to any Lender or the Issuing Bank on account of the
failure of or delay in performance or breach by any other Lender or the
Issuing Bank or the Borrowers or any other Loan Party of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents may execute any and all
duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Restated Credit Agreement unless it shall be requested in
writing to do so by the Required Lenders.
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Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders
and the Borrowers. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor, provided that such appointment shall
require the consent of the Borrowers (which consent shall not be unreasonably
withheld), so long as no Default or Event of Default shall have occurred and
be continuing. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent which shall be a bank
with an office in New York, New York, having a combined capital and surplus
of at least $500,000,000 or an Affiliate of any such bank. Upon the
acceptance of any appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder. After the Agent's
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent,
and the Agents and their Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with Holdings, any Borrower or
any Subsidiary or other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the amount
of its pro rata share (based on its Commitments hereunder, or if such
Commitments have expired or been terminated, based on its outstanding Loans)
of any expenses incurred for the benefit of the Lenders by the Agents,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, that are required to be but shall
not have been reimbursed by the Borrowers and (b) to indemnify and hold
harmless each Agent and any of its directors, officers, employees or agents,
on demand, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted against it in its
capacity as Agent or any of them in any way relating to or arising out of
this Restated Credit Agreement or any other Loan Document or any action taken
or omitted by it or any of them under this Restated Credit Agreement or any
other Loan Document, to the extent the same are required to be but shall not
have been reimbursed by the Borrowers or any other Loan Party, provided that
no Lender shall be liable to an Agent or any such other indemnified person
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that is
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of
such Agent or any of its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents 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 Restated Credit Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agents
or any other Lender and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Restated Credit
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
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ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy,
as follows:
(a) if to the Borrowers or Holdings, to LifeStyle
Furnishings International Ltd. at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of President
(Telecopy No.(▇▇▇) ▇▇▇-▇▇▇▇) with a copy to the Attention of
General Counsel (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent or the Swingline Lender,
to Chase Manhattan Agency Services, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to The Chase Manhattan
Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(c) if to the Issuing Bank, to The First National Bank of
Chicago, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(d) if to a Lender, to it at its address (or telecopy
number) set forth on Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender shall have become a
party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Restated Credit Agreement shall be deemed to have
been given on the date of receipt if delivered by hand or overnight courier
service or when receipt is acknowledged if sent by telecopy or on the date
five Business Days after dispatch by certified or registered mail if mailed,
in each case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 9.01 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 9.01. All
notices, reports, filings or other communications required to be given to the
Lenders as a group shall be deemed to have been given on the date of receipt
by the Administrative Agent.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrowers or Holdings herein and
in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Restated Credit Agreement or any other Loan Document
shall be considered to have been relied upon by the Lenders and the Issuing
Bank and shall survive the making by the Lenders of the Loans and the
issuance of Letters of Credit by the Issuing Bank, regardless of any
investigation made by the Lenders or the Issuing Bank or on their behalf, 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 Restated Credit Agreement or any other Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.14, 2.16, 2.20, 9.05
and 9.16 shall remain operative and in full force and effect regardless of
the expiration of the term of this Restated Credit Agreement, the
consummation of the transactions contemplated hereby, the repayment of any
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of the Loans, the expiration of the Commitments, the expiration of any
Letter of Credit, the invalidity or unenforceability of any term or provision
of this Restated Credit Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the
Collateral Agent, any Lender or the Issuing Bank.
SECTION 9.03. Binding Effect. This Restated Credit Agreement shall
become effective when it shall have been executed by each of the Borrowers,
Holdings and 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 permitted successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Restated
Credit Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the permitted successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of the
Borrowers, Holdings, the Administrative Agent, the Issuing Bank or the
Lenders that are contained in this Restated Credit Agreement shall bind and
inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Restated Credit Agreement
(including all or a portion of its Commitment, the Loans at the time owing to
it and participations in Letters of Credit held by it (it being understood
that Commitments, Loans, L/C Disbursements and participations in Letters of
Credit may only be assigned in pro rata amounts)); provided, however, that
(i) except in the case of an assignment to a Lender or an Affiliate of such
Lender, (A) the Parent Borrower (only so long as an Event of Default pursuant
to clause (b), (c), (g) or (h) of Article VII shall not have occurred and be
continuing) and the Administrative Agent (and, in the case of any assignment
of a Commitment, the Issuing Bank and the Swingline Lender) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld) and (B) the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or, if less, the
entire remaining amount of such Lender's Commitment), (ii) the parties to
each such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500 and (iii) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire. Upon acceptance
and recording pursuant to paragraph (e) of this Section 9.04, from and after
the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution
thereof, (A) the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Restated Credit Agreement and
(B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Restated Credit Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Restated Credit Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees
accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each
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other and the other parties hereto as follows: (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and that its Commitment,
and the outstanding balance of its Loans, in each case without giving effect
to assignments thereof which have not become effective, are as set forth in
such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Restated Credit Agreement, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Restated Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the financial condition
of Holdings, any Borrower or any Subsidiary or the performance or observance
by Holdings, any Borrower or any Subsidiary of any of its obligations under
this Restated Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Restated Credit Agreement, together with copies of the most
recent financial statements referred to in Section 3.05(a) or delivered
pursuant to Section 5.04 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, the Collateral Agent, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Restated
Credit Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent, the Issuing Bank and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Restated
Credit Agreement as are delegated to the Administrative Agent, Issuing Bank
and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Restated Credit Agreement are required
to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its offices in The
City of New York a copy of each Assignment and Acceptance delivered to it and
a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive and Holdings, the Borrowers, the other
Loan Parties, the Administrative Agent, the Issuing Bank, the Collateral
Agent and the Lenders shall treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Restated Credit Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by Holdings, the Borrowers,
the other Loan Parties, the Issuing Bank, the Collateral Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred
to in paragraph (b) above and, if required, the written consent of the Parent
Borrower, the Swingline Lender, the Issuing Bank and the Administrative Agent
to such assignment, the Administrative Agent shall (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Lenders, the Issuing Bank and the
Swingline Lender. No assignment shall be effective unless and until it has
been recorded in the Register as provided in this paragraph (e).
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(f) Each Lender may without the consent of the Parent Borrower, the
Swingline Lender, the Issuing Bank or the Administrative Agent sell
participations to one or more banks or other entities in all or a portion of
its rights and obligations under this Restated Credit Agreement (including
all or a portion of its Commitment and the Loans owing to it); provided,
however, that (i) such Lender's obligations under this Restated Credit
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in
Sections 2.14, 2.16 and 2.20 to the same extent as if they were Lenders,
provided that no such participating bank or entity shall be entitled to
receive any greater amount pursuant to such Sections than a Lender would have
been entitled to receive in respect of the amount of participation sold by
such Lender to such participating bank or entity had no sale occurred, and
(iv) Holdings, the Borrowers, the other Loan Parties, the Administrative
Agent, the Issuing Bank and the Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Restated Credit Agreement, and such Lender shall
retain the sole right to enforce the obligations of Holdings and the
Borrowers relating to the Loans or L/C Disbursements and to approve any
amendment, modification or waiver of any provision of this Restated Credit
Agreement (other than amendments, modifications or waivers decreasing any
fees payable hereunder or the amount of principal of or the rate at which
interest is payable on the Loans, extending any scheduled principal payment
date or date fixed for the payment of interest on the Loans, increasing or
extending the Commitments or releasing all or any substantial part of the
Collateral (except as expressly permitted by the Loan Documents)).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to Holdings or the Borrowers furnished
to such Lender by or on behalf of Holdings or the Borrowers, provided that,
prior to any such disclosure of information, each such assignee or
participant or proposed assignee or participant shall execute an agreement in
the form of Exhibit K.
(h) Any Lender may at any time assign all or any portion of its rights
under this Restated Credit Agreement to a Federal Reserve Bank to secure
extensions of credit by such Federal Reserve Bank to such Lender, provided
that no such assignment shall release a Lender from any of its obligations
hereunder or substitute any such Bank for such Lender as a party hereto. In
order to facilitate such an assignment to a Federal Reserve Bank, the
Borrowers shall, at the request of the assigning Lender, duly execute and
deliver to the assigning Lender a promissory note or notes, in form and
substance reasonably satisfactory to the Borrowers, evidencing the Loans made
to the Borrowers by the assigning Lender hereunder.
(i) Neither Holdings nor any Borrower shall assign or delegate any of
its rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void.
(j) In the event that S&P, ▇▇▇▇▇'▇ and ▇▇▇▇▇▇▇▇'▇ BankWatch (or
InsuranceWatch Ratings Service, in the case of Lenders that are insurance
companies (or Best's Insurance Reports, if such insurance company is not
rated by Insurance Watch Ratings Service)) shall, after the date that any
Lender becomes a Lender, downgrade the long-term certificate deposit ratings
of such Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or
BB, in the case of a Lender that is an insurance company (or B, in the case
of an insurance company not rated by InsuranceWatch Ratings Service)), then
the Issuing Bank shall have the right, but
85
not the obligation, at its own expense, upon notice to such Lender and the
Administrative Agent, to replace (or to request the Borrowers to use their
reasonable efforts to replace) such Lender with an assignee (in accordance
with and subject to the restrictions contained in paragraph (b) above), and
such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in paragraph (b)
above) all its interests, rights and obligations in respect of its Commitment
to such assignee; provided, however, that (i) no such assignment shall
conflict with any law, rule and regulation or order of any Governmental
Authority and (ii) the Issuing Bank or such assignee, as the case may be,
shall pay to such Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date of payment on
the Loans made by such Lender hereunder and all other amounts accrued for
such Lender's account or owed to it hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrowers agree to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Swingline Lender in connection
with the syndication of the credit facilities provided for herein and the
preparation and administration of this Restated Credit Agreement and the
other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof or incurred by the Administrative
Agent, the Collateral Agent or any Lender in connection with the enforcement
or protection of its rights in connection with this Restated Credit Agreement
and the other Loan Documents or in connection with the Loans made or Letters
of Credit issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & ▇▇▇▇▇, counsel for the Administrative
Agent and the Collateral Agent, and, in connection with any such enforcement
or protection, the reasonable fees, charges and disbursements of any other
counsel for the Administrative Agent, the Collateral Agent or any Lender, it
being understood that, except in the case of enforcement costs upon default
by the Borrowers hereunder, such parties and their counsel will, if then
requested by the Borrowers, provide good faith estimates of such expenses to
the Parent Borrower upon request prior to any such undertaking.
(b) The Borrowers agree, jointly and severally, to indemnify the
Administrative Agent, the Collateral Agent, each Lender and the Issuing Bank,
each Affiliate of any of the foregoing persons and each of their respective
directors, trustees, officers, employees and agents (each such person being
called an "Indemnitee") against, and to hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, charges and disbursements, incurred by or
asserted against any Indemnitee arising out of or as a result of (i) any
claim, litigation, investigation or proceeding, whether or not any Indemnitee
is a party thereto, relating to the execution or delivery of this Restated
Credit Agreement or any other Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder, the consummation of the Transactions and
the other transactions contemplated thereby or the use of the proceeds of the
Loans or issuance of Letters of Credit or (ii) any actual or alleged presence
or Release of Hazardous Materials on any property owned or operated by
Holdings, the Borrowers or any of the Subsidiaries, or any Environmental
Claim related in any way to Holdings, the Borrowers or the Subsidiaries,
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee. Notwithstanding any of the foregoing, nothing
within this Section 9.05(b) shall constitute a release by the Parent Borrower
of any claims arising against any Lender, the Issuing Bank or the
Administrative Agent under this Restated Credit Agreement.
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(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Restated Credit Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Restated Credit Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative
Agent, the Collateral Agent, any Lender or the Issuing Bank. All amounts due
under this Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender 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 indebtedness at any time owing by such
Lender to or for the credit or the account of Holdings or any Borrower
against any of and all the obligations of Holdings or any Borrower now or
hereafter existing under this Restated Credit Agreement and other Loan
Documents held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Restated Credit Agreement or such other
Loan Document and although such obligations may be unmatured. The rights of
each Lender under this Section 9.06 are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS RESTATED CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH
IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED
IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION),
INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM
CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Restated Credit Agreement or any other Loan
Document or consent to any departure by any Borrower or any other Loan Party
therefrom shall in any event be effective unless the same shall be permitted
by paragraph (b) below, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice
or demand on the Borrowers or Holdings in any case shall entitle the
Borrowers or Holdings to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Restated Credit Agreement nor any provision hereof may
be waived, amended or modified except pursuant to an agreement or agreements
in writing entered into
87
by the Borrowers, Holdings and the Required Lenders; provided, however, that
no such agreement (i) shall (A) decrease the principal amount of, or extend
the maturity of or any date for the payment of any interest on, any Loan or
any date for reimbursement of an L/C Disbursement, or waive or excuse any
such payment or any part thereof, or decrease the rate of interest on any
Loan or L/C Disbursement, without the prior written consent of each Lender
affected thereby, (B) increase or extend the Commitment of any Lender or
decrease or extend the date for payment of the Commitment Fees of such Lender
without the prior written consent of such Lender or (C) amend or modify the
provisions of Section 2.17 or 9.04(i), the provisions of this Section, the
definition of the term "Required Lenders" or release any Guarantor or, prior
to the Collateral Release Date, all or any substantial part of the Collateral
(except, in each case, as expressly permitted by the Loan Documents), without
the prior written consent of each Lender or (ii) shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Swingline Lender hereunder or under
any other Loan Document without the prior written consent of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender, as the case may be.
(c) If, in connection with any proposed change, waiver, discharge or
termination of any of the provisions of this Restated Credit Agreement as
contemplated by this Section 9.08, or any proposed assignment by Holdings or
any Borrower as contemplated by Section 9.04(i), the consent of the Required
Lenders is obtained but the consent of one or more other Lenders or of the
Issuing Bank whose consent is required is not obtained, then the Borrowers
shall have the right, so long as all nonconsenting Lenders whose individual
consent is required or the Issuing Bank, as applicable, are treated as
described below, to require each such nonconsenting Lender or Issuing Bank to
transfer and assign all its interest, rights and obligations under this
Restated Credit Agreement to one or more assignees pursuant to and in
accordance with Section 2.21, so long as at the time of such transfer and
assignment each such assignee consents to the proposed change, waiver,
discharge or termination and the assignment.
(d) Notwithstanding anything to the contrary in Section 9.08(b), upon
the delivery of notice by the Parent Borrower to the Administrative Agent
that one of the events that triggers a Collateral Release Date has occurred,
which such notice shall describe such event in reasonable detail, (i) the
Collateral Agent shall (A) release all Liens and security interests in
respect of the Collateral held by it on behalf of the Secured Parties and (B)
execute all documents reasonably required by the Parent Borrower in order to
effectuate such release, (ii) all references to "Collateral" herein shall
have no further effect and all covenants and provisions relating to the
Collateral shall cease to apply and (iii) the Security Documents shall (A)
terminate automatically in accordance with the terms thereof and (B) cease to
be Loan Documents hereunder, and each Lender hereby authorizes the
Administrative Agent to enter into on its behalf an amendment to this
Restated Credit Agreement to effect the foregoing.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and
other amounts which are treated as interest or loan charges on such Loan or
participation in such L/C Disbursement under applicable law (collectively,
the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate")
which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan or participation in accordance with applicable law,
the rate of interest payable in respect of such Loan or participation
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that
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would have been payable in respect of such Loan or participation but were not
payable as a result of the operation of this Section 9.09 shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans
or participations or periods shall be increased (but not above the Maximum
Rate therefor) until such cumulated amount, together with interest thereon at
the Federal Funds Effective Rate to the date of repayment, shall have been
received by such Lender.
SECTION 9.10. Entire Agreement. This Restated Credit Agreement, the
Commitment Letter (to the extent it sets forth the fees payable to certain
parties hereunder), [the L/C Commitment Letter,] the other Loan Documents and
the confidentiality agreements previously signed by the Lenders constitute
the entire contract between the parties relative to the subject matter
hereof. Any other previous agreement among the parties with respect to the
subject matter hereof is superseded by this Restated Credit Agreement and the
other Loan Documents. Nothing in this Restated Credit Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Restated Credit
Agreement or the other Loan Documents.
SECTION 9.11. 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 RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS RESTATED CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS. 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 RESTATED
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Restated Credit Agreement or in any other Loan
Document should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby (it
being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of
such provision in any other jurisdiction). The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close
as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Restated Credit 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, and shall become
effective as provided in Section 9.03. Delivery of an executed signature page
to this Restated Credit Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Restated
Credit Agreement.
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SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Restated Credit Agreement and are not to affect the construction of, or
to be taken into consideration in interpreting, this Restated Credit
Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of
Holdings and the Borrowers hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Restated Credit Agreement or
the other Loan Documents, or for recognition or enforcement of any judgment
relating thereto, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be 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 Restated Credit
Agreement shall affect any right that the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Restated Credit Agreement or the
other Loan Documents against the Borrowers, Holdings or their respective
properties in the courts of any jurisdiction.
(b) Each of Holdings and the Borrowers 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
Restated Credit Agreement or the other Loan Documents in any New York State
or Federal court sitting in New York City. 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.
(c) Each party to this Restated Credit Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01.
Nothing in this Restated Credit Agreement will affect the right of any party
to this Restated Credit Agreement to serve process in any other manner
permitted by law.
SECTION 9.16. Confidentiality. The Administrative Agent, the Collateral
Agent, the Issuing Bank and each of the Lenders and participating
institutions pursuant to Section 9.04(f) agrees to keep confidential and not
to publish, disclose or otherwise divulge (and to cause its respective
officers, directors, employees, agents, affiliates and representatives to
keep confidential and not publish, disclose or otherwise divulge) the
Information (as defined below), except that the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender shall be permitted to
disclose Information (a) to such of its respective officers, directors,
employees, agents, affiliates and representatives (including counsel) as need
to know such Information (who will be informed of the confidential nature of
the Information), (b) to the extent otherwise required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by any
regulatory authority (in any which event notice thereof will be provided to
the Parent Borrower and the applicable party to the extent not prohibited by
applicable law), (c) in connection with any suit, action or proceeding
relating to the enforcement of its rights hereunder or under the other Loan
Documents or (d) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section 9.16 or (ii)
becomes available, or was available, to the Administrative Agent, the Issuing
Bank, any Lender or the Collateral Agent on a nonconfidential basis from a
source
90
other than the Borrowers or Holdings or any of their respective affiliates
and such source is not bound by a confidentiality agreement to any of the
Borrowers or Holdings and is not otherwise prohibited from transmitting the
information to a third party. For the purposes of this Section, the term
"Information" shall mean all financial statements, certificates, reports,
agreements and information (including all analyses, compilations and studies
prepared by the Administrative Agent, the Collateral Agent, the Issuing Bank
or any Lender based on any of the foregoing) that are received from any of
the Borrowers or Holdings or any of their respective affiliates or
representatives and related to any of the Borrowers or Holdings or any of
their respective affiliates, any shareholders of any of the Borrowers or
Holdings or any employee, customer or supplier of any of the Borrowers or
Holdings or any of their respective affiliates. The provisions of this
Section 9.16 shall remain operative and in full force and effect regardless
of the expiration and term of this Restated Credit Agreement.
SECTION 9.17. Obligations Joint and Several. (a) Each Borrower agrees
that it shall, jointly with the other Borrowers and severally, be liable for
all the Obligations. Each Borrower further agrees that the Obligations of
the other Borrowers may be extended and renewed, in whole or in part, without
notice to or further assent from it, and that it will remain bound upon its
agreement hereunder notwithstanding any extension or renewal of any
Obligation of the other Borrowers.
(b) Each Borrower waives presentment to, demand of payment from and
protest to the other Borrowers of any of the Obligations, and also waives
notice of acceptance of its obligations and notice of protest for nonpayment.
The obligations of a Borrower hereunder shall not be affected by (i) the
failure of any Lender or the Administrative Agent to assert any claim or
demand or to enforce any right or remedy against the other Borrowers under
the provisions of this Restated Credit Agreement or any of the other Loan
Documents or otherwise, or (ii) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Restated Credit
Agreement, any of the other Loan Documents or any other agreement.
(c) Each Borrower further agrees that its agreement hereunder
constitutes a promise of payment when due and not of collection, and waives
any right to require that any resort be had by any Lender to any balance of
any deposit account or credit on the books of any Lender in favor of any
other Borrower or any other person.
(d) The Obligations of each Borrower hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason,
including compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations of the other
Borrowers or otherwise. Without limiting the generality of the foregoing,
the obligations of each Borrower hereunder shall not be discharged or
impaired or otherwise affected by the failure of the Administrative Agent or
any Lender to assert any claim or demand or to enforce any remedy under this
Restated Credit Agreement or under any other Loan Document or any other
agreement, by any waiver or modification in respect of any thereof, by any
default, failure or delay, wilful or otherwise, in the performance of the
Obligations of the other Borrowers, or by any other act or omission which may
or might in any manner or to any extent vary the risk of such Borrower or
otherwise operate as a discharge of such Borrower as a matter of law or
equity.
(e) Each Borrower further agrees that its obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of
91
principal of or interest on any Obligation of the other Borrowers is
rescinded or must otherwise be restored by the Administrative Agent or any
Lender upon the bankruptcy or reorganization of any of the other Borrowers or
otherwise.
(f) In furtherance of the foregoing and not in limitation of any other
right which the Administrative Agent or any Lender may have at law or in
equity against any Borrower by virtue hereof, upon the failure of a Borrower
to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each
other Borrower hereby promises to and will, upon receipt of written demand by
the Administrative Agent, forthwith pay, or cause to be paid, in cash the
amount of such unpaid Obligations, and thereupon each Lender shall, in a
reasonable manner, assign the amount of the Obligations of the other
Borrowers owed to it and paid by such Borrower pursuant to this guarantee to
such Borrower, such assignment to be pro tanto to the extent to which the
Obligations in question were discharged by such Borrower, or make such
disposition thereof as such Borrower shall direct (all without recourse to
any Lender and without any representation or warranty by any Lender).
(g) Upon payment by a Borrower of any sums as provided above, all rights
of such Borrower against another Borrower, as the case may be, arising as a
result thereof by way of right of subrogation or otherwise shall in all
respects be subordinated and junior in right of payment to the prior
indefeasible payment in full of all the Obligations to the Lenders.
SECTION 9.18. Replacement of Existing Credit Agreement. Notwithstanding
anything to the contrary, the parties hereto acknowledge and agree that this
Restated Credit Agreement (a) is set forth in the form of an amendment and
restatement agreement for convenience only and (b) replaces the Existing
Credit Agreement in its entirety.
92
IN WITNESS WHEREOF, the parties hereto have caused this Restated Credit
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
LIFESTYLE FURNISHINGS
INTERNATIONAL LTD., as the
Parent Borrower,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
AMETEX FABRICS, INC.
THE BERKLINE CORPORATION,
DREXEL HERITAGE FURNISHINGS
INC.,
HENREDON FURNITURE INDUSTRIES,
INC.,
INTERIOR FABRIC DESIGN, INC.,
INTRO EUROPE, INC.,
LA BARGE, INC.,
LEXINGTON FURNITURE
INDUSTRIES, INC.,
▇▇▇▇▇▇▇▇-▇▇▇▇▇, INC.,
MARBRO LAMP COMPANY,
▇▇▇▇, SON & ▇▇▇▇▇▇▇, INC.,
▇▇▇▇▇▇ ▇▇▇▇▇ FABRICS, INC.,
▇▇▇▇▇▇ ▇▇▇▇▇ FABRICS OF N.Y.,
INC.,
SUNBURY TEXTILE ▇▇▇▇▇, INC.,
UNIVERSAL FURNITURE LIMITED,
each as a Subsidiary Borrower,
by
/s/ ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
LIFESTYLE HOLDINGS, LTD.,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
93
FURNISHINGS INTERNATIONAL
INC.,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
94
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
Collateral Agent and Swingline
Lender,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO, individually and as
Issuing Bank,
by
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Agent
CIBC INC., individually and as
Co-Agent,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Director, CIBC Wood
Gundy Securities Corp. as
Agent
95
WACHOVIA BANK,
by
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, V
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, V
Title: Vice President
COMERICA BANK,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: First Vice President
BANK OF TOKYO-MITSUBISHI,
TRUST COMPANY,
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CREDIT LYONNAIS,
by
/s/ ALAIN PANIAESE
----------------------------
Name: Alain Paniaese
Title: Executive Vice
President
DRESDNER BANK,
by
/s/ B. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: B. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer
96
FIRST UNION NATIONAL BANK,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, New York
Branch,
by
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Joint General Manager
THE MITSUBISHI TRUST & BANKING
CORPORATION,
by
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
SANWA BANK LTD.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK,
by
/s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice
President
THE BANK OF SCOTLAND,
by
/s/ ▇▇▇▇▇ ▇▇▇▇ TAT
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇ Tat
Title: Vice President
97
BANQUE NATIONALE DE PARIS,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
DG BANK,
by
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
by
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
DAI ICHI KANGYO BANK LTD.,
by
/s/ SEIICHIRO INO
--------------------------
Name: Seiichiro Ino
Title: Vice President
FIRST AMERICAN NATIONAL BANK,
by
/s/ H. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name: H. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice
President
SAKURA BANK LTD.,
by
/s/ HIROYASHU IMANISHI
------------------------------
Name: Hiroyashu Imanishi
Title: Vice President &
Senior Manager
THE SUMITOMO BANK, LTD.,
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
98
Title: Vice President
SUNTRUST BANKS INC.,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Banking Officer
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Banking Officer
PNC BANK, National
Association,
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President