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EXHIBIT 10.2
$225,000,000
CREDIT AGREEMENT
DATED AS OF DECEMBER 11, 2003
AMONG
SOLA INTERNATIONAL INC.,
AS BORROWER,
THE LENDERS NAMED HEREIN,
UBS SECURITIES LLC
AND
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
AS JOINT LEAD ARRANGERS
AND
BOOKRUNNERS,
UBS SECURITIES LLC
AND
JPMORGAN CHASE BANK,
AS CO-SYNDICATION AGENTS,
UNION BANK OF CALIFORNIA, N.A.,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
AND
U.S. BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms........................................................................ 2
SECTION 1.02 Classification of Loans and Borrowings............................................... 30
SECTION 1.03 Terms Generally...................................................................... 30
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments.......................................................................... 31
SECTION 2.02 Loans................................................................................ 31
SECTION 2.03 Borrowing Procedure.................................................................. 33
SECTION 2.04 Evidence of Debt; Repayment of Loans................................................. 34
SECTION 2.05 Fees................................................................................. 34
SECTION 2.06 Interest on Loans.................................................................... 35
SECTION 2.07 Default Interest..................................................................... 36
SECTION 2.08 Alternate Rate of Interest........................................................... 36
SECTION 2.09 Termination and Reduction of Commitments............................................. 36
SECTION 2.10 Conversion and Continuation of Borrowings............................................ 37
SECTION 2.11 Amortization of Term Borrowings...................................................... 38
SECTION 2.12 Optional Prepayments................................................................. 39
SECTION 2.13 Mandatory Prepayments................................................................ 39
SECTION 2.14 Reserve Requirements; Change in Circumstances........................................ 43
SECTION 2.15 Change in Legality................................................................... 44
SECTION 2.16 Indemnity............................................................................ 45
SECTION 2.17 Pro Rata Treatment................................................................... 45
SECTION 2.18 Sharing of Setoffs................................................................... 46
SECTION 2.19 Payments............................................................................. 46
SECTION 2.20 Taxes................................................................................ 47
SECTION 2.21 Assignment of Commitments Under Certain Circumstances; Duty to Mitigate.............. 48
SECTION 2.22 Letters of Credit.................................................................... 49
SECTION 2.23 Funding Sources...................................................................... 53
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Organization; Powers................................................................. 54
SECTION 3.02 Authorization........................................................................ 54
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SECTION 3.03 Enforceability....................................................................... 54
SECTION 3.04 Governmental Approvals............................................................... 55
SECTION 3.05 Financial Statements................................................................. 55
SECTION 3.06 No Material Adverse Change........................................................... 55
SECTION 3.07 Title to Properties; Possession Under Leases......................................... 56
SECTION 3.08 Subsidiaries......................................................................... 56
SECTION 3.09 Litigation; Compliance with Laws..................................................... 56
SECTION 3.10 Agreements........................................................................... 57
SECTION 3.11 Federal Reserve Regulations.......................................................... 57
SECTION 3.12 Investment Company Act; Public Utility Holding Company Act........................... 57
SECTION 3.13 Use of Proceeds...................................................................... 57
SECTION 3.14 Tax Returns.......................................................................... 58
SECTION 3.15 No Material Misstatements............................................................ 58
SECTION 3.16 Employee Benefit Plans............................................................... 58
SECTION 3.17 Environmental Matters................................................................ 58
SECTION 3.18 Insurance............................................................................ 59
SECTION 3.19 Security Documents................................................................... 59
SECTION 3.20 Labor Matters........................................................................ 60
SECTION 3.21 Solvency............................................................................. 60
SECTION 3.22 Intellectual Property................................................................ 60
SECTION 3.23 PP&E................................................................................. 61
SECTION 3.24 No Burdensome Restrictions........................................................... 61
SECTION 3.25 Anti-Terrorism Law................................................................... 61
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01 All Credit Events.................................................................... 62
SECTION 4.02 Closing Date......................................................................... 63
SECTION 4.03 First Credit Event................................................................... 66
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01 Existence; Businesses and Properties................................................. 67
SECTION 5.02 Insurance............................................................................ 68
SECTION 5.03 Obligations and Taxes................................................................ 68
SECTION 5.04 Financial Statements, Reports, etc................................................... 68
SECTION 5.05 Litigation and Other Notices......................................................... 71
SECTION 5.06 Employee Benefits.................................................................... 71
SECTION 5.07 Maintaining Records; Access to Properties and Inspections............................ 72
SECTION 5.08 Use of Proceeds...................................................................... 72
SECTION 5.09 Compliance with Environmental Laws................................................... 72
SECTION 5.10 Preparation of Environmental Reports................................................. 72
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SECTION 5.11 Further Assurances; Additional Collateral............................................ 73
SECTION 5.12 Certain Matters Relating to Accounts................................................. 75
SECTION 5.13 Guarantees........................................................................... 76
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01 Indebtedness......................................................................... 77
SECTION 6.02 Liens................................................................................ 78
SECTION 6.03 Sale and Lease-Back Transactions..................................................... 81
SECTION 6.04 Investments, Loans and Advances...................................................... 81
SECTION 6.05 Mergers, Consolidations, Sales of Assets and Acquisitions............................ 83
SECTION 6.06 Dividends............................................................................ 84
SECTION 6.07 Transactions with Affiliates......................................................... 84
SECTION 6.08 Capital Expenditures................................................................. 85
SECTION 6.09 Coverage Ratios...................................................................... 85
SECTION 6.10 Maximum Total Leverage Ratio......................................................... 85
SECTION 6.11 Minimum Net Worth.................................................................... 86
SECTION 6.12 Maximum Senior Secured Debt Ratio.................................................... 86
SECTION 6.13 Minimum Liquidity.................................................................... 86
SECTION 6.14 Limitation on Modifications or Prepayment of Indebtedness; Modifications of
Certificate of Incorporation, or Other Constitutive Documents, By-laws and
Certain Other Agreements, etc..................................................... 86
SECTION 6.15 Limitation on Certain Restrictions on Subsidiaries................................... 87
SECTION 6.16 Limitation on Issuance of Capital Stock.............................................. 87
SECTION 6.17 Limitation on Creation of Subsidiaries............................................... 88
SECTION 6.18 Business............................................................................. 88
SECTION 6.19 Limitation on Accounting Changes..................................................... 88
SECTION 6.20 Fiscal Year.......................................................................... 88
SECTION 6.21 Interest Rate Protection and Hedging................................................. 88
SECTION 6.22 Anti-Terrorism Law................................................................... 88
SECTION 6.23 Embargoed Person..................................................................... 88
SECTION 6.24 Anti-Money Laundering................................................................ 89
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ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices.............................................................................. 95
SECTION 9.02 Survival of Agreement................................................................ 96
SECTION 9.03 Binding Effect....................................................................... 97
SECTION 9.04 Successors and Assigns............................................................... 97
SECTION 9.05 Expenses; Indemnity.................................................................. 100
SECTION 9.06 Right of Setoff...................................................................... 101
SECTION 9.07 Applicable Law....................................................................... 102
SECTION 9.08 Waivers; Amendment................................................................... 102
SECTION 9.09 Interest Rate Limitation............................................................. 103
SECTION 9.10 Entire Agreement..................................................................... 104
SECTION 9.11 Waiver of Jury Trial................................................................. 104
SECTION 9.12 Severability......................................................................... 104
SECTION 9.13 Counterparts......................................................................... 104
SECTION 9.14 Headings............................................................................. 104
SECTION 9.15 Jurisdiction; Consent to Service of Process.......................................... 105
SECTION 9.16 Confidentiality...................................................................... 105
SECTION 9.17 Lender Addendum...................................................................... 106
Schedule 2.22(b) Letters of Credit
Schedule 3.08(a) Subsidiaries
Schedule 3.08(b) Structure Chart
Schedule 3.09 Litigation
Schedule 3.10(a) Material Agreements
Schedule 3.10(b) Leases of Real Property
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 4.03 Foreign Counsel
Schedule 5.11(e)(i) Certain Pledged Securities
Schedule 5.11(e)(ii) Certain Foreign Counsel Opinions
Schedule 6.01 Outstanding Indebtedness on Closing Date
Schedule 6.02 Liens Existing on Closing Date
Schedule 6.04(k) Investments Existing on Closing Date
Exhibit A Form of Lender Addendum
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Exhibit B Form of Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Borrowing Request and Interest Rate Election Notice
Exhibit E Form of Landlord Access Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of Guarantee Agreement
Exhibit H-1 Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Exhibit H-2 Form of Foreign Counsel Opinion
Exhibit I Form of Perfection Certificate
Exhibit J-1 Form of Term Note
Exhibit J-2 Form of Revolving Note
Exhibit K Form of Bailee Letter
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THIS CREDIT AGREEMENT (this "Agreement") is dated and entered into as
of December 11, 2003, among SOLA INTERNATIONAL INC., a Delaware corporation (the
"Borrower"), the Lenders (as defined in Article I), UBS SECURITIES LLC and ▇.▇.
▇▇▇▇▇▇ SECURITIES INC., as joint lead arrangers (in such capacity, the "Joint
Lead Arrangers") and bookrunners, UBS SECURITIES LLC and JPMORGAN CHASE BANK, as
co-syndication agents (the "Co-Syndication Agents"), U.S. Bank National
Association, as documentation agent (the "Documentation Agent"), UNION BANK OF
CALIFORNIA, N.A., as an Issuing Bank (as defined in Article I), as
administrative agent (in such capacity, the "Administrative Agent") and as
collateral agent (in such capacity, the "Collateral Agent") for the Lenders,
with reference to the following facts:
R E C I T A L S
A. The Borrower and Union Bank of California, N.A. ("Union Bank")
are parties to that certain Amended and Restated Credit Agreement dated as of
October 28, 2002 (the "Existing Credit Agreement"), pursuant to which Union Bank
and other parties thereto provided a $90,000,000 senior secured revolving credit
facility to the Borrower (the "Existing Credit Facility"). Union Bank is the
Administrative Agent and Collateral Agent under the Existing Credit Facility.
B. The Borrower intends to terminate the Existing Credit Facility
(the "Termination"), to offer in a public offering registered under the
Securities Act of 1933 not less than $100.0 million gross proceeds of the
Borrower's common stock (the "Equity Financing"), to use the net proceeds of
such Equity Financing together with the proceeds of the Term Loans (as defined
in Article I) to be made available to the Borrower hereunder to purchase for
cash by means of a tender offer (the "Debt Tender Offer") all of the Borrower's
outstanding 11% Senior Notes due 2008 (the "11% Senior Notes"), except that up
to E20.0 million aggregate principal amount of 11% Senior Notes may remain
outstanding after the consummation of the Debt Tender Offer (which tender offer
includes the solicitation of consents (the "Consent Solicitation" and, together
with the Termination, the Equity Financing and the Debt Tender Offer, the
"Refinancing"), from holders of the 11% Senior Notes to eliminate substantially
all covenants under the related indenture) and to pay fees and expenses in
connection therewith.
C. The Borrower has requested the Lenders to extend credit in the
form of Term Loans available to the Borrower of $175.0 million and Revolving
Loans (as defined in Article I) available to the Borrower of $50.0 million, of
which no Revolving Loans will be drawn on the Closing Date (as defined in
Article I).
D. The Borrower, the Lenders and the Administrative Agent wish to
enter into this Agreement, pursuant to which the Lenders will provide a senior
secured credit facility described herein to the Borrower, the proceeds of which
shall be utilized (1) in the case of the Term Loans, together with the proceeds
of the Equity Financing, to purchase the 11% Senior Notes and (2) in the case of
the Revolving Loans, for working capital and general corporate purposes of the
Borrower and its Subsidiaries, including Permitted Acquisitions (as defined in
Article I), in each case as more fully set forth herein.
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NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms. As used in this 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 ABR Term Loan or ABR Revolving Loan.
"ABR REVOLVING LOAN" shall mean any Revolving Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR TERM LOAN" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ACCOUNTS" shall have the meaning assigned to such term in the Security
Agreement.
"ACQUIRED INDEBTEDNESS" shall mean (a) with respect to any person that
becomes a Subsidiary after the Closing Date, Indebtedness of such person and its
subsidiaries existing at the time such person becomes a Subsidiary that was not
incurred in connection with, or in contemplation of, such person becoming a
Subsidiary and (b) with respect to the Borrower or any Subsidiary, any
Indebtedness of a person (other than the Borrower or such Subsidiary) existing
at the time such person is merged with or into the Borrower or such Subsidiary,
or Indebtedness expressly assumed by the Borrower or any Subsidiary in
connection with a Permitted Acquisition, which Indebtedness was not, in any
case, incurred by such other person in connection with, or in contemplation of,
such merger or acquisition.
"ACQUISITION CONSIDERATION" shall mean the purchase consideration for
any Permitted Acquisition and all other payments by the Borrower or any
Subsidiary in exchange for, or as part of, or in connection with any Permitted
Acquisition, whether paid in cash or by exchange of Equity Interests or of
assets or otherwise and whether payable at or prior to the consummation of such
Permitted Acquisition or deferred for payment at any future time, whether or not
any such future payment is subject to the occurrence of any contingency, and
includes any and all payments representing the purchase price and any
assumptions of Indebtedness, "earn-outs" and other profit payment arrangements,
consulting agreements, service agreements and non-competition agreements.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in
the preamble hereof.
"ADMINISTRATIVE AGENT FEES" shall have the meaning assigned to such
term in Section 2.05(b).
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"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in the form of Exhibit B, or such other form as may be supplied
from time to time by the Administrative Agent.
"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; provided, however, that, for purposes of Section 6.07, the term
"Affiliate" shall also include any person that directly or indirectly owns more
than 5% of any class of Equity Interests of the person specified or that is an
officer or director of the person specified.
"AGENTS" shall mean the Administrative Agent and the Collateral Agent.
"AGGREGATE REVOLVING CREDIT EXPOSURE" shall mean the aggregate amount
of the Lenders' Revolving Credit Exposures.
"AGREEMENT" shall have the meaning assigned to such term in the
preamble hereof.
"ALTERNATE BASE RATE" shall mean, as of any date of determination, the
rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to
the higher of (a) the Prime Rate in effect on such date, or (b) the Federal
Funds Rate in effect on such date plus 0.50%.
"ANTI-TERRORISM LAWS" shall have the meaning assigned to such term in
Section 3.25.
"APPLICABLE PERCENTAGE" shall mean, for any day, (i) with respect to
any Term Loans, the applicable percentage set forth below under the caption
"Eurodollar Margin" or "ABR Margin," as the case may be, based upon the Total
Leverage Ratio as of the relevant date of determination:
Term Loan Grid
Eurodollar
Total Leverage Ratio Margin ABR Margin
---------------------------------------------------------------------------------------
Category 1
Greater than or equal to 1.75 to 1.00 2.50% 1.50%
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Category 2
Less than 1.75 to 1.00 2.25% 1.25%
and (ii) with respect to any Revolving Loan, any Standby Letter of Credit or the
Commitment Fee, as the context may require, the applicable percentage set forth
below under the caption "Eurodollar Margin" or "ABR Margin" or "Commitment Fee,"
as the case may be, based upon the Total Leverage Ratio as of the relevant date
of determination:
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Revolving Loan Grid
Eurodollar Commitment
Total Leverage Ratio Margin ABR Margin Fee
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Category 1
Greater than or equal to 3.25 to 1.00 3.25% 2.25% .500%
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Category 2
Greater than or equal to 2.75, but less than 3.25
to 1.00 3.00% 2.00% .500%
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Category 3
Greater than or equal to 2.25 to 1.00, but less
than 2.75 to 1.00 2.75% 1.75% .500%
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Category 4
Greater than or equal to 1.75, but less than 2.25
to 1.00 2.50% 1.50% .500%
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Category 5
Less than 1.75 to 1.00 2.00% 1.00% .375%
Each change in the Applicable Percentage resulting from a change in the
Total Leverage Ratio shall be effective with respect to the Commitment Fee and
all Term Loans, Revolving Loans and Standby Letters of Credit outstanding on and
after the date of delivery to the Administrative Agent of the financial
statements and certificates required by Section 5.04(a) or (b) and Section
5.04(d), respectively, indicating such change until the date immediately
preceding the next date of delivery of such financial statements and
certificates indicating another such change. Notwithstanding the foregoing, (i)
from the Closing Date to the date of delivery to the Administrative Agent of the
financial statements and certificates required by Section 5.04(b) and Section
5.04(d) for the fiscal quarter ending at least six months after the Closing
Date, the Total Leverage Ratio for purposes of the Term Loan Grid shall be
deemed to be in Category 1 and for purposes of the Revolving Loan Grid shall be
deemed to be in Category 2 for purposes of determining the respective Applicable
Percentage, (ii) (a) at any time during which the Borrower has failed to deliver
the financial statements and certificates required by Section 5.04(a) or (b) and
Section 5.04(d), respectively, or (b) at any time after the occurrence and
during the continuance of an Event of Default, the Total Leverage Ratio shall be
deemed to be in Category 1 for purposes of determining the Applicable Percentage
in both the Term Loan Grid and the Revolving Loan Grid and (iii) during any
Underusage Period, the applicable percentage set forth under the caption
"Commitment Fee" shall be increased by 0.50%.
"APPLICABLE REVOLVING COMMITMENT FEE PERCENTAGE" shall mean, from time
to time, the Applicable Percentage set forth under the caption "Commitment Fee,"
calculated as set forth therein.
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"ASSET SALE" shall mean the issuance, sale, transfer or other
disposition (by way of merger or otherwise) by the Borrower or any Subsidiary to
any person other than the Borrower or any Guarantor of (a) any Equity Interests
of any Subsidiary (other than directors' qualifying shares) or (b) any other
assets of the Borrower or any Subsidiary.
"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 C, or such other form as shall be approved by the
Administrative Agent.
"ATTRIBUTABLE INDEBTEDNESS" shall mean, when used with respect to any
sale and lease-back transaction, as at the time of determination, the present
value (discounted at a rate equivalent to the Borrower's then-current weighted
average cost of funds for borrowed money as at the time of determination,
compounded on a semi-annual basis) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in any such sale
and lease-back transaction.
"BOARD" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWER" shall have the meaning assigned to such term in the preamble
hereof.
"BORROWING" shall mean Loans of the same Class and Type made, converted
or continued on a single date and as to which a single Interest Period is in
effect.
"BORROWING REQUEST" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit D, or
such other form as shall be approved by the Administrative Agent.
"BREAKAGE EVENT" shall have the meaning assigned to such term in
Section 2.16.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day
on which banks in California 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 ASSET EXCHANGE" shall mean a substantially contemporaneous
exchange, or series of related exchanges, of assets constituting property, plant
or equipment for like-kind assets that are useful in the business of the
Borrower and the Subsidiaries and that have a fair market value (determined in
good faith by the Borrower) at least equal to the fair market value of the
exchanged assets; provided that no Capital Asset Exchange shall exceed $5.0
million in fair market value.
"CAPITAL EXPENDITURES" shall mean, with respect to any person, all
expenditures by such person that should be capitalized in accordance with GAAP,
including all such expenditures with respect to fixed or capital assets
(including expenditures for molds, maintenance and repairs that should be
capitalized in accordance with GAAP) and, without duplication, the amount of
Capital Lease Obligations incurred by such person, excluding, however (i)
acquisition of fixed or capital assets in a Permitted Acquisition and (ii) any
such expenditures made with the Net Cash Pro-
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ceeds of an Asset Sale or Casualty Event (to the extent such Asset Sale or
Casualty Event related to a fixed or capital asset).
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CASH EQUIVALENTS" shall mean, as to any person: (a) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
one year from the date of acquisition by such person; (b) time deposits and
certificates of deposit or acceptances of any Lender or any commercial bank
having, or which is the principal banking subsidiary of a bank holding company
organized under the laws of the United States, any State thereof or the District
of Columbia having, capital, surplus and undivided profits aggregating in excess
of $500,000,000 and a rating of at least "B" from Thomson, with maturities of
not more than one year from the date of acquisition by such person; (c)
repurchase obligations with a term of not more than 10 days for underlying
securities of the types described in clause (a) above entered into with any bank
meeting the qualifications specified in clause (b) above; (d) commercial paper
issued by any person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇,
and in each case maturing not more than one year after the date of acquisition
by such person; (e) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (a) through
(d) above; and (f) demand deposit accounts maintained in the ordinary course of
business, both in and outside the United States.
"CASUALTY EVENT" shall mean, with respect to any property (including
Real Property) of the Borrower or any Subsidiary, any loss of title with respect
to Real Property or any theft, loss or destruction of or damage to, or any
condemnation or other taking (including by any Governmental Authority) of, such
property (including Real Property) for which the Borrower or any Subsidiary
receives insurance proceeds or proceeds of a condemnation award or other
compensation. "Casualty Event" shall include but not be limited to any taking of
any Real Property of the Borrower or any Subsidiary or any part thereof, in or
by condemnation or other eminent domain proceedings pursuant to any law, general
or special, or by reason of the temporary requisition of the use or occupancy of
any Real Property of the Borrower or any Subsidiary or any part thereof, by any
Governmental Authority, civil or military.
"CHANGE IN CONTROL" shall mean the occurrence at any time of (a) the
direct or indirect acquisition (as a result of a purchase, acquisition, merger,
consolidation or otherwise) by any person or a group (as such term is defined in
Section 13(d)(3) of the Exchange Act), of beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of 30% or more of the
outstanding voting power of the then-outstanding voting power of the Borrower;
(b) during any period of 24 consecutive months, individuals who at the beginning
of such period constituted the Borrower's board of directors (together with any
new directors who were ap-
6
pointed, or whose election by the Borrower's shareholders was approved, by a
vote of at least two-thirds of the directors then still in office (who were
directors at the beginning of such period, who were previously so appointed or
whose election or nomination for election was previously so approved)) cease for
any reason to constitute a majority of the directors then in office; or (c) the
occurrence of a "Change in Control" as such term is defined in any of the Notes
Documents or in any other document, agreement or instrument relating to any
Indebtedness of the Borrower or any of its Subsidiaries, the principal amount of
which exceeds $5.0 million.
"CHARGES" shall have the meaning set forth in Section 9.09.
"CLASS," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Term Loans, and when used in reference to any Commitment, refers to whether
such Commitment is a Revolving Commitment or a Term Loan Commitment.
"CLOSING DATE" shall mean December 11, 2003.
"CODE" shall mean the U.S. Internal Revenue Code of 1986, as amended
from time to time.
"COLLATERAL" shall mean all of the Pledged Collateral and all other
property of whatever kind and nature pledged as collateral under any Security
Document.
"COLLATERAL ACCOUNT" shall have the meaning assigned to such term in
the Security Agreement.
"COLLATERAL AGENT" shall have the meaning assigned to such term in the
preamble hereof.
"COMMERCIAL LETTER OF CREDIT" shall mean any letter of credit issued
pursuant to Section 2.22 to support the purchase of goods by Borrower which is
determined to be a commercial letter of credit by the Issuing Bank.
"COMMITMENT" shall mean, with respect to any Lender, such Lender's
Revolving Commitment or Term Loan Commitment.
"COMMITMENT FEE" shall have the meaning assigned to such term in
Section 2.05(a).
"CONSOLIDATED CURRENT ASSETS" shall mean, with respect to any person as
at any date of determination, the total assets (other than cash or Cash
Equivalents), net of applicable reserves, of such person and its Subsidiaries
which may properly be classified as current assets on a consolidated balance
sheet of such person and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED CURRENT LIABILITIES" shall mean, with respect to any
person as at any date of determination, the total liabilities of such person and
its Subsidiaries which may properly be classified as current liabilities (other
than the current portion of any Loans) on a consolidated balance sheet of such
person and its Subsidiaries in accordance with GAAP.
7
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net
Income for such period, adjusted, in each case only to the extent (and in the
same proportion) deducted in determining Consolidated Net Income and with
respect to the portion of Consolidated Net Income attributable to any Subsidiary
only if a corresponding amount would be permitted at the date of determination
to be distributed to the Borrower by such Subsidiary without prior approval
(that has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Subsidiary or its stockholders, by
(x) adding thereto the amount of (i) Consolidated Interest Expense, (ii)
provision for taxes based on income, (iii) amortization, (iv) depreciation, (v)
all other non-cash items reducing the Consolidated Net Income (excluding any
non-cash charge that results in an accrual of a reserve for cash charges in any
future period) and (vi) restructuring charges incurred by the Borrower for any
period ending on or prior to December 31, 2004 in an aggregate amount of up to
$20.0 million for all periods and (y) subtracting the aggregate amount of all
non-cash items, determined on a consolidated basis, to the extent such items
increased Consolidated Net Income for such period.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for any period ,
the ratio of (x) Consolidated EBITDA for such period to (y) Consolidated Fixed
Charges for such period.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum,
without duplication, of
(a) Consolidated Interest Expense for such period,
(b) the aggregate amount of Capital Expenditures for such
period;
(c) all cash payments in respect of income taxes made
during such period (net of any cash refund in respect of income taxes
actually received during such period);
(d) the principal amount of all scheduled amortization
payments on all Indebtedness (including the principal component of all
Capital Lease Obligations, but excluding such amortization payments on
Indebtedness incurred to fund Capital Expenditures included in clause
(b) above in such period or any prior period) of Borrower and its
Subsidiaries for such period (as determined on the first day of the
respective period);
(e) the product of (i) all dividend payments on any
series of Disqualified Capital Stock of Borrower or any of its
Subsidiaries (other than dividend payments to Borrower or any of its
Subsidiaries) multiplied by (ii) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of Borrower and its
Subsidiaries, expressed as a decimal; and
(f) the product of (i) all cash dividend payments on any
Preferred Stock (other than Disqualified Capital Stock) of Borrower or
any of its Subsidiaries (other than dividend payments to Borrower or
any of its Subsidiaries) multiplied by (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of
Borrower and its Subsidiaries, expressed as a decimal.
8
"CONSOLIDATED INTEREST COVERAGE RATIO" shall mean, for any period, the
ratio of (x) Consolidated EBITDA for such period to (y) Consolidated Interest
Expense for such period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the total
consolidated interest expense of the Borrower and its consolidated Subsidiaries
for such period (calculated without regard to any limitations on the payment
thereof and including amortization of debt discount and deferred financing
costs, capitalized interest, commitment fees, letter of credit fees but
excluding amortization of debt issuance costs and other financing fees and
expenses incurred in connection with the Loan Documents and the Notes Documents)
determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" shall mean, for any period, the consolidated
net after tax income of the Borrower and its consolidated Subsidiaries
determined in accordance with GAAP, but excluding in any event (a) any
extraordinary gains or losses; (b) gains or losses realized from (i) the
acquisition of any securities, or the extinguishment of any Indebtedness, of the
Borrower or any Subsidiary, or (ii) any sales of assets; (c) net earnings or
loss of any other person (other than a Subsidiary) in which the Borrower or any
consolidated Subsidiary has an ownership interest, except (in the case of any
such net earnings) to the extent such net earnings shall have actually been
received by the Borrower or such consolidated Subsidiary (subject to the
limitation in clause (d) below) in the form of cash distributions; (d) any
portion of the net earnings of any consolidated Subsidiary which is unavailable
for payment of dividends to the Borrower or any other consolidated Subsidiary by
reason of the provisions of any agreement or applicable law or regulation; (e)
the income (or loss) of any person accrued prior to the date it becomes a
Subsidiary of the Borrower or any consolidated Subsidiary or is merged into or
consolidated with the Borrower or any consolidated Subsidiary or that person's
assets are acquired by the Borrower or such consolidated Subsidiary.
"CONSOLIDATED NET WORTH" shall mean at the date of determination
thereof, the sum of all items which in conformity with GAAP would be classified
as stockholders equity on a consolidated balance sheet of the Borrower at such
date.
"CONTESTED COLLATERAL LIEN CONDITIONS" shall mean, with respect to any
Permitted Lien of the type described in clause (a), (b) or (f) of Section 6.02,
the following conditions:
(i) any proceeding instituted contesting such Lien shall
conclusively operate to stay the sale or forfeiture of any portion of
the Collateral on account of such Lien;
(ii) at the option and upon request of the Administrative
Agent, the appropriate Loan Party shall maintain cash reserves in an
amount sufficient to pay and discharge such Lien and the Administrative
Agent's reasonable estimate of all interest and penalties related
thereto; and
(iii) such Lien shall in all respects be subject and
subordinate in priority to the Lien and security interest created and
evidenced by the Security Documents, except if and to the extent that
the law or regulation creating, permitting or authorizing such Lien
provides that such Lien is or must be superior to the Lien and security
interest created and evidenced by the Security Documents.
9
"CONTINGENT OBLIGATION" shall mean, as to any person, any obligation of
such person guaranteeing or intended to guarantee or otherwise be responsible
for any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of such person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor; (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation; or (d) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof; provided,
however, that the term "Contingent Obligation" shall not include endorsements of
instruments for deposit or collection in the ordinary course of business, any
products warranties in the ordinary course of business and any lease guarantees
executed by the Borrower in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated potential liability in respect
thereof (assuming such person is required to perform thereunder) as reasonably
determined by such person in good faith.
"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.
"CO-SYNDICATION AGENT" shall have the meaning assigned to such term in
the preamble hereof
"CREDIT EVENT" shall have the meaning assigned to such term in Section
4.01.
"DEBT ISSUANCE" shall mean the incurrence by the Borrower or any of its
Subsidiaries of any Indebtedness after the Closing Date (other than as permitted
by Section 6.01).
"DEBT TENDER OFFER" shall have the meaning assigned to such term in the
recitals hereto.
"DEFAULT" shall mean any event or condition which is, or upon notice,
lapse of time or both would constitute, an Event of Default.
"DESIGNATED DEPOSIT ACCOUNT" shall mean a deposit account to be
maintained by the Borrower with the Administrative Agent or one of its
Affiliates, as from time to time designated by the Borrower by written
notification to the Administrative Agent.
"DIRECT FOREIGN SUBSIDIARY" means a Subsidiary (i) not a Domestic
Subsidiary and (ii) the Equity Interests of which are directly owned by the
Borrower or any Domestic Subsidiary.
10
"DISQUALIFIED STOCK" shall mean any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Term Loan Maturity Date, (b) is
convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (i) debt securities or (ii) any Equity Interests referred to in (a)
above, in each case at any time prior to the first anniversary of the Term Loan
Maturity Date or (c) contains any repurchase obligation which may come into
effect prior to payment in full of all amounts hereunder.
"DIVIDEND" with respect to any person shall mean that such person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such person) or cash to its stockholders as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock outstanding on or
after the Closing Date (or any options or warrants issued by such person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock of such person outstanding on or after the Closing Date (or any options or
warrants issued by such person with respect to its capital stock). Without
limiting the foregoing, "Dividends" with respect to any person shall also
include all payments made or required to be made by such person with respect to
any stock appreciation rights, plans, equity incentive or achievement plans or
any similar plans or setting aside of any funds for the foregoing purposes.
"DOCUMENTATION AGENT" shall have the meaning assigned to such term in
the preamble hereof
"DOLLARS" or "$" shall mean lawful money of the United States of
America.
"DOMESTIC SUBSIDIARY" shall mean a Subsidiary incorporated or organized
under the laws of the United States of America, any State thereof or the
District of Columbia.
"ENGLISH SECURITY DOCUMENT" shall have the meaning assigned to such
term in Article VIII.
"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 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 person for damages,
injunctive or equitable relief, personal injury (including sickness, disease or
death), Remedial Action costs, tangible 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 of a Release, (b) exposure to any Hazardous
Material, (c) the presence, use, handling, transportation,
11
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 the common law, any and all applicable
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices 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 public or
occupational health and safety matters, including, but not limited to, 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. 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., 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, local or foreign law, and all amendments or regulations
promulgated under any of the foregoing and, in each case, as in effect at the
relevant time.
"ENVIRONMENTAL PERMIT" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"EQUITY FINANCING" shall have the meaning assigned to such term in the
recitals hereto.
"EQUITY INTEREST" shall mean, with respect to any person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of the equity
capital of such person, including, if such person is a partnership, partnership
interests (whether general or limited) and any other interest or participation
that confers on a person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership, whether outstanding on the
date hereof or issued after the Closing Date.
"EQUITY ISSUANCE" shall mean, without duplication, any issuance or sale
by the Borrower after the Closing Date of (a) any Equity Interests of the
Borrower (including any Equity Interests of the Borrower issued upon exercise of
any warrant or option) or any warrants or options to purchase Equity Interests
of the Borrower or (b) any other security interest representing any Equity
Interest of the Borrower (or the right to obtain any Equity Interest of the
Borrower), including any Preferred Stock; provided, however, that "Equity
Issuance" shall not include (i) issuances by the Borrower of non-qualified
options to purchase stock of the Borrower to managers, officers and directors of
the Borrower in connection with any performance-based stock option plan, (ii)
issuances by the Borrower of rights to purchase equity of the Borrower to
shareholders of the Borrower pursuant to a shareholders' rights plan and (iii)
issuances made pursuant to Section 6.16.
12
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
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 the Borrower, 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 (other than an event for which the 30-day notice period is waived); (b) 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; (c) 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; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any of its ERISA
Affiliates 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, or the occurrence of any event or condition which could reasonably be
expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal from any Plan or Multiemployer Plan; (g) the receipt by the Borrower
or any of its ERISA Affiliates of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any of its ERISA Affiliates 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 making of any
amendment to any Plan which could result in the imposition of a lien or the
posting of a bond or other security; and (i) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could result in liability to the Borrower or any of
the Subsidiaries.
"EURO" or "E" means the single currency of participating member
states of the European Union.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar
Loans.
"EURODOLLAR LOAN" shall mean any Eurodollar Revolving Loan or
Eurodollar Term Loan bearing interest at a rate determined by reference to the
Eurodollar Rate in accordance with the provisions of Article II.
"EURODOLLAR MARKET" shall mean a regular established market located
outside the United States of America by and among banks for the solicitation,
offer and acceptance of dollar deposits in such banks.
"EURODOLLAR RATE" shall mean, with respect to any Eurodollar Borrowing,
(x) the average of the interest rates per annum (rounded upward, if necessary,
to the next 1/100 of 1%) at which deposits in dollars are offered to the
Administrative Agent in the London Eurodollar Mar-
13
ket at or about 11:00 a.m., London, England time, two (2) Business Days before
the first day of the applicable Eurodollar Period in an aggregate amount
approximately equal to the amount of such Eurodollar Borrowing and for the
period of time comparable to the number of days in the applicable Interest
Period divided by (y) one (1) minus the Statutory Reserves (if any) for such
Eurodollar Borrowing for such Interest Period.
"EURODOLLAR REVOLVING LOAN" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Eurodollar Rate in accordance
with the provisions of Article II.
"EURODOLLAR TERM LOAN" shall mean any Term Loan bearing interest at a
rate determined by reference to the Eurodollar Rate in accordance with the
provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Article VII.
"EXCESS CASH FLOW" shall mean, for any fiscal year of the Borrower, the
sum, without duplication, of
(a) Consolidated EBITDA for such fiscal year (less any
amounts added back pursuant to clause (vi) of the definition of
"Consolidated EBITDA" to the extent such amounts represent cash
charges), plus
(b) cash gains excluded from Consolidated Net Income for
such fiscal year, plus
(c) if negative, the absolute value of the amount of Net
Working Capital at the beginning of such Excess Cash Flow Period minus
the amount of Net Working Capital at the end of such Excess Cash Flow
Period; minus
(d) the amount of any cash income taxes paid or payable
by the Borrower and its Subsidiaries with respect to such fiscal year,
net of any cash tax refunds received or receivable by the Borrower or
any of its Subsidiaries in such fiscal year, minus
(e) Consolidated Interest Expense, to the extent paid or
payable in cash paid during such fiscal year, minus
(f) Capital Expenditures made in cash in accordance with
Section 6.08 during such fiscal year, to the extent funded from
internally generated funds, minus
(g) permanent repayments and prepayments of Indebtedness
made by the Borrower and its Subsidiaries during such fiscal year, to
the extent funded with internally generated funds, minus
(h) cash losses excluded from the calculation of
Consolidated Net Income for such fiscal year, minus
(i) if positive, the amount of Net Working Capital at the
beginning of such Excess Cash Flow Period minus the amount of Net
Working Capital at the end of such Excess Cash Flow Period; minus
14
(j) the amount of Acquisition Consideration expended in
cash during such fiscal year; minus
(k) cash Dividends paid during such fiscal year by the
Borrower to the extent permitted by Section 6.06, minus
(l) cash Investments made during such fiscal year by the
Borrower or any Subsidiary to the extent permitted by Section 6.04,
plus return on any Investments, minus
(m) cash fees and expenses paid during such fiscal year
payable under the Loan Documents, including, without limitation, the
Fees (but not including payments of permitted interest and default
interest);
provided that, to the extent otherwise included therein, the Net Cash Proceeds
of Asset Sales and Casualty Events shall be deducted in calculating Excess Cash
Flow.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCLUDED TAXES" shall mean, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) such recipient's net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or in which
it is engaged in business or, in the case of any Lender, in which its applicable
lending office is located; (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction in which
the Borrower is located; and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.21(a)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender's failure to comply
with Section 2.20(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.20(a).
"EYEGLASS LENS BUSINESS" shall mean (i) the design, manufacture,
distribution and retail sale of plastic and glass eyeglass lenses, (ii) the
design, manufacture and distribution of lens coatings and treatments and (iii)
other optical lens-related businesses, including the owning and operating of
prescription lens laboratories.
"FEDERAL FUNDS RATE" shall mean, as of any date of determination, the
rate set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Board (including any such successor,
"H.15(519)") for such date opposite the caption "Federal Funds (Effective)". If
for any relevant date such rate is not yet published in H.15(519), the rate for
such date will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotations") for such
date under the caption "Federal Funds Effective Rate". If on any relevant date
the appropriate rate for such date is not yet published in either H.15(519) or
the
15
Composite 3:30 p.m. Quotations, the rate for such date will be the arithmetic
mean of the rates for the transaction in overnight Federal funds arranged prior
to 9:00 a.m. (New York City time) on that date by each of the three leading
brokers of Federal funds transactions in New York City selected by the
Administrative Agent. For purposes of this Agreement, any change in the
Alternate Base Rate due to a change in the Federal Funds Rate shall be effective
as of the opening of business on the effective date of such change.
"FEE LETTER" shall mean the fee letter agreement, dated December 11,
2003, between the Borrower and the Administrative Agent.
"FEES" shall mean the Commitment Fees, the Administrative Agent Fees,
the L/C Participation Fees, the Issuing Bank Fees and the other fees described
in Section 2.05(c) of this Agreement.
"FINANCIAL OFFICER" of any person shall mean the Chief Financial
Officer or such other officer of such person acceptable to the Administrative
Agent.
"FOREIGN LENDER" shall mean any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FOREIGN SUBSIDIARY" shall mean a Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"GOVERNMENTAL REAL PROPERTY DISCLOSURE REQUIREMENTS" shall mean any
Requirement of Law of any Governmental Authority requiring notification of the
buyer, mortgagee or assignee of Real Property, or notification, registration, or
filing to or with any Governmental Authority, prior to the sale, mortgage or
assignment of any Real Property or transfer of control of an establishment, of
the actual or threatened presence or release into the Environment, or the use,
disposal, or handling of Hazardous Material on, at, under or near the Real
Property to be sold, mortgaged or assigned or the establishment for which
control is to be transferred.
"GRANTING LENDER" shall have the meaning assigned to such term in
Section 9.04(i).
"GUARANTEE AGREEMENT" shall mean a Guarantee Agreement, substantially
in the form of Exhibit G, made by one or more Guarantors in favor of the
Lenders.
"GUARANTOR" shall mean each Subsidiary that is or becomes a party to a
Guarantee Agreement pursuant to Section 5.13 or otherwise.
"HAZARDOUS MATERIALS" shall mean all explosive or radioactive
materials, substances or wastes, hazardous or toxic materials, substances or
wastes, pollutants, contaminants, and solid,
16
liquid or gaseous wastes, including, without limitation, petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing materials or equipment, radon gas,
infectious or medical wastes and all other materials, substances or wastes of
any nature subject or regulated pursuant to any Environmental Law.
"HEDGING AGREEMENT" shall mean any Interest Rate Protection Agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement
entered into between any Lender and Borrower or any Subsidiary of Borrower and
not entered into for speculation.
"INDEBTEDNESS" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind (including subtenant deposits with respect to subleases);
(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 or accrued; (d) all obligations of such person
under conditional sale or other title retention agreements relating to property
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 on
normal trade terms and not overdue by more than 60 days); (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, that if such obligations have not been assumed, the
amount of such Indebtedness included for the purposes of this definition will be
the amount equal to the lesser of the fair market value of such property and the
amount of the Indebtedness secured); (g) all Contingent Obligations of such
person; (h) all Capital Lease Obligations of such person; (i) all Attributable
Indebtedness of such person; (j) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances; and (k) the
maximum fixed redemption or repurchase price of all Disqualified Stock of such
person. The Indebtedness of any person shall include the Indebtedness of any
partnership in which such person is a general partner.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INDEMNITEE" shall have the meaning assigned to such term in Section
9.05(b).
"INDEPENDENT DIRECTOR" shall mean a director of the Borrower who (a) is
independent with respect to the transaction at issue; (b) does not have any
material indirect financial interest in the Borrower or any of its Affiliates;
and (c) has not and whose Affiliates or affiliate firm has not at any time
during the twelve months prior to the taking of any action with respect to the
transaction at issue, directly or indirectly, received, or entered into any
understanding or agreement to receive, any compensation, payment or other
benefit, of any type or form, from the Borrower or any of its Affiliates, other
than customary directors' fees for serving on the Board of Directors of the
Borrower or any Affiliate and reimbursement of out-of-pocket expenses for
attendance at the Borrower's or Affiliate's board and board committee meetings.
"INSIGNIFICANT DIRECT FOREIGN SUBSIDIARY" shall mean a Direct Foreign
Subsidiary with (1) net sales that are less than 5.0% of the consolidated net
sales of the Borrower and the Sub-
17
sidiaries for the most recent fiscal quarter for which a consolidated income
statement of the Borrower is available and (2) tangible assets that are less
than 2.5% of Total Assets as of the end of the most recent fiscal quarter for
which a consolidated balance sheet of the Borrower and the Subsidiaries is
available.
"INSIGNIFICANT DOMESTIC SUBSIDIARY" shall mean a Domestic Subsidiary
with (1) net sales that are less than 5.0% of the consolidated net sales of the
Borrower and the Subsidiaries for the most recent fiscal quarter for which a
consolidated income statement of the Borrower is available and (2) tangible
assets that are less than 2.5% of Total Assets as of the end of the most recent
fiscal quarter for which a consolidated balance sheet of the Borrower and the
Subsidiaries is available.
"INSTRUMENTS" shall have the meaning assigned to such term in the
Security Agreement.
"INTELLECTUAL PROPERTY" shall have the meaning assigned to such term in
Section 3.22.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part, (b) 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, (c) with respect to any Revolving Loan, the
Revolving Credit Maturity Date, (d) with respect to any Term Loan, the Term Loan
Maturity Date and (e) the date of any prepayment of any Loan or conversion of a
Eurodollar Borrowing to another Borrowing.
"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, as the
Borrower may elect (or, in the case of a seven-day Interest Period as set forth
in clause (ii) of Section 2.03, the seventh day after the date of such
Borrowing), and (b) as to any ABR Borrowing, the period commencing on the date
of such Borrowing and ending on the earlier of (i) the next succeeding last
Business Day of March, June, September or December, and (ii) the Revolving
Credit 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 swap
agreement, interest rate cap agreement, interest rate collar agreement or
similar agreement or arrangement designed to protect the Borrower or any
Subsidiary against fluctuations in interest rates and not entered into for
speculation.
"INVENTORY" shall have the meaning assigned to such term in the
Security Agreement.
"INVESTMENTS" shall have the meaning assigned to such term in Section
6.04.
18
"ISSUING BANK" shall mean, as the context may require, (a) Union Bank
of California, N.A., with respect to Letters of Credit issued by it; (b) any
other Lender that may become an Issuing Bank pursuant to Section 2.22(i) or (k),
with respect to Letters of Credit issued by such Lender; or (c) collectively,
all the foregoing.
"ISSUING BANK FEES" shall have the meaning assigned to such term in
Section 2.05(c).
"JOINT-LEAD ARRANGERS" shall have the meaning assigned to such term in
the preamble hereof.
"LANDLORD ACCESS AGREEMENT" shall mean the Landlord Access Agreement,
substantially in the form of Exhibit E, made by the landlord of each leased Real
Property identified on Schedule 3.10(b) in favor of the Collateral Agent for the
benefit of the Secured Parties.
"L/C COMMITMENT" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.22.
"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).
"LEASES" shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, franchise
agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.
"LENDER ADDENDUM" shall mean with respect to any initial Lender, a
lender addendum in the form of Exhibit A, to be executed and delivered by such
Lender on the Closing Date as provided in Section 9.17.
"LENDERS" shall mean (a) each of the financial institutions that
executes a Lender Addendum on the Closing Date (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.
"LETTER OF CREDIT" shall mean any Standby Letter of Credit or
Commercial Letter of Credit issued pursuant to Section 2.22.
"LIEN" shall mean, with respect to any property, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, claim, charge, assignment, hypothecation,
security interest or encum-
19
brance of any kind, any other type of preferential arrangement in respect of
such property or any filing of any financing statement under the UCC or any
other similar notice of Lien under any similar notice or recording statute of
any Governmental Authority, including any easement, right-of-way or other
encumbrance on title to Real Property, in each of the foregoing cases whether
voluntary or imposed by law, and any agreement to give any of the foregoing; (b)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
property; 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 Agreement, the Revolving Notes, the
Term Notes the Letters of Credit, the Fee Letter (solely for purposes of Article
VII), the Guarantee Agreements, the Security Documents, each Hedging Agreement
relating to the Loans entered into with any counterparty that was a Lender or an
Affiliate of a Lender at the time such Hedging Obligation was entered into, as
amended, modified, supplemented or reaffirmed from time to time in accordance
with the terms of this Agreement.
"LOAN PARTIES" shall mean the Borrower and the Guarantors.
"LOANS" shall mean, as the context may require, a Revolving Loan or a
Term Loan or both.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse effect on,
or an event, condition or development that could reasonably be expected to have
a material adverse effect on, the condition (financial or otherwise), business,
operations, assets or liabilities of the Borrower and the Subsidiaries, taken as
a whole; (b) material impairment of the ability of the Loan Parties to perform
any of their obligations under any Loan Document; (c) material impairment of the
rights of or benefits or remedies available to the Lenders or any Agent under
any Loan Document; or (d) a material adverse effect on the Collateral or the
Liens in favor of the Collateral Agent (for its benefit and for the benefit of
the other Secured Parties) on the Collateral or the priority of such Liens.
"MAXIMUM RATE" shall have the meaning assigned to such term in Section
9.09.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
or assignee of the business of such company in the business of rating
securities.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan within the meaning
of Section 4001(a)(3) of ERISA (i) to which the Borrower, a Subsidiary or any
ERISA Affiliate is then making or accruing an obligation to make contributions;
(ii) to which the Borrower, a Subsidiary or any ERISA Affiliate has within the
preceding five plan years made contributions; or (iii) with respect to which the
Borrower or a Subsidiary could reasonably be expected to incur liability.
20
"NET CASH PROCEEDS" shall mean:
(a) with respect to any Asset Sale, the cash proceeds
received by any Loan Party (including cash proceeds subsequently
received (as and when received by any Loan Party) in respect of
non-cash consideration initially received) net of (a) selling expenses
(including reasonable broker's fees or commissions, legal fees,
transfer and similar taxes and the Borrower's good faith estimate of
income taxes paid or payable in connection with such sale); (b) amounts
provided as a reserve, in accordance with GAAP, against any liabilities
under any indemnification obligations associated with such Asset Sale
(provided that, to the extent and at the time any such amounts are
released from such reserve, such amounts shall constitute Net Cash
Proceeds); (c) the Borrower's good faith estimate of payments required
to be made with respect to unassumed liabilities relating to the assets
sold within 120 days of such Asset Sale (provided that, to the extent
such cash proceeds are not used to make payments in respect of such
unassumed liabilities within 120 days of such Asset Sale, such cash
proceeds shall constitute Net Cash Proceeds); and (d) the principal
amount, premium or penalty, if any, interest and other amounts on any
Indebtedness for borrowed money which is secured by a senior Lien on
the asset sold in such Asset Sale and which is repaid with such
proceeds (other than any such Indebtedness assumed by the purchaser of
such asset);
(b) with respect to any Debt Issuance or any issuance or
sale of Equity Interests, the cash proceeds thereof, if any, net of
customary fees, commissions, costs and other expenses incurred in
connection therewith; and
(c) with respect to any Casualty Event, the cash
insurance proceeds, condemnation awards and other compensation received
in respect thereof, net of all reasonable costs and expenses incurred
in connection with the collection of such proceeds, awards or other
compensation in respect of such Casualty Event.
"NET WORKING CAPITAL" shall mean, at any time, Consolidated Current
Assets at such time minus Consolidated Current Liabilities at such time.
"NOTES" shall mean the Borrower's 11% Senior Notes due 2008 and the
Borrower's 6-7/8% Senior Notes due 2008 issued pursuant to the Notes Agreements
and any registered notes issued by the Borrower in exchange for, and as
contemplated by, the Notes with terms substantially identical to the terms of
the Notes.
"NOTES AGREEMENTS" shall mean the indentures, note purchase agreements
and other agreements pursuant to which the Notes have been issued and as
thereafter amended from time to time in accordance with the requirements thereof
and of this Agreement.
"NOTES DOCUMENTS" shall mean the Notes, the Notes Agreements and all
other documents executed and delivered with respect to the Notes or the Notes
Agreements.
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to any
Lender or its respective successors, transferees or assignees pursuant to the
terms of any Loan Document or secured by any of the Security Documents, whether
or not the right of such person to payment in respect of such obli-
21
gations and liabilities is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured and whether or not such claim is stayed or otherwise affected by
any bankruptcy case or insolvency or liquidation proceeding.
"OFFICERS' CERTIFICATE" shall mean a certificate executed by the
chairman of the Board of Directors (if an officer), the chief executive officer
or the president and one of the Financial Officers, each in his or her official
(and not individual) capacity.
"OTHER TAXES" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"PERFECTION CERTIFICATE" shall mean a Perfection Certificate
substantially in the form of Exhibit I.
"PERMITTED ACQUISITION" shall mean, with respect to the Borrower or any
Wholly Owned Subsidiary of the Borrower, any transaction or series of related
transactions for the direct or indirect (a) acquisition of all or substantially
all of the property of any other person, or of any business or division of any
other person; (b) acquisition of 100% of the Equity Interests of any other
person, or otherwise causing any other person to become a Wholly Owned
Subsidiary of such person; or (c) merger or consolidation or any other
combination with any other person, if each of the following conditions are met:
(i) no Default then exists or would result therefrom;
(ii) after giving pro forma effect to such acquisition,
(1) the Borrower shall be in compliance with all covenants set forth in
Sections 6.09, 6.10 and 6.11 as of the most recent test date (assuming,
for purposes of Sections 6.09, 6.10 and 6.11, that such acquisition,
and all other Permitted Acquisitions consummated since the first day of
the most recent four fiscal quarters for each of the financial
covenants set forth in Sections 6.09, 6.10 and 6.11 ending on or prior
to the date of such acquisition, had occurred on the first day of such
most recent four fiscal quarters), and (2) the Borrower and the
Subsidiaries can reasonably be expected to remain in compliance with
such covenants through the Term Loan Maturity Date and to have
sufficient cash liquidity to conduct their respective business and pay
their respective debts and other liabilities as they come due;
(iii) none of the Borrower or any Subsidiary shall, in
connection with any such acquisition, assume or remain liable with
respect to any Indebtedness or other liability (including any material
tax or ERISA liability) of the related seller, except (1) to the extent
permitted under Section 6.01, and (2) obligations of the seller
incurred in the ordinary course of business and necessary or desirable
to the continued operation of the underlying properties or business,
and any other such liabilities or obligations not permitted to be
assumed or otherwise supported by the Borrower or any Subsidiary
hereunder shall
22
be paid in full or released as to the assets being so acquired on or
before the consummation of such acquisition;
(iv) the acquired person shall be engaged in the Eyeglass
Lens Business as conducted by the Borrower and the Subsidiaries on the
Closing Date and the property of the type that constitutes Collateral
on the date hereof acquired in connection with any such acquisition
shall be made subject to the Lien of the Security Documents and shall
be free and clear of any Liens, other than Permitted Liens;
(v) the board of directors or other similar governing
body of the acquired person shall not have indicated publicly its
opposition to the consummation of such acquisition;
(vi) with respect to any acquisition involving Acquisition
Consideration of more than $10.0 million, the Borrower shall have
provided the Administrative Agent and the Lenders with (1) historical
financial statements for the last three fiscal years of the person or
business to be acquired (audited if available without undue cost or
delay) and unaudited financial statements thereof for the most recent
interim period which are available, (2) reasonably detailed projections
for the period up to and including the Revolving Credit Maturity Date
(but in any case for no less than one year from and after the proposed
date of acquisition) pertaining to the person or business to be
acquired, (3) a reasonably detailed description of all material
information relating thereto and copies of all material documentation
pertaining to such acquisition, (4) a reasonably detailed description
of any earnout, deferred compensation or other contingent liability to
the seller in connection with such acquisition, and (5) all such other
information and data relating to such acquisition or the person or
business to be acquired as may be reasonably requested by the
Administrative Agent or the Required Lenders;
(vii) the Borrower shall have delivered to the Agents and
the Lenders a certificate of a Financial Officer of the Borrower
certifying that (1) such acquisition complies with this definition
(which shall have attached thereto reasonably detailed backup data and
calculations showing such compliance), and (2) such acquisition could
not reasonably be expected to result in a Material Adverse Effect;
(viii) the aggregate Acquisition Consideration for all
Permitted Acquisitions shall not exceed (a) $150.0 million since the
Closing Date or, in the event both before and after giving effect to
such acquisition the Borrower's Total Leverage Ratio is less than 1.5
to 1.0, $200.0 million (in either case, excluding up to $50.0 million
of Acquisition Consideration in the form of Equity Interests that are
not Disqualified Stock), (b) $35.0 million for the period from the
Closing Date to March 31, 2004; provided, that the unused portion
thereof in an aggregate amount not to exceed $8.75 million may be used
in the net succeeding fiscal year in addition to the amounts otherwise
permissible in such fiscal year and (c) for any fiscal year thereafter,
$35.0 million or, in the event both before and after giving effect to
such acquisition the Borrower's Total Leverage Ratio is less than 1.5
to 1.0, $50.0 million; provided, that commencing with the fiscal year
beginning August 1, 2005, the unused portion of the permitted
Acquisition Consideration amount as set forth in clause (c) in any
given fiscal year may be used in the immediately following
23
fiscal year in addition to the amounts otherwise permitted in such
fiscal year; provided, further, that any Equity Interests constituting
all or a portion of such Acquisition Consideration shall not have a
cash dividend requirement on or prior to the Term Loan Maturity Date
and provided, further, that if the acquired person is or shall be a
Subsidiary of the Borrower, such Subsidiary shall execute and deliver a
Guarantee Agreement if required by Section 5.13 and take or cause to be
taken such further actions as may be required by this Agreement,
including Sections 5.11 and 5.13 and the other Loan Documents; and
(ix) (A) if the acquisition involves clause (a) of this
definition, the assets, property and business acquired shall be made
subject to the Liens of the Security Documents to the extent required
by Section 5.11 and the Security Documents and (B) if the acquisition
involves clause (b) or (c) of this definition, the person acquired
shall merge with or into the Borrower or a Guarantor or, substantially
contemporaneously with such acquisition, become a Guarantor, except, in
each case, with respect acquisitions made with up to $25.0 million of
Acquisition Consideration since the Closing Date.
"PERMITTED LIENS" shall have the meaning assigned to such term in
Section 6.02.
"PERSON" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability 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 the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA
or with respect to which the Borrower or a Subsidiary could incur liability.
"PLEDGED COLLATERAL" shall have the meaning assigned to such term in
any Security Agreement delivered on the Closing Date or thereafter pursuant to
Section 4.03 or 5.11 hereof.
"PLEDGED SECURITIES" shall have the meaning set forth in any Security
Agreement, the English Security Document or such other Security Document
delivered on the Closing Date or thereafter pursuant to Section 4.03 or 5.11
hereof and shall in any event include a pledge by Borrower of (i) 100% of its
stock in any future Domestic Subsidiaries (other than any Insignificant Domestic
Subsidiary) and (ii) 65% of its stock in Direct Foreign Subsidiaries (other than
Insignificant Direct Foreign Subsidiaries).
"PP&E" shall mean all personal property and equipment of Borrower and
any future Domestic Subsidiaries owned and used in connection with their
operations.
"PREFERRED STOCK" shall mean, with respect to any person, any and all
preferred or preference stock or other equity interests (however designated) of
such person whether now outstanding or issued after the Closing Date.
"PRIME RATE" shall mean the rate of interest publicly announced from
time to time by the Administrative Agent in San Francisco, California (or other
headquarters city of the Administra-
24
tive Agent), as its "reference rate." The "reference rate" is one of several
base rates used by the Administrative Agent and serves as the basis upon which
effective rates of interest are calculated for loans and other credits making
reference thereto. The "reference rate" is not necessarily the lowest base
interest rate used by the Administrative Agent. The "reference rate" is
evidenced by the recording thereof after its announcement in such internal
publication or publications as the Administrative Agent may designate. Any
change in the Prime Rate announced by the Administrative Agent shall take effect
at the opening of business on the day specified in the public announcement of
such change.
"PRO FORMA BASIS" shall mean, in making any calculation with respect to
a period, giving pro forma effect, on a basis consistent with Regulation S-X
under the Exchange Act, to each Permitted Acquisition and each Asset Sale
consummated during such period or after the end of such period and prior to the
date on which such calculation is made, as if such Permitted Acquisition or
Asset Sale occurred at the beginning of such period, including the incurrence or
repayment of any Indebtedness in connection therewith and including or excluding
the Consolidated EBITDA of the business acquired or disposed of (after giving
effect to any pro forma expense and cost reductions calculated on a basis
consistent with Regulation S-X under the Exchange Act); provided, that only
Permitted Acquisitions for which financial statements are required to be
delivered to the Administrative Agent and the Lenders in accordance with clause
(vi) of the definition thereof, or such financial statements are otherwise so
delivered, shall be included in such calculation, unless otherwise agreed to by
the Lenders.
"PRO RATA PERCENTAGE" of any Lender at any time shall mean the
percentage of the Total Commitment represented by such Lender's Commitment.
"PROPERTY" shall mean any right, title or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible and including Equity Interests or other ownership
interests of any person and whether now in existence or owned or hereafter
entered into or acquired.
"PURCHASE MONEY INDEBTEDNESS" shall mean Indebtedness of the Borrower
or any Subsidiary incurred for the purpose of financing all or any part of the
purchase price of any assets (including Equity Interests of any person) or the
cost of installation, construction or improvement of any property or assets and
any refinancing thereof; provided, however, that any Lien arising in connection
with any such Indebtedness shall be limited to the specified assets being
financed (including the assets of any person whose Equity Interests are
acquired) or, in the case of real property or fixtures, including additions and
improvements, the real property to which such asset is attached; provided,
further, however, that such Indebtedness is incurred within 90 days after such
acquisition of such asset by the Borrower or such Subsidiary.
"REAL PROPERTY" shall mean, collectively, all right, title and interest
(including any leasehold estate) in and to any and all parcels of or interests
in real property owned, leased or operated by any person, whether by lease,
license or other use agreement, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.
25
"REFINANCING" shall have the meaning assigned to such term in the
recitals hereto.
"REGISTER" shall have the meaning assigned to such term in Section
9.04(d).
"REGULATION T" shall mean Regulation T 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.
"RELATED FUND" shall mean, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"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 other person or voluntarily undertaken
to: (i) remediate, clean up, 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, clause (i) or (ii) above.
"REQUIRED LENDERS" shall mean, at any time, Lenders having Loans, L/C
Exposure and unused Commitments representing more than 50% of the sum of all
Loans outstanding, L/C Exposure and unused Commitments at such time.
"REQUIREMENTS OF LAW" shall mean, collectively, any and all
requirements of any Governmental Authority including any and all laws,
ordinances, rules, regulations or similar statutes or case law.
"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 Agreement.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans hereunder up to the
amount set forth on Schedule I to the Lender Addendum executed and delivered by
such Lender, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Commitment, as applicable, as the same 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
26
9.04. The aggregate amount of the Lenders' Revolving Commitments on the Closing
Date is $50.0 million.
"REVOLVING CREDIT BORROWING" shall mean a Borrowing comprised of
Revolving Loans.
"REVOLVING CREDIT EXPOSURE" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender, plus the aggregate amount at such time of such
Lender's L/C Exposure.
"REVOLVING CREDIT MATURITY DATE" shall mean December 11, 2008 (five
years from the Closing Date); provided, that if more than $10.0 million
aggregate principal amount of the 6-7/8% Senior Notes due 2008 (for the
avoidance of doubt, excluding any notes incurred to refinance the 6-7/8% Senior
Notes due 2008 in compliance with Sections 6.01(b) and 6.14) or more than E20.0
million aggregate principal amount of 11% Senior Notes remain outstanding on
October 14, 2007, "REVOLVING CREDIT MATURITY DATE" shall mean October 15, 2007.
"REVOLVING LENDER" shall mean a Lender with a Revolving Commitment or
an outstanding Revolving Loan.
"REVOLVING LOANS" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to Section 2.01(b). Each Revolving Loan shall be an ABR
Revolving Loan or a Eurodollar Revolving Loan.
"REVOLVING NOTES" shall mean, individually or collectively, the
promissory notes made payable by Borrower to the order of a Lender hereunder to
evidence such Lender's Revolving Commitment.
"S&P" shall mean Standard & Poor's Rating Services, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"SECURED PARTIES" shall have the meaning assigned to such term in the
Security Documents.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIES COLLATERAL" shall have the meaning assigned to such term in
the Security Agreement and shall in any event include a pledge by Borrower of
(i) 100% of its stock in any future Domestic Subsidiaries (other than any
Insignificant Domestic Subsidiary) and (ii) 65% of its stock in Direct Foreign
Subsidiaries (other than Insignificant Direct Foreign Subsidiaries).
"SECURITY AGREEMENT" shall mean a Security Agreement, substantially in
the form of Exhibit F, among the Borrower and the Collateral Agent for the
benefit of the Secured Parties, as the same may be amended in accordance with
the terms thereof and hereof or such other agreements in form and substance
acceptable to the Collateral Agent effective to grant to the Collateral Agent a
perfected first priority Lien on and security interest in the Pledged
Collateral.
"SECURITY DOCUMENTS" shall mean the Security Agreement, each
reaffirmation of a Security Agreement, the Landlord Access Agreements and each
other security document or pledge
27
agreement required by applicable Requirements of Law to grant a valid, perfected
Lien on and security interest in any property of the type that constitutes
Collateral on the date hereof acquired or developed pursuant to a Permitted
Acquisition or any other additional property required to be made subject to the
Lien of the Security Documents pursuant to Section 5.11, and all UCC or other
financing statements or instruments or agreements which shall contain such
provisions as shall be necessary to conform such agreements to applicable
Requirements of Law required by this Agreement or the Security Agreement to be
executed and/or filed with respect to the security interests in property created
pursuant to any Security Agreement and any other document or instrument utilized
to pledge or grant a security interest in any property of whatever kind or
nature as Collateral for the Obligations including any and all documents or
instruments delivered pursuant to Section 5.11.
"SENIOR SECURED DEBT RATIO" shall mean, at any date of determination,
the ratio of (x) the aggregate Senior Secured Indebtedness of the Borrower and
the Subsidiaries on such date to (y) Consolidated EBITDA for the most recently
completed four fiscal quarters.
"SENIOR SECURED INDEBTEDNESS" shall mean all Indebtedness and
Obligations, at any time existing, owing to the Lenders and their respective
successors, transferees or assignees pursuant to the terms of any Loan Document
and secured by any of the Security Documents.
"SPC" shall have the meaning assigned to such term in Section 9.04(i).
"STANDBY LETTER OF CREDIT" shall mean any letter of credit, that is not
determined to be a Commercial Letter of Credit by the Issuing Bank, issued
pursuant to Section 2.22 to support the payment or performance of an obligation
by Borrower.
"STATUTORY RESERVES" shall mean, for any Interest Period for any
Eurodollar Borrowing, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the United
States Federal Reserve System in New York City with deposits exceeding one
billion dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D). Eurodollar Borrowings shall be deemed to constitute Eurocurrency
liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from time to
time to any Lender under Regulation D.
"SUBSIDIARY" shall mean, with respect to any person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing 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, by the parent or one or more subsidiaries of the parent or by the parent
and one or more subsidiaries of the parent.
"SUBSIDIARY" shall mean any subsidiary of the Borrower.
"TAXES" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM BORROWING" shall mean a Borrowing comprised of Term Loans.
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"TERM LOAN COMMITMENT" shall mean, with respect to each Lender, the
commitment, if any, of each Lender to make a Term Loan hereunder on the Closing
Date in the amount set forth on Schedule I to the Lender Addendum executed and
delivered by such Lender. The initial aggregate amount of the Lenders' Term Loan
Commitments is $175.0 million.
"TERM LOAN LENDER" shall mean a Lender with a Term Loan Commitment or
an outstanding Term Loan.
"TERM LOAN MATURITY DATE" shall mean December 11, 2009 (six years from
the Closing Date); provided, that if more than $10.0 million aggregate principal
amount of the 6-7/8% Senior Notes due 2008 (for the avoidance of doubt,
excluding any notes incurred to refinance the 6-7/8% Senior Notes due 2008 in
compliance with Sections 6.01(b) and 6.14) or more than E20.0 million
aggregate principal amount of 11% Senior Notes remain outstanding on October 14,
2007, "TERM LOAN MATURITY DATE" shall mean October 15, 2007.
"TERM LOAN NOTES" shall mean, individually or collectively, the
promissory notes made payable by Borrower to the order of a Lender hereunder to
evidence such Lender's Term Loan Commitment.
"TERM LOAN REPAYMENT DATE" shall have the meaning assigned to such term
in Section 2.11.
"TERM LOANS" shall mean the term loans made to Borrower pursuant to
Section 2.01(a). Each Term Loan shall be either an ABR Term Loan or a Eurodollar
Term Loan.
"THOMSON" shall mean Thomson Financial BancWatch.
"TOTAL ASSETS" shall mean, as of any date, the total amount of tangible
and intangible assets of Borrower and the Subsidiaries on a consolidated basis
at the end of the fiscal quarter immediately preceding such date.
"TOTAL COMMITMENT" shall mean, at any time, the aggregate amount of the
Commitments, as in effect at such time.
"TOTAL LEVERAGE RATIO" shall mean, at any date of determination, the
ratio of (x) the aggregate Indebtedness of the Borrower and the Subsidiaries on
such date to (y) Consolidated EBITDA for the most recently completed four fiscal
quarters.
"TOTAL TANGIBLE ASSETS" shall mean, as of any date, the total amount of
tangible assets of the Borrower and the Subsidiaries on a consolidated basis at
the end of the fiscal quarter immediately preceding such date.
"TRANSACTIONS" shall mean, collectively, the Refinancing, the other
transactions to occur on or prior to the Closing Date pursuant to the Loan
Documents, including the execution and delivery of the Loan Documents and
effectiveness of the Commitments hereunder and the payment of all fees and
expenses to be paid on or prior to the Closing Date and owing in connection with
the foregoing.
29
"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 Eurodollar Rate and the Alternate Base Rate.
"UCC" shall mean the Uniform Commercial Code as in effect in the
applicable state or jurisdiction.
"UNDERUSAGE PERIOD" shall mean any quarterly period commencing with the
quarter beginning January 1, 2004, in which Borrower's average Aggregate
Revolving Credit Exposure is less than 33% of the aggregate Revolving Commitment
hereunder.
"WHOLLY OWNED SUBSIDIARY" shall mean, as to any person, (a) any
corporation 100% of whose capital stock (other than directors' qualifying
shares) is at the time owned by such person and/or one or more Wholly Owned
Subsidiaries of such person and (b) any partnership, association, joint venture,
limited liability company or other entity in which such person and/or one or
more Wholly Owned Subsidiaries of such person have a 100% equity interest at
such time.
"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 CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Credit Borrowing" or "Term Borrowing")
or by Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a
"Eurodollar Revolving Credit Borrowing").
SECTION 1.03 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 Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time, (b) all financial statements to be
delivered pursuant to this Agreement shall be prepared in accordance with GAAP
as in effect from time to time and (c) all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect on the date
hereof unless agreed to by the Borrower and the Required Lenders. The term
"Domestic Subsidiary" as used herein shall only be applicable to the extent that
a Domestic Subsidiary of the Borrower exists.
30
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:
(a) to make a Term Loan to Borrower on the Closing Date
in a principal amount not to exceed its Term Loan Commitment; and
(b) to make Revolving Loans to the Borrower, at any time
and from time to time after the Closing Date, and until the earlier of
the Revolving Credit Maturity Date and the termination of the Revolving
Commitment of such Lender in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result
in such Lender's Revolving Credit Exposure exceeding such Lender's
Revolving Commitment.
Amounts paid or prepaid in respect of Term Loans may not be reborrowed.
Within the limits set forth in the preceding sentences and subject to the terms,
conditions and limitations set forth herein, the Borrower may borrow, pay or
prepay and reborrow Revolving Loans.
SECTION 2.02 LOANS.
(a) Each Loan shall be made as part of a Borrowing consisting of
Loans made by the Lenders ratably in accordance with their applicable
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), (x) the ABR
Loans comprising any Borrowing shall be in an aggregate principal amount that is
(i) an integral multiple of $100,000 and not less than $100,000 or (ii) equal to
the remaining available balance of the applicable Commitments and (y) the
Eurodollar Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $500,000 and not less than $500,000
or (ii) equal to the remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the 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 Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than fifteen (15) 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 im-
31
mediately available funds to such account in California as the Administrative
Agent may designate not later than 12:00 noon, California time, and the
Administrative Agent shall promptly credit the amounts so received to an account
as directed by the Borrower in the applicable Borrowing Request maintained with
the Administrative Agent 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 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 Borrower severally
agree to repay to the Administrative Agent forthwith, in the case of such
Lender, on demand, and, in the case of the Borrower, within two Business Days of
demand, such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of the Borrower,
the interest rate applicable at the time to the Loans comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. 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 Agreement.
(e) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Revolving Credit Maturity
Date or the Term Loan Maturity Date, as applicable.
(f) If the Issuing Bank shall not have received from the Borrower
the payment required to be made by Section 2.22(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 on such date (or, if such Lender shall have received such notice later
than 12:00 (noon), California time, on any day, not later than 11:00 a.m.,
California 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 Borrower pursuant to Section
2.22(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 Borrower severally agree to pay interest on such amount, for each
day from and including the date such amount is required to be
32
paid in accordance with this paragraph (f) 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 Borrower, a rate per annum equal to the interest rate
applicable to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case
of such Lender, for the first such day, the Federal Funds Rate, and for each day
thereafter, the Alternate Base Rate.
SECTION 2.03 BORROWING PROCEDURE. In order to request a Revolving
Borrowing or a Term Borrowing (other than a deemed Borrowing pursuant to Section
2.02(f), as to which this Section 2.03 shall not apply), the Borrower 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 9:00 a.m.,
California time, at least three Business Days before a proposed Borrowing, and
(b) in the case of an ABR Borrowing, not later than 10:00 a.m., California time,
one Business Day before a proposed Borrowing. Each Borrowing Request shall be
irrevocable, shall be signed by or on behalf of the Borrower and shall specify
the following information:
(i) whether the requested Borrowing is to be a Revolving
Borrowing or Term Loan Borrowing;
(ii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; provided that until the Joint Lead Arrangers
shall have notified the Borrower that the primary syndication of the
Commitments has been completed (which notice shall be given as promptly
as practicable and, in any event, within 180 days after the Closing
Date), the Borrower shall only be permitted to request (x) ABR
Borrowings or (y) Eurodollar Borrowings with an Interest Period of
seven days, unless otherwise agreed to by the Joint Lead Arrangers;
(iii) the date of such Borrowing (which shall be a Business
Day);
(iv) the number and location of the account to which funds
are to be disbursed (which shall be an account that complies with the
requirements of Section 2.02(c));
(v) the amount of such Borrowing; and
(vi) 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 Borrower shall be deemed to have selected an Interest Period of one
month's duration, except as set forth above. 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.
33
SECTION 2.04 EVIDENCE OF DEBT; REPAYMENT OF LOANS.
(a) The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Term Loan Lender, the principal
amount of each Term Loan of such Term Loan Lender as provided in Section 2.11
and (ii) to the Administrative Agent for the account of each Revolving Lender,
the then unpaid principal amount of each Revolving Loan of such Revolving Lender
on the Revolving Credit Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower 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 to such Lender
from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan made hereunder, the Type and Class
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
Borrower to each Lender hereunder; and (iii) the amount of any sum received by
the Administrative Agent hereunder from the Borrower or any Guarantor and each
Lender's share thereof.
(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 Borrower to repay
the Loans in accordance with their terms.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to the order of such Lender
(Lender and its registered assigns) in the form of Exhibit J-1 or J-2, as the
case may be. Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
SECTION 2.05 FEES.
(a) The Borrower agrees to pay to each Lender, through the
Administrative Agent, on the last Business Day of March, June, September and
December in each year and on each date on which any Revolving Commitment of such
Lender shall expire or be terminated as provided herein, a commitment fee (a
"Commitment Fee") equal to the Applicable Revolving Commitment Fee Percentage
per annum on the daily unused amount of the Revolving Commitments (which
calculations shall not take into account L/C Exposure relating to Commercial
Letters of Credit) of such Lender during the preceding quarter (or other period
commencing with the date hereof or ending with the Revolving Credit Maturity
Date or the date on which the Revolving Commitments of such Lender shall expire
or be terminated). All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. The Com-
34
mitment Fee due to each Lender shall commence to accrue on the date hereof and
shall cease to accrue on the date on which the Revolving Commitment of such
Lender shall expire or be terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent, for
its own account, such fees as set forth in the Fee Letter (the "Administrative
Agent Fees").
(c) With respect to each Letter of Credit, the Borrower agrees to
pay: (i) to the Issuing Bank with respect to each Letter of Credit, concurrently
with the issuance of each Letter of Credit and annually thereafter, a fronting
fee equal to 0.125% per annum on the aggregate outstanding face amount of such
Letter of Credit (the "Issuing Bank Fees"); (ii) quarterly in arrears, to the
Administrative Agent for the ratable account of the Lenders in accordance with
each Lender's Pro Rata Percentage of the aggregate L/C Exposure (excluding the
portion thereof attributable to unreimbursed L/C Disbursements), a standby
letter of credit fee (the "L/C Participation Fee") in an amount equal to (A) the
Applicable Percentage per annum in effect at the time of issuance of such
Standby Letter of Credit used to determine the interest rate on Revolving Credit
Borrowings comprised of Eurodollar Loans pursuant to Section 2.06 times (B) the
face amount of such Standby Letter of Credit through the termination or
expiration of such Standby Letter of Credit, which fee the Administrative Agent
shall promptly pay to the Lenders; (iii) concurrently with the issuance of each
Commercial Letter of Credit, to the Administrative Agent for the ratable account
of the Lenders in accordance with each Lender's Pro Rata Percentage of the
aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements), a commercial letter of credit issuance fee in
the amount set forth from time to time as the Issuing Bank's published scheduled
fee for the issuance of commercial letters of credit, which fee the
Administrative Agent shall promptly pay to the Lenders; and (iv) and
concurrently with each negotiation, drawing or amendment of each Commercial
Letter of Credit, to the Issuing Bank for the sole account of the Issuing Bank,
negotiation, drawing and amendment fees in the amounts set forth from time to
time as the Issuing Bank's published scheduled fees for such services.
(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 and any fees
incurred pursuant to Section 2.05(c)(iv) shall be paid directly to the Issuing
Bank. Once paid, none of the Fees shall be refundable under any circumstances.
SECTION 2.06 INTEREST ON LOANS.
(a) Subject to the provisions of Section 2.07, the Loans
comprising each ABR Borrowing 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) at a rate per annum equal to the Alternate Base Rate plus the Applicable
Percentage 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 Eurodollar Rate for the Interest Period in effect for such
Borrowing plus the Applicable Percentage in effect from time to time.
35
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate or Eurodollar Rate for each Interest Period
or day within an Interest 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. Upon and during the continuance of any
Event of Default, the Borrower shall on demand from time to time pay interest,
to the extent permitted by law, on the Loans and any other amount due hereunder
or under any other Loan Document at the higher of (a) 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) equal to the rate that would be applicable to an ABR
Loan plus 2.00% and (b) the rate otherwise applicable to a Loan pursuant to
Section 2.06 plus 2.00% per annum.
SECTION 2.08 ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
reasonably determined that quotations for interest rates for the relevant
deposits referred to in the definition of "Eurodollar Rate" are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein, 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 Eurodollar Rate, the Administrative Agent shall, as
soon as practicable thereafter, give written or telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.09 TERMINATION AND REDUCTION OF COMMITMENTS.
(a) The Term Loan Commitments shall automatically terminate at
5:00 p.m., California time, on the Closing Date. The Revolving Commitments and
the L/C Commitment shall automatically terminate on the Revolving Credit
Maturity Date.
(b) Upon at least three Business Days' prior irrevocable written
or telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Commitments of any Class; provided, however, that (i) each partial reduction
of the Commitments of any Class shall be in an integral multiple of $1.0 million
and in a minimum amount of $5.0 million, and (ii) the aggregate Revolving
Commitment shall not be so reduced to an amount that is less than the Aggregate
Revolving Credit Exposure at the time.
(c) Each reduction in the Commitments hereunder shall be made
ratably among the Lenders in accordance with their respective applicable
Commitments. The Borrower shall pay to the Administrative Agent for the account
of the applicable Lenders, on the date of each termina-
36
tion 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 Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 10:00 a.m., California time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 10:00 a.m., California 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 10:00 a.m.,
California 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 Borrower 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
Borrower 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;
(vii) upon notice to the Borrower from the Administrative
Agent given at the request of the Required Lenders (A) after the
occurrence and during the continuance of a Default, Loans may only be
converted into, or continued as, (x) ABR Loans or (y) Eurodollar Loans
with an Interest Period of one month or less and (B) after the
occurrence and during the continuance of an Event of Default, no
outstanding Loan may be converted into, or continued as, a Eurodollar
Loan; and
37
(viii) until the Joint Lead Arrangers shall have notified
the Borrower that the primary syndication of the Commitments has been
completed (which notice shall be given by the Joint Lead Arrangers as
promptly as practicable and, in any event, within 180 days after the
Closing Date), an ABR Borrowing may be converted only into a Eurodollar
Borrowing with an Interest Period of seven days, unless otherwise
agreed to by the Joint Lead Arrangers.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued; (ii) whether
such Borrowing is to be converted into 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 into 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 into or continuation as a Eurodollar Borrowing, the
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 Borrower shall not have given notice in accordance
with this Section 2.10 to continue any 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 continued into a new Interest Period as an ABR Borrowing.
SECTION 2.11 AMORTIZATION OF TERM BORROWINGS.
(a) Borrower shall pay to the Administrative Agent, for the
account of the Lenders, on the dates set forth below, or if any such date is not
a Business Day, on the immediately succeeding Business Day (each such date being
a "Term Loan Repayment Date"), a principal amount of the Term Loans (as adjusted
from time to time pursuant to Section 2.13(h)) equal to the amount set forth
below for such date, together in each case with accrued and unpaid interest on
the principal amount to be paid to but excluding the date of such payment:
June 30, 2004 $ 2,187,500
September 30, 2004 $ 2,187,500
December 31, 2004 $ 2,187,500
March 31, 2005 $ 2,187,500
June 30, 2005 $ 3,281,250
September 30, 2005 $ 3,281,250
December 31, 2005 $ 3,281,250
March 31, 2006 $ 3,281,250
June 30, 2006 $ 3,281,250
September 30, 2006 $ 3,281,250
December 31, 2006 $ 3,281,250
March 31, 2007 $ 3,281,250
June 30, 2007 $ 4,375,000
September 30, 2007 $ 4,375,000
December 31, 2007 $ 4,375,000
38
March 31, 2008 $ 4,375,000
June 30, 2008 $ 6,562,500
September 30, 2008 $ 6,562,500
December 31, 2008 $ 6,562,500
March 31, 2009 $ 6,562,500
June 30, 2009 $ 6,562,500
September 30, 2009 $ 6,562,500
December 11, 2009 $83,125,000
(b) To the extent not previously paid, all Term Loans shall be due
and payable on the Term Loan Maturity Date.
SECTION 2.12 OPTIONAL PREPAYMENTS.
(a) The Borrower shall have the right at any time and from time to
time to prepay any Borrowing, in whole or in part, (i) upon at least three
Business Days' prior written or telecopy notice in the case of Eurodollar Loans
or (ii) or upon at least one Business Day's prior written or telecopy notice in
the case of ABR Loans, to the Administrative Agent before 9:00 a.m., California
time; provided, however, that each partial prepayment shall be in an amount that
is an integral multiple of $100,000 and not less than $100,000.
(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 Borrower 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 shall be otherwise without
premium or penalty. All prepayments 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) Revolving Loan Prepayments. In the event of any termination of
all the Revolving Commitments as provided in this Agreement, the Borrower shall,
on the date of such termination, repay or prepay all its outstanding Revolving
Credit Borrowings and replace all outstanding Letters of Credit and/or deposit
an amount equal to the L/C Exposure in cash in a cash collateral account
established with the Collateral Agent for the benefit of the Secured Parties. In
the event of any partial or mandatory reduction of the Revolving Commitments
then (i) at or prior to the effective date of such reduction, the Administrative
Agent shall notify the Borrower and the Revolving Lenders of the Aggregate
Revolving Credit Exposure after giving effect thereto and (ii) if the Aggregate
Revolving Credit Exposure would exceed the Revolving Commitment after giving
effect to such reduction or termination, then the Borrower shall, on the date of
such reduction or termination, repay or prepay Revolving Credit Borrowings to
the then required amount and/or replace or cash collateralize outstanding
Letters of Credit in an amount sufficient to eliminate such excess.
(b) Asset Sales. Not later than three Business Days following the
receipt of any Net Cash Proceeds of any Asset Sale, the Borrower shall apply
100% of the Net Cash Proceeds re-
39
ceived with respect thereto to make prepayments in accordance with Sections
2.13(h) and (i); provided that:
(i) no such prepayment shall be required under this
Section 2.13(b)(i) with respect to (A) dispositions permitted by
Section 6.03 and Section 6.05(b), (f), (g) or (to the extent no Net
Cash Proceeds result therefrom) (h) or (B) dispositions resulting in
Net Cash Proceeds from Casualty Events applied as set forth in Section
2.13(e).
(ii) so long as no Default shall then exist or would arise
therefrom and the aggregate of such Net Cash Proceeds of Asset Sales
shall not exceed $2.5 million in any fiscal year of the Borrower, such
proceeds shall not be required to be so applied on such date to the
extent that (A) the Borrower shall have delivered an Officers'
Certificate to the Administrative Agent on or prior to such date
stating that such Net Cash Proceeds shall be used to purchase
replacement assets or acquire 100% of the Equity Interests of any
person that owns such assets no later than 180 days following the date
of such Asset Sale (which Officers' Certificate shall set forth the
estimates of the proceeds to be so expended), provided that if the
acquired person is or shall be a Subsidiary of the Borrower, such
Subsidiary shall execute and deliver a Guarantee Agreement if required
by Section 5.13 and take or cause to be taken such further actions as
may be required by this Agreement, including Sections 5.11 and 5.13 and
the other Loan Documents; and (B) all such Net Cash Proceeds in excess
of $2.0 million in the aggregate at any time shall be held in the
Collateral Account and released therefrom only in accordance with the
provisions of the Security Documents; provided that if all or any
portion of such Net Cash Proceeds not required to be applied to make
prepayments shall not be utilized to purchase replacement assets or
acquire such Equity Interests within such 180-day period, such unused
portion shall be applied on the last day of such period as a mandatory
prepayment as provided in this Section 2.13(b); and provided, further,
that if the property subject to such Asset Sale constituted Collateral,
then all property purchased with the Net Cash Proceeds thereof pursuant
to this subsection shall be made subject to the Lien of the applicable
Security Documents in favor of the Collateral Agent, for its benefit
and for the benefit of the other Secured Parties in accordance with
Section 5.11.
(c) Debt Issuance or Disqualified Stock Issuances. Within three
Business Days of any Debt Issuance or Disqualified Stock after the Closing Date,
the Borrower shall make prepayments in accordance with Sections 2.13(h) and (i)
and in an aggregate principal amount equal to 100% of the Net Cash Proceeds
thereof.
(d) Equity Issuance. Within three Business Days of any Equity
Issuance (other than an issuance of Disqualified Stock) after the Closing Date,
the Borrower shall make prepayments in accordance with Sections 2.13(h) and (i)
in an aggregate amount equal to 50% of the Net Cash Proceeds of such Equity
Issuance; provided that if at the end of the most recently completed fiscal year
prior to such Equity Issuance and at the time of such Equity Issuance the
Borrower's Total Leverage Ratio does not exceed 1.5 to 1.00, the Borrower shall
only be required to use 25% of such Net Cash Proceeds to make such prepayments;
provided, further, however, that, so long as no Default shall then exist or
arise therefrom, such prepayments shall not be required to be made on such date
to the extent that the Borrower shall have delivered a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used to make a
40
Permitted Acquisition no later than 90 days following the date of receipt of
such proceeds (which certificate shall set forth the estimates of the proceeds
to be so expended); and provided, further, that if all or any portion of such
proceeds shall not be so applied within such 90-day period, the Borrower shall
make prepayments in accordance with Sections 2.13(h) and (i) in an aggregate
amount equal to such unapplied portion.
(e) Casualty Events. Not later than three Business Days following
the receipt of any Net Cash Proceeds from a Casualty Event, the Borrower shall
make prepayments in accordance with Sections 2.13(h) and (i) in an aggregate
amount equal to 100% of such Net Cash Proceeds; provided that:
(i) such proceeds shall not be required to be so applied
on such date so long as (A) the aggregate amount of all Net Cash
Proceeds received from Casualty Events in any fiscal year does not
exceed $2.0 million and (B) the aggregate amount of all Net Cash
Proceeds received from Casualty Events since the Closing Date does not
exceed $5.0 million; and
(ii) in the event clause (i) above is not applicable:
(A) so long as no Default shall then exist or
arise therefrom, such proceeds shall not be required to be so
applied on such date to the extent that (I) in the event such
Net Cash Proceeds shall not exceed $5.0 million, the Borrower
shall have delivered an Officers' Certificate to the
Administrative Agent on or prior to such date stating that
such proceeds shall be used, or (II) in the event that such
Net Cash Proceeds exceed $5.0 million, the Administrative
Agent has required by notice to the Borrower on or prior to
such date such proceeds to be used, in each case, to repair,
replace or restore any property in respect of which such Net
Cash Proceeds were paid no later than 365 days following the
date of receipt of such proceeds (which Officers' Certificate
shall set forth the estimates of the proceeds to be so
expended); provided that if the property subject to such
Casualty Event constituted Collateral under the Security
Documents, then all property purchased with the Net Cash
Proceeds thereof pursuant to this subsection shall be made
subject to the Lien of the applicable Security Documents in
favor of the Collateral Agent, for its benefit and for the
benefit of the other Secured Parties in accordance with
Section 5.11;
(B) all such Net Cash Proceeds in excess of $2.0
million in the aggregate shall be held in the Collateral
Account and released therefrom only in accordance with the
provisions of the Security Documents; and
(C) if any portion of such Net Cash Proceeds
shall not be so applied within such 365-day period, such
unused portion shall be applied on the last day of such period
as a mandatory prepayment as provided in this Section 2.13(e).
(f) Excess Cash Flow. No later than the earlier of (i) 90 days
after the end of each fiscal year of the Borrower, commencing with the fiscal
year ending on March 31, 2005, and (ii) the date on which the financial
statements with respect to such period are delivered pursuant
41
to Section 5.04(a), the Borrower shall make prepayments in accordance with
Sections 2.13(h) and (i) in an aggregate principal amount equal to 50% of Excess
Cash Flow for the fiscal year then ended; provided that if at the end of the
most recently completed fiscal year ended prior to such prepayments and at the
time of such prepayments the Borrower's Total Leverage Ratio shall not exceed
1.5 to 1.00, the Borrower shall only be required to use 25% of such Excess Cash
Flow to make such prepayments.
(g) Debt Tender Offer. In the event that for any reason the Debt
Tender Offer shall not close on the Closing Date, and all Notes tendered
thereunder shall not have been purchased on the Closing Date, the Borrower shall
not later than the next Business Day thereafter repay all amounts outstanding
under the Term Loan, together with interest to the extent required by Section
2.06.
(h) Application of Prepayments. (i) Prior to any optional or
mandatory prepayment of Borrowings hereunder, the Borrower shall select the
Borrowing or Borrowings to be prepaid and shall specify such selection in the
notice of such prepayment pursuant to Section 2.13(i), subject to the provisions
of this Section 2.13(h). Any optional or mandatory prepayments of Term Loans
pursuant to Section 2.13(b), (c), (d), (e) or (f) shall be applied to reduce
scheduled payments required under Section 2.11, first, to such scheduled
payments due with the 12 months following such prepayment and, second, on a pro
rata basis among the payments remaining to be made under Section 2.11. After
application of optional or mandatory prepayments described above in this
paragraph (h) and to the extent there are optional or mandatory prepayment
amounts remaining after such application, the Revolving Commitments shall be
permanently reduced ratably among the Revolving Lenders in accordance with their
applicable Revolving Commitments in an aggregate amount equal to such excess,
and the Borrower shall comply with Section 2.13(a).
(ii) Amounts to be applied pursuant to this Section 2.13
to the prepayment of Term Loans and Revolving Loans shall be applied, as
applicable, first to reduce outstanding ABR Term Loans and ABR Revolving Loans,
respectively. Any amounts remaining after each such application shall be applied
to prepay Eurodollar Term Loans or Eurodollar Revolving Loans, as applicable.
Notwithstanding the foregoing, if the amount of any prepayment of Loans required
under this Section 2.13 shall be in excess of the amount of the ABR Loans at the
time outstanding (an "Excess Amount"), only the portion of the amount of such
prepayment as is equal to the amount of such outstanding ABR Loans shall be
immediately prepaid and, at the election of the Borrower, the balance of such
required prepayment shall be either (A) deposited in the Collateral Account and
applied to the prepayment of Eurodollar Loans on the last day of the then
next-expiring Interest Period for Eurodollar Loans (with all interest accruing
thereon for the account of Borrower), provided that (i) interest in respect of
such Excess Amount shall continue to accrue thereon at the rate provided
hereunder for the Loans which such Excess Amount is intended to repay until such
Excess Amount shall have been used in full to repay such Loans and (ii) at any
time while a Default has occurred and is continuing, the Administrative Agent
may, and upon written direction from the Required Lenders shall, apply any or
all proceeds then on deposit in the Collateral Account to the payment of such
Loans in an amount equal to such Excess Amount or (B) prepaid immediately,
together with any amounts owing to the Lenders under Section 2.16.
42
(i) Notice of Prepayment. The Borrower shall notify the
Administrative Agent by written or telecopy notice (confirmed by telephone) of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 10:00 a.m., California time, three Business Days
before the date of prepayment or (ii) in the case of prepayment of an ABR
Borrowing, not later than 10:00 a.m., California time, one Business Day before
the date of prepayment. Each such notice shall be irrevocable. Each such notice
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount of such prepayment. Promptly
following receipt of any such notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
be in an amount that would be permitted in the case of a credit extension of the
same Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing and otherwise
in accordance with this Section 2.13. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.06.
SECTION 2.14 RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision of this Agreement, if
after the Closing Date 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 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 Issuing Bank (except any such
reserve requirement which is reflected in the Eurodollar Rate) or shall impose
on such Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender or the Issuing Bank of
making or maintaining any Eurodollar Loan or increase the cost to any Lender 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) by an amount deemed by such Lender or the Issuing Bank to be
material, then the Borrower will pay to such Lender or the Issuing Bank, as the
case may be, within 10 days after 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 Closing Date of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in any
such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement 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 (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 Agreement or the Loans
made or participations in Letters of Credit
43
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 Borrower shall 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
in reasonable detail the reason therefor, 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 the calculation
thereof, shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank 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 Borrower shall not be under any obligation to compensate any Lender or
the Issuing Bank under paragraph (a) or (b) above with respect to increased
costs or reductions with respect to any period prior to the date that is 270
days prior to such request if such Lender or the Issuing Bank knew or could
reasonably have been expected to be aware of the circumstances giving rise to
such increased costs or reductions and of the fact that such circumstances would
in fact result in a claim for increased compensation by reason of such increased
costs or reductions; provided, further, that the foregoing limitation shall not
apply to any increased costs or reductions arising out of the retroactive
application of any law, regulation, rule, guideline or directive as aforesaid
within such six-month period. Each Lender's determination and calculation of
amounts due it under this Section 2.14 shall be binding on all parties hereto
absent manifest error.
SECTION 2.15 CHANGE IN LEGALITY.
(a) Notwithstanding any other provision of this 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 Borrower 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 re-
44
quest for an ABR Loan (or a request to continue an ABR Loan as such for
an additional Interest Period 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 into ABR Loans, in which event
all such Eurodollar Loans shall be automatically converted into 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 Borrower 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 Borrower.
SECTION 2.16 INDEMNITY. The Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, 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;
(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 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 required to be made
hereunder. In the case of any Breakage Event, such loss shall include 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 likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period (excluding any Applicable Percentage). A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.16 shall be delivered to the Borrower and shall be
conclusive absent manifest error.
SECTION 2.17 PRO RATA TREATMENT. Except as provided below in this
Section 2.17 and as required under Sections 2.13(b), (c), (d), (e) and (f) and
2.15, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Term Loans or Revolving 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 accordance with their
respective ap-
45
plicable Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans). 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 Borrower 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
Term Loan, Revolving Loan or L/C Disbursement as a result of which the unpaid
principal portion of its Term Loans or Revolving Loans and participations in L/C
Disbursements shall be proportionately less than the unpaid principal portion of
the Revolving Loans and participations in L/C Disbursement 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 in the Term Loans, the Revolving Loans and L/C Exposure, as the
case may be, of such other Lender, so that the aggregate unpaid principal amount
of the Term Loans, Revolving Loans and L/C Exposure and participations in
Revolving Loans and L/C Exposure held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Term Loans, Revolving
Loans and L/C Exposure then outstanding as the principal amount of its Term
Loans, Revolving Loans and L/C Exposure prior to such exercise of banker's lien,
setoff or counterclaim or other event was to the principal amount of all Term
Loans, Revolving Loans and L/C Exposure 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 Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in a Term Loan, Revolving 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 Borrower to such Lender by reason thereof as fully as if
such Lender had made a Term Loan or Revolving Loan directly to the Borrower in
the amount of such participation.
SECTION 2.19 PAYMENTS.
(a) The Borrower 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 10:00 a.m.,
California time, on the date when due in immediately available dollars, without
setoff, defense or counterclaim. Each such payment (other than Issuing Bank Fees
and any fees incurred pursuant to Section 2.05(c)(iv), which shall be paid
directly to the Issuing Bank) shall be made to the Administrative Agent at its
address for notices set forth in Section 9.01 of this Agreement, or such other
address that the Administrative Agent may designate in writing to the Borrower.
46
(b) Except as otherwise expressly provided herein, 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.
(c) The Borrower hereby authorizes the Administrative Agent to
debit the Designated Deposit Account to effect any payment due to the Lenders or
the Administrative Agent pursuant to this Agreement provided Administrative
Agent has given Borrower prior notice of the amount and timing of such debit.
Any resulting overdraft in such account shall be payable by the Borrower to the
Administrative Agent on the next succeeding Business Day.
(d) Unless the Administrative Agent shall have been notified by
the Borrower prior to the date on which any payment to be made by the Borrower
hereunder is due that the Borrower does not intend to remit such payment, the
Administrative Agent may, in its discretion, assume that Borrower has remitted
such payment when so due and the Administrative Agent may, in its discretion and
in reliance upon such assumption, make available to each Lender on such payment
date an amount equal to such Lender's share of such assumed payment. If the
Borrower has not in fact remitted such payment to the Administrative Agent, each
Lender shall forthwith on demand repay to the Administrative Agent the amount of
such assumed payment made available to such Lender, together with interest
thereon in respect of each day from and including the date such amount was made
available by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent at the Federal Funds Rate.
SECTION 2.20 TAXES.
(a) Any and all payments by or on account of any obligation of the
Borrower or any Loan Party hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower or any Loan Party shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.20) the Administrative Agent or such Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made; (ii) the Borrower or such Loan Party shall make such
deductions; and (iii) the Borrower or such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within five days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower or any Loan Party hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section 2.20) and any penalties,
interest
47
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender, or by the
Administrative Agent on its behalf or on behalf of a Lender, shall be conclusive
absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower or any other Loan Party to a Governmental
Authority, the Borrower shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.
(f) If the Administrative Agent or any Lender receives a refund in
respect of Indemnified Taxes or Other Taxes paid by the Borrower, which in the
good faith judgment of the Administrative Agent or such Lender is allocable to
such payment, it shall promptly pay such refund, but only to the extent of
indemnity payments made or additional amounts paid by the Borrower under this
Section 2.20 with respect to Taxes and Other Taxes, to the Borrower, net of all
reasonable out-of-pocket expenses (including any Taxes to which such Lender has
become subject as a result of its receipt of such refund) of the Administrative
Agent or such Lender incurred in obtaining such refund and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided, however, that the Borrower agrees to promptly
return such refund (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or the applicable
Lender, as the case may be, if it receives notice from the Administrative Agent
or the applicable Lender that the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. Nothing contained
in this Section 2.20(f) shall require the Administrative Agent or any Lender to
make available its tax returns (or any other information relating to its taxes
which it deems to be confidential) to the Borrower or any other person.
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 (iii) the
Borrower is required to pay any additional amount 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 the Borrower may, at its 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 Issu-
48
ing 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 Agreement to an assignee that shall assume
such assigned obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (x) such assignment shall not conflict
with any law, rule or regulation or order of any court or other Governmental
Authority having jurisdiction, (y) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Commitment is being
assigned, of the Issuing Bank), which consent shall not unreasonably be withheld
or delayed, and (z) the Borrower or such assignee 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
under Section 2.14 and Section 2.16); provided, further, that, if prior to any
such 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 2.15 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 2.15, 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 2.15 or
shall waive its right to further payments under Section 2.20 in respect of such
circumstances or event, 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 (iii) the Borrower is required to pay any
additional amount 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 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) (x) to file any
certificate or document reasonably requested in writing by the Borrower or (y)
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 would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby
agrees 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 LETTERS OF CREDIT.
(a) General. The Borrower may request the issuance of a Letter of
Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
while the Commitments remain in effect. This Section 2.22 shall
49
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
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), the Borrower shall hand deliver
or telecopy to the Issuing Bank and the Administrative Agent (at least two
Business Days 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. 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 Borrower
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
$20.0 million and (ii) the Aggregate Revolving Credit Exposure shall not exceed
the Revolving Commitment as in effect at such time. The Issuing Bank shall issue
the requested Letter of Credit within 2 Business Days after notice given
pursuant to and in accordance with this Section 2.22. The existing letters of
credit identified on Schedule 2.22(b) shall be deemed issued under and pursuant
to this Section 2.22(b) and shall be treated as Letters of Credit for all
purposes under this Agreement.
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the earlier of (x) the date one year after the date of the
issuance of such Letter of Credit (unless the Issuing Bank and the
Administrative Agent shall agree otherwise) and (y) in any event, the date that
is five Business Days prior to the Revolving Credit Maturity Date, unless such
Letter of Credit expires by its terms on an earlier date.
(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 applicable 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 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 Borrower (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 (d) 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, 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 Borrower shall pay to the
Administrative Agent an amount equal to such L/C Disbursement not later than the
end of the day on which the Borrower shall have re-
50
ceived notice from the Issuing Bank that payment of such draft will be made, or,
if the Borrower shall have received such notice later than 11:00 a.m.,
California time, on any Business Day, not later than 11:00 a.m., California
time, on the immediately following Business Day (it being acknowledged that the
Borrower may pay such L/C Disbursement from the unused portion of the Revolving
Commitment).
(f) Obligations Absolute. The Borrower's 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 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 Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, 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 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;
(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 2.22, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is expressly understood and
agreed that the absolute and unconditional obligation of the Borrower hereunder
to reimburse L/C Disbursements will not be excused by the gross negligence or
willful misconduct of the Issuing Bank. However, the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
gross negligence or willful 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
51
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 willful 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 Borrower of such demand for payment and whether 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
Borrower of its 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 Borrower 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 Borrower or the date on which interest shall commence 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 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent and
the Lenders (it being understood that during such 180 day period the Issuing
Bank will continue to issue the Letters of Credit pursuant to this Agreement).
Subject to the next succeeding sentence, upon (x) the acceptance of any
appointment as the Issuing Bank hereunder by a Lender that shall agree to serve
as successor Issuing Bank and (y) consent to such appointment by the
Administrative Agent, which shall not be unreasonably withheld or delayed, 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 Borrower
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 Borrower 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 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 succes-
52
sor 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 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 Borrower shall, on the Business Day it receives notice
thereof and of the amount to be deposited 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 more than
50% of the aggregate undrawn amount of all outstanding Letters of Credit),
deposit in an L/C Sub-Account (as defined in the Security Agreement) 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, 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) automatically 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 Borrower 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 more than 50% of the aggregate undrawn amount of all outstanding
Letters of Credit), be applied to satisfy the Obligations. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount together with any accrued and
unapplied earnings thereon (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all Events of Default
have been cured or waived.
(k) Additional Issuing Banks. The Borrower may, at any time and
from time to time with the consent of the Administrative Agent (which consent
shall not be unreasonably withheld) and such Lender, designate one or more
additional Lenders to act as an issuing bank under the terms of this Agreement.
Any Lender designated as an issuing bank pursuant to this paragraph (k) shall be
deemed (in addition to being a Lender) to be the Issuing Bank with respect to
Letters of Credit issued or to be issued by such Lender, and all references
herein and in the other Loan Documents to the term "Issuing Bank" shall, with
respect to such Letters of Credit, be deemed to refer to such Lender in its
capacity as Issuing Bank, as the context shall require.
SECTION 2.23 FUNDING SOURCES. Nothing in this Agreement shall be deemed
to obligate the Administrative Agent, the Issuing Bank or any Lender to obtain
the funds for any Borrowing, Loan or L/C Disbursement in any particular place or
manner or to constitute a representation by the Administrative Agent, the
Issuing Bank or any Lender that it has obtained or will obtain the funds for any
Borrowing, Revolving Loan or L/C Disbursement in any particular place or manner.
53
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders (with references to
the Borrower and the Subsidiaries being references thereto after giving effect
to the Transactions unless otherwise expressly stated) that:
SECTION 3.01 ORGANIZATION; POWERS. The Borrower and each of the
Subsidiaries (a) is a corporation, partnership or limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization except where the failure to be duly organized,
validly existing or in good standing individually, or together with all such
failures for all Subsidiaries, could not reasonably be expected to result in a
Material Adverse Effect; (b) has all requisite corporate or other power and
authority to own or lease its property 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 such qualification is
required, except where the failure so to qualify could not reasonably be
expected to result in a Material Adverse Effect; and (d) has the organizational
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 Borrower, to borrow
hereunder.
SECTION 3.02 AUTHORIZATION. The execution, delivery and performance by
each Loan Party of each of the Loan Documents to which it is a party and the
consummation by the Loan Parties of the Transactions (including the borrowings
hereunder) (i) have been duly authorized by all requisite corporate or other
constitutional and, if required, stockholder action and (ii) will not (A)
violate (I) any provision of law, statute, rule or regulation applicable to the
Borrower or any Subsidiary, or of the certificate or articles of incorporation
or other constitutive documents or by-laws of the Borrower or any Subsidiary,
(II) any order of any Governmental Authority or (III) any provision of any
indenture, agreement or other instrument to which the Borrower or any Subsidiary
is a party or by which any of them or any of their property is or may be bound;
(B) 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; or (C)
result in the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any Subsidiary
(other than any Lien created hereunder or under the Security Documents) except,
in the case of clause (ii)(A)(III), where such violation, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect (other than any such violation under any of the Notes Documents).
SECTION 3.03 ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by the 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 terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
54
laws affecting the enforceability of creditors' rights generally and by
equitable principles of general applicability (regardless of whether such
enforceability is considered in 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, except for (a) the
filing of UCC financing statements, (b) registration of the Collateral Agent's
lien and security interest in the Pledged Securities under Applicable
Requirements of Law and (c) such as have been made or obtained and are in full
force and effect.
SECTION 3.05 FINANCIAL STATEMENTS.
(a) The Borrower has heretofore furnished to the Lenders its
consolidated balance sheets and related statements of income, stockholders'
equity and cash flows (x) as of and for the fiscal years ended March 31, 2001,
2002 and 2003, audited by and accompanied by the opinion of
PricewaterhouseCoopers LLP for 2001, 2002 and 2003, independent public
accountants and (y) as of and for the six-month period ended September 30, 2003
and for the comparable period in the preceding year, certified by the chief
financial officer of the Borrower. Such financial statements have been prepared
in accordance with GAAP consistently applied (except as disclosed therein),
shall conform to Section 5.04(a) of this Agreement, and present fairly and
accurately in all material respects the financial condition and results of
operations and cash flows of the Borrower as of such dates and for such periods.
Except as set forth in such financial statements or otherwise disclosed in the
Schedules hereto, there are no liabilities of the Borrower or any Subsidiary of
any kind, whether accrued, contingent, absolute, determined, determinable or
otherwise, which could reasonably be expected to result in a Material Adverse
Effect, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability, other than
liabilities under the Loan Documents and the Notes Documents.
(b) All financial statements delivered pursuant to Section 5.04
will be prepared in accordance with GAAP consistently applied and present fairly
and accurately in all material respects the financial condition and results of
operations and cash flows of the Borrower as of such dates and for such periods
(subject, in the case of unaudited statements, to normal year-end adjustments).
Except as set forth in such financial statements or otherwise disclosed in the
Schedules hereto, there are no material liabilities of the Borrower or any
Subsidiary of any kind, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances which could reasonably be expected to result in such a
liability, other than liabilities under the Loan Documents and the Notes
Documents.
(c) The forecasts of financial performance of the Borrower and the
Subsidiaries furnished to the Lenders have been prepared in good faith by the
Borrower and based on assumptions believed by the Borrower to be reasonable.
SECTION 3.06 NO MATERIAL ADVERSE CHANGE. There has been no material
adverse change, or any event, condition or circumstance that could reasonably be
expected to result in a
55
material adverse change, in the business, assets, operations, condition
(financial or otherwise) of the Borrower and the Subsidiaries, taken as a whole,
since March 31, 2003.
SECTION 3.07 TITLE TO PROPERTIES; POSSESSION UNDER LEASES.
(a) Each of the Borrower and the Subsidiaries has good and
marketable title to, or valid leasehold interests in, all its Real Property free
and clear of all Liens, other than Permitted Liens.
(b) Each Lease to which any Loan Party is a party is valid and in
full force and effect and none of the Borrower or any Subsidiary is in default
under any such Lease and, to the knowledge of the Borrower, the other party or
parties thereto are not in default of its or their obligations thereunder except
for defaults which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
(c) Title to all property (other than Real Property) is held by
the Borrower and/or each Subsidiary free and clear of all Liens except for
Permitted Liens.
(d) The property of the Borrower and the Subsidiaries, taken as a
whole, (i) is in good operating order, condition and repair (ordinary wear and
tear excepted) and (ii) constitutes all the assets and properties which are
required for the business and operations of the Borrower and the Subsidiaries as
presently conducted.
(e) None of the Borrower or any Subsidiary has received any notice
of, nor has any knowledge of, the occurrence or pendency or contemplation of any
Casualty Event affecting all or any material portion of its respective property.
SECTION 3.08 SUBSIDIARIES.
(a) Schedule 3.08(a) sets forth a list of all Subsidiaries and the
percentage Equity Interest of the Loan Parties therein. The Equity Interests so
indicated on Schedule 3.08(a) are fully paid and non-assessable and are owned by
the Borrower, directly or indirectly, free and clear of all Liens other than
Liens created by the Security Agreement.
(b) An accurate organization chart, showing the ownership
structure of the Borrower and each Subsidiary on the Closing Date, and after
giving effect to the Transactions, is set forth on Schedule 3.08(b).
SECTION 3.09 LITIGATION; COMPLIANCE WITH LAWS.
(a) Except as set forth on Schedule 3.09 or Schedule 3.17, there
are not any actions, suits or proceedings at law or in equity by or before any
Governmental Authority now pending or, to the knowledge of the Borrower or any
Subsidiary, threatened against or affecting the Borrower, 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
possibility 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.
56
(b) Except for matters covered by Section 3.17, none of the
Borrower or any Subsidiary or any of their respective property is in violation
of, nor will the continued operation of their property as currently conducted
violate, any Requirements of Law (including any zoning or building ordinance,
code or approval or any building permits) or any restrictions of record or
agreements affecting the Real 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.
SECTION 3.10 AGREEMENTS.
(a) None of the Borrower or any Subsidiary is a party to any
agreement or instrument or subject to any corporate or other constitutional
restriction that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(b) None of the Borrower or any Subsidiary is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other agreement or instrument to which it is a
party or by which it or any of its property is or may be bound, where such
default could reasonably be expected to result in a Material Adverse Effect.
None of the Borrower or any Subsidiary is in default in any manner under any
provision of any of the Notes Documents.
(c) Schedule 3.10(a) accurately and completely lists all material
agreements (other than Leases of Real Property set forth on Schedule 3.10(b)) to
which the Borrower and any Subsidiary are a party which are in effect on the
date hereof in connection with the operation of the business conducted thereby
and whether such material agreement requires the consent of any third party
thereunder to the Transactions.
SECTION 3.11 FEDERAL RESERVE REGULATIONS.
(a) None of the Borrower or any Subsidiary 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, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of, or that
is inconsistent with, the provisions of the regulations of the Board, including
Regulation T, U or X.
SECTION 3.12 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. None of the Borrower 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 Borrower will use the proceeds of (a)
the Term Loans on the Closing Date to finance the Refinancing and to pay related
fees and expenses and (b) the Revolving Loans after the Closing Date for working
capital and general corporate purposes (including to effect Permitted
Acquisitions).
57
SECTION 3.14 TAX RETURNS. Each of the Borrower and the Subsidiaries has
filed or caused to be filed all Federal tax returns and all material, state,
local and foreign tax returns or materials 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, except taxes that are being contested in good faith
by appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, shall have set aside on its books adequate reserves in accordance
with GAAP.
SECTION 3.15 NO MATERIAL MISSTATEMENTS. None of any information,
report, financial statement, exhibit or schedule furnished by or on behalf of
the 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, taken as a whole, 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 misleading as of the date such
information is dated or certified; provided that, to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, the Borrower 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. Each of the Borrower and its ERISA
Affiliates is, with respect to each Plan, in compliance in all material respects
with the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder. 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 material liability of the
Borrower or any of its ERISA Affiliates. The present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of
the date of the most recent financial statements reflecting such amounts, exceed
by more than $9,500,000 the fair market value of the assets of all such
underfunded Plans. Using actuarial assumptions and computation methods
consistent with subpart 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of each Borrower, Subsidiary or ERISA Affiliate to all Multiemployer
Plans in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Multiemployer Plan, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.17 ENVIRONMENTAL MATTERS. Except as set forth in Schedule
3.17:
(a) The Real Property owned or operated by the Borrower
and the Subsidiaries does not contain any Hazardous Materials in
amounts or concentrations which (i) constitute or constituted a
violation of, (ii) require Remedial Action under, or (iii) could 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 Real Property and all operations of the Borrower
and the Subsidiaries are in compliance, and in the last three years
have been in compliance, with all applicable 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
neces-
58
sary permits, in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases by
the Borrower or any Subsidiary or, to its knowledge, by any other party
at, from, under or proximate to the Real Property or otherwise in
connection with the operations of the Borrower 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 the Borrower or any Subsidiary has received
any notice of an Environmental Claim in connection with the Real
Property or the operations of the Borrower or the Subsidiaries or with
regard to any person whose liabilities for environmental matters the
Borrower 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; and
(e) Hazardous Materials have not been transported from
the Real Property by or on behalf of the Borrower or any Subsidiary,
nor have Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of the Real Property in a manner that
could give rise to liability under any Environmental Law, nor have the
Borrower or the Subsidiaries retained or assumed any liability,
contractually or by operation of law, with respect to the generation,
treatment, storage or disposal of Hazardous Materials, which
transportation, generation, treatment, storage or disposal, or retained
or assumed 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 each insurance policy that purports to provide coverage
in excess of $1.0 million maintained by the Borrower or by the Borrower for the
Subsidiaries. Such insurance is in full force and effect and all premiums have
been duly paid. The Borrower 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 Security Agreement is effective to create in favor of the
Collateral Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable security interest in and Lien on the Pledged Collateral and, when
(i) financing statements and other filings in appropriate form are filed in the
offices specified on Schedule 3.3 to the Security Agreement, and (ii) the
Securities Collateral (as defined in the Security Agreement) is delivered to the
Collateral Agent, the Security Agreement shall constitute a fully perfected
first priority Lien on, and security interest in, all right, title and interest
of the grantors thereunder in such Pledged Collateral (other than such Pledged
Collateral in which a security interest cannot be perfected under the Uniform
Commercial Code as in effect at the relevant time in the relevant jurisdiction),
in each case subject to no Liens other than Permitted Liens.
59
(b) Each Security Document delivered pursuant to Sections 4.03 and
5.11 will, upon execution and delivery thereof, be 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 Collateral thereunder, and when such Security Document is
filed or recorded in the appropriate offices as may be required under applicable
law, such Security Document will constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Collateral, in each case subject to no Liens other than the applicable Permitted
Liens.
SECTION 3.20 LABOR MATTERS. As of the Closing Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. The hours worked by and
payments made to employees of the Borrower 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 manner which could
reasonably be expected to result in a Material Adverse Effect. All payments due
from the Borrower or any Subsidiary, or for which any claim may be made against
the 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 the Borrower or such Subsidiary except where the failure to do
so could not reasonably be expected to result in a Material Adverse Effect. The
consummation of the Transactions will not give rise to any right of termination
or right of renegotiation on the part of any union under any collective
bargaining agreement to which the Borrower or any Subsidiary is bound.
SECTION 3.21 SOLVENCY. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of each Loan Party will exceed its debts
and liabilities, subordinated, contingent or otherwise; (b) 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 on its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Loan Party will be able
to pay the probable liability on its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party will not have unreasonably small capital with
which to conduct its business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Closing Date.
SECTION 3.22 INTELLECTUAL PROPERTY. Each Loan Party owns, or is
licensed to use, all patents, patent applications, trademarks, trade names,
service marks, copyrights, technology, trade secrets, proprietary information,
know-how and processes necessary for the conduct of its business as currently
conducted (the "Intellectual Property"), except for those the failure to own or
license which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No claim has been asserted and
is pending by any person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Loan Party know of any valid basis for any such claim,
except for such claims that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. The use of such
Intellectual Property by each Loan Party does not infringe the rights of any
person, except for such claims and infringements that, indi-
60
vidually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.23 PP&E. The Borrower and each Domestic Subsidiary owns the
PP&E described as "owned" in the financial statements delivered to the
Administrative Agent prior to the date of this Agreement.
SECTION 3.24 NO BURDENSOME RESTRICTIONS. Except as may have been
disclosed by the Loan Parties in writing to the Administrative Agent, no Loan
Party is a party to any agreement or instrument or subject to any other
obligation or any charter or corporate or partnership restriction, as the case
may be, which, individually or in the aggregate, is likely to have a Material
Adverse Effect.
SECTION 3.25 ANTI-TERRORISM LAW.
(a) To the knowledge of the Loan Parties, no Loan Party or any of
its Affiliates is in violation of any laws relating to terrorism or money
laundering ("Anti-Terrorism Laws"), including the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001 (the "Executive Order"), and
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.
(b) To the knowledge of the Loan Parties, no Loan Party or any of
its Affiliates or their respective brokers or other agents acting or benefiting
in any capacity in connection with the Loans is any of the following:
(i) a person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
(ii) a person owned or controlled by, or acting for or on
behalf of, any Person or entity that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
(iii) a person with which any Lender is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law;
(iv) a person that commits, threatens or conspires to
commit or supports "terrorism" as defined in the Executive Order; or
(v) a person that is named as a "specially designated
national and blocked person" on the most current list published by the
U.S. Treasury Department Office of Foreign Assets Control ("OFAC") at
its official website or any replacement website or other replacement
official publication of such list.
(c) To the knowledge of the Loan Parties, no Loan Party or any of
its brokers or other agents acting in any capacity in connection with the Loans
(i) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any person described in clause
(b) above, (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to the Executive Order,
or
61
(iii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law.
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 and on
the date of each issuance, amendment, extension or renewal 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 Request (or such notice shall have been deemed given
in accordance with Section 2.03) or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the Issuing Bank
and the Administrative Agent shall have received a notice requesting
the issuance, amendment, extension or renewal of such Letter of Credit
as required by Section 2.22(b).
(b) The Borrower and each other Loan Party shall be in
compliance in all material respects 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 Default shall have occurred and be continuing.
(c) The representations and warranties set forth in
Article III hereof or in any other Loan Document 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 representations and warranties expressly
relate to an earlier date.
(d) No law or regulation shall have been adopted, no
order, judgment or decree of any Governmental Authority shall have been
issued, and no litigation shall be pending, which does or seeks to
enjoin, prohibit or restrain, the making or repayment of the Loans.
(e) There shall not have occurred any event or
circumstances that has had or could reasonably be expected to result in
a Material Adverse Effect since September 30, 2003.
Each Credit Event and each delivery of a Borrowing Request shall be
deemed to constitute a representation and warranty by the Borrower on the date
of such Credit Event as to the matters specified in paragraphs (b) and (c) of
this Section 4.01.
62
SECTION 4.02 CLOSING DATE. On the Closing Date:
(a) Loan Documents. All legal matters incident to this
Agreement, the Borrowings and extensions of credit hereunder and the
other Loan Documents shall be reasonably satisfactory to the Lenders,
to the Issuing Bank and to the Administrative Agent and there shall
have been delivered to the Administrative Agent an executed counterpart
of each Revolving Note and each of the other Loan Documents and the
Perfection Certificate in form and substance satisfactory to
Administrative Agent.
(b) Fees. The Joint Lead Arrangers and Administrative
Agent shall have received all Fees and other amounts due and payable on
or prior to the Closing Date, as set forth in an invoice containing
reasonable detail, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses (including the legal fees and
expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Joint Lead
Arrangers, the Administrative Agent and the Collateral Agent, and the
fees and expenses of any local and foreign local counsel) required to
be reimbursed or paid by the Borrower hereunder or under any other Loan
Document (other than as set forth on Schedule 5.11(e)(iii).
(c) Opinions of Counsel. The Administrative Agent shall
have received, on behalf of itself, the other Agents, the Joint Lead
Arrangers, the Lenders and the Issuing Bank, favorable written opinions
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the
Loan Parties, substantially to the effect set forth in Exhibit H-1, (a)
dated the Closing Date, (b) addressed to the Issuing Bank, the Agents,
the Joint Lead Arrangers, the Co-Syndication Agents, the Documentation
Agent and the Lenders and (c) covering such other matters relating to
the Loan Documents and the Transactions as the Administrative Agent
shall reasonably request, and the Borrower hereby requests such counsel
to deliver such opinions.
(d) Corporate Documents. The Administrative Agent shall
have received (i) a copy of the certificate or articles of
incorporation or other constitutive documents, including all amendments
thereto, of the Borrower, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of the Borrower as of a recent date, from such
Secretary of State; (ii) a certificate of the Secretary or Assistant
Secretary of the Borrower dated the Closing Date and certifying (a)
that attached thereto is a true and complete copy of the by-laws of the
Borrower as in effect on the Closing Date and at all times since a date
prior to the date of the resolutions described in clause (b) below, (b)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the
execution, delivery and performance of the Loan Documents to which the
Borrower is a party, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in
full force and effect, (c) that the certificate or articles of
incorporation or other constitutive documents of the Borrower have not
been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above,
and (d) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in
connection herewith on behalf of the Borrower; (iii) a certificate of
another officer as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pur-
63
suant to (ii) above; and (iv) such other documents as the Lenders, the
Issuing Bank or the Administrative Agent may reasonably request.
(e) Officer's Certificate. The Administrative Agent shall
have received a certificate, dated the Closing Date and signed by a
Financial Officer of the Borrower, affirming that all representations,
warranties and covenants of this Agreement are true and correct and
confirming compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.01 and paragraphs (b), (c) and (d)
of this Section 4.02.
(f) Solvency. The Lenders shall have received a
certificate, dated the Closing Date and signed by an officer of the
Borrower, in form and substance satisfactory to the Administrative
Agent, as to the solvency of each of the Loan Parties after giving
effect to the Transactions.
(g) Security Agreement. The Security Agreement shall have
been duly executed by the Borrower and shall have been delivered to the
Collateral Agent and shall be in full force and effect on such date.
(h) Collateral Deliveries. The Borrower shall have
authorized, executed and/or delivered or caused to be delivered each of
the following to the Collateral Agent:
(1) Financing Statements in appropriate form for
filing under the UCC and such other documents under applicable
Requirements of Law in each jurisdiction as may be necessary
or appropriate to perfect the Liens created, or purported to
be created in the Collateral (other than Securities
Collateral), by the Security Agreement;
(2) certified copies of UCC lien search reports,
tax lien, judgment lien, bankruptcy and pending lawsuit
searches or equivalent reports or lien search reports, each of
a recent date listing all effective financing statements, lien
notices or comparable documents that name the Borrower as
debtor and that are filed in those state and county
jurisdictions in which any of the property of the Borrower is
located, the state and county jurisdictions in which the
Borrower's principal place of business is located and the
state jurisdiction in which the Borrower is organized, none of
which encumber the Collateral covered or intended to be
covered by the Security Documents other than those relating to
Prior Liens (as defined in the Security Agreement) acceptable
to the Collateral Agent);
(3) the Perfection Certificate executed by the
Borrower;
(4) with respect to each Real Property, copies
of all Leases relating to locations where Inventory is located
in which a Loan Party holds any interest;
(5) evidence of the completion of all recordings
and filings of, or with respect to, the Security Agreement and
the execution and/or delivery of such other security and other
documents, and the taking of all actions as may be necessary
or, in the opinion of the Collateral Agent, desirable, to
perfect the Liens created, or purported to be created, by the
Security Agreement, except for any of the fore-
64
going to be provided after the Closing Date pursuant to
Sections 4.03 and 5.11 hereof; and
(6) evidence acceptable to the Collateral Agent
of payment by the Loan Parties of all applicable recording
taxes, fees, charges, costs and expenses required for the
recording of the Security Documents.
(i) Insurance. The Administrative Agent shall have
received a copy of, or 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 and to name the Collateral Agent as additional
insured, in form and substance satisfactory to the Administrative
Agent.
(j) Indebtedness and Minority Interests. After giving
effect to the Transactions and the other transactions contemplated
hereby, none of the Borrower or any Subsidiary shall have outstanding
any Indebtedness, preferred stock or minority interests other than (i)
the Loans and extensions of credit hereunder, (ii) the Notes, (iii)
minority interests in subsidiaries reflected on Schedule 3.08(a), (iv)
Indebtedness owed to the Borrower or any Guarantor, and (v)
Indebtedness otherwise permitted pursuant to Section 6.01.
(k) Requirements of Law. The Lenders shall be satisfied
that the Transactions shall be in full compliance with all material
Requirements of Law, including without limitation Regulations T, U and
X of the Board.
(l) Consents. The Lenders shall be satisfied that all
requisite Governmental Authorities and third parties shall have
approved or consented to the Transactions, and there shall be no
governmental or judicial action, actual or threatened, that has or
would have, singly or in the aggregate, a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the
Transactions.
(m) Litigation. There shall be no litigation, public or
private, or administrative proceedings, governmental investigation or
other legal or regulatory developments, actual or threatened, that,
singly or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or could materially and adversely affect the
ability of the Borrower and the Subsidiaries to fully and timely
perform its obligations under the Loan Documents, or the ability of the
parties to consummate the financings contemplated hereby or the other
Transactions.
(n) Material Adverse Change. There shall have not
occurred, in the reasonable judgment of the Administrative Agent, a
material adverse change or material disruption in the financial,
banking or capital markets generally prior to the Closing Date
(including the markets for loans to companies similar to the Borrower)
which has had or could reasonably be expected to have a material
adverse effect on the syndication of the Loans.
65
(o) Financial Statement; Pro Forma Balance Sheet;
Projections. The Lenders shall have received and shall be reasonably
satisfied with the financial statements described in Section 3.05.
(p) Fees and Expenses. The Borrower shall have paid all
fees and expenses of the Agents and Lenders as set forth in Section
9.05.
(q) Existing Credit Agreement. The Borrower shall have
permanently terminated all commitments under the Existing Agreement and
the Existing Credit Agreement shall have been terminated and of no
further force and effect and Borrower shall have delivered UCC
termination statements, payoff letters and other related documentation
of the Agent shall reasonably request.
(r) Debt Tender Offer. All conditions precedent to
consummation of the Debt Tender Offer shall have been satisfied, all
outstanding 11% Senior Notes (other than up to E20.0 million aggregate
principal amount of 11% Senior Notes) shall have been tendered and not
withdrawn and the Borrower shall have, concurrently with the closing on
the Closing Date, accepted all such 11% Senior Notes tendered.
(s) Equity Financing. The Equity Financing shall have
been consummated and the Borrower shall have received not less than
$85.0 million in net cash proceeds therefrom.
SECTION 4.03 FIRST CREDIT EVENT. Prior to the first Credit Event to
occur other than issuance of the Letters of Credit listed in Schedule 2.22(b),
(i) the Borrower shall have authorized, executed and delivered all documents and
taken all actions necessary or appropriate to grant in favor of the Collateral
Agent a fully perfected first priority pledge of and security interest in the
Pledged Securities, other than with respect to those Pledged Securities
identified on Schedule 5.11(e)(i) hereto (which such actions shall be completed
within the time period set forth on such Schedule, unless the Collateral Agent
otherwise agrees), under the laws of the jurisdiction of organization of the
applicable issuer of such Pledged Securities (including, without limitation, the
taking of all actions or the foreign equivalent, if applicable, and the delivery
of all items, or their foreign equivalent, if applicable, of the type and nature
enumerated in Sections 4.02(h)(1), (h)(2), (h)(5) and (h)(6) of this Agreement,
and the delivery of all certificates, agreements or instruments representing
such Pledged Securities, accompanied by instruments of transfer endorsed in
blank to the extent required or permitted under the jurisdiction or organization
of the applicable issuer of such Pledged Securities) and (ii) the Collateral
Agent shall have received, on behalf of itself, the Co-Syndication agents, the
Documentation agent, the other Agents, the Joint Lead Arrangers, the Lenders and
the Issuing Bank, a favorable written opinion of each foreign counsel listed on
Schedule 4.03, other than the foreign counsel listed on Schedule 5.11(e)(ii)
(which such opinions shall be delivered within the time period set forth on such
Schedule, unless the Collateral Agent otherwise agrees), substantially to the
extent set forth in Exhibit H-2 and with such additions, deletions and/or
changes as shall be acceptable to the Collateral Agent, (a) dated no later than
the date of such first Credit Event, (b) addressed to the Co-Syndication agents,
the Documentation agents, the Issuing Bank, the Agents, the Joint Lead Arrangers
and the Lenders and (c) covering such other matters relating to the Loan
Documents and
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the Transactions as the Administrative Agent shall reasonably request, and the
Borrower hereby requests such counsel to deliver such opinions.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that so long as this
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 shall 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, the Borrower will, and will cause each of the
Subsidiaries to:
SECTION 5.01 EXISTENCE; BUSINESSES AND PROPERTIES.
(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 or, in the case of any Subsidiary, where
any such failures, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
(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; maintain and operate such
business in substantially the manner in which it is presently conducted and
operated; comply with all applicable Requirements of Law (including any and all
zoning, building, Environmental Law, ordinance, code or approval or any building
permits or any restrictions of record or agreements affecting the Real Property)
and decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect; pay and perform its obligations under all Leases; perform and comply in
all material respects with its obligations under its material contracts,
agreements and other instruments; 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 and from time to time make, or cause to be
made, all necessary repairs, renewals, additions, improvements and replacements
(including those necessary as a result of a Casualty Event) thereto necessary in
order that the business carried on in connection therewith may be properly
conducted at all times; provided, however, that nothing in this Section 5.01(b)
shall prevent (i) sales of assets, consolidations or mergers by or involving the
Borrower or any Subsidiaries in accordance with Section 6.05; (ii) the
withdrawal by the Borrower or any Subsidiaries of their qualification as a
foreign corporation in any jurisdiction where such withdrawal, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect; or (iii) the abandonment by the Borrower or any Subsidiary of
any rights, franchises, permits, authorizations, copyrights, trademarks, trade
names, licenses and patents or property that such person reasonably determines
are not useful to its business.
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SECTION 5.02 INSURANCE.
(a) Keep its insurable property 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 public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any property
owned, occupied or controlled by it; and maintain such other insurance as may be
required by law; and, with respect to the Collateral, otherwise maintain all
insurance coverage required under the applicable Security Documents.
(b) Notify the Administrative Agent and 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 the Borrower; and promptly deliver to the Administrative Agent
and the Collateral Agent a duplicate original copy of such policy or policies.
SECTION 5.03 OBLIGATIONS AND TAXES. Pay its Indebtedness and other
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 the same shall become delinquent or in default, as well as all lawful
claims for 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 any such
Indebtedness, tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
the Borrower 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 Collateral, the Borrower or the applicable Subsidiary shall
have otherwise complied with the provisions of the applicable Security Document
in connection with such nonpayment.
SECTION 5.04 FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to the
Administrative Agent and each Lender:
(a) Annual Reports. Within 90 days after the end of each
fiscal year, (i) the consolidated balance sheet of the Borrower as of
the end of such fiscal year and related consolidated statements of
income, cash flows and stockholders' equity for such fiscal year, and
notes thereto, all prepared in accordance with Regulation S-X under the
Securities Act and accompanied by an opinion of PricewaterhouseCoopers
LLP or other comparable independent public accounting firm (which
opinion shall not be qualified as to scope or contain any going concern
or other qualification), stating that such financial statements fairly
present, in all material respects, the consolidated financial
condition, results of operations, cash flows and changes in
stockholders' equity of the Borrower and the Subsidiaries as of the end
of and for such fiscal year in accordance with GAAP consistently
applied, (ii) a management report in a form reasonably satisfactory to
the Administrative Agent setting forth, on a consolidating basis, the
financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries as of the end of and for
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such fiscal year, as compared to its financial condition, results of
operations and cash flows as of the end of and for the previous fiscal
year and its budgeted results of operations and cash flows; and (iii) a
management's discussion and analysis of the financial condition and
results of operations for such fiscal year, as compared to the previous
fiscal year;
(b) Quarterly Reports. Within 45 days after the end of
each of the first three fiscal quarters of each fiscal year, (i) the
consolidated balance sheet of the Borrower as of the end of such fiscal
quarter and related consolidated statements of income for such fiscal
quarter and for the then elapsed portion of the fiscal year and related
consolidated statements of income and cash flows for the then elapsed
portion of the fiscal year, in each case in comparative form with the
consolidated statements of income and cash flows for the comparable
periods in the previous fiscal year, and notes thereto, all prepared in
accordance with Regulation S-X under the Securities Act and accompanied
by a certificate of a Financial Officer stating that such financial
statements fairly present, in all material respects, the consolidated
financial condition, results of operations and cash flows of the
Borrower and the Subsidiaries as of the date and for the periods
specified in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments, (ii) a management report in a form
reasonably satisfactory to the Administrative Agent setting forth, on a
consolidating basis, the financial condition, results of operations and
cash flows of the Borrower and its Subsidiaries as of the end of and
for such fiscal quarter and for the then elapsed portion of the fiscal
year, as compared to its financial condition, results of operations and
cash flows as of the end of such fiscal quarter and for the comparable
periods in the previous fiscal year and its budgeted results of
operations and cash flows, and (iii) a management's discussion and
analysis of the financial condition and results of operations for such
fiscal quarter and the then elapsed portion of the fiscal year, as
compared to the comparable periods in the previous fiscal year;
(c) Liquidity Compliance Certificates. Within 20 Business
Days after the end of each month, a statement of balances of cash and
Cash Equivalents and a statement of gross amounts of Accounts and
Inventory, and a certificate evidencing Borrower's Compliance with the
covenant set forth in Section 6.13 of this Agreement;
(d) Financial Officer's Certificate. (i) Concurrently
with any delivery of financial statements under paragraph (a), (b) or
(c) above, a certificate of a Financial Officer certifying that no
Default has occurred or, if such a Default has occurred, specifying the
nature and extent thereof and any corrective action taken or proposed
to be taken with respect thereto; (ii) concurrently with any delivery
of financial statements under paragraph (a) or (b) above, a certificate
of a Financial Officer setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with
the covenants contained in Sections 6.08, 6.09, 6.10, 6.11, 6.12 and
6.13; and (iii) in the case of paragraph (a) above, a report of the
accounting firm opining on or certifying such financial statements
stating that in the course of its regular audit of the financial
statements of the Borrower and the Subsidiaries, which audit was
conducted in accordance with GAAP, such accounting firm obtained no
knowledge that any Default has occurred or, if in the opinion of such
accounting firm such a Default has occurred, specifying the nature and
extent thereof;
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(e) Financial Officer's Certificate Regarding Collateral.
Concurrently with the delivery of financial statements under paragraph
(a) above, Borrower (on behalf of itself and the other Loan Parties)
shall deliver to the Administrative Agent a certificate of a Financial
Officer (i) setting forth the information required pursuant to the
Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate delivered
on the Closing Date or the date of the most recent certificate
delivered pursuant to this paragraph (e) and (ii) certifying that all
UCC financing statements (including fixture filings, as applicable) or
other appropriate filings, recordings or registrations, containing a
description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above to the extent
necessary to protect and perfect the security interests under the
Security Agreement for a period of not less than 18 months after the
date of such certificates (except as noted therein with respect to any
continuation statements to be filed within such period);
(f) Information Regarding Collateral. The Borrower will
furnish to the Administrative Agent prompt written notice of any change
(i) in any Loan Party's legal name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive
office, its principal place of business, any office in which it
maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located
(including the establishment of any such new office or facility), (iii)
in any Loan Party's identity or structure or (iv) in any Loan Party's
Federal Taxpayer Identification Number. The Borrower agrees not to
effect or permit any change referred to in the preceding sentence
unless written notice has been delivered to the Collateral Agent,
together will all applicable information to enable the Administrative
Agent to make all filings under the UCC or otherwise that are required
in order for the Collateral Agent (for the benefit of the Secured
Parties) to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral;
(g) Public Reports. Promptly after the same become
publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the 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 holders of
any of its securities pursuant to the terms of the documentation
governing such securities (or any trustee, agent or other
representative therefor), as the case may be;
(h) Budgets. As soon as completed but in any event no
later than 60 days after the first day of each fiscal year of the
Borrower, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income by each
of the Borrower's business units and sources and uses of cash and
balance sheets) prepared by the Borrower and marked confidential for
each fiscal quarter of such fiscal year of the Borrower and their
respective subsidiaries, with appropriate presentation and discussion
of the principal assumptions upon which such budgets are based;
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(i) Annual Meetings with Lenders. Within 120 days (or at
a date mutually agreeable between Borrower and Administrative Agent)
after the close of each fiscal year, the Borrower shall, at the request
of the Administrative Agent or Required Lenders, hold a meeting (at a
mutually agreeable location and time) with all Lenders who choose to
attend such meeting at which meeting shall be reviewed the financial
results of the previous fiscal year and the financial condition of the
Borrower and the Subsidiaries and the budgets presented for the current
fiscal year of the Borrower and the Subsidiaries; and
(j) Other Information. Promptly, from time to time, such
other information regarding the operations, business affairs and
financial condition of the Borrower or any Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent or any
Lender may reasonably request.
SECTION 5.05 LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) any 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 threat or
notice of intention of any person to file or commence, any action, suit
or proceeding, whether at law or in equity by or before any
Governmental Authority, (i) against the Borrower or any Subsidiary
thereof that could reasonably be expected to result in a Material
Adverse Effect or (ii) with respect to any Loan Document;
(c) any development that has resulted in, or could
reasonably be expected to result in a Material Adverse Effect;
(d) the occurrence of a Casualty Event in excess of $1.0
million; and
(e) (i) the incurrence of any Lien (other than Permitted
Liens) on, or claim asserted against, any material portion of the
Collateral or (ii) the occurrence of any other event which could
materially adversely affect the value of the Collateral.
SECTION 5.06 EMPLOYEE BENEFITS. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within 10
days after, any Responsible Officer of the Borrower or any Subsidiary 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 the Borrower in an aggregate amount exceeding $1,000,000, a statement of a
Financial Officer of the Borrower setting forth details as to such ERISA Event
and the action, if any, that the Borrower proposes to take with respect thereto,
and (ii) upon request by the Administrative Agent, copies of: (i) each Schedule
B (Actuarial Information) to the annual report (Form 5500 Series) filed by the
Borrower, any Subsidiary or any ERISA Affiliate with the Internal Revenue
Service with respect to each Plan; (ii) the most recent actuarial valuation
report for each Plan; (iii) all notices received by the Borrower, any Subsidiary
or any ERISA Affiliate from a Multiemployer Plan sponsor or any governmental
agency concerning an ERISA Event; and (iv) such other documents or governmental
reports or filings relating to any Plan (or employee benefit plan
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sponsored or contributed to by the Borrower or Subsidiary) as the Administrative
Agent shall reasonably request.
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 of all dealings and
transactions in relation to its business and activities, except where the
failure to comply with such Requirements of Law could not have a Material
Adverse Effect. The Borrower will, and will cause each of the Subsidiaries to,
permit any representatives designated by the Administrative Agent, the
Collateral Agent, any Syndication Agent or any Lender to visit and inspect the
financial records and the property of the Borrower or any Subsidiary at
reasonable times during regular business hours, upon reasonable notice, as often
as reasonably requested, and to make extracts from and copies of such financial
records, in each case in the presence of an employee of any Loan Party, and
permit any representatives designated by the Administrative Agent or any Lender
to discuss the affairs, finances and condition of the Borrower or any Subsidiary
with the officers thereof and independent accountants therefor; provided that
costs and expenses of any Lender for more than one visit per fiscal year (other
than any such visit during an Event of Default) by such Lender shall be at such
Lender's expense.
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 Real Property to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Real Property; obtain and renew all material Environmental
Permits necessary for its operations and Real Property; and conduct any Remedial
Action in accordance with Environmental Laws, except in the case of any of the
foregoing where the failure to do the same, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; provided,
however, that none of the Borrower or any Subsidiary shall be required to
undertake any Remedial Action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate reserves
are being maintained with respect to such circumstances in accordance with GAAP.
SECTION 5.10 PREPARATION OF ENVIRONMENTAL REPORTS. If a Default caused
by reason of a breach of Section 3.17 or Section 5.09 shall have occurred and be
continuing for more than 30 days without the Borrower or the Subsidiaries
commencing activities reasonably likely to cure such Default, at the written
request of the Required Lenders through the Administrative Agent, provide to the
Lenders within 60 days after such request, at the expense of the Borrower, an
environmental site assessment report regarding the matters 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 Default.
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SECTION 5.11 FURTHER ASSURANCES; ADDITIONAL COLLATERAL.
(a) Execute any and all further documents, financing statements,
agreements and instruments, and take all further action (including, giving
notices of assignment, filing UCC and other financing statements and delivering
legal opinions and, including creation of lockbox, cash collection accounts
and/or sweep accounts) that may be required under applicable law, or that the
Required Lenders, the Administrative Agent or the Collateral Agent may request,
in order to, among other things, effectuate the transactions contemplated by the
Loan Documents and 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.
(b) The parties hereto acknowledge and agree that it is their
intention that the Obligations shall be secured by, among other things, a first
priority Lien (subject only to Permitted Liens) on all of the domestic Accounts
and Inventory and Pledged Securities owned by the Borrower (and such Accounts,
Inventory and Pledged Securities owned by any Subsidiary to the extent required
to be pledged pursuant to Section 5.11(f) hereof), whether now owned or
hereafter acquired. Promptly, and in any event within 30 days after the
acquisition of any Accounts, Inventory or Pledged Securities by the Borrower
(and/or such Accounts, Inventory and Pledged Securities owned by any Subsidiary
to the extent required to be Pledged pursuant to Section 5.11(f) hereof) or any
Permitted Acquisition, the Borrower will, at its sole cost and expense, promptly
secure the Obligations by pledging or creating, or causing to be pledged or
created, perfected first priority security interests with respect to such
Accounts, Inventory or Pledged Securities, as applicable. Such security
interests and Liens will be created under the Security Documents and other
instruments and documents in form and substance reasonably satisfactory to the
Collateral Agent, and the Borrower shall deliver or cause to be delivered to the
Collateral Agent all such instruments and documents (including legal opinions,
lien waivers, and lien searches) as the Collateral Agent shall reasonably
request to evidence compliance with this Section 5.11. The Borrower shall take
all further action of the type described in Section 5.11(a) in order to grant,
preserve, protect and perfect such Lien and security interest.
(c) In addition to the Borrower's obligations under Section
5.04(e), if and when applicable, the Borrower shall, from time to time, provide
such evidence as the Collateral Agent shall reasonably request as to the
perfection and priority status of each security interest and Lien contemplated
herein. With respect to each Real Property in which a Loan Party holds the
tenant's interest thereunder set forth on Schedule 3.10(b) and where Collateral
is located, such Loan Party shall use its commercially reasonable efforts to
obtain as promptly as practicable a Landlord Access Agreement substantially as
set forth in Exhibit E with such additions, deletions and/or changes as shall be
acceptable to the Collateral Agent. With respect to each location where
Collateral is held set forth on Schedule 2(e) to the Perfection Certificate,
such Loan Party shall use its commercially reasonable efforts to obtain as
promptly as practicable a bailee letter substantially as set forth in Exhibit K
with such additions, deletions and/or changes as shall be acceptable to the
Collateral Agent.
(d) The Borrower shall, with respect to each Real Property in
which a Loan Party holds the tenant's interest thereunder as set forth on
Schedule 3.10(b) and at which Collateral is located and to the extent that the
same has not been delivered to the Collateral Agent on or prior to the Closing
Date, take all further commercially reasonable action necessary to obtain a
Land-
73
lord Access Agreement with respect to such Real Property, if required by
Administrative Agent; provided that a demand by any landlord for a material
increase in the rent for such Real Property or a material extension of the lease
relating thereto shall be deemed commercially unreasonable; provided, further,
that each Loan Party will furnish to the Lenders and their counsel on the first
Business Day of each month beginning January 1, 2004, a status report describing
such actions and to the extent that a landlord shall refuse to execute a
Landlord Access Agreement, a detailed description of the reason for such refusal
and/or the exact terms pursuant to which such landlord would have agreed to
execute such agreement if such terms were deemed commercially unreasonable by
the Borrower.
(e) As promptly as practicable and in any event not later than the
time periods set forth in Schedule 5.11(e)(i) or (ii), as applicable, (i) the
Borrower shall have (A) authorized, executed and delivered all documents and
taken all actions necessary or appropriate to grant in favor of the Collateral
Agent a fully perfected first priority pledge of and security interest in the
Pledged Securities identified on Schedule 5.11(e)(i) under the laws of the
jurisdiction of organization of the applicable issuer of such Pledged Securities
(including, without limitation, the taking of all actions or the foreign
equivalent, if applicable, and the delivery of all items, or their foreign
equivalent, if applicable, of the type and nature enumerated in Sections
4.02(h)(1), (h)(2), (h)(5) and (h)(6) of this Agreement, and the delivery of all
certificates, agreements or instruments representing such Pledged Securities,
accompanied by instruments of transfer endorsed in blank to the extent required
or permitted under the jurisdiction or organization of the applicable issuer of
such Pledged Securities) and (B) take such other action in connection therewith
as is set forth on such Schedule 5.11(e)(i) and (ii) the Collateral Agent shall
have received, on behalf of itself, the other Agents, the Joint Lead Arrangers,
the Documentation Agent, the Co-Syndication Agents, the Lenders and the Issuing
Bank, a favorable written opinion of each foreign counsel listed on Schedule
5.11(e)(ii), substantially to the effect set forth in Exhibit H-2 and with such
additions, deletions and/or changes as shall be acceptable to the Collateral
Agent, (a) dated no later than such 60th day after the Closing Date, (b)
addressed to the Documentation Agent, the Co-Syndication Agents, the Issuing
Bank, the Agents, the Joint Lead Arrangers and the Lenders and (c) covering such
other matters relating to the Loan Documents and the Transactions as the
Administrative Agent shall reasonably request, and the Borrower hereby requests
such counsel to deliver such opinions.
(f) If, after the Closing Date, (i) the Borrower or any Domestic
Subsidiary shall acquire or create a Domestic Subsidiary or Direct Foreign
Subsidiary (other than an Insignificant Domestic Subsidiary or an Insignificant
Direct Foreign Subsidiary), (ii) any Direct Foreign Subsidiary that was an
Insignificant Direct Foreign Subsidiary fails to continue to qualify as an
Insignificant Direct Foreign Subsidiary, (iii) any Insignificant Domestic
Subsidiary fails to continue to qualify as an Insignificant Domestic Subsidiary
or (iv) the Administrative Agent shall so request with respect to any Domestic
Subsidiary or Direct Foreign Subsidiary (other than an Insignificant Domestic
Subsidiary or an Insignificant Direct Foreign Subsidiary), then, in each such
case, the Borrower shall or shall cause the applicable Domestic Subsidiary or
Direct Foreign Subsidiary (other than an Insignificant Domestic Subsidiary or an
Insignificant Direct Foreign Subsidiary), to, at its expense:
(A) within 30 days after such event, duly execute and
deliver to the Collateral Agent (i) a joinder agreement and/or pledge
amendment to the Security
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Agreement and (ii) a pledge agreement securing payment of all the
Obligations of the Loan Parties under the Loan Documents and creating a
first priority security interest in, and Lien on, not less than (x)
100% of the voting Equity Interest of the applicable Domestic
Subsidiary or (y) 65% of the voting Equity Interest of the applicable
Direct Foreign Subsidiary owned by the Borrower or such Subsidiary, as
the case may be, in form and substance sufficient under the laws of
such Domestic Subsidiary's or Direct Foreign Subsidiary's jurisdiction
of organization and otherwise acceptable to the Collateral Agent, and
take, and cause such Subsidiary to take, whatever other action may be
necessary or advisable in the reasonable opinion of the Collateral
Agent, to perfect the first priority security interest in and Lien on
the Equity Interest purported to be created by such pledge, subject to
no Liens, and enforceable against all third parties in accordance with
its terms;
(B) within 30 days after such event, deliver to the
Collateral Agent, upon the request of the Collateral Agent in its
reasonable discretion, a signed copy of a legal opinion of foreign
counsel substantially to the effect set forth in Exhibit H-2 and with
such additions, deletions and/or changes as shall be acceptable to the
Collateral Agent, addressed to the Collateral Agent and the Lenders, of
counsel for the Loan Parties reasonably acceptable to the Collateral
Agent and such other opinions as to such other matters as the
Collateral Agent may reasonably request; and
(C) at any time and from time to time, promptly execute
and deliver any and all further instruments and documents (including,
without limitation, solvency certificates with respect to such pledge)
and take all such action as the Collateral Agent may deem necessary or
reasonably desirable to obtain the full benefits of the agreements
described in Section 5.11(f)(A) above, and/or to perfect and preserve
the first priority Liens in favor of the Collateral Agent on the
applicable Equity Interests pledged hereby.
(g) Each Loan Party agrees that, unless otherwise indicated in
this Section 5.11, each action required by this Section 5.11 shall be completed
within 30 days of the date such action is requested or required to be taken. In
addition, the Borrower hereby covenants and agrees that it shall complete the
actions specified on Schedule 5.11(e)(iii) within the time period set forth on
such Schedule, unless the Collateral Agent shall otherwise agree.
SECTION 5.12 CERTAIN MATTERS RELATING TO ACCOUNTS.
(a) Upon the Collateral Agent's demand made at any time after the
occurrence and during the continuance of an Event of Default and at the
Borrower's or the applicable Loan Party's sole cost and expense, deliver or
cause to be delivered all tangible evidence of Accounts, including, without
limitation, copies of all documents evidencing Accounts and of any books and
records relating thereto to the Collateral Agent or to its representatives. Upon
the occurrence and during the continuance of an Event of Default, the Collateral
Agent may transfer a full and complete copy of any Loan Party's books, records,
credit information, reports, memoranda and all other writing relating to the
Accounts to and for the use by any person that has acquired or is contemplating
acquisition of an interest in the Accounts or the Collateral Agent's security
interest therein without the consent of any Loan Party.
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(b) At the request of the Collateral Agent made at any time after
the occurrence and during the continuance of any Event of Default and in form
and manner reasonably satisfactory to the Collateral Agent, legend the Accounts
and the other books, records and documents of such Loan Party evidencing or
pertaining to the Accounts with an appropriate reference to the fact that the
Accounts have been pledged to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.
(c) Deliver to the Collateral Agent, within 10 days after receipt
thereof by Borrower or any Loan Party, any Instrument evidencing Accounts which
is in the principal amount of $200,000 or more. Any Instrument delivered to the
Collateral Agent pursuant to Section 5.12(b) shall be appropriately endorsed (if
applicable) to the order of the Collateral Agent, as agent for the Secured
Parties, and shall be held by the Collateral Agent as further security
hereunder; provided, however, that so long as no Default or Event of Default
shall have occurred and be continuing and the Collateral Agent is collecting
Accounts, the Collateral Agent shall, promptly upon request of such Loan Party,
make appropriate arrangements for making any Instrument pledged by such Loan
Party available to such Loan Party for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent reasonably deemed
appropriate by the Collateral Agent, against trust receipt or like document).
SECTION 5.13 GUARANTEES.
(a) If, after the Closing Date, (a) the Borrower or any Subsidiary
shall acquire or create another Subsidiary (other than (i) an Insignificant
Domestic Subsidiary or (ii) a Foreign Subsidiary) or (b) any Subsidiary that was
an Insignificant Domestic Subsidiary fails to continue to qualify as an
Insignificant Domestic Subsidiary, then, in each such case, cause such
Subsidiary to:
(1) execute and deliver to the Collateral Agent a
Guarantee Agreement; and
(2) deliver to the Lenders one or more opinions of
counsel satisfactory to the Collateral Agent that such Guarantee
Agreement (x) has been duly authorized, executed and delivered by such
Subsidiary and (y) constitutes a valid and legally binding obligation
of such Subsidiary in accordance with its terms.
In addition, in the event that (a) the aggregate net sales of all
Insignificant Domestic Subsidiaries which have not become Guarantors exceed 5.0%
of the consolidated net sales of the Borrower and the Subsidiaries for any
fiscal quarter or (b) the aggregate tangible assets of all Insignificant
Domestic Subsidiaries which have not become Guarantors exceed 5.0% of Total
Tangible Assets as of the end of any such fiscal quarter, the Borrower shall
cause one or more Domestic Subsidiaries to become Guarantors and take such other
actions so that the Insignificant Domestic Subsidiaries which have not become
Guarantors do not exceed in the aggregate either of the totals in clause (a) or
(b) of this paragraph.
The Borrower may at its option cause any other Subsidiary to become a
Guarantor by complying with the provisions of clauses (1) and (2) above.
76
(b) Cause each Subsidiary which now or hereafter guarantees any of
the obligations under the Borrower's Notes, concurrent with the granting of any
such guarantee, to guarantee the Borrower's obligations hereunder by duly
executing and delivering a Guarantee Agreement.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as
this 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, the Borrower will not, nor will it cause or permit
any Subsidiaries to:
SECTION 6.01 INDEBTEDNESS. Incur, create, assume or permit to exist,
directly or indirectly, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and
the other Loan Documents;
(b) Indebtedness of the Borrower and the Guarantors under
the Notes Documents in an aggregate principal amount not to exceed (i)
in the case of the 6-7/8% Senior Notes, $94.7 million and refinancings
thereof provided that such refinancing Indebtedness meets the terms and
conditions set forth in the proviso to clause (c) below provided
further that the maturity of the refinancing Indebtedness shall be no
earlier than 91 days after the Term Loan Maturity Date (without giving
effect to the proviso in the definition thereof) and (ii) in the case
of the 11% Senior Notes, prior to the close of business on the Closing
Date, E205.0 million and, thereafter, E20.0 million, in each
case less the aggregate amount of all repayments thereunder effected
after the Closing Date;
(c) Indebtedness actually outstanding on the Closing Date
and listed on Schedule 6.01 (other than the Notes and any intercompany
Indebtedness), and refinancings or renewals thereof; provided that (i)
any such refinancing Indebtedness is in an aggregate principal amount
not greater than the aggregate principal amount of the Indebtedness
being renewed or refinanced, plus the amount of any premiums required
to be paid thereon and fees and expenses associated therewith; (ii)
such refinancing Indebtedness has a later or equal final maturity and
longer or equal weighted average life than the Indebtedness being
renewed or refinanced; and (iii) the covenants, events of default,
subordination and other provisions thereof (including any guarantees
thereof) shall be, in the aggregate, no less favorable to the Lenders
than those contained in the Indebtedness being renewed or refinanced;
(d) intercompany Indebtedness of the Borrower and the
Subsidiaries outstanding to the extent permitted by Section 6.04(d);
77
(e) in addition to any Indebtedness permitted by the
preceding paragraph (d), Indebtedness of any Wholly Owned Subsidiary to
the Borrower or another Wholly Owned Subsidiary constituting the
purchase price in respect of intercompany transfers of goods and
services made in the ordinary course of business to the extent not
constituting Indebtedness for borrowed money;
(f) Indebtedness under performance bonds, letter of
credit obligations to provide security for worker's compensation claims
and bank overdrafts, in each case incurred in the ordinary course of
business; provided that any obligations arising in connection with such
bank overdraft Indebtedness is extinguished within fifteen Business
Days;
(g) Purchase Money Indebtedness or Indebtedness in
respect of Capital Lease Obligations and refinancings or renewals
thereof incurred after the Closing Date in an aggregate amount not to
exceed at any time outstanding $20.0 million;
(h) Indebtedness arising in connection with endorsement
of instruments for deposit in the ordinary course of business;
(i) Contingent Obligations of the Borrower or any
Guarantor in respect of Indebtedness otherwise permitted hereunder and
other Contingent Obligations of the Borrower or any Guarantor in
respect of obligations of the Borrower, any Subsidiary or any Guarantor
(other than Indebtedness) incurred in the ordinary course of business;
and
(j) other Indebtedness (in addition to the Indebtedness
permitted in the foregoing clauses (a)-(i)) of the Borrower not to
exceed $20.0 million in the aggregate at any time outstanding; provided
that the Borrower may incur such Indebtedness only if at the time of
such incurrence no Default shall have occurred and be continuing.
Notwithstanding the foregoing, the Borrower shall not incur
more than $50,000 of Indebtedness (in addition to Indebtedness outstanding on
the Closing Date) secured under that certain security agreement (as amended)
dated as of December 27, 1994 by Optical Electro Forming Inc. in favor of United
Financial Group, Inc.
SECTION 6.02 LIENS. Create, incur, assume or permit to exist, directly
or indirectly, any Lien upon or with respect to any property or assets now owned
or hereafter acquired by it or any Subsidiary or on any income or revenues or
rights in respect thereof, except as provided for in the Loan Documents, or sell
any Collateral, property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such Collateral, property or assets or
assign any right to receive income, or file or permit the filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute, except the following (the "Permitted
Liens"):
(a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes,
assessments or governmental charges or levies, which (i) are being
contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings)
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien, or (ii) in the case of any
78
such charge or claim which has or may become a Lien against an of the
Collateral, such Lien and the contest thereof shall satisfy the
Contested Collateral Lien Conditions;
(b) Liens in respect of property of the Borrower or any
of the Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money,
such as carriers', warehousemen's, materialmen's, landlord's and
mechanics' liens and other similar Liens arising in the ordinary course
of business, and (i) which are being contested in good faith by
appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, which proceedings (or orders
entered in connection with such proceedings) have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien and (ii) in the case of any such Lien which has or may
become a Lien against any of the Collateral, such Lien and the contest
thereof shall satisfy the Contested Collateral Lien Conditions;
(c) Liens in existence on the Closing Date and set forth
on Schedule 6.02; provided that (i) the aggregate principal amount of
the Indebtedness, if any, secured by such Liens does not increase; and
(ii) such Liens do not encumber any property or assets other than the
property or assets subject thereto on the Closing Date of Borrower or
any Subsidiary;
(d) easements, rights-of-way, restrictions (including
zoning restrictions), covenants, encroachments, protrusions and other
similar charges or encumbrances, and minor title deficiencies on or
with respect to any Real Property, in each case whether now or
hereafter in existence, not (i) securing Indebtedness, (ii) materially
impairing the value or marketability of such Real Property and (iii)
materially interfering with the conduct of the business of the Borrower
and the Subsidiaries at such Real Property;
(e) Liens arising out of judgments or awards not
resulting in a Default and in respect of which the Borrower or any of
the Subsidiaries shall in good faith be prosecuting an appeal or
proceedings for review in respect of which there shall be secured a
subsisting stay of execution pending such appeal or proceedings;
provided that the aggregate amount of all such judgments or awards (and
any cash and the fair market value of any property subject to such
Liens) does not exceed $2.0 million at any time outstanding;
(f) Liens (other than any Lien imposed by ERISA) (i)
imposed by law or deposits made in connection therewith in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, (ii)
incurred in the ordinary course of business to secure the performance
of tenders, statutory obligations (other than excise taxes), surety,
stay, customs and appeal bonds, statutory bonds, bids, leases,
government contracts, trade contracts, performance and return of money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money) or (iii) arising by virtue of deposits made
in the ordinary course of business to secure liability for premiums to
insurance carriers; provided that (x) with respect to clauses (i), (ii)
and (iii) hereof such Liens are set amounts not yet due and payable or
delinquent or, to the extent such amounts are so due and payable, such
amounts are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with
GAAP, which proceedings for orders
79
entered in connection with such proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien, (y) to the extent such Liens are not imposed by Law,
such Liens shall in no event encumber any Property other than cash and
Cash Equivalents and (z) in the case of any such Lien against any of
the Collateral, such Lien and the contest thereof shall satisfy the
Contested Collateral Lien Conditions the aggregate amount of deposits
at any time pursuant to clause (ii) and clause (iii) shall not exceed
$250,000 in the aggregate;
(g) any interest or title of a lessor, sublessor,
licensee or licensor under any Lease permitted by this Agreement;
(h) Liens in favor of customs and revenue authorities
arising as a matter of law to secure the payment of customs duties in
connection with the importation of goods;
(i) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods
entered into by the Borrower or any of the Subsidiaries in the ordinary
course of business in accordance with the past practices of the
Borrower and the Subsidiaries;
(j) Liens to secure Purchase Money Indebtedness or
arising pursuant to Capital Lease Obligations incurred pursuant to
Section 6.01(g); provided that (i) the Indebtedness secured by any such
Lien (including refinancings thereof) does not exceed 100% of the cost
of the property being acquired or leased at the time of the incurrence
of such Indebtedness and (ii) any such Liens attach only to the
property being financed to secure Purchase Money Indebtedness or
pursuant to Capital Lease Obligations and do not encumber any other
property of any Loan Party;
(k) bankers' Liens, rights of setoff and other similar
Liens existing solely with respect to cash and Cash Equivalents on
deposit in one or more accounts maintained by the Borrower or any
Subsidiary, in each case granted in the ordinary course of business in
favor of the bank or banks with which such accounts are maintained,
securing amounts owing to such bank with respect to cash management and
operating account arrangements, including those involving pooled
accounts and netting arrangements; provided that in no case shall any
such Liens secure (either directly or indirectly) the repayment of any
Indebtedness;
(l) Liens on assets of a person existing at the time such
person is acquired or merged with or into or consolidated with the
Borrower or any Subsidiary (and not created in anticipation or
contemplation thereof), including without limitation, Liens securing
Acquired Indebtedness; provided that such Liens do not extend to assets
not subject to such Liens at the time of acquisition (other than
improvements thereon) and are no more favorable to the lienholders than
those securing such Acquired Indebtedness prior to the incurrence of
such Acquired Indebtedness by the Borrower or a Subsidiary; and
(m) Liens incurred in the ordinary course of business of
the Borrower or any Subsidiary with respect to obligations (other than
Indebtedness) that do not in the aggregate exceed $15.0 million at any
time outstanding;
80
provided, however, that no Liens shall be permitted to exist, directly or
indirectly, on any Securities Collateral, any Intellectual Property or any PP&E,
except for existing negative pledges under the Notes Documents and other
Material Contracts listed on Schedule 3.10(b), which negative pledges shall be
exclusive to Administrative Agent as additional consideration for Lender's
agreements under the Loan Documents.
Except with respect to specific property encumbered pursuant to a Lien
permitted to be incurred pursuant to this Section 6.02, the Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, enter
into any agreement on or after the Closing Date prohibiting or restricting in
any manner (directly or indirectly and including by way of covenant,
representation or warranty or event of default) the creation or assumption of
any Lien upon their property (including, without limitation, intellectual
property of the Borrower and its Subsidiaries), whether now owned or hereafter
acquired, except pursuant to the Loan Documents, the Notes Documents containing
such prohibitions or restrictions not more restrictive or prohibitive in any
material respect than those contained in the Notes Documents and customary
provisions contained in Leases.
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 unless (i) the sale of such
property is permitted by Section 6.05 and (ii) any Liens arising in connection
with its use of such property are permitted by Section 6.02.
SECTION 6.04 INVESTMENTS, LOANS AND ADVANCES. Directly or indirectly,
lend money or credit or make advances to any person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other person, or purchase or own a futures contract
or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract (all of the
foregoing, collectively, "Investments"), except that the following shall be
permitted:
(a) the Borrower and the Subsidiaries may acquire and
hold accounts receivable owing to any of them if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary terms;
(b) the Borrower and the Subsidiaries may acquire and
hold cash and Cash Equivalents;
(c) the Borrower and the Subsidiaries may endorse
negotiable instruments for collection in the ordinary course of
business;
(d) any Loan Party may make intercompany loans to any
other Loan Party; provided that upon the request of the Collateral
Agent or the Required Lenders any promissory notes evidencing such
intercompany loans shall be pledged (and delivered) by the Borrower or
the respective Wholly Owned Subsidiary that is the lender of such
intercompany loan as Collateral pursuant to the Security Agreement;
81
(e) the Borrower and the Subsidiaries may sell or
transfer amounts to the extent permitted by Section 6.05;
(f) the Borrower may establish Subsidiaries to the extent
permitted by Section 6.17;
(g) the Borrower or any Subsidiary may consummate
Permitted Acquisitions;
(h) loans and advances to directors, officers and
employees of the Borrower and the Subsidiaries for bona fide business
purposes in an aggregate amount not to exceed $2.0 million at any time
outstanding;
(i) Investments by any Loan Party in any other Loan Party
for so long as a Loan Party;
(j) Investments in any Loan Party by any Subsidiary;
(k) Investments outstanding on the Closing Date and set
forth on Schedule 6.04(k);
(l) Investments in securities of trade creditors or
customers received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditors
or customers;
(m) Investments made by the Borrower or any Subsidiary as
a result of consideration received in connection with an Asset Sale
made in compliance with Section 6.05;
(n) lease, utility and other similar deposits in the
ordinary course of business;
(o) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and
owing to the Borrower or any Subsidiary or in satisfaction of
judgments;
(p) Investments (other than Collateral) by the Borrower
or any Subsidiary in any other Subsidiary to the extent made in the
ordinary course to fund or support the ordinary course operations of
such Subsidiary; provided, however, that upon the request of the
Collateral Agent or the Required Lenders all or any part of such
Investments made as intercompany indebtedness shall be evidenced by
promissory notes in form, and shall be pledged to the Collateral Agent
pursuant to documentation, reasonably satisfactory to the Collateral
Agent;
(q) Investments in the form of intercompany loans by the
Borrower in Subsidiaries located in China, Brazil and Venezuela not to
exceed $25.0 million in the aggregate to support such Subsidiaries'
development, construction and expansion of production lines; provided,
however, that upon the request of the Collateral Agent or the Required
Lenders all or any part of such Investments shall be evidenced by
promissory notes in form, and shall be pledged to the Collateral Agent
pursuant to documentation, reasonably satisfactory to the Collateral
Agent;
82
(r) Investments for the purpose of repaying the Notes or
repurchasing the bond obligations under the Notes, to the extent
permitted by Section 6.14;
(s) other Investments in an aggregate amount not to
exceed $15.0 million at any time outstanding (with such Investment
being valued as of the date made and without regard to subsequent
changes in value); and
(t) Investments for the purpose of repurchasing Equity
Interests in the Borrower or any Subsidiary in an amount not to exceed,
together with any Dividends paid pursuant to Section 6.06, $20.0
million in the aggregate; or, in the event, both before and after
giving effect to such Investment, the Borrower's Total Leverage Ratio
is less than 1.5 to 1.0, $40.0 million in the aggregate.
SECTION 6.05 MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND ACQUISITIONS.
Wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or any part of its
property, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property (other than purchases or other
acquisitions of inventory, materials, equipment and intangible assets in the
ordinary course of business) of any person (or agree to do any of the foregoing
at any future time), except that:
(a) Capital Expenditures by the Borrower and the
Subsidiaries shall be permitted to the extent permitted by Section
6.08;
(b) each of the Borrower and the Subsidiaries may, in the
ordinary course of business, sell, lease or otherwise dispose of any
equipment that is obsolete or no longer useful in its business with
fair market value of less than $5.0 million (or such greater amount as
approved in writing by Required Lenders) in the aggregate in any fiscal
year, provided, that such limitation shall not apply to dispositions of
assets (including real property) in connection with closing of
facilities of the Borrower or any of the Subsidiaries in an aggregate
amount not to exceed $20.0 million for the period from the Closing Date
to December 31, 2004;
(c) each of the Borrower and the Subsidiaries may make
sales, leases or other dispositions of equipment or real or personal
property of the Borrower or any Subsidiary determined by the Board of
Directors or senior management of the Borrower or such Subsidiary to be
no longer useful or necessary in the operation of the business of the
Borrower or such Subsidiary; provided that the Net Cash Proceeds
thereof shall be applied in accordance with Section 2.13(b);
(d) Investments and Permitted Acquisitions may be made to
the extent permitted by Section 6.04;
(e) each of the Borrower and the Subsidiaries may lease
(as lessee) real or personal property and may guaranty such lease in
the ordinary course of business (i) to the extent otherwise permitted
hereunder and (ii) so long as any such lease does not create a Capital
Lease Obligation except to the extent permitted by Section 6.01;
83
(f) each of the Borrower and the Subsidiaries may make
sales or transfers of inventory in the ordinary course of business and
consistent with past practices (including without limitation sales or
transfers of inventory by the Borrower to the Subsidiaries);
(g) any Loan Party may transfer, lease or otherwise
acquire property or assets to or from any other Loan Party and any
Subsidiary may transfer or lease any property or assets to any Loan
Party or any Wholly Owned Subsidiary may be merged into the Borrower
(so long as the Borrower is the surviving corporation of such merger)
or any other Wholly Owned Subsidiary that is a Guarantor; provided,
however, that the Lien on and security interest in such property
granted in favor of the Collateral Agent under the Security Documents
shall be maintained in accordance with the provisions of Section 5.11;
and
(h) the Borrower and the Subsidiaries may make sales,
leases or other dispositions of assets through Capital Asset Exchanges.
To the extent the Required Lenders waive the provisions of this Section 6.05
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 6.05, such Collateral (unless sold to the Borrower or
its subsidiaries) shall be sold free and clear of the Liens created by the
Security Documents, and the Administrative Agent and Collateral Agent shall take
all actions deemed appropriate in order to effect the foregoing.
SECTION 6.06 DIVIDENDS. Authorize, declare or pay, directly or
indirectly, any Dividends with respect to the Borrower or any Subsidiary, except
that any Subsidiary of the Borrower (i) may pay cash Dividends to the Borrower
or any Wholly Owned Subsidiary of the Borrower, and (ii) if such Subsidiary is
not a Wholly Owned Subsidiary, may pay cash Dividends to its shareholders
generally so long as the Borrower or its respective Subsidiary which owns the
equity interest or interests in the Subsidiary paying such Dividends receives at
least its proportionate share thereof (based upon its relative holdings of
equity interests in the Subsidiary paying such Dividends and taking into account
the relative preferences, if any, of the various classes of equity interests in
such Subsidiary), and except that the Borrower and any Subsidiary may pay
Dividends in an aggregate amount not to exceed, together with any amounts
expended pursuant to Section 6.04(t), $20.0 million; or, in the event that, both
before and after giving effect to any such Dividend, the Borrower's Total
Leverage Ratio does not exceed 1.5 to 1.0, $40.0 million.
SECTION 6.07 TRANSACTIONS WITH AFFILIATES. Enter into, directly or
indirectly, any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate of the Borrower or any
Subsidiary, other than in the ordinary course of business and on terms and
conditions substantially as favorable to the Borrower or such Subsidiary as
would reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable arm's-length transaction with a person other than an Affiliate,
except that:
(a) Dividends may be paid to the extent provided in
Section 6.06;
(b) Investments may be made and other transactions may be
entered into between and among the Borrower and the Subsidiaries to the
extent permitted by Sections 6.01 and 6.04; and
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(c) reasonable director, officer and employee
compensation and other benefits (including retirement, health and other
benefit plans) and indemnification arrangements, in each case approved
by the Independent Directors, shall be permitted.
SECTION 6.08 CAPITAL EXPENDITURES
Make any Capital Expenditures, except that during each fiscal year listed below,
the Borrower and the Subsidiaries may make Capital Expenditures in an aggregate
amount not to exceed the amount set forth opposite such fiscal year:
Fiscal Year Ended Amount
----------------- ------
March 31, 2004 $30,000,000
March 31, 2005 $30,000,000
March 31, 2006 $35,000,000
March 31, 2007 $35,000,000
March 31, 2008 and thereafter $40,000,000
; provided, however, that the unused portion of the permitted Capital
Expenditure amount as set forth above in any fiscal year may be used in the
immediately following fiscal year in addition to the amounts otherwise permitted
in such fiscal year.
SECTION 6.09 COVERAGE RATIOS. (a) Permit the Consolidated Interest
Coverage Ratio for any four fiscal quarter period ending during any period set
forth below, after giving pro forma effect to the Refinancing as if the
Refinancing had occurred on the first day of such four quarter period for each
four quarter period ending prior to December 31, 2004, to be less than the ratio
set forth opposite such period below:
Period Ratio
------ -----
Closing Date - March 31, 2005 3.25 to 1.0
April 1, 2005 and thereafter 3.50 to 1.0
(b) Permit the Consolidated Fixed Charge Coverage Ratio for any four fiscal
quarter period ending during any period set forth below, after giving pro forma
effect to the Refinancing as if the Refinancing had occurred on the first day of
such four quarter period for each four quarter period ending prior to December
31, 2004, to be less than the ratio set forth below opposite such period below:
Period Ratio
------ -----
Closing Date - March 31, 2005 1.1 to 1.0
April 1, 2005 and thereafter 1.2 to 1.0
SECTION 6.10 MAXIMUM TOTAL LEVERAGE RATIO. Permit the Total Leverage
Ratio, at any time during any period set forth below to be greater than the
ratio set forth opposite such period below:
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Period Ratio
------ -----
Closing Date - March 31, 2005 3.25 to 1.0
April 1, 2005 - March 31, 2006 3.00 to 1.0
April 1, 2006 and thereafter 2.75 to 1.0
SECTION 6.11 MINIMUM NET WORTH. Permit Consolidated Net Worth,
calculated on a Pro Forma Basis and without giving effect to any cumulative
translation adjustments, at any time on or after September 30, 2003 to be less
than the sum of $256.0 million, plus 50% of positive Consolidated Net Income for
each fiscal quarter after September 30, 2003 to the date of calculation.
SECTION 6.12 MAXIMUM SENIOR SECURED DEBT RATIO. Permit the Senior
Secured Debt Ratio at any time during any period set forth below to be greater
than the ratio set forth opposite such period below:
Period Ratio
------ -----
Closing Date - March 31, 2005 2.50 to 1.00
April 1, 2005 - March 31, 2006 2.25 to 1.00
April 1, 2006 - March 31, 2007 2.00 to 1.00
April 1, 2007 and thereafter 1.75 to 1.00
SECTION 6.13 MINIMUM LIQUIDITY. Permit the aggregate of unrestricted
cash and unrestricted Cash Equivalents of the Borrower to be less than $25.0
million at any time.
SECTION 6.14 LIMITATION ON MODIFICATIONS OR PREPAYMENT OF INDEBTEDNESS;
MODIFICATIONS OF CERTIFICATE OF INCORPORATION, OR OTHER CONSTITUTIVE DOCUMENTS,
BY-LAWS AND CERTAIN OTHER AGREEMENTS, ETC.
(a) Amend or modify, or permit the amendment or modification of,
any provision of any Indebtedness (other than the Loan Documents) or of any
agreement (including any purchase agreement, indenture, loan agreement or
security agreement) relating thereto other than any amendments or modifications
to Indebtedness which do not in any way materially adversely affect the
interests of the Lenders and are otherwise permitted under Section 6.01(c).
(b) Make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment on or redemption or acquisition for value of, or
any prepayment or redemption of, any Indebtedness outstanding under the Notes;
provided that (i) the Borrower may consummate the Debt Tender Offer, (ii) the
Borrower may pay, prepay, redeem, defease or acquire Indebtedness outstanding
under the Notes in an amount of up to $10.0 million and may refinance the 6-7/8%
Senior Notes as permitted by Section 6.01(b) and (iii) the Borrower may prepay,
redeem or defease the Notes using any portion of Excess Cash Flow not required
to be used to repay the Loans pursuant to Section 2.13(f), provided that, both
before and after giving effect to such prepayment, redemption or defeasance
pursuant to this clause (iii), no Default shall have occurred and be continuing
and the Borrower's Total Leverage Ratio shall not exceed 1.75 to 1.00.
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(c) Amend, modify or change its articles of incorporation or other
constitutive documents (including by the filing or modification of any
certificate of designation) or by-laws, or any agreement entered into by it,
with respect to its capital stock (including any shareholders' agreement), or
enter into any new agreement with respect to its capital stock, other than any
amendments, modifications, agreements or changes pursuant to this clause (c) or
any such new agreements pursuant to this clause (c) which do not in any way
materially adversely affect in any material respect the interests of the
Lenders.
SECTION 6.15 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.
Directly or indirectly create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (a)
pay dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or any of the
Borrower's Subsidiaries or (c) transfer any of its properties to the Borrower or
any of the Borrower's Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law; (ii) this Agreement and the
other Loan Documents; (iii) the Notes Documents containing such encumbrances or
restrictions not more restrictive in any material respect than those contained
in the Notes Documents; (iv) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or a
Subsidiary; (v) customary provisions restricting assignment of any agreement
entered into by the Borrower or a Subsidiary of the Borrower in the ordinary
course of business; (vi) restrictions imposed by the holder of a Lien permitted
by Section 6.02 which restrict the transfer of the asset or assets subject
thereto; and (vii) restrictions which are not more restrictive than those
contained in this Agreement contained in any documents governing any
Indebtedness incurred after the Closing Date in accordance with the provisions
of this Agreement.
SECTION 6.16 LIMITATION ON ISSUANCE OF CAPITAL STOCK. Issue, or permit
any Subsidiary to issue, any Equity Interest (including by way of sales of
treasury stock) or any options or warrants to purchase, or securities
convertible into, Equity Interests, except (i) any of the foregoing where the
Net Cash Proceeds of any such Equity Issuance is applied by Borrower to the
then-outstanding Indebtedness of Borrower and its Subsidiaries to the extent
outstanding and which repayment is then permitted in accordance with its terms
without any prepayment fee or premium, (ii) for stock splits, stock dividends
and additional Equity Interest issuances which do not decrease the percentage
ownership of the Borrower or any Subsidiary in any class of the Equity Interest
of such Subsidiary, (iii) Subsidiaries of the Borrower formed after the Closing
Date pursuant to Section 6.17 may issue Equity Interests to the Borrower or the
respective Subsidiary of the Borrower which is to own such stock, (iv) issuances
by the Borrower of non-qualified options to purchase stock of the Borrower to
managers, officers and directors of the Borrower in connection with any
performance-based stock option plan (all Equity Interests issued to any Loan
Party in accordance with this Section 6.16 shall, to the extent required by the
Security Agreement, be delivered to the Collateral Agent for pledge pursuant to
the Security Agreement), (v) up to $50.0 million in the aggregate during the
period from the Closing Date to the Term Loan Maturity Date of Equity Interests
in the Borrower may be issued to pay all or part of the purchase price in a
merger or acquisition permitted under this Agreement and (vi) proceeds of the
Equity Financing.
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SECTION 6.17 LIMITATION ON CREATION OF SUBSIDIARIES. Establish, create
or acquire any additional Subsidiaries without the prior written consent of the
Required Lenders; provided that the Borrower may establish or create one or more
Wholly Owned Subsidiaries of the Borrower or one of its Wholly Owned
Subsidiaries without such consent so long as (i) 65% of the Equity Interests of
any new Direct Foreign Subsidiary (other than an Insignificant Direct Foreign
Subsidiary) is upon the creation or establishment of any such new Subsidiary
pledged and delivered to the Collateral Agent for the benefit of the Secured
Parties under the Security Agreement and (ii) upon the creation or establishment
of any new Domestic Subsidiary (other than an Insignificant Subsidiary) such
Subsidiary becomes a party to the applicable Security Documents in accordance
with Section 5.11 and the other Loan Documents.
SECTION 6.18 BUSINESS. Engage (directly or indirectly) in any business
other than the Eyeglass Lens Business of the type conducted as of the Closing
Date.
SECTION 6.19 LIMITATION ON ACCOUNTING CHANGES. Make or permit any
change in accounting policies or reporting practices, without the consent of the
Required Lenders, which consent shall not be unreasonably withheld, except
changes that are required by GAAP. In the event that any such changes are
required by GAAP, the terms and conditions of this Agreement shall be changed as
the Administrative Agent may deem reasonably necessary to take account of such
changes.
SECTION 6.20 FISCAL YEAR. Change its fiscal year-end to a date other
than March 31.
SECTION 6.21 INTEREST RATE PROTECTION AND HEDGING. Nothing in this
Article VI shall prohibit Borrower or any Subsidiary from purchasing or entering
into agreements for interest rate protection, hedging, foreign currency exchange
or commodity price protection with any Lender or other party; provided, however,
that the Security Documents shall only secure obligations to Lenders (and the
Existing Issuer as defined therein) for such agreements and liabilities
thereunder.
SECTION 6.22 ANTI-TERRORISM LAW. The Loan Parties shall not, and shall
not permit any Subsidiary to, directly or indirectly, (i) knowingly conduct any
business or engage in making or receiving any contribution of funds, goods or
services to or for the benefit of any Person described in Section 3.25 above,
(ii) knowingly deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order or any
other Anti-Terrorism Law, or (iii) knowingly engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law (and the Loan Parties shall deliver to the Lenders any
certification or other evidence requested from time to time by any Lender in its
reasonable discretion, confirming the Loan Parties' compliance with this Section
6.23).
SECTION 6.23 EMBARGOED PERSON. At all times throughout the term of the
Loans, (a) none of the funds or assets of the Loan Parties that are used to
repay the Loans shall, to the knowledge of any Loan Party, constitute property
of, or shall be beneficially owned directly or indirectly by, any Person subject
to sanctions or trade restrictions under United States law ("Embargoed Person"
or "Embargoed Persons") that is identified on (1) the "List of Specially
Desig-
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nated Nationals and Blocked Persons" (the "SDN List") maintained by OFAC, and/or
to the knowledge of any Loan Party, as of the date thereof, based upon
reasonable inquiry by such Loan Party, on any other similar list ("Other List")
maintained by OFAC pursuant to any authorizing statute including, but not
limited to, the International Emergency Economic Powers Act, 50 U.S.C. Sections
1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
Executive Order or regulation promulgated thereunder, with the result that the
investment in the Loan Parties (whether directly or indirectly) is prohibited by
law, or the Loans made by the Lenders would be in violation of law, or (2) the
Executive Order, any related enabling legislation or any other similar Executive
Orders (collectively, "Executive Orders"), and (b) no Embargoed Person shall, to
the knowledge of any Loan Party, have any direct interest, as of the date
hereof, based upon reasonable inquiry by any Loan Party, indirect interest, of
any nature whatsoever in the Loan Parties, with the result that the investment
in the Loan Parties (whether directly or indirectly) is prohibited by law or the
Loans are in violation of law.
SECTION 6.24 ANTI-MONEY LAUNDERING. At all times throughout the term of
the Loans, to the knowledge of any Loan Party, as of the date hereof, based upon
reasonable inquiry by such Loan Party, none of the funds of such Loan Party that
are used to repay the Loans shall be derived from any unlawful activity with the
result that the making of the Loans would be in violation of law.
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
any Loan Party pursuant to 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 by or on
behalf of any Loan Party 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 (including a Term Loan Repayment Date) 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 any other amount (other than an amount
referred to in paragraph (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 three Business Days;
(d) default shall be made in the due observance or
performance by the 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;
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(e) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in any Loan Document (other than those
specified in paragraph (b), (c) or (d) above) and such default shall
continue unremedied or shall not be waived for a period of 30 days
after written notice thereof from the Administrative Agent or any
Lender to the Borrower;
(f) the Borrower or any Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness (other than the Obligations), when and as the same shall
become due and payable (after giving effect to any applicable grace
period), or (ii) 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 (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee on its or their
behalf (with or without the giving of notice, the lapse of time or
both) to cause, such Indebtedness to become due prior to its stated
maturity; provided that it shall not constitute an Event of Default
pursuant to this paragraph (f) unless the aggregate amount of all such
Indebtedness referred to in clauses (i) and (ii) exceeds $2.5 million
at any one time;
(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 the Borrower or any
Subsidiary, or of a substantial part of the property or assets of the
Borrower or a 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 the Borrower or any Subsidiary or
for a substantial part of the property or assets of the Borrower or a
Subsidiary; or (iii) the winding-up or liquidation of the Borrower or
any 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) the Borrower or any 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 paragraph (g) above; (iii)
apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any Subsidiary or for a substantial part of the property or
assets of the Borrower or any 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; (vii) take any action for the purpose
of effecting any of the foregoing; or (viii) wind up or liquidate;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $2.5 million shall be rendered against
the Borrower, any Subsidiary or any combination thereof and the same
shall remain undischarged for a period of 30 consecu-
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tive 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 the Borrower or any Subsidiary to enforce any
such judgment;
(j) an ERISA Event shall have occurred that, in the
opinion of the Required Lenders, when taken together with all other
such ERISA Events, could reasonably be expected to result in liability
of the Borrower and its ERISA Affiliates in an aggregate amount
exceeding $1.0 million;
(k) any security interest and Lien purported to be
created by any Security Document shall cease to be in full force and
effect, or shall cease to give the Collateral Agent, for the benefit of
the Secured Parties, the Liens granted under such Security Documents
(including a perfected first priority security interest in and Lien on,
all of the Collateral thereunder (except as otherwise expressly
provided in this Agreement or such Security Documents)) in favor of the
Collateral Agent, or shall be asserted by the Borrower or any other
Loan Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security
Document) security interest in or Lien on the Collateral covered
thereby;
(l) any Guarantee Agreement shall cease to be in full
force and effect;
(m) any Loan Document or any material provisions thereof
shall at any time and for any reason be declared by a court of
competent jurisdiction to be null and void, or a proceeding shall be
commenced by any Loan Party or any other person, or by any Governmental
Authority, seeking to establish the invalidity or unenforceability
thereof (exclusive of questions of interpretation of any provision
thereof), or any Loan Party shall repudiate or deny that it has any
liability or obligation for the payment of principal or interest or
other obligations purported to be created under any Loan Document;
(n) there shall have occurred a Change in Control; or
(o) any Loan Party shall be prohibited or otherwise
restrained from conducting the business theretofore conducted by it in
any manner that has or could reasonably be expected to result in a
Material Adverse Effect by virtue of any determination, ruling,
decision, decree or order of any court or Governmental Authority of
competent jurisdiction;
then, and in every such event (other than an event with respect to the 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 notice to the Borrower, 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 the Borrower 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 the Borrower, anything contained herein
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or in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower 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 the Borrower 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 the Borrower, 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 Agreement,
(a) Union Bank of California, N.A., is hereby appointed to act as Administrative
Agent and (b) Union Bank of California, N.A., is hereby appointed to act as
Collateral Agent and, in each case, on behalf of the Lenders and the Issuing
Bank (for purposes of this Article VIII, the Administrative Agent and the
Collateral Agent are referred to collectively as the "Agents"). Each of the
Lenders and each assignee of any such Lender hereby irrevocably authorizes the
Agents to take such actions on behalf of such Lender or assignee or the Issuing
Bank and to exercise such 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, 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 the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrower or any other Loan Party pursuant to this 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 and supplements) 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 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 their own gross negligence or willful 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
Borrower 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 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 instructions of the Required Lenders
and, ex-
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cept 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 Borrower 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 Borrower 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 no Agent shall be under any duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, any Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor, with the written consent of the Borrower, which
consent shall not be unreasonably withheld; provided that such consent shall not
be required if such successor shall be a Lender under this Agreement or if any
Default shall have occurred and be continuing. If no successor shall have been
so appointed by the Required Lenders and consented to by the Borrower as
provided herein 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 San Francisco, California, having a combined capital and surplus of
at least $5.0 billion or an Affiliate of any such bank; provided that if such
retiring Agent is unable to find a commercial banking institution which is
willing to accept such appointment and which meets the qualifications set forth
above, the retiring Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor Agent. 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 the Borrower or any Subsidiary or other
Affiliate thereof as if it were not an Agent. The Agents need not account to any
other Lender for any monies received by it for reimbursement of its costs and
expenses as Agents
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hereunder, or (subject to Section 2.18) for any monies received by it in its
capacity as a Lender hereunder.
Each Lender agrees (a) to reimburse the Agents, on demand, in the
amount of its pro rata share (based on the aggregate amount of its outstanding
Commitment hereunder) of any reasonable expenses incurred for the benefit of the
Lenders by the Agents, including reasonable counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Lenders, that
shall not have been reimbursed by the Borrower 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, and reasonable 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
Agreement or any other Loan Document or any action taken or omitted by it or any
of them under this Agreement or any other Loan Document, to the extent the same
shall not have been reimbursed by the Borrower 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, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent or any of its directors, officers, employees or agents. Each Lender
agrees to reimburse the Issuing Bank and its directors, employees and agents, in
each case, to the same extent and subject to the same limitations as provided
above for the 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 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 Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder. Each of the parties
hereto acknowledges and agrees that the Syndication Agents and the Joint Lead
Arrangers shall have no duties, responsibilities, obligations or liabilities, as
such, hereunder or under the other Loan Documents.
The Collateral Agent in its capacity as trustee or otherwise under any
Security Document governed by English law (an "English Security Document") (a)
is not liable for any failure, omission or defect in perfecting or registering
the security constituted or created by any English Security Document, (b) may
accept without enquiry such title as the Borrower or any Guarantor may have to
any asset secured by any English Security Document, (c) is not under any
obligation to hold any English Security Document or any other document in
connection with the Loan Documents or the assets secured by any English Security
Document (including title deeds) in its own possession or to take any steps to
protect or preserve the same, and (d) may permit the Borrower and/or any
Guarantor to retain any English Security Document or other document in its
possession.
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Except where the Collateral Agent holds a legal mortgage over, or over
an interest in, real property or shares, the Collateral Agent in its capacity as
trustee or otherwise shall not be under any obligation to hold any title deeds,
English Security Documents or any other documents in connection with the
property charged by any English Security Document or any other such security in
its own possession or to take any steps to protect or preserve the same. The
Collateral Agent may permit the Borrower or the Guarantor, as the case may be,
to retain such title deeds and other documents in its possession.
All moneys which under the trusts contained in the English Security
Documents are received by the Collateral Agent in its capacity as trustee or
otherwise may be invested in the name of or under the control of the Collateral
Agent in any investment authorized by English law for the investment by trustees
of trust money or in any other investments which may be selected by the
Collateral Agent. Additionally, the same may be placed on deposits in the name
of or under control of the Collateral Agent at such bank or institution
(including the Collateral Agent) and upon such terms as the Collateral Agent may
think fit.
Each Secured Party authorizes, empowers and directs the Collateral
Agent (by itself or by such person as it may nominate) to execute and enforce
the English Security Documents as trustee on its behalf in accordance with the
terms of such English Security Documents.
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 Borrower, to it at:
Sola International Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
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copies to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇.▇▇▇
(b) if to the Administrative Agent or Collateral Agent, to:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
(c) if to a Lender, to it at its address (or telecopy number) set
forth on the applicable Lender Addendum 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 Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the earlier of the date of receipt or 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.
SECTION 9.02 SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this 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
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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 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 and 9.05
shall remain operative and in full force and effect regardless of the expiration
of the term of this 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 Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender.
SECTION 9.03 BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have received counterparts (or fax copies of
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 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 Borrower, the Administrative Agent, the Issuing Bank or the
Lenders that are contained in this 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 Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Lender or
an Affiliate or Related Fund of such Lender and except in the case of an
assignment of Term Loans made in connection with the primary syndication (as
determined by the Joint Lead Arrangers) of the Term Loan Commitment and the Term
Loans by the Joint Lead Arrangers, (w) the Administrative Agent (and, in the
case of any assignment of a Commitment, the Issuing Bank) must give its prior
written consent to such assignment (which consent shall not be unreasonably
withheld or delayed), (x) unless a Default or Event of Default has occurred and
is continuing, the Borrower must give its prior consent to such assignment
(which consent shall not be unreasonably withheld or delayed), (y) prior written
notice shall be given by the Administrative Agent to UBS Securities LLC and ▇.▇.
▇▇▇▇▇▇ Securities Inc. (provided that any failure by the Administrative Agent to
provide any such notice shall not affect the validity of such assignment) and
(z) the amount of the Commitment or Loans 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 $2.5 million in the case of an assignment of Revolving
Commitments or Revolving Loans and $1.0 million in the case of an assignment of
Term Loan Commitments or Term Loans (or, if less, the entire remaining amount of
such Lender's Commitment) or such lesser amount as to which the Administrative
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Agent and, so long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may from time to time agree; (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
$3,500.00, payable by such parties except as otherwise provided herein; 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, (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 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 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 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 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 balances of its Loans, 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 Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto, or
the financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of its obligations under
this 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 Agreement 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 Agreement; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent 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 Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices 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 Commitment of,
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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 the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank, the Collateral Agent
and any Lender (with respect to its own interest), 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 Borrower, 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
Borrower and the Issuing Bank. No assignment shall be effective unless it has
been recorded in the Register as provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower, 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 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
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 participating bank or
other entity shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by the transferor Lender
to such participating bank or other entity had no such transfer occurred; and
(iv) the Borrower, 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 Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers increasing or decreasing the Commitment of such Lender (except in
connection with a ratable decrease in the Commitments of all Lenders),
subjecting such Lender to any additional obligation, reducing the principal of
or rate of interest on, or change the currency of, any Loan of such Lender,
postponing the date fixed for any payment of principal of or interest on any
Loan of such Lender, amending or modifying the definition of the term "Required
Lenders", or modifying the provisions of Section 9.08).
(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 the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that each such assignee or participant
or proposed assignee or participant shall agree to preserve the confidentiality
of such
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confidential information on terms no less restrictive than those applicable to
the Lenders pursuant to Section 9.16.
(h) Any Lender may at any time assign all or any portion of its
rights under this Agreement to secure extensions of credit to such Lender or in
support of obligations owed by such Lender; provided that no such assignment
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
(i) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any Loan;
and (ii) if an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such Loan, the Granting Lender shall be obligated to
make such Loan pursuant to the terms hereof. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPC, it
will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this Section
9.04, any SPC may (i) with notice to, but without the prior written consent of,
the Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by the Borrower and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis on terms no less restrictive than those
applicable to Lenders pursuant to Section 9.16 any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC.
(j) The Borrower shall not 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.
SECTION 9.05 EXPENSES; INDEMNITY.
(a) The Borrower agrees to pay all reasonable out-of-pocket
expenses (including but not limited to expenses incurred in connection with due
diligence and travel, courier, reproduction, printing and delivery expenses)
incurred by the Administrative Agent, the Collateral Agent and the Issuing Bank
in connection with the syndication of the credit facilities provided for herein
and the preparation, execution, delivery and administration of this Agreement
and the other Loan Documents or in connection with any amendments (or proposals
thereof), modifica-
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tions (or proposals thereof), enforcement costs, documentary taxes or waivers of
the provisions hereof or thereof (whether or not the transactions hereby or
thereby contemplated shall be consummated). The Borrower agrees to pay all
reasonable out of pocket expenses 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 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, counsel for the Joint Lead Arrangers, 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.
(b) The Borrower agrees 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, officers, trustees,
employees and agents (each such person being called an "Indemnitee") against,
and to hold each Indemnitee harmless from, all reasonable out-of-pocket costs
and 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, in any way connected with, or as
a result of (i) the administration of the Collateral or enforcement of the Loan
Documents, (ii) any actual or proposed use of the proceeds of the Loans or
issuance of Letters of Credit, (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto, or (iv) any actual or alleged presence or Release of Hazardous
Materials on any Real Property owned, leased or operated by the Borrower or any
Subsidiary, or any Environmental Claim related in any way to the Borrower or the
Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such costs, 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 willful
misconduct of such Indemnitee.
(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
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 Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender. All amounts due under this Section 9.05 shall be
payable on written demand therefor accompanied by reasonable documentation with
respect to any reimbursement, indemnification or other amount requested.
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, except to the extent prohibited 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 the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement and
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The
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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. Each
Lender agrees to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender (provided that the failure to give
such notice shall not affect the validity of such setoff and application).
SECTION 9.07 APPLICABLE LAW. THIS 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 INTERNAL
LAWS OF THE STATE OF NEW YORK.
SECTION 9.08 WAIVERS; AMENDMENT.
(a) No failure or delay of the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender 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 Agreement or
any other Loan Document or consent to any departure by the 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 Borrower in any case shall in and of itself entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall:
(i) increase the Commitment of any Lender without the
written consent of such Lender;
(ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any Fees
payable hereunder, without the written consent of each Lender directly
affected thereby;
(iii) postpone or extend the maturity of any Loan, or any
scheduled date of payment of or the installment otherwise due on the
principal amount of any Term Loan under Section 2.11, or the required
date of payment of any reimbursement obligation, or any date for the
payment of any interest or fees payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment or postpone the scheduled date of
expiration of any Letter of Credit beyond the Revolving Maturity Date,
without the written consent of each Lender directly affected thereby;
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(iv) change Section 2.17 or 2.18 in a manner that would
alter the pro rata sharing of payments or setoffs required thereby,
without the written consent of each Lender;
(v) change the percentage set forth in the definition of
"Required Lenders" or any other provision of any Loan Document
(including this Section 9.08) specifying the number or percentage of
Lenders (or Lenders of any Class) required to waive, amend or modify
any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender (or each Lender
of such Class, as the case may be);
(vi) release any Guarantor from its Guarantee Agreement
(except as expressly provided in the Loan Documents, or limit its
liability in respect of such Guarantee Agreement, without the written
consent of each Lender;
(vii) release all or substantially all of the Collateral
from the Liens of the Security Documents or alter the relative
priorities of the Obligations entitled to the Liens of the Security
Documents (except in connection with securing additional Obligations
equally and ratably with the other Obligations), in each case without
the written consent of each Lender;
(viii) change any provisions of any Loan Document in a
manner that by its terms adversely affects the rights in respect of
payments due to Lenders holding Loans of any Class differently than
those holding Loans of any other Class, without the written consent of
Lenders holding a majority in interest of the outstanding Loans and
unused Commitments of each affected Class; or
(ix) expressly amend, modify, supplement or waive any
condition precedent in Section 4.01 to any Revolving Credit Borrowing
without the written consent of Revolving Lenders having Revolving
Loans, L/C Exposure and unused Revolving Commitments representing more
than 50% of the sum of all Revolving Loans outstanding, L/C Exposure
and unused Revolving Commitments at such time;
provided, further, that (1) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the Collateral Agent or
the Issuing Bank without the prior written consent of the Administrative Agent
or the Issuing Bank, as the case may be, and (2) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Revolving Lenders (but not the Term Loan Lenders),
or the Term Loan Lenders (but not the Revolving Lenders) may be effected by an
agreement or agreements in writing entered into by Borrower and requisite
percentage in interest of the affected Class of Lenders that would be required
to consent thereto under this Section 9.08 if such Class of Lenders were the
only Class of Lenders hereunder at the time.
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 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 con-
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tracted 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 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 Rate to
the date of repayment, shall have been received by such Lender.
SECTION 9.10 ENTIRE AGREEMENT. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relating
to the subject matter hereof. Any other previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents. Nothing in this 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 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 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 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 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). Any invalid, illegal or unenforceable provision shall be deemed
replaced 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 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 Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
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
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
104
SECTION 9.15 JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) The Borrower 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 the City
of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement 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 Agreement or the other Loan Documents against the
Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court. 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 Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16 CONFIDENTIALITY. The Administrative Agent, Issuing Lender
and each Lender (each, a "Lending Party") agrees to keep confidential in
accordance with its customary practice (and to use its reasonable efforts to
cause its respective agents and representatives to keep confidential) any
information furnished or made available to it by the Borrower pursuant to this
Agreement that is marked confidential; provided that nothing herein shall
prevent any Lending Party from disclosing such information (a) to any other
Lending Party or any Affiliate of any Lending Party, or any officer, director,
employee, agent, or advisor of any Lending Party or Affiliate of any Lending
Party, (b) to any other person if reasonably incidental to the administration or
hedging of the credit facility provided herein, (c) as required by any law,
rule, or regulation, (d) upon the order of any court or administrative agency,
(e) upon the request or demand of any regulatory agency or authority, (f) that
is or becomes available to the public or that is or becomes available to such
Lending Party other than as a result of a disclosure by such Lending Party
prohibited by this Agreement, (g) in connection with any litigation to which
such Lending Party or any of its affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Loan Document, (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed participant or
assignee and (j) to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section).
105
Notwithstanding the foregoing, and notwithstanding any other
express or implied agreement or understanding to the contrary, each of the
parties hereto and their and their Affiliates' respective employees,
representatives, and other agents are authorized to disclose the federal tax
treatment and federal tax structure of these transactions to any and all
persons, without limitation of any kind. Each of the parties hereto may disclose
all materials of any kind (including opinions or other tax analyses) insofar as
they relate to the federal tax treatment and federal tax structure of the
transactions contemplated by the Loan Documents. This authorization is
retroactively effective to the commencement of the first discussions between or
among any of the parties regarding the transactions contemplated hereby and by
the other Loan Documents, but does not extend to disclosure of any other
information including (without limitation) (a) the identities of participants or
potential participants in the transactions, (b) the existence or status of any
negotiations, (c) any pricing or other financial information or (d) any other
term or detail not related to the federal tax treatment and federal tax
structure of the transactions contemplated by the Loan Documents.
SECTION 9.17 LENDER ADDENDUM. Each initial Lender shall become a party
to this Agreement by delivering to the Administrative Agent a Lender Addendum
duly executed by such Lender, the Borrower and the Administrative Agent.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SOLA INTERNATIONAL INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent, Collateral Agent and
an Issuing Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
106
UBS SECURITIES LLC,
as Co-Syndication Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Title: Director
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK,
as Co-Syndication Agent
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
U.S. Bank National Association,
as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
107
108
Schedule 2.22(b)
LETTERS OF CREDIT
1. Irrevocable Standby Letter of Credit No. 306S234450, dated November 3,
2003, in the amount of US $1,050,000, issued by Union Bank of
California, N.A. to CHINATRUST COMMERCIAL BANK, as beneficiary.
2. Irrevocable Standby Letter of Credit No. 306S234448, dated May 8, 2003,
in the amount of US $550,000, issued by Union Bank of California, N.A.
to LUMBERMANS MUTUAL CASUALTY COMPANIES, as beneficiary.
Schedule 3.08(a)
SUBSIDIARIES
Unless otherwise indicated, all subsidiaries are, either directly or indirectly,
wholly owned by the Loan Parties.
SUBSIDIARY % OWNED BY THE BORROWER (1)
---------- ------------------------
SOLA Argentina S.A. 100%
SOLA Optical Partners, A Limited Partnership 100%
SOLA Optical Holdings (Pty.) Ltd. 100%
Sola Technologies Pty. Ltd. 100%
SOLA Corporation Limited 100%
SOLA International Holdings Ltd. 100%
American Optical Benelux N.V. 100%
Sola Belgium N.V. 100%
SOLA Brasil Industria Optica Ltda 100%
American Optical Brasil Ltda. 100%
SOLA Industria e Comercio Ltda 100%
Sociedade Amazonense de Oculos Ltda 100%
American Optical Lens Company Limited 100%
1132782 Ontario, Inc. 100%
SOLA Optical CZ S.R.O. 100%
Sola Nordic AS 100%
SOLA Optical (U.K.) Limited 100%
UKO International Limited 100%
American Optical UK Ltd. 100%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Group Limited 100%
United Kingdom Optical Company Limited 100%
The ▇▇▇▇▇▇ Company Limited 100%
Levers Optical (Manufacturing) Limited 100%
J&H ▇▇▇▇▇▇ Group Limited 100%
Raphael's Limited 100%
UKO International (Overseas Holding) Ltd. 100%
▇. ▇▇▇▇▇▇▇ and Company (South Africa) Limited 100%
▇. ▇▇▇▇▇▇▇ and Company (Zimbabwe) Limited 100%
AO European Services Limited 100%
Alpha Lens Company Limited 100%
British American Optical Company Limited 100%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Limited 100%
U.K. ▇▇▇▇▇▇▇ Limited 100%
▇. ▇▇▇▇▇▇▇ and Company Limited 100%
Sola International Logistic Services Limited 100%
SOLA Optical Holdings S.A.R.L. 100%
Industrie Optique SOLA S.A. 100%
SOLA Optical S.A. 100%
AO Ouest Optique S.A. 100%
SOLA Optical Holdings GmbH 100%
SOLA Optical GmbH 100%
American Optical GmbH 100%
SOLA Hong Kong Ltd. 100%
--------------------------
(1) Indicates direct ownership and indirect ownership through subsidiaries
SUBSIDIARY % OWNED BY THE BORROWER(2)
---------- ------------------------
SOLA Optical Lens Marketing Pvt. Ltd. 100%
SOLA Holdings Ireland Limited 100%
SOLA IFSC 100%
SOLA ADC Lenses Limited 100%
SOLA RDC Limited 100%
SOLA Ophthalmic Products Ltd. 100%
SOLA Optical Italia S.p.A. 100%
American Optical Italia S.R.L. 100%
SOLA Optical Japan Limited 100%
Solnox Optical Ltd. 50%
Sola Ophthalmic Lens Distribution SDN BHD 100%
Lentes SOLA S.A. de C.V. 100%
American Optical de Mexico S.A. de C.V. 100%
Optica Sola de Mexico, Srl 100%
Imgo Industries B.V. 100%
Sola Technologies Limited 100%
SOLA Optical (Poland) S.P.Z.O.O. 100%
▇▇▇▇ Industria Optical S.A. 89%
SOLA Optical Singapore Pte. Ltd. 100%
American Optical Co. Pte. Ltd. 100%
American Optical Company International A.G. 100%
SOLA Optical Taiwan Ltd. 100%
SOLA Optical Holdings I Ltd. 100%
SOLA Optical Holdings II Ltd. 100%
SOLA Optical Holdings III Ltd. 100%
SOLA Optical Holdings IV Ltd. 100%
SOLA Optical Holdings V Ltd. 100%
SOLA Optical Holdings VI Ltd. 100%
SOLA Optical Holdings Aus. Ltd. 100%
SOLA Optical Holdings Fr. Ltd. 100%
SOLA Optical Holdings Mex. LLC 100%
American Optical Lens Company 100%
SOLA Custom Coatings Inc. 100%
Siouxland Ophthalmic Labs, Inc. 100%
Kansas City Ophthalmics, LLC 100%
SOLA de Venezuela Industria Optica C.A. 100%
SOLA Optical China Limited 76%
▇▇▇▇ ▇.▇. Lens Manufacturing Ltd. 100%**
SOLA Shanghai Ltd. 50%**
SOLA Optical Guangzhou Ltd. 100%**
SOLA Optical Espana Lentes Oftalmicas SL 100%
▇▇▇▇▇▇▇▇ Optical Inc. 100%
American Optical IP Companies 100%
** Indicates percentage ownership of Sola Optical China Limited in which
Borrower holds a 76% interest.
Schedule 3.08(b)
STRUCTURE CHART
See Attached
-------------------------------
(1) Indicates direct ownership and indirect ownership through subsidiaries
SOLA INTERNATIONAL INC.
GROUP STRUCTURE
[FLOW CHART]
[FLOW CHART (CONTINUED)]
[FLOW CHART (CONTINUED)]
[FLOW CHART (CONTINUED)]
[FLOW CHART (CONTINUED)]
[FLOW CHART (CONTINUED)]
Schedule 3.09
LITIGATION
None
Schedule 3.10(a)
MATERIAL AGREEMENTS
Description of Material Agreement Consent required, if any
--------------------------------- ------------------------
Rights Agreement dated as of August 27, 1998 between SOLA International Inc. and Bank None
Boston N.A.
Indenture by and between the Company and State Street Bank and Trust Company of None
California, N.A., as Trustee, dated March 31, 1998
Officers' Certificate Related to Terms of 6 7/8% Senior Notes due 2008 None
Indenture dated as of April 17, 2001 by and between the Company and The Bank of None
New York, as Trustee, with respect to the 11% Notes due 2008
Registration Rights Agreement dated as of April 17, 2001 by and among the None
Company and UBS AG acting through its business group UBS Warburg, as
Initial Purchaser, with respect to the 11% Notes due 2008
Purchase Agreement, dated as of September 1, 1993 by and between SOLA Holdings None
Inc., ▇▇▇▇▇▇▇▇▇▇ plc and certain of ▇▇▇▇▇▇▇▇▇▇ plc's subsidiaries
Lease Agreement between Optical SOLA de Mexico and Messrs. ▇▇▇▇▇▇▇▇▇ None
Luttenroth-▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ (including English
summary of principal terms)
SOLA Investors Inc. Stock Option Plan None
Amendment Number One to SOLA Investors Inc. Stock Option Plan None
Amended and Restated 1998 SOLA International Inc. Stock Option Plan None
Form of Indemnification Agreement between the executive officers and directors of the None
Company and the Company
SOLA International Inc. Management Incentive Plan None
SOLA Optical 401(k) Savings Plan None
Trust Agreement entered into as of May 15, 1996 between SOLA Optical USA, Inc. and None
Chase Manhattan Bank, N.A.
Employment Agreement between Sola International Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, dated None
as of November 6, 2000
Confidential Severance Agreement between Sola International Inc. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, None
dated January 1, 1997
Confidential Severance Agreement between Sola International Inc. and ▇▇▇▇ ▇▇▇▇▇▇▇▇, None
dated April 6, 2002
Credit Agreement dated as of October 28, 2002 among SOLA International Inc., the Will be terminated in
Lenders named therein, Union Bank of California, N.A., as Sole Lead Arranger, as connection with Closing
an Issuing Bank, as Administrative Agent, and as Collateral Agent for the Lenders
Letter Agreement dated as of December 31, 2002 to Credit Agreement dated as of October Will be terminated in
28, 2002 among SOLA International Inc., the Lenders named therein, Union Bank of connection with Closing
California, N.A. as Sole Lead Arranger, as an Issuing Bank, as Administrative
Agent, and Collateral Agent for the
Lenders
Employment Agreement between SOLA International Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇, dated None
September 4, 2003
Schedule 3.10(b)
LEASES OF REAL PROPERTY
Full Service Lease-Gross, dated July 10, 2000, between ▇▇▇▇▇▇▇/▇▇▇▇▇▇ #15 and
Sola International Inc.
Standard Office Lease-Gross, dated November 4, 1997, between ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ and American Optical Lens Company, as amended
Standard Industrial Lease, dated June 12, 1989, as amended, between MIP
Properties, Inc. (as successor) and Sola International Inc. (as successor)
▇▇▇▇▇▇ Court Lease, dated November 3, 2000, between Brookwood Sorrento
Investors, L.L.C. and Sola International Inc.
Industrial Lease Agreement, dated November 8, 2000, between Industrial
Developments International, Inc. and Sola International Inc., as amended
Sublease, dated June 19, 1996, between American Optical Corporation and American
Optical Lens Company
Lease, dated March 1, 1996, as amended, between Plan Way Properties, L.L.C. (as
successor) and Sola International Inc. (as successor)
Lease, dated January 5, 2000, between Spectron Laser Systems, Ltd. and Sola
International Inc. (as successor)
Underlease, dated September 22, 1983, between Techno Limited and UKO
International Ltd. (as assignee/successor)
Lease, dated June 1, 1998, between ▇▇▇▇▇ Industrial Company Limited and UK
Optical Limited
Lease, dated December 21, 1989, between ▇▇▇▇▇▇▇ Estates Limited and Sola Optical
UK Limited
Supplemental Lease, dated September 4, 2000, between ▇▇▇▇▇ Industries Limited
and Sola Optical UK Limited
Bail Commercial, dated December 8, 2000, between Espace Enterprises du Pays de
Fougeres and AO Ouest Optique
Bail Commercial, dated October 11, 2000, between S.C.I. des Quatre Vents and AO
Ouest Optiquie
Bail Commercial, dated January 1, 2001, between Actipierre 2 and AO Ouest
Optique
Memorandum of Lease, dated June 1, 1995, between Sola International Holdings
Ltd. and Transitions Optical Pty. Ltd.
Memorandum of Lease, dated October 1, 1995, between Industrial and Commercial
Premises Corporation and Sola International Holdings Limited
Lease, dated May 16, 2001, between ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, LLC and Sola
International Inc.
Office Building Lease, dated July 24, 2001, between Torrey View Assoicates, LP
and Sola International Inc.
First Amendment Original and Expansion Space dated July 25, 2003, between
Hibiscus Torrey View, LLC and Sola International Inc.
Lease between ▇▇▇▇ ▇▇▇▇▇▇▇ and SOLA International Inc. (as successor) with
respect to ▇▇▇▇▇-▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
Lease between T & B Realty and SOLA International Inc. (as successor) with
respect to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Lease between MIE Properties Inc. and SOLA International Inc. (as successor)
with respect to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Lease between ▇▇▇▇-▇▇▇▇▇ Associates LLP and SOLA International Inc. (as
successor) with respect to ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Lease, dated as of March 21, 2003, between Siouxland Ophthalmic Labs, Inc. and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, relating to ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
Lease between IDI Inc. and SOLA International Inc. with respect to ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Lease Agreement, dated June 1, 1999, between 42nd and Washington Street Partners
and Kansas City Ophthalmics, LLC, relating to ▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Lease, dated January 1, 2001, between ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇ ▇▇▇▇, husband
and wife, and Siouxland Ophthalmic Labs, Inc., relating to ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
Lease, dated May 24, 1999, between the ▇▇▇▇▇▇ Family Trust and the ▇▇▇▇▇▇▇▇
Optical Inc., as amended by the Lease Renewal Addendum, dated September 1,
2000, between ▇▇▇▇▇▇▇ and Associates and the Company
Schedule 3.17
ENVIRONMENTAL MATTERS
None.
Schedule 3.18
INSURANCE
TYPE OF POLICY POLICY NUMBER CARRIER/INSURER
-------------- ------------- ---------------
Property & Boiler/Machinery IMB 6455033 AIG
Marine Open Cargo & Stock Throughput JC475203 Lloyds
Commercial General Liability 35781928 Chubb (Pacific Indemnity)
Business Automobile Liability 74983926 (CA & WVA) Chubb (Federal Insurance)
74984017 (VA)
Foreign Liability 35782054 Chubb (Great Northern)
Umbrella Liability 93631808 Chubb (Federal Insurance)
Crime 003509610 AIG (National Union)
Fiduciary Liability 8156-4953 Chubb (Federal Insurance)
Employment Practices Liability 003509504 AIG (National Union)
Directors and Officers 3826287 AIG (National Union)
GA0757621 Gulf
593CM0543 St. ▇▇▇▇
81690547 Chubb
Special Risk 077844-012 Liberty
Schedule 4.03(b)
FOREIGN COUNSEL
None.
Schedule 5.11(e)(i)
CERTAIN PLEDGED SECURITIES
Pledge of shares of Sola Optical China Ltd. (together with other documentation
satisfactory to the Collateral Agent) including registration thereof under the
laws of the British West Indies, if necessary, to be completed no later than 60
days following the Closing Date.
Pledge of shares of Sola Optical Italia SPA (together with other documentation
satisfactory to the Collateral Agent) to be completed no later than 10 days
following the Closing Date. Arrangement for local Italian bank to hold shares
for Union Bank of California, N.A., as Collateral Agent to be completed no later
than 45 days following the Closing Date.
Pledge of shares of Sola Optical Partners, a Limited Partnership (together with
other documentation satisfactory to the Collateral Agent) to be completed no
later than 5 days following the Closing Date. Registration of pledge of shares
of Sola Optical Partners, a Limited partnership including the filing of ASIC
forms, stamping of Deed of Mortgage of Securities and lodging of Deed of
Mortgage of Securities to be completed no later than 30 days following the
Closing Date.
Pledge of shares of Sola Brasil Industria Optica Ltda. (together with other
documentation satisfactory to the Collateral Agent) to be completed no later
than 5 days following the Closing Date. Registration of pledge of shares of Sola
Brasil Industria Optica Ltda. in Brazil with Registry of Deed and amendment to
Articles of Association of Sola Brasil Industria Optica Ltda. to be completed no
later than 20 days after the Closing Date.
Pledge of shares of Sola Optical Holdings SARL in France (together with other
documentation satisfactory to the Collateral Agent) to be completed no later
than 5 days following the Closing Date. Registration of pledge of shares of Sola
Optical Holdings SARL in France to be completed no later than 30 days following
the Closing Date.
Pledge of shares of Optica Sola de Mexico, S de ▇.▇. de C.V. (together with
other documentation satisfactory to the Collateral Agent) to be completed no
later than 5 days following the Closing Date. Notation of pledge of shares of
Optica Sola de Mexico, S de ▇.▇. de C.V. in Book of Registry of Partners thereof
to be completed no later than 10 days following the Closing Date.
Pledge of shares of Sola Optical (UK) Limited in the United Kingdom (together
with other documentation satisfactory to the Collateral Agent) to be completed
no later than 5 days following the Closing Date. Registration of Deed of
Mortgage of Shares of Sola Optical (UK)
Limited in the United Kingdom in the Share Registry to be completed no later
than 20 days following the Closing Date.
Pledge of shares of Sola Holdings Ireland Limited (together with other
documentation satisfactory to the Collateral Agent) to be completed no later
than 30 days following the Closing Date.
Schedule 5.11(e)(ii)
CERTAIN FOREIGN COUNSEL OPINIONS
Opinion to be delivered in connection with the pledge of shares of Sola Optical
China Ltd. to be delivered within 60 days of the Closing Date
Opinion to be delivered in connection with the pledge of shares of Sola Optical
Italia SPA to be delivered within 45 days of the Closing Date
Opinion to be delivered in connection with the pledge of shares of Sola Holdings
Ireland Limited (Ireland)to be delivered within 30 days of the Closing Date
Opinion to be delivered in connection with the pledge of shares of Optica SOLA
de Mexico S.R.L. de C.V. to be delivered within 5 days of the Closing Date
Opinion to be delivered in connection with the pledge of shares of Sola Optical
Partners, a Limited Partnership to be delivered within 5 days of the Closing
Date
Opinion to be delivered in connection with the pledge of shares of Sola Brasil
Industria Optica Ltda. to be delivered within 5 days of the Closing Date
Opinion to be delivered in connection with the pledge of shares of Sola Optical
Holdings S.A.R.L. to be delivered within 5 days of the Closing Date
Opinion to be delivered in connection with the pledge of shares of Sola Optical
(U.K.) Limited to be delivered within 5 days of the Closing Date
Schedule 5.11(e)(iii)
CERTAIN POST CLOSING MATTERS
Achievement of good standing by Borrower in West Virginia within 30 days of
Closing Date
Achievement of good standing by Borrower in Rhode Island within 30 days of
Closing Date
Payment of fees of counsel to the Collateral Agent in connection with the pledge
of Shares of Sola Optical China Ltd. no later than 10 days following the deliver
of the legal opinion relating thereto.
Payment of fees of counsel to the Collateral Agent in connection with the pledge
of the Pledged Securities (other than as set forth in the paragraph immediately
above) no later than 30 days after the Closing Date.
Schedule 6.01
OUTSTANDING INDEBTEDNESS ON CLOSING DATE
All Indebtedness on the balance sheet of the Borrower, dated September
30, 2003, as filed with the Securities and Exchange Commission as an exhibit to
the Company's Form 10-Q for fiscal year ended September 30, 2003, in the amount
of approximately $499.8 million outstanding as of September 30, 2003, and
approximately $513.1 million outstanding as of the Closing Date, including
without limitation the following:
- Notes payable to banks which, as of March 31, 2003, represented
borrowings generally denominated in foreign currencies under foreign
credit agreements with lenders in the amount of approximately $522,000
as of March 31, 2003. The weighted average interest rate on these
borrowings as of March 31, 2003 was 2.17%.
- Uncollateralized term loans, interest rates varying from 4.0% to 7.5%
at March 31, 2003, principal and interest payable through March 2006,
in the amount of approximately $1,765,000 as of March 31, 2003
- Loans collateralized by equipment and other assets, interest rates
varying from 0.2% to 12.0% at March 31, 2003, principal and interest
payable through August 2011, in the amount of approximately $6,292,000
as of March 31, 2003
- Loans collateralized by equipment and other assets, interest rates
indexed to LIBOR and Bank Base Rate (LIBOR 1.3% and Bank Base Rate
3.75% at March 31, 2003), principal and interest payable through March
2007, in the amount of approximately $592,000 as of March 31, 2003
- Uncollateralized term loan, interest 1.85% at March 31, 2003,
principal and interest payable through June 2008, in the amount of
approximately $484,000 as of March 31, 2003
- Uncollateralized interest free government loan, principal payable June
2007 through June 2011, in the amount of approximately $339,000 as of
March 31, 2003
Schedule 6.02
LIENS EXISTING ON CLOSING DATE
Type of Secured
Debtor Jurisdiction filing Party Collateral File Date File Number
------ ------------ ------- -------- ---------- --------- -----------
American Optical Massachusetts UCC-1 M&I First Certain 08/28/1995 334788
Corp. Secretary of National Leasing equipment
the Commonwealth Corp.
American Optical Massachusetts UCC M&I First Certain 03/31/2000 000705441
Corp. Secretary of Continuation National Leasing equipment
the Commonwealth Corp.
B & W Optical Co., Maryland State UCC-1 Citicorp Vendor Leased equipment 07/09/2001 00000001810893
Inc. Dept. of Finance, Inc. 54, Liber U00167,
Assessments & Folio 0712
Taxation
B & W Optical Co., Maryland State UCC Citicorp Vendor Leased equipment 11/30/2001 00000001810893
Inc. Dept. of Amendment Finance, Inc. 54, Liber U00188,
Assessments & Folio 0809
Taxation
Optical Electro Florida UCC-1 United Financial All machinery, 01/03/1995 950000001496
Forming, Inc. Secretary of Group, Inc. inventory, etc.
State pursuant to
Security
Agreement
Optical Electro Florida UCC United Financial All machinery, 12/20/1999 990000286739
Forming, Inc. Secretary of Amendment Group, Inc. inventory, etc.
State AND pursuant to
Continuation Security
Agreement
Optical Electro Florida UCC-1 First Union Leased equipment 06/29/2001 200100143842-9
Forming, Inc. Secretary of Commercial Corp.
State
Optical Electro Florida UCC-1 First Union Leased equipment 06/28/2002 200201541066
Forming, Inc. Secretary of Commercial
State Corporation
SOLA International California UCC-1 IBM Credit Leased equipment 05/05/1999 9913160549
Inc. (Lessee) Secretary of Corporation
State (Lessor)
SOLA International California UCC-1 IBM Credit Leased equipment 12/07/1999 9935160863
Inc. (Lessee) Secretary of Corporation
State (Lessor)
Sola International California UCC-1 Fidelity Leasing Certain 03/07/2001 0107160629
Inc. Secretary of Inc. equipment
State
Sola International California UCC-1 Fidelity Leasing Certain 04/09/2001 0110660197
Inc. Secretary of Inc. equipment
State
Sola International Delaware UCC-1 IBM Credit Certain 07/15/2002 21937584
Inc. Secretary of Corporation equipment
State
Sola International Delaware UCC-1 CIT Leased equipment 09/05/2002 22277246
Inc. Secretary of Communications
State Finance
Corporation
Type of Secured
Debtor Jurisdiction filing Party Collateral File Date File Number
------ ------------ ------- -------- ---------- --------- -----------
Sola International Delaware UCC-1 Makino, Inc. Certain 10/28/2003 32825530
Inc. Secretary of equipment
State
Sola International Kentucky, ▇▇▇▇▇ UCC-1 CIT Leased equipment 06/04/2001 2019682
Inc. County Communications
Finance
Corporation
Sola International Massachusetts UCC-1 Fidelity Leasing Certain 04/09/2001 200101365390
Inc. Secretary of the Inc. equipment
Commonwealth -
UCC Division
Schedule 6.04(k)
INVESTMENTS EXISTING ON CLOSING DATE
The Borrower has the following investments as of the Closing Date:
- The Borrow has agreed to provide 6-month financing to one of its
customers by accepting 6-month term promissory notes from such
customer, in a total aggregate amount not to exceed $8,000,000
outstanding at any given time.
- The Borrower has investments in its direct and indirect subsidiaries
listed in Schedule 3.08(a)
- The Borrower holds a convertible note made by Micro Optics Design
Corporation. The balance due to the Borrower under this convertible
note as of November 21, 2003, was $2,302,765.31.
- The Borrower has an agreement to defer payment in an amount not to
exceed $4.0 million in accounts receivable due to the Borrower from
U.S. Vision, Inc. Repayment of such investment is subordinated to
repayment of U.S. Vision, Inc.'s other lenders.
EXHIBIT A
FORM OF
LENDER ADDENDUM
Reference is made to that certain Credit Agreement dated as of December 11, 2003
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among SOLA INTERNATIONAL INC. as Borrower, the
Lenders (as defined in Article I thereof), UBS SECURITIES LLC and ▇.▇. ▇▇▇▇▇▇
SECURITIES INC., as Joint Lead Arrangers and Bookrunners, UBS SECURITIES LLC and
JPMORGAN CHASE BANK, as Co-Syndication Agents, UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent and Collateral Agent and the other financial
institutions party thereto. Capitalized terms used and not defined herein are
used with the meanings assigned to such terms in the Credit Agreement.
Upon execution and delivery of this Lender Addendum by the parties hereto as
provided in Section 9.17 of the Credit Agreement, the undersigned hereby becomes
a Lender thereunder having the Commitment set forth in Schedule 1 hereto,
effective as of the Closing Date. THIS LENDER ADDENDUM SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
This Lender Addendum may be executed by one or more of the parties hereto on any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an
executed signature page hereof by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Lender Addendum to be
duly executed and delivered by their proper and duly authorized officers as of
this ____ day of ___________ 2003.
[Name of Lender]
By:
--------------------------------
Name:
Title:
A-1
Accepted and agreed:
SOLA INTERNATIONAL INC.,
a Delaware corporation
By:
-------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
A-2
SCHEDULE 1
COMMITMENTS AND NOTICE ADDRESS
1. Name of Lender:
------------------
2. Address:
------------------
------------------
------------------
3. Attention:
------------------
Telephone:
------------------
Facsimile:
------------------
4. Revolving Commitment: $
-----------------
5. Term Loan Commitment $
-----------------
A-3
EXHIBIT B
UNION BANK OF CALIFORNIA, N.A.
FORM OF
ADMINISTRATIVE QUESTIONNAIRE -- SOLA INTERNATIONAL INC.
Lending Institution:
------------------------------------------------------------
Name for Signature Pages:
------------------------------------------------------
Will sign Credit Agreement: [ ]
Will come via Assignment: [ ]
Number of Days post Closing: _____________
Name for Signature Blocks:
-----------------------------------------------------
Name for Publicity:
-----------------------------------------------------
Address:
-----------------------------------------------------
Main Telephone:
-----------------------------------------------------
Telex No/Answer back:
-----------------------------------------------------
CONTACT-Credit Name:
-------------------------------------------
Address:
-------------------------------------------
-------------------------------------------
Telephone:
-------------------------------------------
Fax:
-------------------------------------------
CONTACT-Operations Name:
-------------------------------------------
Address:
-------------------------------------------
Telephone:
-------------------------------------------
Fax:
-------------------------------------------
PAYMENT INSTRUCTIONS
Bank Name:
--------------------------------------------------------
ABA/Routing No.
--------------------------------------------------------
Account Name:
--------------------------------------------------------
Account No.
--------------------------------------------------------
For further credit
--------------------------------------------------------
B-1
Account No.
--------------------------------------------------------
Attention:
--------------------------------------------------------
Reference:
--------------------------------------------------------
UNION BANK OF CALIFORNIA, N.A., ADMINISTRATIVE DETAILS
Union Bank of California, N.A. Account Administrator Secondary Contact
--------------------- -----------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Tel:[( ) ] Tel:[( ) ]
Main Telephone: [( ) ] Fax:[( ) ] Fax:[( ) ]
Wire Instructions: The Agent's wire instructions will be disclosed at the time
of closing.
A-2
EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to that certain Credit Agreement dated as of December 11, 2003
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among SOLA INTERNATIONAL INC., as Borrower,
the Lenders (as defined in Article I thereof), UBS SECURITIES LLC and ▇.▇.
▇▇▇▇▇▇ SECURITIES INC., as Joint Lead Arrangers and Bookrunners, UBS SECURITIES
LLC and JPMORGAN CHASE BANK, as Co-Syndication Agents, UNION BANK OF CALIFORNIA,
N.A., as Administrative Agent and Collateral Agent and the other financial
institutions party thereto. Capitalized terms used and not defined herein are
used with the meanings assigned to such terms in the Credit Agreement.
1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and
the Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Closing Date set forth below (but not prior to the
registration of the information contained herein in the Register pursuant to
Section 9.04(e) of the Credit Agreement), the interests set forth below (the
"Assigned Interest") in the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, including, without limitation, the
amounts and percentages set forth below of (i) the Commitments of the Assignor
on the Closing Date; (ii) the Loans owing to the Assignor which are outstanding
on the Closing Date; and (iii) participations held by the Assignor in Letters of
Credit which are outstanding on the Closing Date. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements of such party set forth in Section 9.04(c) of the
Credit Agreement, a copy of which has been received by each such party. From and
after the Closing Date (i) the Assignee shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the interests assigned
by this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent of the interests assigned by this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being delivered to the Administrative Agent
together with (i) if the Assignee is a Foreign Lender (as defined in the Credit
Agreement), the forms specified in Section 2.20(e) of the Credit Agreement, duly
completed and executed by such Assignee; (ii) if the Assignee is not already a
Lender under the Credit Agreement, an Administrative Questionnaire in the form
of Exhibit B to the Credit Agreement; and (iii) a processing and recordation fee
of $3,500.00.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
4. Date of Assignment:
5. Legal Name of Assignor:
6. Legal Name of Assignee:
7. Assignee's Address for Notices:
8. Closing Date of Assignment (may not be fewer than 5 Business Days after the
Date of Assignment unless the Administrative Agent shall otherwise agree):
C-1
9. Percentage Assigned of Applicable Facility/Commitment:
Percentage Assigned of
Applicable Facility/Commitment
(set forth, to at least 8 decimals,
as a percentage of the Facility and
Principal Amount the aggregate Commitments of
Facility/Commitment Assigned all Lenders thereunder)
------------------- ---------------------- -----------------------
Revolving Loans $ %
Term Loans $ %
C-2
The terms set forth above are hereby agreed to:
______________ ,
as Assignor
By:
---------------------------------------
Name:
Title:
______________ ,
as Assignee
By:
---------------------------------------
Name:
Title:
Accepted:(1)
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent
By:
-------------------------------
Name:
Title:
------------------------------
(1) To be completed to the extent consent is required under Section 9.04(b) of
the Credit Agreement. Prior written notice of the assignant shall also be
given to UBS Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc.
C-3
EXHIBIT D
FORM OF
BORROWING REQUEST
AND INTEREST RATE ELECTION NOTICE
This certificate is delivered to the Administrative Agent (as defined
below) pursuant to Section 2.03 of that certain Credit Agreement dated as of
December 9, 2003 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"; capitalized terms used
herein are used with the meanings assigned to such terms in the Credit
Agreement), among SOLA INTERNATIONAL INC. (the "Borrower"), the Lenders (as
defined in Article I thereof), UBS SECURITIES LLC and ▇.▇. ▇▇▇▇▇▇ SECURITIES
INC., as Joint Lead Arrangers and Bookrunners, UBS SECURITIES LLC and JPMORGAN
CHASE BANK, as Co-Syndication Agents, UNION BANK OF CALIFORNIA, N.A., as
Administrative Agent and Collateral Agent and [ ] as Documentation Agent.
As of ______________, the Borrower is requesting Loans in the aggregate
amount of _____________________. The Borrower hereby requests that said Loans be
made in the amount(s), Class and Type(s) and for the Interest Period(s)
specified below:
Interest Period
Amount Revolving or Term ABR or Eurodollar (Eurodollar)
------ ----------------- ----------------- ------------
$
$
SOLA INTERNATIONAL INC.,
a Delaware corporation
By:
----------------------------------
Name:
Title:
D-1
EXHIBIT E
FORM OF
LANDLORD ACCESS AGREEMENT
LANDLORD ACCESS AGREEMENT
THIS LANDLORD ACCESS AGREEMENT (the "AGREEMENT") is made and entered into as of
________________, by and between ________________________, having an office at
___________________________________ ("LANDLORD") and UNION BANK OF CALIFORNIA,
N.A., as collateral agent for the benefit of the Secured Parties (as defined in
the Credit Agreement (as hereinafter defined)), having an office at ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (in such
capacity, "COLLATERAL AGENT").
R E C I T A L S :
A. Landlord is the record title holder and owner of the real property described
in Schedule A attached hereto (the "REAL PROPERTY").
B. Landlord has leased all or a portion of the Real Property (the "LEASED
PREMISES") to SOLA International Inc. ("LESSEE") pursuant to a certain lease
agreement or agreements described in Schedule B attached hereto (collectively,
and as amended, amended and restated, supplemented or otherwise modified from
time to time, the "LEASE").
▇. ▇▇▇▇ International Inc. ("BORROWER") and Collateral Agent, among others, have
entered into a credit agreement, dated as of December 11, 2003, (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"; capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement),
pursuant to which the Lenders have agreed to make certain loans to Borrower
(collectively, the "LOANS").
D. As security for the payment and performance of Lessee's Obligations under the
Credit Agreement and the other documents evidencing and securing the Loans
(collectively, the "LOAN DOCUMENTS") Collateral Agent (for the benefit of the
Secured Parties) has or will acquire a security interest in (among other things)
Lessee's inventory, goods and accounts, (together with all additions,
substitutions, replacements and improvements to, and proceeds of, the foregoing,
collectively, the "PERSONAL PROPERTY")
E. Collateral Agent has requested that Landlord execute this Agreement as part
of Borrower's continuing obligations under the Credit Agreement.
A G R E E M E N T :
NOW, THEREFORE, for and in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord hereby represents, warrants and agrees in favor of
Collateral Agent, as follows:
-2-
1. Landlord certifies that (i) Landlord is the landlord under the Lease
described in Schedule B attached hereto and (ii) the Lease is in full force and
effect and has not been amended, modified or supplemented except as set forth in
Schedule B hereto.
2. Landlord agrees that Collateral Agent has the right to remove the
Personal Property from the Leased Premises at any time in accordance with the
terms of the Loan Documents; provided that Collateral Agent shall repair any
damage arising from such removal. Landlord further agrees that it will not
hinder Collateral Agent's actions in removing Personal Property from the Leased
Premises or Collateral Agent's actions in otherwise enforcing its security
interest in the Personal Property. Collateral Agent shall not be liable for any
diminution in value of the Leased Premises caused by the absence of Personal
Property actually removed or by the need to replace the Personal Property after
such removal. Landlord acknowledges that Collateral Agent shall have no
obligation to remove the Personal Property from the Leased Premises.
3. Landlord acknowledges and agrees that Lessee's granting of a security
interest in the Personal Property in favor of the Collateral Agent (for the
benefit of the Secured Parties) shall not constitute a default under the Lease
nor permit Landlord to terminate the Lease or re-enter or repossess the Leased
Premises or otherwise be the basis for the exercise of any remedy by Landlord
and Landlord hereby expressly consents to the granting of such security
interest.
4. The terms and provisions of this Agreement shall inure to the benefit
of and be binding upon the successors and assigns of Landlord (including,
without limitation, any successor owner of the Real Property) and Collateral
Agent. Landlord will disclose the terms and conditions of this Agreement to any
purchaser or successor to Landlord's interest in the Leased Premises.
5. All notices to any party hereto under this Agreement shall be in
writing and sent to such party at its respective address set forth above (or at
such other address as shall be designated by such party in a written notice to
the other party complying as to delivery with the terms of this Section 5) by
certified mail, postage prepaid, return receipt requested or by overnight
delivery service.
6. The provisions of this Agreement shall continue in effect until
Landlord shall have received Collateral Agent's written certification that the
Loans have been paid in full and all of Borrower's other Obligations under the
Credit Agreement and the other Loan Documents have been satisfied.
7. THE INTERPRETATION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED UNDER THE
-3-
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
8. Landlord agrees to execute, acknowledge and deliver such further
instruments as Collateral Agent may request to allow for the proper recording of
this Agreement (including, without limitation, a revised landlord access
agreement in form and substance sufficient for recording) or to otherwise
accomplish the purposes of this Agreement.
IN WITNESS WHEREOF, Landlord and Collateral Agent have caused this Agreement to
be duly executed and delivered by their duly authorized officers as of the date
first above written.
----------------------------------------,
as Landlord
By:
-----------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Collateral Agent
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
Schedule A
Description of Real Property
Schedule B
Description of Lease
Location/
Property
Lessor Lessee Dated Modification Address
------ ------ ----- ------------ -------
E-1
EXHIBIT F
SECURITY AGREEMENT
By
SOLA INTERNATIONAL INC.,
as Borrower
and
THE GUARANTORS FROM TIME TO TIME PARTY HERETO
and
UNION BANK OF CALIFORNIA, N.A.,
as Collateral Agent
Dated as of December 11, 2003
TABLE OF CONTENTS
Page
----
PREAMBLE..................................................................................... 1
RECITALS..................................................................................... 1
AGREEMENT.................................................................................... 2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS...................................................................... 2
SECTION 1.2 INTERPRETATION................................................................... 12
SECTION 1.3 RESOLUTION OF DRAFTING AMBIGUITIES............................................... 13
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1 PLEDGE........................................................................... 13
SECTION 2.2 SECURED OBLIGATIONS.............................................................. 14
SECTION 2.3 FUTURE ADVANCES.................................................................. 14
SECTION 2.4 NO RELEASE....................................................................... 14
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1 DELIVERY OF CERTIFICATED SECURITIES COLLATERAL................................... 14
SECTION 3.2 PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL............................... 15
SECTION 3.3 FINANCING STATEMENTS AND OTHER FILINGS........................................... 15
SECTION 3.4 JOINDER OF AFFILIATES............................................................ 16
SECTION 3.5 INTELLECTUAL PROPERTY............................................................ 16
SECTION 3.6 SUPPLEMENTS; FURTHER ASSURANCES.................................................. 16
SECTION 3.7 USE AND PLEDGE OF PLEDGED COLLATERAL............................................. 16
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
-i-
SECTION 4.1 PAYMENT.......................................................................... 17
SECTION 4.2 AUTHORITY AND VALIDITY; PRESERVATION OF CORPORATE EXISTENCE...................... 17
SECTION 4.3 PERFECTION ACTIONS; PRIOR LIENS.................................................. 18
SECTION 4.4 LIMITATION ON LIENS.............................................................. 18
SECTION 4.5 OTHER FINANCING STATEMENTS....................................................... 18
SECTION 4.6 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE; RECORDS; CHANGE OF NAME.... 18
SECTION 4.7 LOCATION OF INVENTORY............................................................ 19
SECTION 4.8 WAREHOUSE RECEIPTS NON-NEGOTIABLE................................................ 19
SECTION 4.9 CORPORATE NAMES; PRIOR TRANSACTIONS.............................................. 19
SECTION 4.10 DUE AUTHORIZATION AND ISSUANCE.................................................. 19
SECTION 4.11 NO VIOLATIONS, ETC.............................................................. 20
SECTION 4.12 NO OPTIONS, WARRANTS, ETC....................................................... 20
SECTION 4.13 NO CLAIMS....................................................................... 20
SECTION 4.14 NO CONFLICTS, CONSENTS, ETC..................................................... 20
SECTION 4.15 PLEDGED COLLATERAL.............................................................. 21
SECTION 4.16 INSURANCE; CONDEMNATION......................................................... 21
SECTION 4.17 PAYMENT OF TAXES; COMPLIANCE WITH LAWS; CONTESTING LIENS; CLAIMS................ 23
SECTION 4.18 ACCESS TO PLEDGED COLLATERAL, BOOKS AND RECORDS; OTHER INFORMATION.............. 23
ARTICLE V
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 5.1 SPECIAL REPRESENTATIONS AND WARRANTIES........................................... 23
SECTION 5.2 MAINTENANCE OF RECORDS........................................................... 24
SECTION 5.3 LEGEND............................................................................ 24
SECTION 5.4 MODIFICATION OF TERMS, ETC....................................................... 24
SECTION 5.5 COLLECTION....................................................................... 24
SECTION 5.6 INSTRUMENTS...................................................................... 25
SECTION 5.7 PAYMENT INTO LOCKBOXES........................................................... 25
ARTICLE VI
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 6.1 PLEDGE OF ADDITIONAL SECURITIES COLLATERAL....................................... 25
SECTION 6.2 VOTING RIGHTS; DISTRIBUTIONS, ETC................................................ 26
SECTION 6.3 NO NEW SECURITIES................................................................ 27
SECTION 6.4 OPERATIVE AGREEMENTS............................................................. 27
SECTION 6.5 DEFAULTS, ETC.................................................................... 28
-ii-
ARTICLE VII
CERTAIN PROVISIONS CONCERNING
COLLATERAL ACCOUNT AND COLLECTION OF ACCOUNTS
SECTION 7.1 COLLATERAL ACCOUNT............................................................... 28
SECTION 7.2 COVER FOR LETTER OF CREDIT LIABILITIES........................................... 29
SECTION 7.3 COLLECTION OF ACCOUNTS........................................................... 30
SECTION 7.4 RESTRICTION ON CREDIT BALANCES IN DEPOSIT ACCOUNTS............................... 31
ARTICLE VIII
TRANSFERS AND OTHER LIENS
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
SECTION 9.1 REMEDIES......................................................................... 32
SECTION 9.2 NOTICE OF SALE................................................................... 33
SECTION 9.3 WAIVER OF NOTICE AND CLAIMS...................................................... 34
SECTION 9.4 CERTAIN SALES OF PLEDGED COLLATERAL.............................................. 34
SECTION 9.5 NO WAIVER; CUMULATIVE REMEDIES................................................... 35
ARTICLE X
APPLICATION OF PROCEEDS
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 CONCERNING COLLATERAL AGENT..................................................... 37
SECTION 11.2 COLLATERAL AGENT MAY PERFORM; COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT....... 38
SECTION 11.3 EXPENSES........................................................................ 38
SECTION 11.4 INDEMNITY....................................................................... 39
SECTION 11.5 CONTINUING SECURITY INTEREST; ASSIGNMENT........................................ 39
SECTION 11.6 TERMINATION; RELEASE............................................................ 40
SECTION 11.7 MODIFICATION IN WRITING......................................................... 40
SECTION 11.8 NOTICES......................................................................... 40
SECTION 11.9 GOVERNING LAW................................................................... 40
SECTION 11.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL........... 41
-iii-
SECTION 11.11 SEVERABILITY OF PROVISIONS..................................................... 41
SECTION 11.12 EXECUTION IN COUNTERPARTS...................................................... 41
SECTION 11.13 LIMITATION ON INTEREST PAYABLE................................................. 41
SECTION 11.14 BUSINESS DAYS.................................................................. 42
SECTION 11.15 RELATIONSHIP................................................................... 42
SECTION 11.16 WAIVER OF STAY................................................................. 42
SECTION 11.17 NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION................................... 43
SECTION 11.18 NO CLAIMS AGAINST COLLATERAL AGENT............................................. 43
SECTION 11.19 OBLIGATIONS ABSOLUTE........................................................... 43
SCHEDULE 1.1(a) Initial Intercompany Notes
SCHEDULE 1.1(b) Initial Pledged Interests
SCHEDULE 1.1(c) Initial Pledged Shares
SCHEDULE 1.1(d) Prior Liens
SCHEDULE 3.3 Financing Statements and Other Necessary Filings
SCHEDULE 4.14 Required Consents
EXHIBIT 1 Form of Issuer Acknowledgement
EXHIBIT 2 Form of Pledge Amendment
EXHIBIT 3 Form of Joinder Agreement
EXHIBIT 4 Form of Lockbox Agreement
EXHIBIT 5 Existing Issuer Obligations
-iv-
AMENDED AND RESTATED
SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this
"Agreement"), dated as of December 11, 2003, is made by SOLA INTERNATIONAL INC.,
a Delaware corporation having an office at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), and EACH OF THE GUARANTORS
FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT
(collectively, the "Guarantors\") as pledgors, assignors and debtors (the
Borrower, together with any such Guarantors, in such capacities and together
with any successors in such capacities, the "Pledgors," and each, a "Pledgor"),
in favor of UNION BANK OF CALIFORNIA, N.A., having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in its capacity as
Collateral Agent for the lending institutions (the "Lenders") from time to time
party to the Credit Agreement (as hereinafter defined), as pledgee, assignee and
secured party and for the issuers of hedging agreements and interest rate
protection agreements described in Exhibit 5 attached hereto (the "Existing
Issuers") (in such capacities and together with any successors in such
capacities, the "Collateral Agent").
RECITALS:
A. Pursuant to that certain Credit Agreement dated as of
December 11, 2003 (as amended, restated or otherwise modified from time to time,
the "Credit Agreement"), among the Borrower, the Lenders, certain other parties
thereto and the Collateral Agent, the Lenders have agreed to make to or for the
account of the Borrower certain Loans (as hereinafter defined) and to issue
certain Letters of Credit (as hereinafter defined) for the account of the
Borrower.
B. It is contemplated that the Borrower or any
Subsidiary (as hereinafter defined) of Borrower may enter into one or more
Interest Rate Protection Agreements (as herinafter defined) with the Lenders or
their Affiliates (as hereinafter defined) fixing the interest rates with respect
to the Loans under the Credit Agreement.
C. It is contemplated that the Borrower or any
Subsidiary of Borrower may enter into one or more Hedging Agreements (as
hereinafter defined) with the Lenders or their Affiliates fixing or hedging the
price of foreign currency exchange rates or the cost of certain commodities.
D. It is acknowledged by the Parties hereto that there
are not currently any Guarantors hereunder. In the future, as provided under the
Credit Agreement, each Guarantor will, contemporaneous with the execution of a
Joinder Agreement (as hereinafter defined) enter into a certain guarantee (the
"Guarantee"), guaranteeing, among other things, the obligations of the Borrower
under the Credit Agreement and the other Loan Documents (as hereinafter
defined).
E. Upon the execution of the Guarantee, each Guarantor
will receive substantial benefits from the execution, delivery and performance
of the Loan Documents and each is, therefore, willing to join into this
Agreement.
F. Each Pledgor is or will be the legal and/or
beneficial owner of the Pledged Collateral (as hereinafter defined) to be
pledged by it hereunder.
G. It is a condition to the obligations of the Lenders
to make the Loans under the Credit Agreement, a condition to any Lender issuing
Letters of Credit under the Credit Agreement, and a condition to the
Administrative Agent entering into any Interest Rate Protection Agreement or
Hedging Agreement that each Pledgor execute and deliver the applicable Loan
Documents, including this Agreement.
H. This Agreement is given by each Pledgor in favor of
the Collateral Agent for its benefit and the benefit of the Lenders and the
Existing Issuers until Borrower's obligations under the agreements described in
Exhibit 5 expire by their terms (collectively, the "Secured Parties") to secure
the payment and performance of all of the Secured Obligations (as hereinafter
defined).
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Pledgors and the Collateral Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. The following terms used in this Agreement shall have the
following meanings:
"Accounts" shall mean, with respect to each Pledgor,
collectively, (i) all "accounts," as such term is defined in the UCC and (ii)
all (A) book debts and other forms of obligations and receivables now or
hereafter owned or held by or payable to such Pledgor relating in any way to or
arising from the sale or lease of goods or the rendering of services by such
Pledgor or any other party, including the right to payment of any interest or
finance charge with respect thereto, together with all merchandise represented
by any of the accounts, (B) all such merchandise that may be reclaimed or
repossessed or returned to such Pledgor, (C) all of such Pledgor's rights as an
unpaid vendor, including stoppage in transit, reclamation, replevin and
sequestration, (D) all "supporting obligations" (as such term may be defined in
the UCC), including, without limitation, all assets pledged, assigned,
hypothecated or granted to, and all letters of credit, guarantee claims, Liens
and security interests held by Pledgor to secure payment of any accounts and
which are delivered for or on behalf of any account debtor, (E) all accessions
to all of the foregoing described properties and interests in properties, (F)
all powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection with the foregoing and (G) all evidence
of the filing of financing statements and other statements and the registration
of other instruments in connection therewith and amendments thereto, notices to
other creditors or secured parties and certificates from filing or other
registration offices.
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"Additional Pledged Interests" shall mean, collectively, with
respect to each Pledgor, all (i) options, warrants, rights, agreements,
additional membership or partnership interests or other interests of whatever
class of any issuer of Initial Pledged Interests or any interest in any such
issuer, including, without limitation, all rights, privileges, authority and
powers of such Pledgor relating to the equity or membership or partnership
interests in any such issuer or under the Operative Agreement of any such
issuer, from time to time acquired by such Pledgor in any manner and (ii)
membership, partnership or other interests, as applicable, of each limited
liability company, partnership or other entity (other than a corporation)
hereafter acquired or formed by such Pledgor within or outside the United States
other than an Insignificant Domestic Subsidiary or Insignificant Direct Foreign
Subsidiary and all options, warrants, rights, agreements, additional membership
or partnership interests or other interests of whatever class of such limited
liability company, partnership or other entity including, without limitation,
all rights, privileges, authority and powers of such Pledgor to such membership,
partnership or other interests or under the Operative Agreement of such limited
liability company, partnership or other entity from time to time acquired after
the date hereof by such Pledgor in any manner, in each case including, subject
to the provisions of Section 3.2, certificates, instruments and agreements
representing such additional interests (which, subject to the provisions of
Section 3.2, are and shall remain at all times until this Agreement terminates,
certificated interests) and any and all interest of such Pledgor in the entries
on the books of any financial intermediary pertaining to such additional
interests.
"Additional Pledged Shares" shall mean, collectively, with
respect to each Pledgor, all (i) options, warrants, rights, agreements,
additional shares of capital stock of whatever class of any issuer of the
Initial Pledged Shares or any interest in any such issuer, including, without
limitation, all rights, privileges, authority and powers of such Pledgor
relating to the additional shares issued by any such issuer under the Operative
Agreement of any such issuer, from time to time acquired by such Pledgor in any
manner and (ii) the issued and outstanding shares of capital stock of each
corporation hereafter acquired or formed by such Pledgor within or outside the
United States other than an Insignificant Domestic Subsidiary or Insignificant
Direct Foreign Subsidiary and all options, warrants, rights, agreements or
additional shares of capital stock of whatever class of such corporation
including, without limitation, all rights, privileges, authority and powers of
such Pledgor relating to such shares or under the Operative Agreement of such
corporation from time to time acquired by such Pledgor in any manner, in each
case including the certificates representing such additional shares (which are
and shall remain at all times until this Agreement terminates, certificated
shares) and any and all interest of such Pledgor in the entries on the books of
any financial intermediary pertaining to such additional shares.
"Affiliate" shall have the meaning assigned to such term in
the Credit Agreement.
"Agreement" shall mean this Agreement, as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof.
"Bankruptcy Code" shall mean Title 11 of the United States
Code, as now constituted or hereafter amended.
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"Bank Accounts" shall mean, collectively, (i) the Lockboxes,
the Collection Accounts and the Lockbox Concentration Account and all accounts
and sub-accounts relating to any of the foregoing accounts and (ii) all cash,
funds, checks, notes and any instruments from time to time on deposit in any of
the accounts or sub-accounts described in clause (i) of this definition.
"Borrower" shall have the meaning assigned to such term in the
Preamble hereof.
"Business Day" shall have the meaning assigned to such term in
the Credit Agreement.
"Capital Lease Obligation" shall have the meaning assigned to
such term in the Credit Agreement.
"Cash Equivalents" shall have the meaning assigned to such
term in the Credit Agreement.
"Cash Management Agreements" shall mean cash management
agreements between the Borrower and any Lender or its respective Affiliates
specifically identified in writing by the Borrower to the Collateral Agent from
time to time; provided, however, a cash management agreement shall not
constitute a "Cash Management Agreement" hereunder unless such cash management
agreement is on terms acceptable to the Collateral Agent in its sole discretion
and the Collateral Agent has acknowledged and agreed in writing that such cash
management agreement shall constitute a "Cash Management Agreement" hereunder.
"Charges" shall mean any and all property and other taxes,
assessments and special assessments, levies, fees and all governmental charges
imposed upon or assessed against, and all claims (including claims for labor,
materials, supplies and warehousing and other claims arising by operation of
law) against, all or any portion of the Pledged Collateral.
"Chattel Paper" shall mean, collectively, with respect to each
Pledgor, all "chattel paper," as such term is defined in the UCC relating to
Accounts and Inventory.
"Collateral" shall have the meaning assigned to such term in
the Credit Agreement.
"Collateral Account" shall mean a collateral account or
sub-account established and maintained by the Collateral Agent (or a Lender that
agrees to be a collateral sub-agent for the Collateral Agent) in its name as
Collateral Agent for the Secured Parties in accordance with the provisions of
Section 7.1 hereof and all funds from time to time on deposit in the Collateral
Account including, without limitation, all Cash Equivalents and all certificates
and instruments from time to time representing or evidencing such investments;
all notes, certificates of deposit, checks and other instruments from time to
time hereafter delivered to or otherwise possessed by the Collateral Agent for
or on behalf of any Pledgor in substitution for, or in addition to, any or all
of the Pledged Collateral; and all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the items constituting Pledged
Collateral. For purposes of Section 2 hereof, the term
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"Collateral Account" shall also include the L/C Sub-Account and all sub-accounts
thereof and all cash, funds, checks, notes and any instruments from time to time
on deposit in the L/C Sub-Account and any sub-accounts thereof.
"Collateral Agent" shall have the meaning assigned to such
term in the Preamble hereof.
"Collection Account" shall have the meaning assigned to such
term in Section 7.3(i) hereof.
"Collections" shall mean all cash, funds, checks, notes,
instruments and any other form of remittance tendered by account debtors in
payment of Accounts.
"Commitments" shall have the meaning assigned to such term in
the Credit Agreement.
"Contested Liens" shall mean, collectively, any Liens
contested pursuant to Section 6.02 of the Credit Agreement.
"Contracts" shall mean, collectively, with respect to each
Pledgor, all "contracts," as such term is defined in the UCC, of such Pledgor
relating to Accounts and Inventory (whether written or oral, or third party or
intercompany) between such Pledgor and third parties, and all assignments,
amendments, restatements, supplements, extensions, renewals, replacements or
modifications thereof.
"Cost of Construction" shall mean to the extent applicable,
the sum, so far as it relates to the reconstructing, renewing, restoring or
replacing of the Inventory, of (i) obligations incurred or assumed by any
Pledgor or undertaken by any tenant pursuant to the terms of any lease or
license for labor, materials and other expenses and to contractors, builders and
materialmen, (ii) the cost of contract bonds and of insurance of every kind,
nature or character that may reasonably be deemed by any Pledgor to be necessary
or appropriate during the course of construction and (iii) the expenses incurred
or assumed by any Pledgor for estimates, plans and specifications and
preliminary investigations therefor, and for supervising construction, as well
as for the performance of all other duties required by or necessary for proper
construction.
"Credit Agreement" shall have the meaning assigned to such
term in Recital A hereof.
"Default" shall have the meaning assigned to such term in the
Credit Agreement.
"Default Rate" shall mean the rate per annum equal to the
highest rate then payable under the Credit Agreement.
"Destruction" shall mean any and all damage to, or loss or
destruction of, all or any portion of the Pledged Collateral.
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"Direct Foreign Subsidiary" shall have the meaning assigned to
such term in the Credit Agreement.
"Distributions" shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
"Documents" shall mean, collectively, with respect to each
Pledgor, all "documents," as such term is defined in the UCC, of such Pledgor
related to Accounts and Inventory, and in any event, shall include, without
limitation, all receipts of such Pledgor covering, evidencing or representing
Accounts and Inventory.
"Domestic Subsidiary" shall have the meaning assigned to such
term in the Credit Agreement.
"Event of Default" shall have the meaning assigned to such
term in the Credit Agreement.
"Full Replacement Cost" shall mean the cost associated with
replacing any General Collateral subject to any Destruction and, to the extent
applicable, the Cost of Construction to replace the Inventory, exclusive of
depreciation.
"GAAP" shall have the meaning assigned to such term in the
Credit Agreement.
"General Collateral" shall mean the Pledged Collateral other
than the Securities Collateral.
"General Intangibles" shall mean, collectively, with respect
to each Pledgor, all "general intangibles," as such term is defined in the UCC,
of such Pledgor relating to Accounts and Inventory and, in any event shall
include, without limitation, (i) all of such Pledgor's rights, title and
interest in, to and under all Insurance Policies and Contracts related to
Accounts and Inventory, and (ii) all lists, books, records, correspondence,
ledgers, print-outs, files (whether in printed form or stored electronically),
tapes and other papers or materials containing information relating to any of
the Pledged Collateral including, without limitation, all customer lists,
identification of suppliers, data, plans, recorded knowledge, studies, catalogs,
research data, sales data and other information relating to sales of products
now or hereafter manufactured, distributed or franchised by such Pledgor,
accounting information pertaining to such Pledgor's operations or any of the
Pledged Collateral and all media in which or on which any of the information or
knowledge or data or records relating to such operations or any of the Pledged
Collateral may be recorded or stored and all computer programs used for the
compilation or printout of such information, knowledge, records or data, and
(iii) all "payment intangibles," as such term is defined in the UCC, of such
Pledgor relating to Accounts and Inventory.
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"Governmental Authority" shall mean any federal, state, local,
foreign or other governmental, quasi-governmental or administrative (including
self-regulatory) body, instrumentality, department, agency, authority, board,
bureau, commission, office of any nature whatsoever or other subdivision
thereof, or any court, tribunal, administrative hearing body, arbitration panel
or other similar dispute-resolving body, whether now or hereafter in existence,
or any officer or official thereof, having jurisdiction over any Pledgor or the
Pledged Collateral or any portion thereof.
"Guarantee" shall have the meaning assigned to such term in
Recital D hereof.
"Guarantors" shall have the meaning assigned to such term in
the Preamble hereof.
"Hedging Agreements" shall mean any Hedging Agreement (as
defined in the Credit Agreement) with the Lenders or their Affiliates and also
shall include any such obligations to an Existing Issuer as described in Exhibit
5.
"Indemnified Liabilities" shall have the meaning assigned to
such term in Section 11.4(i) hereof.
"Indemnitees" shall have the meaning assigned to such term in
Section 11.4(i) hereof.
`Initial Pledged Interests" shall mean, with respect to each
Pledgor, all membership interests and/or partnership interests, as applicable,
of each issuer described in Schedule 1.1(b) annexed hereto together with all
rights, privileges, authority and powers of such Pledgor in and to each such
issuer or under the Operative Agreement of each such issuer, and the
certificates, instruments and agreements representing such membership or
partnership interests and any and all interest of such Pledgor in the entries on
the books of any financial intermediary pertaining to such membership or
partnership interests.
"Initial Pledged Shares" shall mean, collectively, with
respect to each Pledgor, the issued and outstanding shares of capital stock of
each Person described in Schedule 1.1(c) annexed hereto together with all
rights, privileges, authority and powers of such Pledgor in and to each such
issuer or under the Operative Agreement of each such issuer, and the
certificates, instruments and agreements representing the Initial Pledged Shares
and any and all interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to the Initial Pledged Shares.
"Insignificant Direct Foreign Subsidiary" shall have the
meaning assigned to such term in the Credit Agreement.
"Insignificant Domestic Subsidiary" shall have the meaning
assigned to such term in the Credit Agreement.
"Instruments" shall mean, collectively, with respect to each
Pledgor, all "instruments," as such term is defined in Article 9 of the UCC
relating to Accounts and
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Inventory, and in any event shall include, without limitation, all promissory
notes, drafts, bills of exchange or acceptances relating to Accounts and
Inventory.
"Insurance Certificate" shall mean a certificate evidencing
the Insurance Requirements (i) in substantially the form commonly known as
"▇▇▇▇▇ 27" that (A) provides that the insurance has been issued, is in full
force and effect, and conveys all the rights and privileges afforded under the
Insurance Policies, (B) provides an unequivocal obligation to give advance
notice to additional interest parties of termination and notification of changes
and (C) purports to convey all the privileges of the Insurance Policies to the
certificate holders and (ii) that otherwise complies with the requirements with
respect thereto set forth in Section 4.17 hereof.
"Insurance Policies" shall mean, collectively, with respect to
each Pledgor, all insurance policies held by such Pledgor or naming such Pledgor
as insured, additional insured or loss payee (including, without limitation, the
Required Insurance Policies), all such insurance policies entered into after the
date hereof, other than insurance policies (or certificates of insurance
evidencing such insurance policies) relating to health and welfare insurance and
life insurance policies in which such Pledgor is not named as beneficiary (i.e.,
insurance policies that are not "Key Man" insurance policies) and all rights,
claims and recoveries relating thereto (including, without limitation, all
dividends, returned premiums and other rights to receive money in respect of any
of the foregoing).
"Insurance Requirements" means, collectively, with respect to
each Pledgor, all provisions of the Required Insurance Policies, all
requirements of the issuer of any of the Required Insurance Policies and all
orders, rules, regulations and any other requirements of the National Board of
Fire Underwriters (or any other body exercising similar functions) binding upon
such Pledgor and applicable to the Pledged Collateral or any use or condition
thereof.
"Intercompany Notes" shall mean, with respect to such Pledgor,
all intercompany notes described in Schedule 1.1(a) annexed hereto (and each
other intercompany note hereafter acquired by such Pledgor and requested to be
pledged pursuant to Sections 6.04(d), 6.04(p) or 6.04(q) of the Credit
Agreement) and all certificates, instruments or agreements evidencing such
intercompany notes and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof to the extent
permitted pursuant to the terms of this Agreement.
"Interest Rate Protection Agreement" shall mean any Interest
Rate Protection Agreement (as defined in the Credit Agreement) with the Lenders
or their Affiliates and shall include any such obligations to an Existing Issuer
as described in Exhibit 5.
"Inventory" shall mean, collectively, with respect to each
Pledgor, all "inventory," as such term is defined in the UCC, of such Pledgor
wherever located and of every class, kind and description and, in any event
shall include, without limitation, (i) all "goods" as such term is defined in
the UCC, merchandise, raw materials, work-in-process, returned goods, finished
goods, samples and consigned goods (to the extent of the consignee's interest
therein), materials and supplies of any kind or nature which are or might be
used in connection with the
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manufacture, printing, publication, packing, shipping, advertising, selling or
finishing of any such goods and all other products, goods, materials and
supplies, (ii) all inventory as is temporarily out of such Pledgor's custody or
possession, items in transit and any returns and repossessions upon any Accounts
and (iii) all substitutions therefor or replacements thereof, and all additions
and accessions thereto.
"Joinder Agreement" shall mean the form of joinder agreement
attached hereto as Exhibit 3.
"L/C Sub-Account" shall have the meaning assigned to such term
in Section 7.2 hereof.
"Lenders" shall have the meaning assigned to such term in the
Preamble hereof.
"Letters of Credit" shall have the meaning assigned to such
term in the Credit Agreement.
"Liability Insurance" shall mean, collectively, the insurance
policies and coverages described in clause (B) and, to the extent applicable,
clauses (E) and (F) of Section 4.17(i) hereof.
"Lien" shall have the meaning assigned to such term in the
Credit Agreement.
"Loan Documents" shall have the meaning assigned to such term
in the Credit Agreement.
"Loan Parties" shall have the meaning assigned to such term in
the Credit Agreement.
"Loans" shall have the meaning assigned to such term in the
Credit Agreement.
"Lockbox Agreement" shall mean each Lockbox Agreement
substantially in the form of Exhibit 4 annexed hereto, entered into in
connection with this Agreement, in each case, with such changes as the
Collateral Agent may, in its sole discretion, approve.
"Lockbox Bank" shall have the meaning assigned to such term in
Section 7.3(i) hereof.
"Lockbox Concentration Account" shall have the meaning
assigned to such term in Section 7.3(ii) hereof.
"Lockboxes" shall have the meaning assigned to such term in
Section 7.3(i) hereof.
"Officers' Certificate" shall mean, as applied to any
corporation (or limited liability company or partnership), a certificate
executed on behalf of such corporation (or limited liability company or
partnership) by its chairman of the board (if an officer) or its chief executive
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officer or one of its vice presidents (or an equivalent officer or, in the case
of a limited liability company, its managing member if no such equivalent
officer has been so appointed or, in the case of a partnership, its general
partner) and by its chief financial officer, vice president-finance or its
treasurer (or an equivalent officer or, in the case of a limited liability
company, its managing member if no such equivalent officer has been so appointed
or, in the case of a partnership, its general partner) or any assistant
treasurer in their official (and not individual) capacities; provided, however,
that every Officers' Certificate with respect to the compliance with a condition
precedent to the making of any Loan or the taking of any other action hereunder
shall include (i) a statement that the officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, and (ii) a statement as to
whether, in the opinion of the signers, such condition has been complied with.
"Operative Agreement" shall mean (i) in the case of any
limited liability company or partnership, any membership or partnership
agreement thereof or the foreign equivalent and (ii) in the case of any
corporation, any charter or certificate of incorporation and by-laws thereof or
the foreign equivalent.
"Perfection Certificate" shall have the meaning assigned to
such term in the Credit Agreement.
"Permitted Liens" shall have the meaning assigned to such term
in the Credit Agreement.
"Person" shall have the meaning assigned to such term in the
Credit Agreement.
"Pledge Amendment" shall have the meaning assigned to such
term in Section 6.1 hereof.
"Pledged Collateral" shall have the meaning assigned to such
term in Section 2.1 hereof.
"Pledged Interests" shall mean, collectively, the Initial
Pledged Interests and the Additional Pledged Interests; provided, however, that
such Pledgor shall not be required to pledge shares possessing more than 65% of
the voting power of all classes of capital stock entitled to vote of any
Subsidiary which is a controlled foreign corporation (as defined in Section
957(a) of the Tax Code) and, in any event, shall not be required to pledge the
shares of stock of any Subsidiary otherwise required to he pledged pursuant to
this Agreement to the extent that such pledge would constitute an investment of
earnings in United States property under Section 956 (or a successor provision)
of the Tax Code, which investment would trigger an increase in the gross income
of a United States shareholder of such Pledgor pursuant to Section 951 (or a
successor provision) of the Tax Code.
"Pledged Securities" shall mean, collectively, the Pledged
Interests, the Pledged Shares and the Successor Interests, and shall in any
event include a pledge by Borrower of (i) 100% of its stock in Domestic
Subsidiaries (other than any Insignificant Domestic
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Subsidiaries) and (ii) 65% of its stock in Direct Foreign Subsidiaries (other
than Insignificant Direct Foreign Subsidiaries).
"Pledged Shares" shall mean, collectively, the Initial Pledged
Shares and the Additional Pledged Shares; provided, however, that such Pledgor
shall not be required to pledge shares possessing more than 65% of the voting
power of all classes of capital stock entitled to vote of any Subsidiary which
is a controlled foreign corporation (as defined in Section 957(a) of the Tax
Code) and, in any event, shall not be required to pledge the shares of stock of
any Subsidiary otherwise required to be pledged pursuant to this Agreement to
the extent that such pledge would constitute an investment of earnings in United
States property under Section 956 (or a successor provision) of the Tax Code,
which investment would trigger an increase in the gross income of a United
States shareholder of such Pledgor pursuant to Section 951 (or a successor
provision) of the Tax Code.
"Pledgor" shall have the meaning assigned to such term in the
Preamble hereof.
"Prior Liens" shall mean, collectively, the Liens identified
in Schedule 1.1(d) annexed to this Agreement relating to the items of Pledged
Collateral identified in such Schedule.
"Proceeds" shall mean, collectively, all "proceeds," as such
term is defined in the UCC or under other relevant law, and in any event shall
include, without limitation, any and all (i) proceeds of the conversion,
voluntary or involuntary, of the Pledged Collateral or any portion thereof into
cash or liquidated claims, (ii) proceeds of any insurance (except payments made
to a Person which is not a party to this Agreement), indemnity, warranty,
guaranty or claim payable to the Collateral Agent or to such Pledgor from time
to time with respect to any of the Pledged Collateral including, without
limitation, proceeds in respect of any and all Required Insurance Policies,
(iii) payments (in any form whatsoever) made or due and payable to such Pledgor
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any portion of the Pledged
Collateral by any Governmental Authority (or any Person acting on behalf of a
Governmental Authority), (iv) products of the Pledged Collateral and (v) other
amounts from time to time paid or payable under or in connection with any of the
Pledged Collateral.
"Property Insurance" shall mean, collectively, the insurance
policies and coverages described in clauses (A), (C) and (D) and, to the extent
applicable, clause (F) of Section 4 17(i) hereof.
"Prudent Operator" shall mean the standard of care taken by a
prudent operator of property and assets similar in use and configuration to the
Pledged Collateral and located in the locality where the Pledged Collateral is
located.
"Required Insurance Policies" means, collectively, with
respect to each Pledgor, the insurance policies and coverages maintained by such
Pledgor with respect to the Pledged Collateral pursuant to Section 4.16 hereof
and all renewals and extensions thereof.
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"Requirements of Law" shall mean, collectively, any and all
requirements of any Governmental Authority including, without limitation, any
and all laws, ordinances, rules, regulations or similar statutes or case law.
"Secured Obligations" shall mean all obligations (whether or
not constituting future advances, obligatory or otherwise) of the Borrower, any
Subsidiary and any and all of the other Loan Parties from time to time arising
under or in respect hereof, the Credit Agreement, the Interest Rate Protection
Agreements, the Hedging Agreements, the Cash Management Agreements and the other
Loan Documents (including, without limitation, the obligations to pay principal,
interest and all other charges, fees, expenses, commissions, reimbursements,
premiums, indemnities and other payments related to or in respect of the
obligations contained in this Agreement, the Credit Agreement, the Interest Rate
Protection Agreements, the Hedging Agreements, the Cash Management Agreements
and the other Loan Documents), in each case whether (i) such obligations are
direct or indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due whether at stated maturity, by acceleration or
otherwise, (ii) arising in the regular course of business or otherwise, (iii)
for payment or performance and/or (iv) now existing or hereafter arising
(including, without limitation, interest and other obligations arising or
accruing after the commencement of any bankruptcy, insolvency, reorganization or
similar proceeding with respect to any Loan Party, or which would have arisen or
accrued but for the commencement of such proceeding, even if such obligation or
the claim therefor is not enforceable or allowable in such proceeding);
provided, however, the Secured Obligations shall not include any extension,
re-issuance or redocumentation of any obligation to any Existing Issuer as
described in Exhibit 5.
"Secured Parties" shall have the meaning assigned to such term
in Recital H hereof.
"Securities Act" shall have the meaning assigned to such term
in Section 9.4(ii) hereof.
"Securities Collateral" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"Security Documents" shall have the meaning assigned to such
term in the Credit Agreement.
"Subsidiaries" shall have the meaning assigned to such term in
the Credit Agreement.
"Successor Interests" shall mean, collectively, with respect
to each Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company or partnership owned by such Pledgor (unless such successor is such
Pledgor itself) formed by or resulting from any consolidation or merger in which
any Person listed in Schedule 1.1(b) or Schedule 1.1(c) annexed hereto is not
the surviving entity; provided, however, that the pledge of the Successor
Interests affected hereby shall in no
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event affect the obligations of such Pledgor under any provision prohibiting
such action hereunder or under the Credit Agreement.
"Tax Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided, however, that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any item or portion of the Pledged
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.
SECTION 1.2 Interpretation. In this Agreement, unless
otherwise specified, (i) singular words include the plural and plural words
include the singular, (ii) words importing any gender include the other gender,
(iii) references to any Person include such Person's successors and assigns and
in the case of an individual, the word "successors" includes such Person's
heirs, devisees, legatees, executors, administrators and personal
representatives, (iv) references to any statute or other law include all
applicable rules, regulations and orders adopted or made thereunder and all
statutes or other laws amending, consolidating or replacing the statute or law
referred to, (v) the words "consent," "approve" and "agree," and derivations
thereof or words of similar import, mean the prior written consent, approval or
agreement of the Person in question, (vi) the words "include" and "including,"
and words of similar import, shall be deemed to be followed by the words
"without limitation", (vii) the words "hereto," "herein," "hereof" and
"hereunder," and words of similar import, refer to this Agreement in its
entirety, (viii) unless otherwise expressly indicated, references to Articles,
Sections, Schedules, Exhibits, subsections, paragraphs and clauses are to the
Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses
hereof, (ix) the Schedules and Exhibits to this Agreement, in each case as
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with the provisions hereof are incorporated herein by
reference, (x) the titles and headings of Articles, Sections, Schedules,
Exhibits, subsections, paragraphs and clauses are inserted as a matter of
convenience only and shall not affect the construction of any provisions hereof
and (xi) all obligations of each Pledgor hereunder shall be satisfied by each
Pledgor at each Pledgor's sole cost and expense.
SECTION 1.3 Resolution of Drafting Ambiguities. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Collateral Agent) shall not be employed in the
interpretation hereof.
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ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1 Pledge. As collateral security for the payment and
performance in full of all the Secured Obligations, each Pledgor hereby pledges,
assigns, transfers and grants to the Collateral Agent for its benefit and for
the benefit of the Secured Parties, a security interest in and to and pledge of
all of the right, title and interest of such Pledgor in, to and under the
following property, wherever located, whether now existing or hereafter arising
or acquired from time to time (collectively, the "Pledged Collateral"):
(i) Accounts;
(ii) Inventory;
(iii) Documents;
(iv) Instruments;
(v) Chattel Paper;
(vi) Pledged Securities;
(vii) Distributions;
(viii) General Intangibles;
(ix) Bank Accounts;
(x) Intercompany Notes;
(xi) Collateral Account; and
(xii) Proceeds of any and all of the foregoing; and
(xiii) all books and records relating to the Pledged
Collateral.
SECTION 2.2 Secured Obligations. This Agreement secures, and
the Pledged Collateral is collateral security for, the payment and performance
in full when due of the Secured Obligations.
SECTION 2.3 Future Advances. This Agreement shall secure the
payment of any and all amounts advanced from time to time pursuant to the Loan
Documents, the Interest Rate Protection Agreements, the Hedging Agreements and
the Cash Management Agreements.
SECTION 2.4 No Release. Nothing set forth in this Agreement
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such
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Pledgor's part to be performed or observed under or in respect of any of the
Pledged Collateral or from any liability to any Person under or in respect of
any of the Pledged Collateral or shall impose any obligation on the Collateral
Agent or any other Secured Party to perform or observe any such term, covenant,
condition or agreement on such Pledgor's part to be so performed or observed or
shall impose any liability on the Collateral Agent or any other Secured Party
for any act or omission on the part of such Pledgor relating thereto or for any
breach of any representation or warranty on the part of such Pledgor contained
in this Agreement, any Interest Rate Protection Agreement, the Hedging
Agreements, the Cash Management Agreements or any other Loan Document, or under
or in respect of the Pledged Collateral or made in connection herewith or
therewith. The obligations of each Pledgor contained in this Section 2.4 shall
survive the termination hereof and the discharge of such Pledgor's other
obligations under this Agreement, any Interest Rate Protection Agreement, the
Hedging Agreements, the Cash Management Agreements and the other Loan Documents.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1 Delivery of Certificated Securities Collateral.
All certificates, agreements or instruments representing or evidencing the
Securities Collateral, to the extent not previously delivered to the Collateral
Agent, shall immediately upon receipt thereof by any Pledgor be delivered to and
held by or on behalf of the Collateral Agent pursuant hereto provided, however,
such delivery shall not be required to the extent prohibited under the laws of
the jurisdiction of organization of such issuer and shall not be required until
such time as all acts necessary to effect a perfected first priority security
interest in and lien on such Security Collateral under the laws of the
jurisdiction of organization of such issuer of such Pledged Security shall have
been taken as required pursuant to Section 4.03 of the Credit Agreement. All
certificated Securities Collateral shall be in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank (or the foreign equivalent to the extent required under the
laws of the jurisdiction of organization of the issuer of such Pledged
Security), all in form and substance reasonably satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default, to endorse,
assign or otherwise transfer to or to register in the name of the Collateral
Agent or any of its nominees or endorse for negotiation any or all of the
Securities Collateral, without any indication that such Securities Collateral is
subject to the security interest hereunder. In addition, the Collateral Agent
shall have the right at any time to exchange certificates representing or
evidencing Securities Collateral for certificates of smaller or larger
denominations.
SECTION 3.2 Perfection of Uncertificated Securities
Collateral. If any issuer of Pledged Securities is organized in a jurisdiction
which does not permit the use of certificates to evidence equity ownership, or
if any of the Pledged Securities are at any time not evidenced by certificates
of ownership, then each applicable Pledgor shall, to the extent permitted by
applicable law, record such pledge on the equityholder register or the books of
the issuer, cause the issuer to execute and deliver to the Collateral Agent an
acknowledgment of the
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pledge of such Pledged Securities substantially in the form of Exhibit 1 annexed
hereto, execute any customary pledge forms or other documents necessary or
appropriate to complete the pledge and give the Collateral Agent the right to
transfer such Pledged Securities under the terms hereof and provide to the
Collateral Agent an opinion of counsel, in form and substance satisfactory to
the Collateral Agent, confirming such pledge and perfection thereof.
SECTION 3.3 Financing Statements and Other Filings. The only
filings, registrations and recordings necessary and appropriate to create,
preserve, protect and perfect the security interest granted by each Pledgor to
the Collateral Agent pursuant to this Agreement in respect of the Pledged
Collateral are listed in Schedule 3.3 annexed hereto. Except as otherwise
provided by Section 4.03 of the Credit Agreement, all such filings,
registrations and recordings have been filed, registered and recorded
contemporaneously with the execution of the Loan Documents or shall be filed,
registered and recorded immediately after the date thereof. Each Pledgor agrees
that at any time and from time to time, it will execute and, at the sole cost
and expense of the Pledgors file and refile, or permit the Collateral Agent to
file and refile, such financing statements, financing statement amendments,
continuation statements and other documents (including, without limitation, this
Agreement), in form acceptable to the Collateral Agent, in such offices as may
be necessary or the Collateral Agent may deem reasonably appropriate, wherever
required or permitted by law in order to perfect, continue and maintain a valid,
enforceable, first priority security interest in the Pledged Collateral as
provided herein and to preserve the other rights and interests granted to the
Collateral Agent hereunder, as against third parties, with respect to any
Pledged Collateral. Each Pledgor hereby authorizes the Collateral Agent to file
any such financing, amendment or continuation statement or other document
without the signature of such Pledgor where permitted by law.
SECTION 3.4 Joinder of Affiliates. The Pledgors shall cause
each Affiliate of the Borrower which, from time to time, after the date hereof
shall be required to pledge any assets to the Collateral Agent for the benefit
of the Secured Parties pursuant to the provisions of the Credit Agreement, to
execute and deliver to the Collateral Agent a joinder agreement substantially in
the form of Exhibit 3 annexed hereto and, upon such execution and delivery, such
Affiliate shall be deemed to be a "Guarantor" and a "Pledgor" for all purposes
hereunder.
SECTION 3.5 Intellectual Property. After an Event of Default
has occurred and is continuing, each Pledgor hereby grants to the Collateral
Agent the right to the use of all Intellectual Property, to the extent necessary
to permit the Collateral Agent to exercise any and all rights and remedies
relating to the Pledged Collateral provided for under this Agreement. The rights
described in this Section 3.5 shall be without any liability for royalties or
other related charges from the Collateral Agent to the Pledgors. Each of the
Pledgors hereby acknowledges that such Pledgor has, pursuant to this Agreement,
granted to the Collateral Agent, the rights described in the foregoing
provisions of this Section 3.5. Notwithstanding the foregoing, the license
granted under this Section 3.5 shall not include any license agreement which by
its terms prohibits the granting of such license (only to the extent that such
agreement effectively prohibits, within the meaning of Section 9-408 of the UCC,
the grant contemplated by the Section 3.5) until such time as the applicable
Pledgor shall have obtained consent to the granting thereof, provided, that each
applicable Pledgor shall use its commercially reasonable efforts
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promptly to obtain consent to the granting of such license to the Collateral
Agent, and at such time such consent is obtained, such license shall be included
in the license granted hereunder.
SECTION 3.6 Supplements; Further Assurances. Each Pledgor
agrees to take such further actions, and to execute and deliver to the
Collateral Agent such additional assignments, agreements, supplements, powers
and instruments, as may be necessary or the Collateral Agent may deem reasonably
appropriate, wherever required or permitted by law, in order to perfect,
preserve and protect the security interest in the Pledged Collateral as provided
herein and the rights and interests granted to the Collateral Agent hereunder,
to carry into effect the purposes hereof or better to assure and confirm unto
the Collateral Agent or permit the Collateral Agent to exercise and enforce its
respective rights, powers and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, each Pledgor shall
make, execute, endorse, acknowledge, file or refile and/or deliver to the
Collateral Agent from time to time such lists, descriptions and designations of
the Pledged Collateral, copies of warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments, all as may
be necessary or otherwise reasonably requested by the Collateral Agent to carry
out the intent of this Agreement. After providing notice to the Pledgors and the
Pledgors failing to promptly take such action requested, the Collateral Agent
may institute and maintain, in its own name or in the name of any Pledgor, such
suits and proceedings as the Collateral Agent may be advised by counsel shall be
necessary or expedient to prevent any impairment of the security interest in or
the perfection thereof in the Pledged Collateral. All of the foregoing shall be
at the sole cost and expense of the Pledgors.
SECTION 3.7 Use and Pledge of Pledged Collateral. Unless an
Event of Default shall have occurred and be continuing, the Collateral Agent
shall from time to time execute and deliver, upon written request of any Pledgor
and at the sole cost and expense of the Pledgors, any and all instruments,
certificates or other documents, in a form reasonably requested by such Pledgor,
necessary or appropriate in the reasonable judgment of such Pledgor to enable
such Pledgor to continue to exploit, license, use, enjoy and protect the Pledged
Collateral in accordance with the terms hereof and the Credit Agreement. The
Pledgors and the Collateral Agent acknowledge that this Agreement is intended to
grant to the Collateral Agent for the benefit of the Secured Parties a security
interest in and Lien upon the Pledged Collateral and shall not constitute or
create a present assignment of any of the Pledged Collateral.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants as follows:
SECTION 4.1 Payment. Such Pledgor shall pay as and when the
same shall become due, whether at its stated maturity, by acceleration or
otherwise, each and every amount payable by such Pledgor under the Loan
Documents, the Interest Rate Protection
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Agreements, the Hedging Agreements and the Cash Management Agreements each in
accordance with the terms thereof (subject to any applicable grace or cure
periods provided therein).
SECTION 4.2 Authority and Validity; Preservation of Corporate
Existence.
(i) Such Pledgor represents and warrants that (A) it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (B) it is duly qualified to transact business
and is in good standing in each state in which the Pledged Collateral is
located, except those states where failure to be so qualified, together with all
such failures for all Pledgors, could not reasonably be expected to result in a
Material Adverse Effect, (C) it has full organizational power and lawful
authority to execute and deliver this Agreement and to pledge the Pledged
Collateral as contemplated herein, and all corporate governmental actions,
consents, authorizations and approvals necessary or required therefor have been
duly and effectively taken or obtained, except for any recordings and notices to
any applicable Governmental Authority with respect to pledges of the Pledged
Securities in Direct Foreign Subsidiaries which are to be obtained at a later
date in accordance with Section 4.03 of the Credit Agreement, and (D) this
Agreement is a legal, valid and binding obligation of such Pledgor, enforceable
against such Pledgor in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally and by equitable
principles of general applicability (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(ii) Such Pledgor shall (A) preserve and maintain in full
force and effect its existence and good standing under the laws of the
jurisdiction of its organization, (B) preserve and maintain in full force and
effect its qualification to transact business and good standing in the state in
which the Pledged Collateral is located and (C) preserve and maintain in full
force and effect all consents, authorizations and approvals necessary or
required of any Governmental Authority or any other Person relating to the
execution, delivery and performance hereof.
SECTION 4.3 Perfection Actions; Prior Liens. Upon the
completion of the deliveries, filings and other actions contemplated in Section
3.1 through Section 3.3 hereof, the security interest granted to the Collateral
Agent for the benefit of the Secured Parties pursuant to this Agreement in and
to the Pledged Collateral will constitute a perfected, continuing first priority
security interest therein, superior and prior to the rights of all other Persons
therein other than with respect to the holders of (i) Prior Liens and (ii)
Contested Liens.
SECTION 4.4 Limitation on Liens. Such Pledgor is as of the
date hereof, and, as to Pledged Collateral acquired by it from time to time
after the date hereof, such Pledgor will be, the sole direct and beneficial
owner of all Pledged Collateral pledged by it hereunder free from any Lien or
other right, title or interest of any Person other than Permitted. Pledgor shall
defend the Pledged Collateral pledged by it hereunder against all claims and
demands of all Persons at any time claiming any interest therein adverse to the
Collateral Agent or any other Secured Party except for Permitted Liens. There is
no agreement, and no Pledgor shall enter into any agreement or take any other
action, that would result in the imposition of any other Lien,
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restrict the transferability of any of the Pledged Collateral or otherwise
impair or conflict with such Pledgors' obligations or the rights of the
Collateral Agent hereunder.
SECTION 4.5 Other Financing Statements. There is no (nor will
there be any) valid or effective financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Pledged Collateral other
than financing statements relating to Permitted Liens, and so long as any of the
Secured Obligations remain unpaid or the Commitments of the Lenders to make any
Loan or to issue any Letter of Credit shall not have expired or been sooner
terminated, no Pledgor shall execute, authorize or permit to be filed in any
public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to any
Pledged Collateral, except, in each case, financing statements filed or to be
filed in respect of and covering the security interests granted by such Pledgor
to the holder of the Permitted Liens.
SECTION 4.6 Jurisdiction of Organization; Chief Executive
Office; Records; Change of Name. As of the date hereof, the chief executive
office, jurisdiction of organization and type of organization (together with the
organizational identification number, if any, issued by the applicable
jurisdiction with respect to such Pledgor) of such Pledgor is located at the
address indicated next to its name in Schedules 1(a) and 2(a) annexed to the
Perfection Certificate. Such Pledgor shall not move its chief executive office
to any location other than one within the continental United States that is
listed in such Schedule 2(a) annexed to the Perfection Certificate except to
such new location as such Pledgor may establish in accordance with the last
sentence of this Section 4.6. All tangible evidence of all Accounts and General
Intangibles of such Pledgor and the only original books of account and records
of such Pledgor relating thereto are, and will continue to be, kept at such
chief executive office or such other location listed in Schedule 2(a) annexed to
the Perfection Certificate, or at such new location for such chief executive
office as such Pledgor may establish in accordance with the last sentence of
this Section 4.6. All Accounts and General Intangibles of such Pledgor are, and
will continue to be, controlled and monitored (including, without limitation,
for general accounting purposes) from such chief executive office or such other
location listed in Schedule 2(a) annexed to the Perfection Certificate, or at
such new location for such chief executive office as such Pledgor may establish
in accordance with the last sentence of this Section 4.6. Such Pledgor shall not
establish a new location for its chief executive office to any location other
than one within the continental United States that is listed in Schedule 2(a)
annexed to the Perfection Certificate or change its name, identity or structure
or jurisdiction of organization until (i) it shall have given the Collateral
Agent not less than 30 days' prior written notice (in the form of an Officers'
Certificate) of its intention so to do, clearly describing such new location
within the continental United States or name, identity, structure or
jurisdiction and providing such other information in connection therewith as the
Collateral Agent may request and (ii) with respect to such new location or name,
identity, structure or jurisdiction, such Pledgor shall have taken all action
reasonably satisfactory to the Collateral Agent to maintain the perfection and
priority of the security interest of the Collateral Agent for the benefit of the
Secured Parties in the Pledged Collateral intended to be granted hereby,
including, without limitation, using commercially reasonably efforts to obtain
waivers of landlord's or warehouseman's liens with respect to such new location,
if applicable.
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SECTION 4.7 Location of Inventory. All Inventory of such
Pledgor are located at the chief executive office or such other location listed
in Schedules 2(c), 2(d) and 2(e) annexed to the Perfection Certificate. Other
than in connection with sales of Inventory in the ordinary course of Pledgor's
business, such Pledgor shall not move any Inventory to any location other than
one within the continental United States that is listed in such Schedules 2(c),
2(d) and 2(e) annexed to the Perfection Certificate until (i) it shall have
given the Collateral Agent not less than 30 days' prior written notice (in the
form of an Officers' Certificate) of its intention so to do, clearly describing
such new location within the continental United States and providing such other
information in connection therewith as the Collateral Agent may request and (ii)
with respect to such new location, such Pledgor shall have taken all action
reasonably satisfactory to the Collateral Agent to maintain the perfection and
priority of the security interest of the Collateral Agent for the benefit of the
Secured Parties in the Pledged Collateral intended to be granted hereby,
including, without limitation, using commercially reasonable efforts to obtain
waivers of landlord's or warehouseman's liens with respect to such new location,
if applicable.
SECTION 4.8 Warehouse Receipts Non-Negotiable. If any
warehouse receipt or receipt in the nature of a warehouse receipt is issued with
respect to any of the Pledged Collateral, the applicable Pledgor shall not
permit such warehouse receipt or receipt in the nature thereof to be
"negotiable" (as such term is used in Section 7-104 of the UCC).
SECTION 4.9 Corporate Names; Prior Transactions. Such Pledgor
has not, during the past five years, been known by or used any other corporate
or fictitious name or been a party to any merger or consolidation, or acquired
all or substantially all of the assets of any Person, or acquired any of its
property or assets out of the ordinary course of business, except as set forth
in Schedules l(c) and 3 annexed to the Perfection Certificate.
SECTION 4.10 Due Authorization and Issuance. All of the
Pledged Shares have been, and to the extent hereafter issued will be upon such
issuance, duly authorized, validly issued and fully paid and nonassessable. All
of the Initial Pledged Interests have been fully paid for, and there is no
amount or other obligation owing by any Pledgor to any issuer of the Initial
Pledged Interests in exchange for or in connection with the issuance of the
Initial Pledged Interests or any Pledgor's status as a partner or a member of
any issuer of the Initial Pledged Interests.
SECTION 4.11 No Violations, etc. The pledge of the Pledged
Securities pursuant to this Agreement does not violate Regulations T, U or X of
the Federal Reserve Board.
SECTION 4.12 No Options, Warrants, etc. There are no options,
warrants, calls, rights, commitments or agreements of any character to which
such Pledgor is a party or by which it is bound obligating such Pledgor to
issue, deliver or sell or cause to be issued, delivered or sold additional
Pledged Securities or obligating such Pledgor to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. There are no voting
trusts or other agreements or understandings to which such Pledgor is a party
with respect to the transfer, voting or exercise of any other right of the
equity interests of any issuer of the Pledged Securities.
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SECTION 4.13 No Claims. Such Pledgor owns or has rights to use
all of the Pledged Collateral pledged by it hereunder and all rights with
respect to any of the foregoing used in, necessary for or material to such
Pledgor' s business as currently conducted and as contemplated to be conducted
pursuant to the Loan Documents. The use by such Pledgor of such Pledged
Collateral and all such rights with respect to the foregoing do not infringe on
the rights of any Person, except for such infringement, violation or conflict
which could not be reasonably expected to have a Material Adverse Effect. No
claim has been made and remains outstanding that such Pledgor's use of any
Pledged Collateral does or may violate the rights of any third Person that would
have a Material Adverse Effect.
SECTION 4.14 No Conflicts, Consents, etc. Neither the
execution and delivery hereof by each Pledgor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof (i)
violates any Operative Agreement of such Pledgor or any issuer of Pledged
Securities, (ii) violates the terms of any agreement, indenture, mortgage, deed
of trust, equipment lease, instrument or other document to which such Pledgor is
a party, or by which it may be bound or to which any of its properties or assets
may be subject, except for such infringement, violation or conflict which could
not be reasonably expected to have a Material Adverse Effect, (iii) conflicts
with any Requirement of Law applicable to any such Pledgor or its property, or
(iv) results in or requires the creation or imposition of any Lien (other than
the Lien contemplated hereby) upon or with respect to any of the property now
owned or hereafter acquired by such Pledgor. No consent of any party (including,
without limitation, equityholders or creditors of such Pledgor or any account
debtor under an Account) and no consent, authorization, approval, license or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body or other Person is required for (A) the pledge by such Pledgor
of the Pledged Collateral pledged by it pursuant to this Agreement or for the
execution, delivery or performance hereof by such Pledgor, except as set forth
in Schedule 4.14 annexed hereto, (B) the exercise by the Collateral Agent of the
voting or other rights provided for in this Agreement or (C) the exercise by the
Collateral Agent of the remedies in respect of the Pledged Collateral pursuant
to this Agreement. With respect to each consent, authorization, approval,
license or other action described in Schedule 4.14 annexed hereto, such Pledgor
shall use its commercially reasonable efforts to cause the counterparty with
respect thereto to deliver such consent, authorization, approval or license or
otherwise cause such other action to be taken within 30 days after the date
hereof or otherwise in accordance with Section 4.03 of the Credit Agreement;
provided, however, that such Pledgor shall in no event be required to pay or
cause to be paid any remuneration to any such counterparty in order to obtain
such consent, authorization, approval or licenses to the extent that it would be
commercially unreasonable so to do. In the event that the Collateral Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
Person therefor, then, upon the reasonable request of the Collateral Agent, such
Pledgor agrees to use its commercially reasonable efforts to assist and aid the
Collateral Agent to obtain as soon as practicable any necessary approvals or
consents for the exercise of any such remedies, rights and powers.
SECTION 4.15 Pledged Collateral. All information set forth
herein, including the schedules annexed hereto, and all information contained in
any documents, schedules and lists heretofore delivered to any Secured Party in
connection with this Agreement
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(including, without limitation, the Perfection Certificate), in each case,
relating to the Pledged Collateral, is accurate and complete in all material
respects. The Pledged Collateral described on the schedules annexed hereto
constitutes all of the property of such type of Pledged Collateral owned or held
by the Pledgors and required to be pledged pursuant to this Agreement and the
Credit Agreement.
SECTION 4.16 Insurance; Condemnation.
(i) Required Insurance Policies and Coverages. No Pledgor
shall take any action that impairs the rights of the Collateral Agent or any
Secured Party in the Pledged Collateral and (A) as of the date hereof, the
Pledged Collateral and the use thereof comply with all applicable Insurance
Requirements, and there exists no default under any Insurance Requirement, (B)
all premiums due and payable with respect to the Required Insurance Policies
have been paid, (C) all Insurance Policies are in full force and effect and such
Pledgor has not received notice of violation or cancellation thereof and (D) all
Insurance Policies or Insurance Certificates required to be delivered pursuant
to Section 4.02(i) of the Credit Agreement have been delivered to the Collateral
Agent in form satisfactory to the Collateral Agent. Each Pledgor shall at all
times keep the Pledged Collateral insured, at such Pledgor's own expense, to the
Collateral Agent's reasonable satisfaction against fire, theft and all other
risks to which the Pledged Collateral may be subject, in such amounts and with
such deductibles as would be maintained by a Prudent Operator or as the
Collateral Agent may otherwise require, including, without limitation, the
following insurance policies and coverages:
(A) physical hazard insurance on an "all risk" basis
covering, without limitation, hazards commonly covered by fire and
extended coverage, lightning, windstorm, civil commotion, hail, riot,
strike, water damage, sprinkler leakage, collapse and malicious
mischief, in an amount equal to the Full Replacement Cost of the
Inventory;
(B) commercial general liability insurance against claims
for bodily injury, death or property damage occurring on, in or about
the Pledged Collateral, and covering any and all claims, including,
without limitation, all legal liability to the extent insurable imposed
upon the Collateral Agent and all court costs and attorneys' fees,
arising out of or in connection with the possession, use or condition
of the Pledged Collateral;
(C) explosion insurance in respect of any boilers,
machinery and similar apparatus used in the production of, located near
or otherwise effecting the Inventory;
(D) business interruption insurance;
(E) worker's compensation insurance as required by the
laws of the state where the Pledged Collateral is located to protect
such Pledgor and the Collateral Agent against claims for injuries
sustained in the course of employment at the premises of such Pledgor;
and
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(F) such other insurance against risks as the Collateral
Agent may from time to time reasonably require.
(ii) Required Form of Insurance Policies. Each Insurance
Policy described in clause (i) of this Section 4.16 shall provide that:
(A) it may not be modified, reduced, canceled or
otherwise terminated without at least thirty (30) days' prior written
notice to the Collateral Agent;
(B) the Collateral Agent is permitted to pay any premium
therefor within thirty (30) days after receipt of any notice stating
that such premium has not been paid when due;
(C) all losses thereunder shall be payable
notwithstanding any act or negligence of such Pledgor or its agents or
employees which otherwise might have resulted in a forfeiture of all or
a part of such insurance payments;
(D) to the extent such Insurance Policy constitutes
Property Insurance relating to Inventory, all losses payable thereunder
shall be payable to the Collateral Agent, as loss payee, pursuant to a
standard non-contributory New York mortgagee endorsement and shall be
in an amount at least sufficient to prevent coinsurance liability; and
(E) with respect to Liability Insurance, the Collateral
Agent shall be named as an additional insured.
(iii) Settlements. Settlement of any claim under any of the
Required Insurance Policies, if such claim involves any loss in excess of
$500,000 (in the reasonable judgment of the Collateral Agent), shall require the
prior written approval of the Collateral Agent, and such Pledgor shall cause
each such policy to contain a provision to such effect.
(iv) Renewals. At least ten (10) days prior to the
expiration of any Required Insurance Policy, such Pledgor shall deliver to the
Collateral Agent a Required Insurance Policy or Policies renewing or extending
such expiring Required Insurance Policy or Policies, renewal or extension
Insurance Certificates or other reasonable evidence of renewal or extension
providing that the Insurance Policies are in full force and effect.
(v) Additional Insurance. Such Pledgor shall not purchase
separate insurance policies concurrent in form or contributing in the event of
loss with those Required Insurance Policies required to be maintained under this
Section 4.16, unless the Collateral Agent is included thereon as an additional
insured and, if applicable, with loss payable to the Collateral Agent under an
endorsement containing the provisions described in clause (ii) of this Section
4.16. Such Pledgor shall immediately notify the Collateral Agent whenever any
such separate insurance policy is obtained and shall promptly deliver to the
Collateral Agent the Required Insurance Policy or Insurance Certificate
evidencing such insurance.
(vi) Blanket Coverage. Such Pledgor may maintain the
coverages required by clause (i) of this Section 4.16 under blanket policies
covering the Pledged Collateral and other
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property owned or operated by such Pledgor or an Affiliate of such Pledgor if
the terms of such blanket policies otherwise comply with the provisions of
clause (i) of this Section 4.16 and contain specific coverage allocations in
respect of the Inventory complying with the provisions of clause (i) of this
Section 4.16.
SECTION 4.17 Payment of Taxes; Compliance with Laws;
Contesting Liens; Claims. Each Pledgor represents and warrants that all Charges
imposed upon or assessed against the Pledged Collateral have been paid and
discharged except to the extent such Charges constitute a Lien not yet due and
payable or constitute Contested Liens. Each Pledgor shall pay prior to the date
on which any penalties would attach thereto all Charges against the Pledged
Collateral. Each Pledgor shall comply with all Requirements of Law applicable to
the Pledged Collateral the failure to comply with which would have a Material
Adverse Effect. Notwithstanding the foregoing, each Pledgor may at its own
expense contest the validity, amount or applicability of any Charges pursuant to
the provisions of Section 6.02 of the Credit Agreement.
SECTION 4.18 Access to Pledged Collateral, Books and Records;
Other Information. Upon reasonable notice to each Pledgor, the Collateral Agent,
its agents, accountants and attorneys shall have full and free access to visit
and inspect, as applicable, during normal business hours and such other
reasonable times as may be reasonably requested by the Collateral Agent, all of
the Pledged Collateral including, without limitation, all of the books,
correspondence and records of such Pledgor relating thereto. The Collateral
Agent and its representatives may examine the same, take extracts therefrom and
make photocopies thereof, and such Pledgor agrees to render to the Collateral
Agent, at such Pledgor's cost and expense, such clerical and other assistance as
may be requested by the Collateral Agent with regard thereto. Such Pledgor
shall, at any and all times, within a reasonable time after written request by
the Collateral Agent, furnish or cause to be furnished to the Collateral Agent,
in such manner and in such detail as may be reasonably requested by the
Collateral Agent, additional information with respect to the Pledged Collateral.
ARTICLE V
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 5.1 Special Representations and Warranties. As of the
time when each of its Accounts arises, each Pledgor shall be deemed to have
represented and warranted that such Account and all records, papers and
documents relating thereto (i) are genuine and correct and in all material
respects what they purport to be, (ii) represent the legal, valid and binding
obligation of the account debtor, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles relating
to enforceability, evidencing amounts unpaid and owed by such account debtor,
arising out of the performance of labor or services or the sale or lease and
delivery of the merchandise listed therein or out of an advance or a loan, not
subject to the fulfillment of any contract or condition whatsoever or to any
defenses, set-offs or counterclaims except with respect to refunds, returns and
allowances in the ordinary course of business, or stamp or other taxes, (iii)
will, in the case of an Account, except for the
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original or duplicate original invoice sent to a purchaser evidencing such
purchaser's account, be the only original writings evidencing and embodying such
obligation of the account debtor named therein and (iv) are in compliance and
conform with all applicable federal, state and local laws and applicable laws of
any relevant foreign jurisdiction except where the failure to so comply or
conform could not be reasonably expected to have a Material Adverse Effect.
SECTION 5.2 Maintenance of Records. Each Pledgor shall keep
and maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including, without limitation,
records of all payments received, all credits granted thereon, all merchandise
returned and all other documentation relating thereto. Each Pledgor shall, at
such Pledgor's sole cost and expense, upon the Collateral Agent's demand made at
any time after the occurrence and during the continuance of any Event of
Default, deliver all tangible evidence of Accounts, including, without
limitation, all documents evidencing Accounts and any books and records relating
thereto, to the Collateral Agent or to its representatives (copies of which
evidence and books and records may be retained by such Pledgor). Upon the
occurrence and during the continuance of any Event of Default, the Collateral
Agent may transfer a full and complete copy of any Pledgor's books, records,
credit information, reports, memoranda and all other writings relating to the
Accounts to and for the use by any Person that has acquired or is contemplating
acquisition of an interest in the Accounts or the Collateral Agent's security
interest therein without the consent of any Pledgor but subject to the
confidentiality provisions of the Credit Agreement.
SECTION 5.3 Legend. Each Pledgor shall legend, at the request
of the Collateral Agent made at any time after the occurrence of any Event of
Default and in form and manner satisfactory to the Collateral Agent, the
Accounts and the other books, records and documents of such Pledgor evidencing
or pertaining to the Accounts with an appropriate reference to the fact that the
Accounts have been pledged to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.
SECTION 5.4 Modification of Terms, etc. No Pledgor shall
rescind or cancel any indebtedness evidenced by any Account or modify any term
thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or renew
any such indebtedness except in the ordinary course of business consistent with
prudent business practice or compromise or settle any dispute, claim, suit or
legal proceeding relating thereto except in the ordinary course of business
consistent with prudent business practice or sell any Account or interest
therein without the prior written consent of the Collateral Agent. Each Pledgor
shall timely fulfill all obligations on its part to be fulfilled under or in
connection with the Accounts.
SECTION 5.5 Collection. Each Pledgor shall cause to be
collected from the account debtor of each of the Accounts, as and when due
(including, without limitation, Accounts that are delinquent, such Accounts to
be collected in accordance with generally accepted commercial collection
procedures), any and all amounts owing under or on account of such Account, and
apply forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account, except that any Pledgor may, with respect
to an Account, allow in the ordinary course of business (i) a refund or credit
due as a result of returned
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or damaged or defective merchandise and (ii) such extensions of time to pay
amounts due in respect of Accounts and such other modifications of payment terms
or settlements in respect of Accounts as shall be commercially reasonable in the
circumstances, all in accordance with such Pledgor's ordinary course of business
consistent with its collection practices as in effect from time to time. The
costs and expenses (including, without limitation, attorneys' fees) of
collection, in any case, whether incurred by any Pledgor and after an Event of
Default should have occurred and be continuing, the Collateral Agent or any
Secured Party, shall be paid by the Pledgors.
SECTION 5.6 Instruments. Each Pledgor shall deliver to the
Collateral Agent, within ten days after receipt thereof by such Pledgor, any
Instrument evidencing Accounts which is in the principal amount of $200,000 or
more. Any Instrument delivered to the Collateral Agent pursuant to this Section
5.6 shall be appropriately endorsed (if applicable) to the order of the
Collateral Agent, as agent for the Secured Parties, and shall be held by the
Collateral Agent as further security hereunder; provided, however, that so long
as no Event of Default shall have occurred and be continuing, the Collateral
Agent shall, promptly upon request of such Pledgor, make appropriate
arrangements for making any Instrument pledged by such Pledgor available to such
Pledgor for purposes of presentation, collection or renewal (any such
arrangement to be effected, to the extent deemed appropriate by the Collateral
Agent, against trust receipt or like document).
SECTION 5.7 Payment into Lockboxes. After the occurrence of a
Default and upon the request of the Collateral Agent, each Pledgor shall cause
all payments in respect of the Accounts to be deposited into Lockboxes and
otherwise comply with the provisions of Section 7.3 hereof. The costs and
expenses (including, without limitation, reasonable attorneys' fees) of
collection, whether incurred by the Collateral Agent or any Secured Party, shall
be paid by the Pledgors.
ARTICLE VI
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 6.1 Pledge of Additional Securities Collateral. Each
Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of
any Person required to be Pledged to the Collateral Agent for the benefit of the
Lenders pursuant to the provisions of Section 5.11 of the Credit Agreement or
this Agreement, accept the same in trust for the benefit of the Collateral Agent
and promptly (and in any event within five Business Days) deliver to the
Collateral Agent a pledge amendment, duly executed by such Pledgor, in
substantially the form of Exhibit 2 annexed hereto (each, a "Pledge Amendment"),
and the certificates and other documents required under Section 3.1 and Section
3.2 hereof in respect of the additional Pledged Securities or Intercompany Notes
which are to be pledged pursuant to this Agreement or the Credit Agreement, and
confirming the attachment of the Lien hereby created on and in respect of such
additional Pledged Securities or Intercompany Notes. Each Pledgor hereby
authorizes the Collateral Agent to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Securities or Intercompany Notes listed on
any Pledge Amendment delivered to the Collateral Agent shall for all purposes
hereunder be considered Pledged Collateral.
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SECTION 6.2 Voting Rights; Distributions, etc.
(i) So long as no Event of Default shall have occurred
and be continuing:
(A) Each Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with
the terms or purposes hereof or any other Loan Document; provided,
however, that no Pledgor shall in any event exercise such rights in any
manner which may have an adverse effect on the value of the Pledged
Collateral or the Lien and security interest intended to be granted to
the Collateral Agent hereunder.
(B) Each Pledgor shall be entitled to receive and retain,
and to utilize free and clear of the Lien hereof, any and all
Distributions, but only if and to the extent made in accordance with
the provisions of the Credit Agreement; provided, however, that any and
all such Distributions consisting of rights or interests in the form of
securities shall be forthwith delivered to the Collateral Agent to hold
as Pledged Collateral and shall, if received by any Pledgor, be
received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of such Pledgor and be
forthwith delivered to the Collateral Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement);
provided, further, however, that no Pledgor shall be so required to
pledge any Distributions consisting of rights or interests in the form
of securities if such pledge shall result in the Collateral Agent
possessing more than 65% of the voting power of all classes of capital
stock entitled to vote of any Subsidiary which is a controlled foreign
corporation (as defined in Section 957(a) of the Tax Code) or would
constitute an investment of earnings in United States property under
Section 956 (or a successor provision) of the Tax Code, which
investment would trigger an increase in the gross income of a United
States shareholder of such Pledgor pursuant to Section 951 (or a
successor provision) of the Tax Code.
(C) The Collateral Agent shall be deemed without further
action or formality to have granted to each Pledgor all necessary
consents relating to voting rights and shall, if necessary, upon
written request of any Pledgor and at the sole cost and expense of the
Pledgors, from time to time execute and deliver (or cause to be
executed and delivered) to such Pledgor all such instruments as such
Pledgor may reasonably request in order to permit such Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to Section 6.2(i)(A) hereof and to receive the Distributions
which it is authorized to receive and retain pursuant to Section
6.2(i)(B) hereof.
(ii) Upon the occurrence and during the continuance of any
Event of Default:
(A) All rights of each Pledgor to exercise the voting and
other consensual rights it would otherwise be entitled to exercise
pursuant to Section 6.2(i)(A) hereof without any action or the giving
of any notice shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall thereupon have the sole
right to exercise such voting and other consensual rights.
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(B) All rights of each Pledgor to receive Distributions
which it would otherwise be authorized to receive and retain pursuant
to Section 6.2(i)(B) hereof shall cease and all such rights shall
thereupon become vested in the Collateral Agent, which shall thereupon
have the sole right to receive and hold as Pledged Collateral such
Distributions; provided, however, that no Pledgor shall be so required
to pledge any Distributions consisting or rights of interest in the
form of securities if such pledge shall result in the Collateral Agent
possessing more than 65% of the voting power of all classes of capital
stock entitled to vote of any Subsidiary which is a controlled foreign
corporation (as defined in Section 957(a) of the Tax Code) or would
constitute an investment of earnings in United States property under
Section 956 (or a successor provision) of the Tax Code, which
investment would trigger an increase in the gross income of a United
States shareholder of such Pledgor pursuant to Section 951 (or a
successor provision) of the Tax Code.
(iii) Each Pledgor shall, at its sole cost and expense,
from time to time execute and deliver to the Collateral Agent appropriate
instruments as the Collateral Agent may request in order to permit the
Collateral Agent to exercise the voting and other rights which it may be
entitled to exercise pursuant to Section 6.2(ii)(A) hereof and to receive all
Distributions which it may be entitled to receive under Section 6.2(ii)(B)
hereof.
(iv) All Distributions which are received by any Pledgor
contrary to the provisions of Section 6.2(ii)(B) hereof shall be received in
trust for the benefit of the Collateral Agent, shall be segregated from other
funds of such Pledgor and shall immediately be paid over to the Collateral Agent
as Pledged Collateral in the same form as so received (with any necessary
endorsement).
SECTION 6.3 No New Securities. Except to the extent otherwise
permitted under Article VIII hereof, each Pledgor shall cause each issuer of the
Pledged Securities not to issue any stock or other securities or equity
interests in addition to or in substitution for the Pledged Securities issued by
such issuer, except to such Pledgor.
SECTION 6.4 Operative Agreements. Each Pledgor has delivered
to the Collateral Agent true, correct and complete copies of the Operative
Agreements with respect to each issuer of the Pledged Securities. The Operative
Agreements are in full force and effect, have not as of the date hereof been
amended or modified except as disclosed to the Collateral Agent, and there is no
existing default by any party thereunder or any event which, with the giving of
notice of passage of time or both, would constitute a default by any party
thereunder. Each Pledgor shall deliver to the Collateral Agent a copy of any
notice of default given or received by it under any Operative Agreement within
ten days after such Pledgor gives or receives such notice. No Pledgor will
terminate or agree to terminate any Operative Agreement or make any amendment or
modification to any Operative Agreement which may have an adverse effect on the
value of the Pledged Securities and Distributions relating thereto or the Lien
and security intended to be granted to the Collateral Agent hereunder.
SECTION 6.5 Defaults, etc. Such Pledgor is not in default in
the payment of any portion of any mandatory capital contribution, if any,
required to be made under any
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agreement to which such Pledgor is a party relating to the Pledged Securities
pledged by it, and such Pledgor is not in violation of any other provisions of
any such agreement to which such Pledgor is a party, or otherwise in default or
violation thereunder. No Securities Collateral pledged by such Pledgor is
subject to any defense, offset or counterclaim, which have been asserted or
alleged against such Pledgor by any Person with respect thereto, and as of the
date hereof, there are no certificates, instruments, documents or other writings
(other than the Operative Agreements and certificates, if any, delivered to the
Collateral Agent) which evidence any Pledged Securities of such Pledgor.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING
COLLATERAL ACCOUNT AND COLLECTION OF ACCOUNTS
SECTION 7.1 Collateral Account.
(i) Deposits into Collateral Account. Each Pledgor shall
deposit into the Collateral Account from time to time (A) after the occurrence
of a Default, the cash proceeds of any of the Collateral (including pursuant to
any disposition thereof) to the extent contemplated by Sections 2.13(b)(ii) and
2.13(e)(ii) of the Credit Agreement, (B) any cash in respect of any Pledged
Collateral to which the Collateral Agent is entitled pursuant to Section 6.2
hereof, (C) such amounts that such Pledgor is required to pledge as additional
collateral security hereunder pursuant to the Loan Documents and (D) any other
amounts that such Pledgor desires to pledge to the Collateral Agent for the
benefit of the Secured Parties as additional collateral security hereunder.
(ii) Application of Amounts in Collateral Account. The
balance from time to time in the Collateral Account shall constitute part of the
Pledged Collateral hereunder and shall not constitute payment of the Secured
Obligations until applied as hereinafter provided. So long as no Event of
Default has occurred and is continuing or will result therefrom, the Collateral
Agent shall within two Business Days of receiving a request of such Pledgor for
release of cash proceeds from the Collateral Account constituting Net Cash
Proceeds relating to any Casualty Event or Asset Sale, remit the cash proceeds
on deposit in the Collateral Account to or upon the order of such Pledgor, in
periodic installments, if applicable, so long as such Pledgor has satisfied the
conditions relating thereto set forth in Section 7.1(iv). At any time following
the occurrence and during the continuance of an Event of Default, the Collateral
Agent may (and, if instructed by the Lenders as specified in the Credit
Agreement, shall) in its (or their) discretion apply or cause to be applied
(subject to collection) the balance from time to time outstanding to the credit
of the Collateral Account to the payment of the Secured Obligations in the
manner specified in Article X hereof subject, however, in the case of amounts
deposited in the L/C Sub-Account, to the provisions of Section 7.2 hereof. The
balance from time to time in the Collateral Account shall be subject to
withdrawal only as provided herein.
(iii) Investment of Balance in Collateral Account. Amounts
on deposit in the Collateral Account shall be invested from time to time in such
Cash Equivalents as the respective Pledgor (or, after the occurrence and during
the continuance of an Event of Default, the
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Collateral Agent) shall determine, which Cash Equivalents shall be held in the
name and be under the control of the Collateral Agent (or any sub-agent);
provided, however, that at any time after the occurrence and during the
continuance of an Event of Default, the Collateral Agent may (and, if instructed
by the Lenders as specified in the Credit Agreement, shall) in its (or their)
discretion at any time and from time to time elect to liquidate any such Cash
Equivalents and to apply or cause to be applied the proceeds thereof to the
payment of the Secured Obligations in the manner specified in Article X hereof.
(iv) Proceeds of Asset Sale, Casulaty Event and Collateral
Dispositions. So long as no Event of Default shall have occurred and be
continuing, in the event the applicable Pledgor elects to reinvest Net Cash
Proceeds in respect of any Asset Sale or Casualty Event in accordance with the
provisions of Sections 2.13(b) and 2.13(e) of the Credit Agreement, as
applicable, the Collateral Agent shall receive at least 10 days' prior notice of
each request for payment and shall not release any part of such Net Cash
Proceeds, until the applicable Loan Party has furnished to the Collateral Agent
(i) an Officers' Certificate setting forth: (A) a brief description of the
reinvestment to be made, (B) the dollar amount of the expenditures to be made,
or costs incurred by such Loan Party in connection with such reinvestment and
(C) evidence that the properties or assets acquired in connection with such
reinvestment have a fair market value at least equal to the amount of such Net
Cash Proceeds requested to be released from the Collateral Account and (ii) all
security agreements and other items required by the provisions of Section 5.11
to, among other things, subject such reinvestment properties or assets to the
Lien of the Security Documents in favor of the Collateral Agent, for its benefit
and for the benefit of the other Secured Parties.
SECTION 7.2 Cover for Letter of Credit Liabilities. Amounts
deposited into the Collateral Account as cover for liabilities in respect of
Letters of Credit under the Credit Agreement pursuant to Section 2.22 thereof
shall be held by the Collateral Agent in a separate sub-account designated as
the "L/C Sub-Account" (the "L/C Sub-Account") and, notwithstanding any other
provision hereof to the contrary, all amounts held in the L/C Sub-Account shall
constitute collateral security first for the liabilities in respect of Letters
of Credit outstanding from time to time and second as collateral security for
the other Secured Obligations hereunder until such time as all Letters of Credit
shall have been terminated and all of the liabilities in respect of Letters of
Credit have been paid in full (except to the extent set forth in Section
2.22(j)(iii) of the Credit Agreement).
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SECTION 7.3 Collection of Accounts.
(i) Lockboxes. Pledgor shall establish one or more
lockboxes (the "Lockboxes") with a Lockbox Bank and after the occurrence of a
Default and upon the request of the Collateral Agent, each Pledgor shall
irrevocably instruct all account debtors on all of the Accounts of such Pledgor,
all agents for the collection of Accounts and all issuers or obligors under
letters of credit or other documents supporting Accounts to remit all
Collections to such Lockboxes. Each Pledgor, the Collateral Agent and each of
the financial institutions selected by such Pledgor and reasonably acceptable to
the Collateral Agent (each, a "Lockbox Bank" and, collectively, the "Lockbox
Banks") shall enter into Lockbox Agreements, which among other things shall
provide for the opening of an account for the deposit of Collections (each, a
"Collection Account" and, collectively, the "Collection Accounts") at a Lockbox
Bank. Each Pledgor shall maintain separate and distinct Lockboxes and Collection
Accounts and the Lockboxes and Collection Accounts of each Pledgor will be
clearly identified as the Lockbox and Collection Accounts of such Pledgor and no
other Person, including no other Pledgor. After the occurrence of a Default and
upon the request of the Collateral Agent, such amounts shall be so deposited on
a daily basis and all Collections and other amounts received by or on behalf of
each such Pledgor from any account debtor, agent or credit support party shall
be held in trust for the benefit of the Collateral Agent and shall be deposited
into the Collection Account of such Pledgor within one Business Day after such
Pledgor's receipt thereof. Such arrangements shall not be modified or terminated
without the prior written consent of the Collateral Agent.
(ii) Lockbox Concentration Account. Upon the terms and
subject to the conditions set forth in the Lockbox Agreements, all good funds
held in each Collection Account shall be wired each Business Day into a separate
account for each such Pledgor (each, a "Lockbox Concentration Account")
maintained by the Collateral Agent. Each Pledgor shall accurately report all
amounts deposited in the Collection Accounts to ensure the proper transfer of
funds as set forth above. Each Pledgor acknowledges and agrees that, (A)
pursuant to the Lockbox Agreements executed and delivered by such Pledgor it has
irrevocably directed the Lockbox Banks to transfer no later than 11:00 a.m. (New
York time) each Business Day all available funds, investments, money, cash,
Instruments, securities, rights, Proceeds and other property and amounts
contained in their respective Collection Accounts into the Lockbox Concentration
Account established for such Pledgor hereunder and (B) the Collateral Agent
shall have exclusive dominion and control of the Lockbox Concentration Accounts.
After the occurrence of a Default and upon the request of the Collateral Agent,
if any Pledgor receives directly any remittance or payments notwithstanding the
arrangements for payments directly into Collection Accounts (as provided for in
the Lockbox Agreements), such Pledgor shall hold such remittance and payments in
trust for the Collateral Agent, and shall deposit such amounts into its
respective Lockbox Concentration Account within one Business Day after such
Pledgor's receipt thereof.
(iii) Dispositions from Lockbox Concentration Account.
After an Event of Default shall have occurred and be continuing and with the
approval of the Collateral Agent acting at the direction of the Required Lenders
(which approval may be granted or withheld in the sole and absolute discretion
of the Required Lenders), each Pledgor is hereby authorized by the Collateral
Agent to direct on any Business Day the disposition of any and all moneys,
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financial assets, checks, drafts, securities, instruments and other property
deposited in its Lockbox Concentration Account into one or more deposit accounts
for use by such Pledgor in a manner permitted by the Credit Agreement. The
Collateral Agent shall make such disposition by 11:00 a.m. New York time on each
such date.
(iv) Revocation of Withdrawal Right. Upon the occurrence
and during the continuance of any Event of Default and revocation by the
Collateral Agent acting at the direction of the Required Lenders (which
revocation may be made in the sole and absolute discretion of the Required
Lenders), the authorization of the Pledgors under Section 7.4(iii) shall be
revoked and all deposits maintained in the Lockbox Concentration Accounts, and
any additional moneys and other property subsequently maintained with any
Lockbox Bank, shall be transferred to the Collateral Account. All such deposits
in the Collateral Account shall be held by the Collateral Agent as Pledged
Collateral for the Secured Obligations or applied to the payment of the Secured
Obligations in accordance with Article X hereof. The costs and expenses
(including attorney's fees) of collection, whether incurred by any Pledgor or
the Collateral Agent (or any sub-agent), shall be borne by the Pledgors.
SECTION 7.4 Restriction on Credit Balances in Deposit
Accounts. The Pledgors shall not at any time deposit or cause to be deposited
into any account, except as otherwise specifically permitted pursuant to the
provisions of this Article VII, any funds, investments, money, cash,
instruments, securities, rights, proceeds and other property and amounts
received by or on behalf of the Pledgors from any Account; provided, however,
that so long as no Event of Default shall have occurred and be continuing, the
Pledgors may deposit or cause to be deposited into such account such funds,
investments, money, cash, instruments, securities, rights, proceeds and other
property and amounts received by or on behalf of the Pledgors so long as the
aggregate sum thereof shall in no event exceed at any time $500,000; provided,
further, that all amounts in excess of $500,000 shall be deposited directly into
the Collection Account of the applicable Pledgor or the Collateral Account in
accordance with the provisions of this Article VII.
ARTICLE VIII
TRANSFERS AND OTHER LIENS
No Pledgor shall (i) sell, convey, assign or otherwise dispose
of, or grant any option with respect to, any of the Pledged Collateral pledged
by it hereunder except as permitted by the Credit Agreement, (ii) create or
permit to exist any Lien upon or with respect to any of the Pledged Collateral
pledged by it hereunder other than Permitted Liens or (iii) permit any issuer of
the Pledged Securities to merge, consolidate or change its legal form, unless
(A) such entity is organized in a jurisdiction outside the United States and 65%
of all of the outstanding equity interests of the surviving or resulting entity
are, upon such merger or consolidation, pledged hereunder and any cash,
securities or other property is distributed in respect of the outstanding equity
interests of any other entity that was merged into or consolidated with such
issuer is deposited in the Collateral Account and (B) such Pledgor shall have
complied with the applicable provisions of the Credit Agreement.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
SECTION 9.1 Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent may from time to time
exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it:
(i) Personally, or by agents or attorneys, reasonably and
immediately take possession of the Pledged Collateral or any part
thereof, from any Pledgor or any other Person who then has possession
of any part thereof with or without notice or process of law, and for
that purpose may enter upon any Pledgor's premises where any of the
Pledged Collateral is located, remove such Pledged Collateral, remain
present at such premises to receive copies of all communications and
remittances relating to the Pledged Collateral and use in connection
with such removal and possession any and all services, supplies, aids
and other facilities of any Pledgor;
(ii) Demand, ▇▇▇ for, collect or receive any money or
property at any time payable or receivable in respect of the Pledged
Collateral including, without limitation, instructing the obligor or
obligors on any agreement, instrument or other obligation constituting
part of the Pledged Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent, and in connection with any of the foregoing,
compromise, settle, extend the time for payment and make other
modifications with respect thereto; provided, however, that in the
event that any such payments are made directly to any Pledgor, prior to
receipt by any such obligor of such instruction, such Pledgor shall
segregate all amounts received pursuant thereto in trust for the
benefit of the Collateral Agent and shall promptly (but in no event
later than one Business Day after receipt thereof) deposit such amounts
into the Collateral Account;
(iii) Sell, assign, grant a license to use or otherwise
liquidate, or direct any Pledgor to sell, assign, grant a license to
use or otherwise liquidate, any and all investments made in whole or in
part with the Pledged Collateral or any part thereof, and take
possession of the proceeds of any such sale, assignment, license or
liquidation;
(iv) Take possession of the Pledged Collateral or any part
thereof, by directing any Pledgor in writing to deliver the same to the
Collateral Agent at any place or places within the continental United
States so designated by the Collateral Agent, in which event such
Pledgor shall at its own expense: (A) forthwith cause the same to be
moved to the place or places designated by the Collateral Agent and
there delivered to the Collateral Agent, (B) store and keep any Pledged
Collateral so delivered to the Collateral Agent at such place or places
pending further action by the Collateral Agent and (C) while the
Pledged Collateral shall be so stored and kept, provide such security
and maintenance services as shall be reasonably necessary to protect
the same and to preserve and maintain them in good condition. Each
Pledgor's obligation to deliver the Pledged Collateral as
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contemplated in this Section 9.1(iv) is of the essence hereof. Upon
application to a court of equity having jurisdiction, the Collateral
Agent shall be entitled to a decree requiring specific performance by
any Pledgor of such obligation;
(v) Withdraw all moneys, instruments, securities and
other property in any Bank Account or other account of any Pledgor
pledged to the Collateral Agent hereunder (including, without
limitation, the accounts contemplated in Article VII) for application
to the Secured Obligations as provided in Article X hereof;
(vi) Retain and apply the Distributions to the Secured
Obligations as provided in Article X hereof;
(vii) Exercise any and all rights as beneficial and legal
owner of the Pledged Collateral, including, without limitation,
perfecting assignment of and exercising any and all voting, consensual
and other rights and powers with respect to any Pledged Collateral; and
(viii) Exercise all the rights and remedies of a secured
party on default under the UCC, and the Collateral Agent may also in
its sole discretion, without notice except as specified in Section 9.2
hereof, sell, assign or grant a license to use the Pledged Collateral
or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery, and
at such price or prices and upon such other terms as the Collateral
Agent may deem commercially reasonable. The Collateral Agent or any
other Secured Party or any of their respective Affiliates may be the
purchaser, licensee, assignee or recipient of any or all of the Pledged
Collateral at any such sale and shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all
or any portion of the Pledged Collateral sold, assigned or licensed at
such sale, to use and apply any of the Secured Obligations owed to such
Person as a credit on account of the purchase price of any Pledged
Collateral payable by such Person at such sale. Each purchaser,
assignee, licensee or recipient at any such sale shall acquire the
property sold, assigned or licensed absolutely free from any claim or
right on the part of any Pledgor, and each Pledgor hereby waives, to
the fullest extent permitted by law, all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. The
Collateral Agent shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned. Each Pledgor hereby waives, to the fullest
extent permitted by law, any claims against the Collateral Agent
arising by reason of the fact that the price at which any Pledged
Collateral may have been sold, assigned or licensed at such a private
sale was less than the price which might have been obtained at a public
sale, even if the Collateral Agent accepts the first offer received and
does not offer such Pledged Collateral to more than one offeree.
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SECTION 9.2 Notice of Sale. Each Pledgor acknowledges and
agrees that, to the extent notice of sale shall be required by law, ten days'
notice to such Pledgor of the time and place of any public sale or of the time
after which any private sale or other intended disposition is to take place
shall be commercially reasonable notification of such matters. No notification
need be given to any Pledgor if it has signed, after the occurrence of an Event
of Default, a statement renouncing or modifying any right to notification of
sale or other intended disposition.
SECTION 9.3 Waiver of Notice and Claims. Each Pledgor hereby
waives, to the fullest extent permitted by applicable law, notice or judicial
hearing in connection with the Collateral Agent's taking possession or the
Collateral Agent's disposition of any of the Pledged Collateral, including,
without limitation, any and all prior notice and hearing for any prejudgment
remedy or remedies and any such right which such Pledgor would otherwise have
under law, and each Pledgor hereby further waives, to the fullest extent
permitted by applicable law: (i) all damages occasioned by such taking of
possession, (ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral Agent's
rights hereunder and (iii) all rights of redemption, appraisal, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law. The
Collateral Agent shall not be liable for any incorrect or improper payment made
pursuant to this Article IX in the absence of gross negligence or willful
misconduct. Any sale of, or the grant of options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of the applicable
Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Pledgor and against any and all Persons claiming or
attempting to claim the Pledged Collateral so sold, optioned or realized upon,
or any part thereof, from, through or under such Pledgor.
SECTION 9.4 Certain Sales of Pledged Collateral.
(i) Each Pledgor recognizes that, by reason of certain
prohibitions contained in law, rules, regulations or orders of any Governmental
Authority, the Collateral Agent may be compelled, with respect to any sale of
all or any part of the Pledged Collateral, to limit purchasers to those who meet
the requirements of such Governmental Authority. Each Pledgor acknowledges that
any such sales may be at prices and on terms less favorable to the Collateral
Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales.
(ii) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws, the Collateral Agent
may be compelled, with respect to any sale of all or any part of the Securities
Collateral, to limit purchasers to Persons who will agree, among other things,
to acquire such Securities Collateral for their own account, for investment and
not with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the
Collateral Agent than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made
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pursuant to a registration statement under the Securities Act), and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Collateral Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Securities Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would agree to do so.
(iii) Notwithstanding the foregoing, each Pledgor shall,
upon the occurrence and during the continuance of any Event of Default, at the
request of the Collateral Agent, for the benefit of the Collateral Agent, cause
any registration, qualification under or compliance with any federal or state
securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of
the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including,
without limitation, registration under the Securities Act (or any similar
statute then in effect), appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with all other
requirements of any Governmental Authority. Each Pledgor shall cause the
Collateral Agent to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof,
shall furnish to the Collateral Agent such number of prospectuses, offering
circulars or other documents incident thereto as the Collateral Agent from time
to time may request, and shall indemnify and shall cause the issuer of the
Securities Collateral to indemnify the Collateral Agent and all others
participating in the distribution of such Securities Collateral against all
claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(iv) If the Collateral Agent determines to exercise its
right to sell any or all of the Securities Collateral, upon written request, the
applicable Pledgor shall from time to time furnish to the Collateral Agent all
such information as the Collateral Agent may request in order to determine the
number of securities included in the Securities Collateral which may be sold by
the Collateral Agent as exempt transactions under the Securities Act and the
rules of the Securities and Exchange Commission thereunder, as the same are from
time to time in effect.
SECTION 9.5 No Waiver; Cumulative Remedies.
(i) No failure on the part of the Collateral Agent to
exercise, no course of dealing with respect to, and no delay on the part of the
Collateral Agent in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of any such
right, power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy; nor shall the Collateral
Agent be required to look
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first to, enforce or exhaust any other security, collateral or guaranties. The
remedies herein provided are cumulative and are not exclusive of any remedies
provided by law.
(ii) In the event that the Collateral Agent shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case, the Pledgors,
the Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights, remedies and powers of the Collateral Agent and the
other Secured Parties shall continue as if no such proceeding had been
instituted.
ARTICLE X
APPLICATION OF PROCEEDS
The proceeds received by the Collateral Agent in respect of
any sale of, collection from or other realization upon all or any part of the
Pledged Collateral pursuant to the exercise by the Collateral Agent of its
remedies as a secured creditor as provided in Article IX hereof shall be
applied, together with any other sums then held by the Collateral Agent pursuant
to this Agreement, promptly by the Collateral Agent as follows:
FIRST, to the payment of all costs and expenses, fees,
commissions and taxes of such sale, collection or other realization
including, without limitation, the costs and expenses of the Collateral
Agent and its agents and counsel, and all expenses, liabilities and
advances made or incurred by the Collateral Agent in connection
therewith, together with interest on each such amount at the highest
rate then in effect under the Credit Agreement from and after the date
such amount is due, owing or unpaid until paid in full;
SECOND, to the payment of all other costs and expenses of such
sale, collection or other realization including, without limitation,
the costs and expenses of the Lenders and their agents and counsel and
all costs, liabilities and advances made or incurred by the Lenders in
connection therewith, together with interest on each such amount at the
highest rate then in effect under the Credit Agreement from and after
the date such amount is due, owing or unpaid until paid in full;
THIRD, without duplication of amounts applied pursuant to
clauses FIRST and SECOND above, to the indefeasible payment in full in
cash, pro rata, of (i) interest, principal and other amounts
constituting Secured Obligations (other than the obligations arising
under the Interest Rate Protection Agreements, the Hedging Agreements
and the Cash Management Agreements) in accordance with the terms of the
Credit Agreement and (ii) the obligations arising under the Interest
Rate Protection Agreements, the Hedging Agreements and the Cash
Management Agreements in accordance with the terms of the Interest Rate
Protection Agreements, the Hedging Agreements and the Cash Management
Agreements, as applicable; and
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FOURTH, the balance, if any, to the Person lawfully entitled
thereto (including the Pledgors or their respective successors or
assigns).
In the event that any such proceeds are insufficient to pay in
full the items described in clauses FIRST though THIRD of this Article X, the
Pledgors shall remain liable for any deficiency.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Concerning Collateral Agent.
(i) The Collateral Agent has been appointed as Collateral
Agent pursuant to the Credit Agreement. The actions of the Collateral Agent
hereunder are subject to the provisions of the Credit Agreement. The Collateral
Agent shall have the right hereunder to make demands, to give notices, to
exercise or refrain from, exercising any rights, and to take or refrain from
taking action (including, without limitation, the release or substitution of the
Pledged Collateral), in accordance with this Agreement and the Credit Agreement.
The Collateral Agent may employ agents and attorneys-in-fact in connection
herewith and shall not be liable for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it in good faith. The Collateral Agent
may resign and a successor Collateral Agent may be appointed in the manner
provided in the Credit Agreement. Upon the acceptance of any appointment as the
Collateral Agent by a successor Collateral Agent, that successor Collateral
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent under this Agreement, and
the retiring Collateral Agent shall thereupon be discharged from its duties and
obligations under this Agreement. After any retiring Collateral Agent's
resignation, the provisions hereof shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the
Collateral Agent.
(ii) The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equivalent to that which the Collateral Agent, in its individual
capacity, accords its own property consisting of property of a similar kind and
nature as the Pledged Collateral, it being understood that neither the
Collateral Agent nor any of the Secured Parties shall have responsibility for
(i) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral,
whether or not the Collateral Agent or any other Secured Party has or is deemed
to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any Person with respect to any Pledged Collateral.
(iii) The Collateral Agent shall be entitled to rely upon
any written notice, statement, certificate, order or other document or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper person, and, with respect to all
matters pertaining to this Agreement and its duties hereunder, upon advice of
counsel selected by it.
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(iv) With respect to any of its rights and obligations as
a Lender, Collateral Agent shall have and may exercise the same rights and
powers hereunder. The term "Lenders," "Lender" or any similar terms shall,
unless the context clearly otherwise indicates, include Collateral Agent in its
individual capacity as a Lender. Collateral Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with such Pledgor or any Affiliate of such Pledgor to the same extent as if
Collateral Agent were not acting as collateral agent.
(v) If any item of Pledged Collateral also constitutes
collateral granted to Collateral Agent under any other deed of trust, mortgage,
security agreement, pledge or instrument of any type, in the event of any
conflict between the provisions hereof and the provisions of such other deed of
trust, mortgage, security agreement, pledge or instrument of any type in respect
of such collateral, Collateral Agent, in its sole discretion, shall select which
provision or provisions shall control.
SECTION 11.2 Collateral Agent May Perform; Collateral Agent
Appointed Attorney-in-Fact. If any Pledgor shall fail to perform any covenants
contained in this Agreement, (including, without limitation, such Pledgor's
covenants to (i) pay the premiums in respect of all required insurance policies
hereunder, (ii) pay Charges, (iii) make repairs, (iv) discharge Liens or (v) pay
or perform any obligations of such Pledgor under any Pledged Collateral) or if
any warranty on the part of any Pledgor contained herein shall be breached,
after an Event of Default shall have occurred and be continuing, the Collateral
Agent may (but shall not be obligated to) do the same or cause it to be done or
remedy any such breach, and may expend funds for such purpose; provided,
however, that Collateral Agent shall in no event be bound to inquire into the
validity of any tax, lien, imposition or other obligation which such Pledgor
fails to pay or perform as and when required hereby and which such Pledgor does
not contest in accordance in accordance with the provision of Section 4.17
hereof. Any and all amounts so expended by the Collateral Agent shall be paid by
the Pledgors in accordance with the provisions of Section 11.3 hereof. Neither
the provisions of this Section 11.2 nor any action taken by Collateral Agent
pursuant to the provisions of this Section 11.2 shall prevent any such failure
to observe any covenant contained in this Agreement nor any breach of warranty
from constituting an Event of Default. After an Event of Default shall have
occurred and be continuing, each Pledgor hereby appoints the Collateral Agent
its attorney-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor, or otherwise, from time to time in the
Collateral Agent's discretion to take any action and to execute any instrument
consistent with the terms hereof and the other Loan Documents which the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof. The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof. Each
Pledgor hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof.
SECTION 11.3 Expenses. Each Pledgor will upon demand pay to
the Collateral Agent the amount of any and all reasonable costs and expenses,
including the fees and expenses of its counsel and the fees and expenses of any
experts and agents which the Collateral Agent may incur in connection with (i)
any action, suit or other proceeding affecting the Pledged Collateral or any
part thereof commenced, in which action, suit or proceeding the Collateral
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Agent is made a party or participates or in which the right to use the Pledged
Collateral or any part thereof is threatened, or in which it becomes necessary
in the judgment of the Collateral Agent to defend or uphold the Lien hereof
(including, without limitation, any action, suit or proceeding to establish or
uphold the compliance of the Pledged Collateral with any requirements of any
Governmental Authority or law), (ii) the collection of the Secured Obligations,
(iii) the enforcement and administration hereof, (iv) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral, (v) the exercise or enforcement of any of the rights
of the Collateral Agent or any Secured Party hereunder or (vi) the failure by
any Pledgor to perform or observe any of the provisions hereof. All amounts
expended by the Collateral Agent and payable by any Pledgor under this Section
11.3 shall be due upon demand therefor (together with interest thereon accruing
at the Default Rate during the period from and including the date on which such
funds were so expended to the date of repayment) and shall be part of the
Secured Obligations. Each Pledgor's obligations under this Section 11.3 shall
survive the termination hereof and the discharge of such Pledgor' s other
obligations under this Agreement, the Credit Agreement, any Interest Rate
Protection Agreement, the Hedging Agreements, the Cash Management Agreements and
the other Loan Documents.
SECTION 11.4 Indemnity.
(i) Indemnity. Each Pledgor agrees to indemnify, pay and
hold harmless the Collateral Agent and each of the other Secured Parties and the
officers, directors, employees, agents and Affiliates of the Collateral Agent
and each of the other Secured Parties (collectively, the "Indemnitees") from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs (including, without limitation,
settlement costs), expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) which may be imposed on, incurred by, or
asserted against that Indemnitee, in any manner relating to or arising out
hereof, any Interest Rate Protection Agreement, the Hedging Agreements, the Cash
Management Agreements or any other Loan Document (including, without limitation,
any misrepresentation by any Pledgor in this Agreement, any Interest Rate
Protection Agreement, the Hedging Agreements, the Cash Management Agreements or
any other Loan Document) (the "Indemnified Liabilities"); provided, however,
that no Pledgor shall have any obligation to an Indemnitee hereunder with
respect to Indemnified Liabilities if it has been determined by a final
non-appealable decision of a court of competent jurisdiction that such
Indemnified Liabilities arose from the gross negligence or willful misconduct of
that Indemnitee. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, each Pledgor shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
(ii) Survival. The obligations of the Pledgors contained
in this Section 12.4 shall survive the termination hereof and the discharge of
the Pledgors' other obligations under this Agreement, any Interest Rate
Protection Agreement, the Hedging Agreements, the Cash Management Agreements and
under the other Loan Documents.
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(iii) Reimbursement. Any amounts paid by any Indemnitee as
to which such Indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Pledged Collateral.
SECTION 11.5 Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors, their respective successors and
assigns and (ii) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No
other Persons (including, without limitation, any other creditor of any Pledgor)
shall have any interest herein or any right or benefit with respect hereto.
Without limiting the generality of the foregoing clause (ii) and subject to the
terms of the Credit Agreement, any Lender may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender, herein or otherwise, subject however, to the
provisions of the Credit Agreement and any applicable Interest Rate Protection
Agreement, the Hedging Agreements or the Cash Management Agreements.
SECTION 11.6 Termination; Release. When all the Secured
Obligations have been paid in full and the Commitments of the Lenders to make
any Loan or to issue any Letter of Credit under the Credit Agreement shall have
expired or been sooner terminated, this Agreement shall terminate. Upon
termination hereof or any release of Pledged Collateral in accordance with the
provisions of the Credit Agreement, the Collateral Agent shall, upon the request
and at the sole cost and expense of the Pledgors, forthwith assign, transfer and
deliver to Pledgor, against receipt and without recourse to or warranty by the
Collateral Agent, such of the Pledged Collateral to be released (in the case of
a release) as may be in possession of the Collateral Agent and as shall not have
been sold or otherwise applied pursuant to the terms hereof, and, with respect
to any other Pledged Collateral, proper documents and instruments (including
UCC-3 termination statements or releases) acknowledging the termination hereof
or the release of such Pledged Collateral, as the case may be.
SECTION 11.7 Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by any Pledgor therefrom, shall be effective unless
the same shall be made in accordance with the terms of the Credit Agreement and
unless in writing and signed by the Collateral Agent. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by any Pledgor from the terms
of any provision hereof shall be effective only in the specific instance and for
the specific purpose for which made or given. Except where notice is
specifically required by this Agreement or any other Loan Document, no notice to
or demand on any Pledgor in any case shall entitle any Pledgor to any other or
further notice or demand in similar or other circumstances.
SECTION 11.8 Notices. Unless otherwise provided herein or in
the Credit Agreement, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Credit Agreement, as to any Pledgor, addressed to it at the address
of the Borrower set forth in the Credit Agreement and as to the
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Collateral Agent, addressed to it at the address set forth in the Credit
Agreement, or in each case at such other address as shall be designated by such
party in a written notice to the other party complying as to delivery with the
terms of this Section 11.8.
SECTION 11.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS EXCEPT
TO THE GREATEST EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR ITEM OR TYPE OF
PLEDGED COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
SECTION 11.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS;
WAIVER OF JURY TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY NEW YORK STATE COURT OR FEDERAL
COURT OF THE UNITED STATES OF AMERICA SITTING IN THE CITY OF NEW YORK, AND ANY
APPELLATE COURT OF ANY THEREOF, AND BY EXECUTION AND DELIVERY HEREOF, EACH
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. EACH PLEDGOR AGREES THAT SERVICE OF PROCESS IN ANY
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO BORROWER
AT ITS ADDRESS SET FORTH IN THE CREDIT AGREEMENT OR AT SUCH OTHER ADDRESS OF
WHICH THE COLLATERAL AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. IF ANY
AGENT APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT SERVICE, SUCH PLEDGOR HEREBY
AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT TO BRING PROCEEDINGS
AGAINST ANY PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION. THE PLEDGORS HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 11.11 Severability of Provisions. Any provision hereof
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.12 Execution in Counterparts. This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so
-42-
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.
SECTION 11.13 Limitation on Interest Payable. It is the
intention of the parties to conform strictly to the usury laws, whether state or
federal, that are applicable to the transaction of which this Agreement is a
part. All agreements between the Pledgors and the Collateral Agent whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever shall the amount paid or
agreed to be paid by the Pledgors for the use, forbearance or detention of the
money to be loaned under the Credit Agreement, any Interest Rate Protection
Agreement, the Hedging Agreements, the Cash Management Agreements or any other
Loan Document, or for the payment or performance of any covenant or obligation
contained herein or in the Credit Agreement, any Interest Rate Protection
Agreement, the Hedging Agreements, the Cash Management Agreements or any other
Loan Document, exceed the maximum amount permissible under applicable federal or
state usury laws. If under any circumstances whatsoever fulfillment of any such
provision, at the time performance of such provision shall be due, shall involve
exceeding the limit of validity prescribed by law, then the obligation to be
fulfilled shall be reduced to the limit of such validity. If under any
circumstances the Pledgors shall have paid an amount deemed interest by
applicable law, which would exceed the highest lawful rate, such amount that
would be excessive interest under applicable usury laws shall be applied to the
reduction of the principal amount owing in respect of the Secured Obligations
and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal and any other amounts due hereunder, the excess
shall be refunded to the Pledgors. All sums paid or agreed to be paid for the
use, forbearance or detention of the principal under any extension of credit by
the Collateral Agent shall, to the extent permitted by applicable law, and to
the extent necessary to preclude exceeding the limit of validity prescribed by
law, be amortized, prorated, allocated and spread from the date hereof until
payment in full of the Secured Obligations so that the actual rate of interest
on account of such principal amounts is uniform throughout the term hereof.
SECTION 11.14 Business Days. In the event any time period or
any date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.
SECTION 11.15 Relationship. The relationship of Collateral
Agent to each of the Pledgors hereunder is strictly and solely that of lender to
borrower and secured party to pledgor, and nothing contained in the Credit
Agreement, this Agreement, any Interest Rate Protection Agreement, the Hedging
Agreements, the Cash Management Agreements or any other document or instrument
now existing and delivered in connection therewith or otherwise in connection
with the Secured Obligations is intended to create, or shall in any event or
under any circumstance be construed as creating a partnership, joint venture,
tenancy-in-common, joint tenancy or other relationship of any nature whatsoever
between Collateral Agent and each of the Pledgors other than as lender and
borrower and mortgagee and mortgagor.
-43-
SECTION 11.16 Waiver of Stay. Each Pledgor agrees that in the
event that such Pledgor or any property or assets of such Pledgor shall
hereafter become the subject of a voluntary or involuntary proceeding under the
Bankruptcy Code or such Pledgor shall otherwise be a party to any federal or
state bankruptcy, insolvency, moratorium or similar proceeding to which the
provisions relating to the automatic stay under Section 362 of the Bankruptcy
Code or any similar provision in any such law is applicable, then, in any such
case, whether or not the Collateral Agent has commenced foreclosure proceedings
under this Agreement, the Collateral Agent shall be entitled to relief from any
such automatic stay as it relates to the exercise of any of the rights and
remedies (including, without limitation, any foreclosure proceedings) available
to the Collateral Agent as provided in this Agreement or in any other Loan
Document.
SECTION 11.17 No Credit for Payment of Taxes or Imposition.
Such Pledgor shall not be entitled to any credit against the principal, premium,
if any, or interest payable under the Credit Agreement, and such Pledgor shall
not be entitled to any credit against any other sums which may become payable
under the terms thereof or hereof, by reason of the payment of any Tax on the
Pledged Collateral or any part thereof.
SECTION 11.18 No Claims Against Collateral Agent. Nothing
contained in this Agreement shall constitute any consent or request by the
Collateral Agent, express or implied, for the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Pledged Collateral or any part thereof, nor as giving any Pledgor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would permit the making of any claim against the Collateral Agent in respect
thereof or any claim that any Lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to
the Lien hereof.
SECTION 11.19 Obligations Absolute. All obligations of each
Pledgor hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any
Pledgor or any other Loan Party;
(ii) any lack of validity or enforceability of the Credit
Agreement, any Interest Rate Protection Agreement, the Hedging
Agreements, the Cash Management Agreements, any Letter of Credit or any
other Loan Document, or any other agreement or instrument relating
thereto;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
the Credit Agreement, any Interest Rate Protection Agreement, the
Hedging Agreements, the Cash Management Agreements, any Letter of
Credit or any other Loan Document, or any other agreement or instrument
relating thereto;
-44-
(iv) any pledge, exchange, release or non-perfection of
any other collateral, or any release or amendment or waiver of or
consent to any departure from any guarantee, for all or any of the
Secured Obligations;
(v) any exercise, non-exercise or waiver of any right,
remedy, power or privilege under or in respect hereof, any Interest
Rate Protection Agreement, the Hedging Agreements, the Cash Management
Agreements or any other Loan Document except as specifically set forth
in a waiver granted pursuant to the provisions of Section 11.7 hereof;
or
(vi) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, any Pledgor.
[Signature Pages Follow]
-45-
IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have
caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
SOLA INTERNATIONAL INC.,
as Pledgor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
UNION BANK OF CALIFORNIA, N.A.,
as Collateral Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
-46-
SCHEDULE 1.1(a)
Initial Intercompany Notes
TO BE UPDATED BY THE COMPANY
Pledgor: Sola International Inc.
None.
Schedule 1.1(a)-Page 1
SCHEDULE 1.1 (b)
Initial Pledged Interests
TO BE UPDATED BY THE COMPANY
Pledgor: Sola International Inc.
PERCENTAGE OF
ALL ISSUED
CAPITAL OR
ISSUER NUMBER OTHER EQUITY
(JURISDICTION OF TYPE OF CERTIFICATE OF INTERESTS OF
INCORPORATION) INTEREST NO(S). SHARES ISSUER
------------------------------ -------- ---------- ------ -------------
Sola Brash Indstria Quotas N/A N/A 65%
Optica Ltda.
(Brazil)
Optica SOLA de Mexico Capital N/A N/A 65%
S.R.L. de C.V. Quotas
(Mexico)
Sola Optical Partners, a Partnership N/A N/A 65%
Limited Partnership
(Australia)
Sola Optical Holdings S.A.R.L. S.A.R.L. N/A 38,051 65%
(France) Interest
N/A Not applicable
Schedule 1.1(b)-Page 1
SCHEDULE 1.1 (c)
Initial Pledged Interests
TO BE UPDATED BY THE COMPANY
Pledgor: Sola International Inc.
PERCENTAGE OF
ALL ISSUED
CAPITAL OR
ISSUER NUMBER OTHER EQUITY
(JURISDICTION OF CLASS CERTIFICATE OF INTERESTS OF
INCORPORATION) OF STOCK NO(S). SHARES ISSUER
------------------------------ ---------- ---------- --------- -------------
Lentes SOLA S.A. de Capital 2 860,015 65%
C.V. (Mexico) Minimo Fijo
Capital 2 3,900
Variable
Sola Optical Italia S.p.A. Ordinary 6,7,11 3,462,810 65%
(Italy) Shares
Sola Optical (U.K.) Ordinary 7 2,195,946 65%
Limited (UK) Shares
Sola Holdings Ireland Ordinary 7 3,403,151 65%
Limited (Ireland) Shares
Schedule 1.1(c)-Page 1
SCHEDULE 1.1(d)
Prior Liens
TO BE UPDATED BY THE COMPANY
SECURED PARTY JURISDICTION DATE FILE NUMBER COMMENTS
-------------------------------------------------------------------------------------------------------------------------
Sun Data, Inc. Secretary of State, 1/21/97 UCC-1 9702260584 Equipment on Lease No. 150723 (see
CA attachment to financing statement)
Mellon First United Secretary of State, 6/13/97 UCC-1 9716860693 Equipment -- printer, carrier,
Leasing CA prompt, high speed printer label
printer (Lease #65101)
Mellon First United Secretary of State, 7/21/97 UCC-1 9720660487 Equipment -- mailing machine,
Leasing CA scale, acct. software, differential
weight (Lease #92345)
Mellon First United Secretary of State, 4/21/98 UCC-1 9811261083 Equipment: 1 CH5000 Challenger, 1
Leasing CA Eltron Printer and equipment (Lease
#1997977531)
Mellon First United Secretary of State, 4/27/98 UCC-1 9811860999 Equipment -- A.H. 5000 Manifest
Leasing CA Challenger System w/access. (Lease
#199797756)
MCI Capital Services Secretary of State, 7/1/98 UCC-1 9818360303 Equipment - Blanket lien associated
CA with computer programs and software
from Lease #6754578-001
Xerox Corp. Secretary of State, 8/3/98 UCC-1 9821760512 Equipment -- Xerox 5385 copier
CA w/access. (Lease #957487275)
IBM Credit Secretary of State, 10/14/98 UCC-1 9829461094 Computers, information processing
Corporation CA and peripheral equipment an goods
referenced on IBM Supplement 547333
dated 8/31/98
IBM Credit Secretary of State, 5/5/99 UCC-1 9913160549 Computers, information processing
Corporation CA and peripheral equipment an goods
referenced on IBM Supplement 657608
dated 4/26/99
IBM Credit Secretary of State, 12/7/99 UCC-1 9935160863 Computers, information processing
Corporation CA and peripheral equipment an goods
referenced on IBM Supplement 744423
dated 11/5/99
Fidelity Leasing Inc. Secretary of State, 3/7/01 UCC-1 0107160629 Equipment -- 3 Cisco 2610 router
CA
Fidelity Leasing Inc. Secretary of State, 4/9/01 UCC-1 0110660197 Equipment -- Cisco 2610 routers
CA
Sun Microsystems Secretary of State, 5/8/01 UCC-1 0113060415 All equipment and related items
Finance CA described in any Lease Schedule to
Master Lease Agreement No. 4067082
UBS AG, Stamford Secretary of State, 7/31/01 UCC-1 0121360001 Blanket Lien
Branch CA
Schedule 1.1(d)-Page 1
UBS AG, Stamford Secretary of State, 7/31/01 UCC-1 10754692 Blanket Lien
Branch DE
IBM Credit Secretary of State, 7/15/02 UCC-1 21937584 Software Equipment under lease
Corporation DE number
CIT Communications Secretary of State, 9/5/02 UCC-1 22277246 Software Equipment under lease
Finance Corporation DE number H00271
MCI Capital Services Department of State, 6/26/98 UCC-1 980000140996 Computer Equipment and Software
FL under Lease #6754578
MCI Capital Services Clerk of Superior 6/26/98 UCC-1 Computer equipment and software
Court ▇▇▇-▇▇▇▇-▇▇▇▇▇▇ under Master Lease Agreement
Gwinnett County, #6754578
GA
MCI Capital Service Secretary of State, 6/26/98 UCC-1 2467785 Computer equipment and software
KS under Lease #6754578
CIT Communications County Clerk 6/4/01 UCC-1 2019682 Equipment including but not limited
Finance Corporation ▇▇▇▇▇ County, KY to data equipment acquired or sole
to debtor by secured party pursuant
to Lease #S421603
MCI Capital Services Secretary of State, 6/26/98 UCC-1 155666 Computer equipment and software
KY under Lease #6754578
Fidelity Leasing Inc. County Clerk 6/4/01 UCC-1 456402 Cisco Computer equipment
Kenton County,
Covington
Courthouse, KY
UBS AG, Stamford Secretary of State, 7/31/01 UCC-1 ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ Blanket Lien
Branch KY
Fidelity Leasing Inc. Secretary of the 4/9/01 UCC-1 200101365390 Computer Equipment - Cicsco routers
Commonwealth MA
UBS AG, Stamford Secretary of State, 7/31/01 UCC-1 2010001423446 Blanket Lien
Branch ME
MCI Capital Services Secretary of State, 6/29/98 UCC-1 2049113 Computer equipment and software
MN under Lease Agreement #6754578
MCI Capital Services Secretary of State, 6/26/98 UCC-1 2930850 All equipment, inventory, general
MO intangibles, accounts and chattel
paper evidenced by the Master Lease
Agreement No. 6754578-001
MCI Capital Services Recorder of Deeds 6/29/98 UCC-1 3763 Computer Equipment and Software
▇▇▇▇▇▇ County, MO under Lease #6754578-001
UBS AG, Stamford Secretary of State, 7/31/01 UCC-1 20018008595 Blanket Lien
Branch MO
UBS AG, Stamford Secretary of State, 7/31/01 UCC-1 02059086 Blanket Lien
Branch NJ
MCI Capital Services Secretary of the 6/26/98 UCC-1 29090945 Computer equipment and software
Commonwealth, under Master Lease Agreement
Pennsylvania #6754578
MCI Capital Services Prothonotary 6/26/98 UCC-1 1123 ST 1998 Computer equipment and software
Dauphin County, under Lease #6754578
PA
UBS AG, Stamford Secretary of State, 7/31/01 UCC-1 722 Blanket Lien
Branch RI
MCI Capital Services Secretary of State, 6/26/98 UCC-1 98-129211 Computer equipment and software
TX under Lease #6754578-001
Schedule 1.1(d)-Page 2
SCHEDULE 3.3
Financing Statements and Other Necessary Filings
TO BE UPDATED BY THE COMPANY
I. UCC Filings
Delaware Secretary of State
II. Other Filings
None
Schedule 3.3-Page 1
SCHEDULE 4.15
Required Consents
TO BE UPDATED BY THE COMPANY
None.
Schedule 4.15-Page 1
EXHIBIT 1
FORM OF
ISSUER ACKNOWLEDGMENT
The undersigned hereby (i) acknowledges receipt of a copy of
that certain Security Agreement dated as of December 11, 2003 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Security Agreement"; capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement), among
Sola International Inc. (the "Borrower"), the Guarantors from time to time party
thereto and Union Bank of California, N.A., as Collateral Agent (in such
capacity and together with any successors in such capacity, the "Collateral
Agent"), (ii) agrees promptly to note on its books the security interests
granted to the Collateral Agent and confirmed under the Security Agreement (iii)
agrees that after it has received notice of an Event of Default it will comply
with instructions of the Collateral Agent with respect to the applicable
Securities Collateral without further consent by the applicable Pledgor, (iv)
agrees to notify the Collateral Agent upon obtaining knowledge of any interest
in favor of any Person in the applicable Securities Collateral that is adverse
to the interest of the Collateral Agent therein and (v) waives any right or
requirement at any time hereafter to receive a copy of the Security Agreement in
connection with the registration of any Securities Collateral thereunder in the
name of the Collateral Agent or its nominee or the exercise of voting rights by
the Collateral Agent or its nominee.
[NAME OF ISSUER]
By: ___________________________________
Name:
Title:
Exhibit 1 -Page 1
EXHIBIT 2
FORM OF
PLEDGE AMENDMENT
This Pledge Amendment, dated as of [_____________, ______] is
delivered pursuant to Section 6.1 of that certain Security Agreement dated as of
December 11, 2003 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Security Agreement"; capitalized terms used but
not otherwise defined herein shall have the meanings assigned to such terms in
the Security Agreement), among the undersigned, the Borrower, the Guarantors
from time to time party thereto and Union Bank of California, N.A., as
Collateral Agent (in such capacity and together with any successors in such
capacity, the "Collateral Agent"). The undersigned hereby agrees that this
Pledge Amendment may be attached to the Security Agreement and that the Pledged
Securities and/or Intercompany Notes listed on this Pledge Amendment shall be
deemed to be and shall become part of the Pledged Collateral and shall secure
all Secured Obligations.
______________________________________,
as Pledgor
By: ___________________________________
Name:
Title:
PLEDGED SECURITIES
PERCENTAGE OF
NUMBER ALL ISSUED CAPITAL
CLASS PAR CERTIFICATE OF OR OTHER EQUITY
ISSUER OF STOCK VALUE NO(S). SHARES INTERESTS OF ISSUER
------ -------- ----- ----------- ------ -------------------
PLEDGED INTERCOMPANY NOTES
PRINCIPAL DATE OF INTEREST MATURITY
ISSUER AMOUNT ISSUANCE RATE DATE
------ ------ -------- ---- ----
Exhibit 2 - Page 1
EXHIBIT 3
FORM OF
JOINDER AGREEMENT
[Name of New Pledgor]
[Address of New Pledgor]
[Date]
[Name and Address
of Collateral Agent]
Ladies and Gentlemen:
Reference is made to that certain Security Agreement dated as
of December 11, 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Security Agreement"; capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Security Agreement), among Sola International Inc. (the
"Borrower"), each of the Guarantors listed on the signature pages thereto or
from time to time party thereto by execution of a joinder agreement and Union
Bank of California, N.A., as Collateral Agent (in such capacity and together
with any successors in such capacity the "Collateral Agent").
This letter supplements the Security Agreement and is
delivered by the undersigned, ______________ (the "New Pledgor"), pursuant to
Section 3.4 of the Security Agreement. The New Pledgor hereby agrees to be bound
as a Guarantor and as a Pledgor by all of the terms, covenants and conditions
set forth in the Security Agreement to the same extent that it would have been
bound if it had been a signatory to the Security Agreement on the execution date
of the Security Agreement. The New Pledgor hereby makes each of the
representations and warranties and agrees to each of the covenants applicable to
the Pledgors contained in the Security Agreement.
Attached hereto are supplements to each of the schedules to
the Security Agreement with respect to the New Pledgor. Such supplements shall
be deemed to be part of the Security Agreement.
This agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCLUDING (TO THE GREATEST EXTENT PERMITTED
Exhibit 3 - Page 1
BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Exhibit 3 - Page 2
IN WITNESS WHEREOF, the New Pledgor has caused this letter
agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
[NEW PLEDGOR]
By: ___________________________________
Name:
Title:
AGREED TO AND ACCEPTED:
UNION BANK OF CALIFORNIA, N.A.,
as Collateral Agent
By: __________________________________
Name:
Title:
[Schedules to be attached]
Exhibit 3 - Page 3
EXHIBIT 4
FORM OF
LOCKBOX AGREEMENT
LOCKBOX AGREEMENT (the "Agreement"), dated as of [_____, ___]
by and among [_______], a [_______], ("Pledgor"), Union Bank of California,
N.A., as pledgee, assignee and secured party, in its capacity as agent (in such
capacities, "Collateral Agent") for the financial institutions (the "Lenders")
from time to time party to the Credit Agreement (as hereinafter defined), and
[_______] (the "Bank").
RECITALS:
A. Pursuant to that certain Credit Agreement, dated as
of December 11, 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"; capitalized terms
used and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement), by and among [Pledgor (the Company")]*, the
Lenders party thereto, Collateral Agent as administrative agent, collateral
agent and certain other parties thereto, the Lenders have agreed to (i) make to
or for the account of [Pledgor or the Company] * certain Revolving Loans up to
an aggregate principal amount of [____________] and (ii) issue certain Letters
of Credit at the request of [Pledgor or the Company].*
B. In connection with the Credit Agreement, [Pledgor or
the Company](1) and each of the other Loan Parties [, including Pledgor,]** has
granted to Collateral Agent, for its benefit and the benefit of the Lenders, a
security interest in their present and future Accounts, and the Proceeds (as
hereinafter defined) thereof, and the Loan Parties[, including Pledgor,]2 have
agreed that all collections and proceeds of such Accounts shall be remitted in
kind to Collateral Agent.
C. After the occurrence of a Default and upon the
request of the Collateral Agent, Pledgor has agreed to instruct all account
debtors on the Accounts of Pledgor to remit to lockboxes established by Pledgor
all payments to be made to Pledgor by checks or other drafts.
D. After the occurrence of a Default and upon the
request of the Collateral Agent, Pledgor has agreed to deposit in an account at
the Bank all collections and proceeds of
-------------------------
(1) Insert "Pledgor" in the case of the Lockbox Agreement executed by the
Company and "the Company" in the case of each Lockbox Agreement
executed by any other Credit Party.
(2) Delete bracketed language in the case of the Lockbox Agreement executed
by the Company; delete brackets in the case of Lockbox Agreements
executed by any other Credit Party.
Exhibit 4 - Page 1
the Accounts (subject to the provisions of the Loan Documents) received in
United States currency.
D. Collateral Agent and Pledgor desire to use the
lockbox service of the Bank and the Bank is willing to provide such service for
Pledgor and Collateral Agent.
AGREEMENT:
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Post Office Box. The Bank will rent P.O. Box [ ]
(the "Bank Lockbox") of the post office located at [ ] in the name of Pledgor.
All account debtors on the Accounts of Pledgor may be instructed to mail their
remittances to the Bank Lockbox.
Section 2. Access to Mail. The Bank will have exclusive and
unrestricted access to the Bank Lockbox and will have complete and exclusive
authority to receive, pick up and open all regular, registered, certified or
insured mail addressed to the Bank Lockbox. On written demand of Collateral
Agent, the Bank shall cease its processing of such mail, and shall release the
same, in kind, to Collateral Agent, without the prior consent of Pledgor, and
Collateral Agent shall thereafter process said mail promptly in accordance with
this agreement. The Bank shall not inquire into Collateral Agent's right to make
such a demand under any agreement among Collateral Agent, Lenders and Pledgor,
and shall be forever released of all obligations with respect to said
remittances upon release to Collateral Agent. Pledgor shall have no control
whatsoever over any mail, checks, money orders, collections or other forms of
remittances received in any Lockbox. Appropriate instructions have been, or will
be, given by the Bank to the United States Post Office where the Bank Lockbox is
maintained, and such instructions shall not be revoked without the prior written
consent of Collateral Agent. Except as permitted under Section 3 below, any
instruction given to the Bank by Pledgor without the prior written agreement of
Collateral Agent shall be void and of no force or effect. All mail addressed to
the Bank Lockbox will be picked up by the Bank according to its regular
collection schedule.
Section 3. Remittance Collection. On the day received, the
Bank will open all mail addressed to the Bank Lockbox and remove and inspect the
enclosures. All checks, money orders and other forms or orders for the payment
of money and other collection remittances (hereinafter collectively referred to
as "checks") shall be processed by the Bank as follows:
(i) Missing Date. All undated checks will be dated by the Bank
as of the postmark date and processed as hereafter provided.
(ii) Postdated. Checks postdated up to three days from date of
receipt shall be processed on the date indicated on the check. The Bank
shall not deposit checks postdated more than three days, but shall
notify Collateral Agent by telephone of such checks and follow
Collateral Agent's instructions for disposition of such checks.
(iii) Stale Date. Checks dated six months or more prior to the
date of collection will not be deposited and shall be sent to
Collateral Agent.
Exhibit 4 - Page 2
(iv) Different Amount. Where written and numeric amounts
differ, a check will be processed by the Bank only if the correct
amount can be determined from the accompanying documents, otherwise the
check will not be deposited and shall be sent to Collateral Agent.
(v) Signature Missing. Checks which do not bear the drawer's
signature and do not indicate the drawer's identity will not be
deposited but shall be sent to Collateral Agent. If, as determined by
the Bank, the drawer can be identified from the face of the check, the
Bank will deposit and process the check by affixing a stamped
impression requesting the drawer bank to contact the drawer for
authority to pay.
(vi) Alterations and Restrictions. Checks with alterations and
checks bearing restrictive notations such as "Payment in Full" will not
be deposited, and the Bank shall notify Collateral Agent of such checks
by telephone on the day of receipt and will deposit, hold or forward
such checks with accompanying written matter, if any, as requested by
Collateral Agent.
(vii) Foreign Banks and Currency. Checks drawn in foreign
currency will be processed in accordance with the Bank's normal
procedure for such checks and Collateral Agent will be notified by
telephone of any such checks on the date received by the Bank.
(viii) Instruments or Other Payments. Instruments evidencing,
or other forms of payment in respect of, the Accounts, will be
processed in accordance with the Bank's normal procedure, and the Bank
shall notify Collateral Agent of such Instruments or other forms of
payment by telephone on the day of receipt and will hold or forward
such Instruments or other forms of payment with accompanying written
matter, if any, as requested by Collateral Agent.
To the extent requested by Collateral Agent, Pledgor shall assist and instruct
Collateral Agent in connection with the orderly and expeditious processing of
the checks described in clauses (i)-(vii). Any items which Collateral Agent has
specifically instructed the Bank in writing not to process will not be deposited
and shall be sent to Collateral Agent.
Section 4. Processing Acceptable Checks. All checks, except
those not acceptable for deposit under the terms hereof, shall be deposited on
the day of receipt by the Bank to Account No. [______] at the Bank (the
"Collection Account"), which is an account owned and controlled exclusively by
Collateral Agent, and all such checks shall be endorsed as follows:
credited to account number [_________];
absence of endorsement hereby supplied and guaranteed by
[Lockbox Bank]
Any available funds in the Collection Account will be wired no
later than 2:00 p.m. (New York time) each Business Day with the following
instructions:
[ ]
ABA [ ]
Exhibit 4 - Page 3
for [ ]
[ ]
Acct. No. [ ]
Attn: [ ]
Ref.: [Loan Party ]
All remittance advices, envelopes, and written matter (except as expressly
provided herein) received in the Bank Lockbox together with photocopies of all
checks shall be sent to Pledgor and, if requested by Collateral Agent, copies of
same shall be sent to Collateral Agent. After the occurrence of a Default and
upon the request of the Collateral Agent, the Bank shall mail both a deposit
advice for all deposits to the Collection Account, on a daily basis, and a
statement of account, on a monthly basis, to both Collateral Agent and Pledgor
and, if no deposit is made on a Bank business day, a deposit advice, correctly
dated, will be sent to Collateral Agent and Borrower with the notation "No
Deposit" appearing thereon.
Section 5. Returned Checks. Checks deposited in the Collection
Account which are returned unpaid because of "Insufficient Funds," "Uncollected
Funds," etc. will be redeposited by the Bank only once. If a returned check
exceeds $10,000 the Bank shall also telephone Pledgor for further instructions
on the day such check is received. If redeposit is not warranted for reasons
such as "account closed" or "payment stopped" or if a check is returned a second
time, the Bank will send a debit advice with the item to Pledgor with copies of
same to Collateral Agent.
Section 6. Remittance Received by Pledgor. Remittances which
are sent directly to or received by Pledgor shall be forwarded to the Bank
Lockbox on the day received.
Section 7. Record Maintenance. All deposit checks will be
microfilmed (on front and back) by the Bank and retained for five years by the
Bank prior to destruction. Photocopies of filmed items will be provided to
Collateral Agent or Pledgor on request, within the five-year period.
Section 8. Bank Charges. All charges of the Bank for services
rendered pursuant to this Agreement shall be billed to and paid directly by
Pledgor. Said charges shall not be charged against remittances nor shall they be
debited to the Collection Account.
Section 9. No Offset. The Bank hereby agrees that it will
treat all remittances received in the Bank Lockbox in accordance with the terms
hereof, and it will not, directly or indirectly, offset or assert any claim
against the Bank Lockbox or the Collection Account or divert such remittances on
account of any obligations owed to the Bank by Pledgor or by the party making
the remittance, except as provided in Section 5 hereof
Section 10. Bank Liability. In acting under this Agreement,
the Bank shall not be liable to any Lender or Pledgor for any error of judgment,
or for any act done or step taken or omitted by it in good faith, except for
gross negligence or willful misconduct.
Exhibit 4 - Page 4
Section 11. Term. This Agreement shall continue in full force
and effect until termination by the Bank on 60 days' prior written notice to all
other parties. Collateral Agent may terminate this Agreement at any time, which
termination shall be effective on receipt of written notice by the Bank, and in
the event of such termination, Collateral Agent shall at its option have the
sole right to remove mail from the Bank Lockbox. Pledgor shall have no right to
unilaterally terminate this Agreement.
Section 12. Definitions. The following terms shall have the
following meanings. All such definitions shall be equally applicable to the
singular and plural forms of the terms defined.
"Instruments" shall mean, collectively, with respect to each
Pledgor, all "instruments," as such term is defined in the UCC, and in any event
shall include, without limitation, all promissory notes, drafts, bills of
exchange or acceptances.
"Proceeds" shall mean all "proceeds," as such term is defined
in the UCC, and in any event shall include, without limitation, any and all (i)
proceeds of any insurance (except payments made to a Person which is not a party
to this Agreement), indemnity, warranty, guaranty or claim payable to the
Collateral Agent or to such Pledgor from time to time with respect to any of the
Pledged Collateral, (ii) payments (in any form whatsoever) made or due and
payable to such Pledgor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Pledged Collateral by any Governmental Authority (or any Person acting on behalf
of a Governmental Authority), (iii) instruments representing obligations to pay
amounts in respect of the Pledged Collateral, (iv) products of the Pledged
Collateral and (v) other amounts from time to time paid or payable under or in
connection with any of the Pledged Collateral.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in any applicable jurisdiction.
Section 13. Modification. This Agreement may only be modified
by a writing signed by all of the parties hereto.
Section 14. Notices.
(a) All notices, including phone notice, daily deposit
advices, monthly statements of account and copies of all checks and the
documents which are to be given or sent to Collateral Agent shall be sent to the
following address or transmitted to the following facsimile number, and, where
applicable, given at the following phone number:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit 4 - Page 5
(b) All notices to the Bank shall be sent to:
[ ]
[ ]
[ ]
Attention: [ ]
Telephone: [ ]
Facsimile: [ ]
(c) All notices and items which are to be sent to Pledgor
shall be sent to:
Sola International Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address, telephone number or facsimile number as any such party
may designate for itself by like notice.
Section 15. Control. Each party to this Agreement hereby
confirms that, to the extent applicable, (i) each account governed hereby is a
"deposit account", (ii) this Agreement shall constitute an "authenticated
record", (iii) the arrangements established under this Agreement shall
constitute "control" of each such account, as each of those terms is defined in
Article 9 of the UCC.
Section 16. Pledgor's Agreement. Pledgor agrees that it will
indemnify and hold the Bank harmless from any and all loss, liability, expense
or damage that the Bank may incur in processing lockbox items in accordance with
this Agreement, including, without limitation, any loss that the Bank
experiences as a result of returned items to the extent the balances in the
Collection Account referenced in Section 4 are insufficient to cover such
losses, except for any loss, liability, expense or damage that the Bank may
incur as a result of the Bank's gross negligence or willful misconduct.
Section 17. Limitation on Liability. Collateral Agent and
Pledgor acknowledge that the Bank undertakes to perform only such duties as are
expressly set forth in this Agreement and those which are normally undertaken by
the Bank in connection with lockbox processing. Notwithstanding any other
provision hereof, it is agreed by the parties that the Bank shall not be liable
for any action taken by the Bank or any of its directors, officers, agents or
employees in accordance with this Agreement, except for the Bank's or such
natural person's gross negligence or willful misconduct. In no event shall the
Bank be liable for losses or delays resulting from force majeure, computer
malfunction, interruption of communication facilities, labor difficulties or
other causes beyond its reasonable control or for any indirect, special or
consequential damages.
Exhibit 4 - Page 6
Section 18. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING (TO THE GREATEST EXTENT
PERMITTED BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL, ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 19. CONSENT TO JURISDICTION AND SERVICE OF PROCESS;
WAIVER OF JURY TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY NEW YORK STATE COURT OR FEDERAL
COURT OF THE UNITED STATES OF AMERICA SITTING IN THE CITY OF NEW YORK, AND ANY
APPELLATE COURT OF ANY THEREOF, AND BY EXECUTION AND DELIVERY HEREOF, EACH
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. EACH PLEDGOR AGREES THAT SERVICE OF PROCESS IN ANY
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO BORROWER
AT ITS ADDRESS SET FORTH IN THE CREDIT AGREEMENT OR AT SUCH OTHER ADDRESS OF
WHICH THE COLLATERAL AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. IF ANY
COLLATERAL AGENT APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT SERVICE, SUCH
PLEDGOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT
NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT TO
BRING PROCEEDINGS AGAINST ANY PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION.
THE PLEDGORS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 20. Successors and Assigns. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party and all covenants, promises,
and agreements by or on behalf of Pledgor, the Bank or Collateral Agent shall
bind and inure to the benefit of the successors and assigns of Pledgor, the Bank
or Collateral Agent and the Lenders, as the case may be.
Section 21. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties on separate
counterparts and each such counterpart shall for all purposes be deemed an
original, but all such counterparts shall together
Exhibit 4 - Page 7
constitute but one and the same agreement. Pledgor, the Bank and Collateral
Agent hereby acknowledge receipt of a true, correct, and complete counterpart
hereof.
Section 22. Severability. Any provision hereof which is
prohibited or unenforceable in any jurisdiction shall as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 23. Headings. The section headings in this Agreement
are inserted for convenience of reference and shall not be considered a part
hereof or used in its interpretation.
Exhibit 4 - Page 8
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers as of the day
and year first above written.
[____________________________________]
as Pledgor
By: _________________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Collateral Agent
By: _________________________________
Name:
Title:
[____________________________________]
as Bank
By: _________________________________
Name:
Title:
Exhibit 4 - Page 9
EXHIBIT 5
TO BE UPDATED BY THE COMPANY
Exhibit 5 - Page 1
SCHEDULE 1.1(a)
Initial Intercompany Notes
Pledgor: Sola International Inc.
None.
SCHEDULE 1.1(b)
Initial Pledged Interests
Pledgor: Sola International Inc.
PERCENTAGE OF
ALL ISSUED
CAPITAL OR
NUMBER OTHER EQUITY
ISSUER TYPE OF CERTIFICATE OF INTERESTS OF
(Jurisdiction of Incorporation) INTEREST NO(S). SHARES ISSUER
------------------------------- ---------- ----------------- ---------- -------------
Sola Brasil Industria Quotas N/A 41,711,930 65%
Optica Ltda. (Brazil)
Optica SOLA de Capital 1 - ($53,000 N/A 65%
Mexico S.R.L. de C.V. Quotas 4 - ($1,173,958;
(Mexico) $1,120,958)
Sola Optical Partners, a Partnership N/A N/A 65%
Limited Partnership
(Australia)
Sola Optical Holdings S.A.R.L. N/A 38,051 65%
S.A.R.L. (France) Interest
N/A Not applicable
SCHEDULE 1.1(c)
Initial Pledged Shares
Pledgor: Sola International Inc.
PERCENTAGE OF
ALL ISSUED
CAPITAL OR
NUMBER OTHER EQUITY
ISSUER CLASS CERTIFICATE OF INTERESTS OF
(Jurisdiction of Incorporation) OF STOCK NO(S). SHARES ISSUER
------------------------------- --------------- ----------- --------- -------------
Sola Optical China Ltd Ordinary Shares N/A 19,100 65%
Sola Optical Italia Ordinary Shares 6, 7, 11 3,462,810 65%
S.p.A. (Italy)
Sola Optical (U.K.) Ordinary Shares 7 2,195,946 65%
Limited (UK)
Sola Holdings Ireland Ordinary Shares 7 3,403,151 65%
Limited (Ireland)
SCHEDULE 1.1(d)
Prior Liens
Type of Secured
Debtor Jurisdiction filing Party Collateral File Date File Number
------ ------------ ------- -------- ---------- --------- -----------
American Optical Massachusetts UCC-1 M&I First Certain 08/28/1995 334788
Corp. Secretary of National equipment
the Leasing Corp.
Commonwealth
American Optical Massachusetts UCC M&I First Certain 03/31/2000 000705441
Corp. Secretary of Continuation National equipment
the Leasing Corp.
Commonwealth
B & W Optical Co., Maryland State UCC-1 Citicorp Vendor Leased equipment 07/09/2001 00000001810893
Inc. Dept. Finance, Inc. 54, Liber
of Assessments & U00167,
Taxation Folio 0712
B & W Optical Co., Maryland State UCC Citicorp Vendor Leased equipment 11/30/2001 00000001810893
Inc. Dept. Amendment Finance, Inc. 54, Liber
of Assessments & U00188,
Taxation Folio 0809
Optical Electro Florida UCC-1 United Financial All machinery, 01/03/1995 950000001496
Forming, Inc. Secretary of Group, Inc. inventory, etc.
State pursuant to
Security
Agreement
Optical Electro Florida UCC United Financial All machinery, 12/20/1999 990000286739
Forming, Inc. Secretary of Amendment Group, Inc. inventory, etc.
State AND pursuant to
Continuation Security
Agreement
Optical Electro Florida UCC-1 First Union Leased equipment 06/29/2001 200100143842-9
Forming, Inc. Secretary of Commercial Corp.
State
Optical Electro Florida UCC-1 First Union Leased equipment 06/28/2002 200201541066
Forming, Inc. Secretary of Commercial
State Corporation
SOLA International California UCC-1 IBM Credit Leased equipment 05/05/1999 9913160549
Inc. (Lessee) Secretary Corporation
of State (Lessor)
SOLA International California UCC-1 IBM Credit Leased equipment 12/07/1999 9935160863
Inc. (Lessee) Secretary Corporation
of State (Lessor)
Sola International California UCC-1 Fidelity Leasing Certain 03/07/2001 0107160629
Inc. Secretary Inc. equipment
of State
Sola International California UCC-1 Fidelity Leasing Certain 04/09/2001 0110660197
Inc. Secretary Inc. equipment
of State
Sola International Delaware UCC-1 IBM Credit Certain 07/15/2002 21937584
Inc. Secretary Corporation equipment
of State
Sola International Delaware UCC-1 CIT Leased equipment 09/05/2002 22277246
Inc. Secretary Communications
of State Finance
Corporation
Sola International Delaware UCC-1 Makino, Inc. Certain 10/28/2003 32825530
Inc. Secretary equipment
of State
Sola International Kentucky, ▇▇▇▇▇ UCC-1 CIT Leased equipment 06/04/2001 2019682
Inc. County Communications
Finance
Corporation
Type of Secured
Debtor Jurisdiction filing Party Collateral File Date File Number
------ ------------ ------- -------- ---------- --------- -----------
Sola International Massachusetts UCC-1 Fidelity Leasing Certain 04/09/2001 200101365390
Inc. Secretary of the Inc. equipment
Commonwealth -
UCC Division
SCHEDULE 3.3
Financing Statements and Other Necessary Filings
I. UCC Filings
Delaware Secretary of State
II. Other Filings
Filings and recordings with applicable Governmental Authorities in the
jurisdiction of organization of each Direct Foreign Subsidiary whose
securities are Pledged Securities.
SCHEDULE 4.14
Required Consents
None.
EXHIBIT 5
Existing Issuer Obligations
FORWARD AGREEMENTS:
(BOUGHT)
CURRENCY
CURRENCY CURRENCY TRADE MATURITY PURCHASED CONTRACT
LOCATION ENTITY PURCHASED SOLD DATE DATE AMOUNT RATE
-------- ------ --------- ---- ---- ---- ------ ----
Ireland Sola IFSC SGD USD 11/18/03 12/15/03 5,935,259.21 1.7233
Sola IFSC JPY USD 11/18/03 12/15/03 180,142,264.00 108.9720
Sola IFSC USD DKK 11/18/03 12/15/03 2,072,291.21 6.3366
Sola IFSC USD AUD 11/18/03 12/15/03 5,312,710.80 0.714184
Sola IFSC GBP USD 11/18/03 12/15/03 6,590,359.03 1.686858
Sola IFSC USD EUR 11/18/03 12/15/03 26,578,932.99 1.177338
Sola IFSC USD DKK 11/18/03 12/15/03 141,803.49 6.250398
Sola IFSC SGD USD 11/18/03 12/15/03 124,765.16 1.7133
Sola IFSC USD GBP 11/18/03 12/15/03 1,070,364.27 1.6940
BOUGHT SGD 6,060,024.37 SOLD USD
BOUGHT JPY 180,142,264.00 SOLD DKK
BOUGHT USD 35,176,102.76 SOLD AUD
BOUGHT GBP 6,590,359.03 SOLD EUR
SOLD GBP
U.S. Sola USA Pesos USD 2/28/03 12/26/03 7,590,000.00 11.7590
Sola USA Pesos USD 2/28/03 1/23/04 12,905,000.00 11.8345
Sola USA Pesos USD 2/28/03 2/20/04 17,460,000.00 11.9000
Sola USA Pesos USD 2/28/03 3/31/04 12,145,000.00 12.0000
BOUGHT 50,100,000.00 SOLD USD
PESOS
U.K. AOUK USD GBP 1/23/03 12/15/03 650,000.00 1.5856
AOUK USD GBP 1/23/03 1/15/04 650,000.00 1.5823
--------------
BOUGHT USD 1,300,000.00 SOLD GBP
Australia SOA (2) AUD USD 3/4/03 12/26/03 418,060.20 1.6722
SOA (2) AUD USD 3/4/03 1/23/04 418,060.20 1.6722
SOA (2) AUD USD 3/4/03 2/20/04 418,060.20 1.6722
SOA (2) AUD USD 3/4/03 3/31/04 418,060.20 1.6722
(12 months 4/1-3/31/04 Total Contract Sell USD 3,000,000 and Buy AUD 5,016,722.41 @ 1.6722)
--------------
BOUGHT AUD 1,672,240.80 SOLD USD
SOA (3) AUD USD 8/14/03 12/26/03 574,611.03 1.5470
SOA (3) AUD USD 8/14/03 1/23/04 574,611.03 1.5470
SOA (3) AUD USD 8/14/03 2/20/04 574,611.03 1.5470
SOA (3) AUD USD 8/14/03 3/31/04 574,611.03 1.5470
--------------
BOUGHT AUD 2,298,444.12 SOLD USD
(SOLD)
SOLD
CURRENCY
CONTRACT COUNTERPARTY
-------- (EG, FIN'L PURPOSE OF TRANSACTION
LOCATION AMOUNT INSTITUTION) (EG, HEDGE ACCTS PAYABLES)
-------- --------
Ireland 3,444,164.16 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
1,653,105.97 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
13,131,350.94 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
7,438,854.41 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
11,116,999.85 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
22,575,448.16 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
886,328.25 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
72,820.10 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
631,848.29 ▇▇ ▇▇▇▇▇▇ Hedge Monthly Interco Netting Payment
16,287,090.09
14,017,679.19
7,438,854.41
22,575,448.16
631,848.29
U.S. 645,463.05 ▇▇ ▇▇▇▇▇▇ Cashflow (Forecasted) Hedge - Budget
1,090,455.87 ▇▇ ▇▇▇▇▇▇ Cashflow (Forecasted) Hedge - Budget
1,467,226.89 ▇▇ ▇▇▇▇▇▇ Cashflow (Forecasted) Hedge - Budget
1,012,083.33 ▇▇ ▇▇▇▇▇▇ Cashflow (Forecasted) Hedge - Budget
4,215,229.14
U.K. 409,939.46 ▇▇ ▇▇▇▇▇▇ Cashflow (Forecasted) Hedge - Budget
410,794.41 ▇▇ ▇▇▇▇▇▇ Cashflow (Forecasted) Hedge - Budget
-------------
820,733.87
Australia 250,000.00 Westpac Bank Cashflow (Forecasted) Hedge - Budget
250,000.00 Westpac Bank Cashflow (Forecasted) Hedge - Budget
250,000.00 Westpac Bank Cashflow (Forecasted) Hedge - Budget
250,000.00 Westpac Bank Cashflow (Forecasted) Hedge - Budget
(12 months 4/1-3/31/04 Total Contract Sell USD 3,000,000 and Buy AUD 5,016,722.41 @ 1.6722)
-------------
1,000,000.00
371,428.57 Westpac Bank Cashflow (Forecasted) Hedge - Budget
371,428.57 Westpac Bank Cashflow (Forecasted) Hedge - Budget
371,428.57 Westpac Bank Cashflow (Forecasted) Hedge - Budget
371,428.57 Westpac Bank Cashflow (Forecasted) Hedge - Budget
-------------
1,485,714.29
U.S. Sola International Inc. EUR USD 10/24/03 12/15/03 15,000,000.00
Sola International Inc. EUR USD 10/24/03 12/15/03 25,000,000.00
Sola International Inc. EUR USD 10/28/03 12/15/03 50,000,000.00
Sola International Inc. EUR USD 10/28/03 12/15/03 50,000,000.00
Sola International Inc. EUR USD 10/28/03 12/15/03 100,000,000.00
--------------
BOUGHT EUR 240,000,000.00
U.S. 1.1787 17,680,500.00 ▇▇ ▇▇▇▇▇▇ Euro Bond Liability Hedge
1.1791 29,477,500.00 ▇▇ ▇▇▇▇▇▇ Euro Bond Liability Hedge
1.1728 58,640,000.00 ▇▇ ▇▇▇▇▇▇ Euro Bond Liability Hedge
1.1728 58,640,000.00 ▇▇ ▇▇▇▇▇▇ Euro Bond Liability Hedge
1.1750 117,500,000.0 ▇▇ ▇▇▇▇▇▇ Euro Bond Liability Hedge
-------------
SOLD USD 281,938,000.00
SWAP AGREEMENTS:
SELL (BUY) USD SOLA TO
CONTRACT # CONTRACT DATE MATURITY DATE TO ▇▇ ▇▇▇▇▇▇ CONTRACT RATE (SELL) BUY EUROS
28306800 11/24/03 12/11/03 282,000,000 1.175 240,000,000
28306801 11/24/03 12/15/03 (281,832,000) 1.1743 (240,000,000)
------------ ------------
168,000 -
EXHIBIT G
FORM OF
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT (this "Agreement") dated as of [ ], among SOLA INTERNATIONAL
INC., a Delaware corporation (the "Borrower"), [INSERT NAME OF GUARANTOR] (the
"Guarantor") and UNION BANK OF CALIFORNIA, N.A., as collateral agent (in such
capacity, the "Collateral Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
Reference is made to that certain Credit Agreement dated as of December 11, 2003
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Credit Agreement") among the Borrower, the Lenders (as defined in
Article I thereof), UBS SECURITIES LLC and ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as Joint
Lead Arrangers and Bookrunners, UBS SECURITIES LLC and JPMORGAN CHASE BANK, as
Co-Syndication Agents, UNION BANK OF CALIFORNIA, N.A., as Administrative Agent
and Collateral Agent and the other financial institutions party thereto.
Capitalized terms used and not defined herein (including, without limitation,
the term "Obligations," as used in Section 1 and elsewhere herein) are used with
the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the Issuing Bank has
agreed to issue Letters of Credit for the account of the Borrower, in each case
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. The Guarantor is a Subsidiary of the Borrower and acknowledges
that it has derived and will derive substantial benefit from the making of the
Loans by the Lenders to the Borrower and the issuance of the Letters of Credit
by the Issuing Bank for the account of the Borrower. As consideration therefor
and in order to induce the Lenders to make Loans and the Issuing Bank to issue
Letters of Credit, the Guarantor is willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. The Guarantor unconditionally guarantees, jointly with any
other guarantors of the Obligations under the Credit Agreement and other Loan
Documents (the "Other Guarantors") and severally, as a primary obligor and not
merely as a surety, the due and punctual payment of the Obligations. The
Guarantor waives notice of and hereby consents to any agreements or arrangements
whatsoever by the Secured Parties with any other person pertaining to the
Obligations, including agreements and arrangements for payment, extension,
renewal, subordination, composition, arrangement, discharge or release of the
whole or any part of the Obligations, or for the discharge or surrender of any
or all security, or for the compromise, whether by way of acceptance of part
payment or otherwise, and the same shall in no way impair the Guarantor's
liability hereunder.
SECTION 2. Obligations Not Waived. To the fullest extent permitted by applicable
law, the Guarantor waives presentment to, demand of payment from and protest to
the Borrower or any other person of any of the Obligations, and also waives
notice of acceptance of its guarantee, notice of protest for nonpayment and all
other formalities. To the fullest extent permitted by applicable law, the
obligations of the Guarantor hereunder shall not be affected by (a) the failure
of any Loan Party to assert any claim or demand or to enforce or exercise any
right or remedy against the Borrower or any Other Guarantor under the provisions
of the Credit Agreement, any
G-1
other Loan Document or otherwise; (b) any extension, renewal or increase of or
in any of the Obligations; (c) any rescission, waiver, amendment or modification
of, or any release from, any of the terms or provisions of this Agreement, the
Credit Agreement, any other Loan Document, any guarantee or any other agreement
or instrument, including with respect to any Other Guarantor under the Loan
Documents; (d) the release of (or the failure to perfect a security interest in)
any of the security held by or on behalf of the Collateral Agent or any other
Secured Party; or (e) the failure or delay of any Secured Party to exercise any
right or remedy against the Borrower or any Other Guarantor of the Obligations.
SECTION 3. Security. The Guarantor authorizes the Collateral Agent to (a) take
and hold security for the payment of this Guarantee and the Obligations and
exchange, enforce, waive and release any such security; (b) apply such security
and direct the order or manner of sale thereof as it in its sole discretion may
determine subject to the terms of any other Loan Documents; and (c) release or
substitute any one or more endorsees, other guarantors or other obligors. In no
event shall this Section 3 require any Guarantor to grant security, except as
required by the terms of the Loan Documents.
SECTION 4. Guarantee of Payment. The Guarantor further agrees that its guarantee
constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Collateral Agent or any other
Secured Party to any of the security held for payment of the Obligations or to
any balance of any deposit account or credit on the books of the Collateral
Agent or any other Secured Party in favor of the Borrower or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations of the
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense (other than a defense of payment) or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of the Guarantor hereunder
shall not be discharged or impaired or otherwise affected by the failure of the
Collateral Agent or any other Secured Party to assert any claim or demand or to
enforce any remedy under the Credit Agreement, any other Loan Document, any
guarantee or any other agreement or instrument, by any amendment, waiver or
modification of any provision of the Credit Agreement or any other Loan Document
or other agreement or instrument, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act, omission
or delay to do any other act that may or might in any manner or to any extent
vary the risk of the Guarantor or that would otherwise operate as a discharge of
the Guarantor as a matter of law or equity (other than the indefeasible payment
in full in cash of all the Obligations) or which would impair or eliminate any
right of the Guarantor to subrogation.
SECTION 6. Defenses Waived. To the fullest extent permitted by applicable law,
the Guarantor waives any defense based on or arising out of the unenforceability
of the Obligations or any part thereof from any cause or the cessation from any
cause of the liability (other than the final and indefeasible payment in full in
cash of the Obligations) of the Borrower or any other person. The Collateral
Agent and the other Secured Parties may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with the Borrower or any other guarantor or exercise any other right or remedy
available to them against the Borrower or any other guarantor,
G-2
without affecting or impairing in any way the liability of the Guarantor
hereunder except to the extent the Obligations have been fully, finally and
indefeasibly paid in cash. Pursuant to applicable law, the Guarantor waives any
defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantor against
the Borrower or any other guarantor or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of the foregoing and
not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against the Guarantor by virtue hereof,
upon the failure of the Borrower or any other Loan Party to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, the Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Collateral Agent or such other
Secured Party as designated thereby in cash an amount equal to the unpaid
principal amount of such Obligations then due, together with accrued and unpaid
interest and fees on such Obligations. Upon payment by the Guarantor of any sums
to the Collateral Agent or any Secured Party as provided above, all rights of
the Guarantor against the Borrower arising as a result thereof by way of right
of subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full in cash of all the Obligations. In addition, any indebtedness of
the Borrower or any Subsidiary now or hereafter held by the Guarantor is hereby
subordinated in right of payment to the prior payment in full of the
Obligations. If any amount shall be paid to the Guarantor on account of (i) such
subrogation, contribution, reimbursement, indemnity or similar right or (ii) any
such indebtedness at any time when any Obligation then due and owing has not
been paid, such amount shall be held in trust for the benefit of the Secured
Parties and shall forthwith be paid to the Collateral Agent to be credited
against the payment of the Obligations, whether matured or unmatured, in
accordance with the terms of the Loan Documents.
SECTION 8. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state, Federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of the Guarantor under this Agreement
would otherwise be held or determined to be void, voidable, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under this Agreement, then, notwithstanding any
other provision to the contrary, the amount of such liability shall, without any
further action by the Guarantor, any creditor or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
SECTION 9. Information. The Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, all
other circumstances bearing upon the risk of nonpayment of the Obligations and
the nature, scope and extent of the risks that the Guarantor assumes and incurs
hereunder and agrees that none of the Collateral Agent or the other Secured
Parties will have any duty to advise the Guarantor of information known to it or
any of them regarding such circumstances or risks.
SECTION 10. Representations and Warranties. The Guarantor represents and
warrants as to itself that all representations and warranties relating to it
contained in the Credit Agreement are true and correct.
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SECTION 11. Termination. The Guarantees made hereunder (a) shall terminate when
(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 all Loans; (ii) each payment required to be made under the Credit
Agreement in respect of any Letter of Credit; and (iii) all other Obligations
then due and owing, have in each case been indefeasibly paid in full and the
Lenders have no further commitment to lend under the Credit Agreement, the L/C
Exposure has been reduced to zero and the Issuing Bank has no further obligation
to issue Letters of Credit under the Credit Agreement and (b) shall continue to
be effective or be reinstated, as the case may be, if at any time any payment,
or any part thereof, on any Obligation is rescinded or must otherwise be
restored by any Secured Party upon the bankruptcy or reorganization of the
Borrower, the Guarantor or otherwise.
SECTION 12. Binding Effect; Several Agreement; Assignments; Releases. Whenever
in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Guarantor that are
contained in this Agreement shall bind and inure to the benefit of each party
hereto and their respective successors and assigns. This Agreement shall become
effective as to the Guarantor when a counterpart hereof executed on behalf of
the Guarantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon the Guarantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of the
Guarantor, the Collateral Agent and the other Secured Parties, and their
respective successors and assigns, except that neither the Borrower nor the
Guarantor shall have the right to assign its rights or obligations hereunder or
any interest herein (and any such attempted assignment shall be void) without
the prior written consent of the Required Lenders. The Collateral Agent is
hereby expressly authorized to, and agrees upon request of the Borrower that it
will, release the Guarantor from its obligations hereunder in the event that all
the capital stock of the Guarantor shall be sold, transferred or otherwise
disposed of to a person that is not an Affiliate of the Borrower in a
transaction permitted by Section 6.05 of the Credit Agreement.
SECTION 13. Waivers; Amendment. (a) No failure or delay of the Collateral Agent
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent hereunder and of
the other Secured Parties 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 Agreement or consent to any departure by the
Guarantor 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 Guarantor in any case shall entitle the Guarantor to any
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the
Borrower, the Guarantor and the Collateral Agent (with the consent of the
Lenders if required under the Credit Agreement).
G-4
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to the Guarantor shall be given to it at
its address set forth in Schedule 1 hereof with a copy to the Borrower.
SECTION 16. Survival of Agreement; Severability.
(a) All covenants, agreements, representations and warranties made by the
Borrower and the Guarantor herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the
Collateral Agent and the other Secured Parties and shall survive the making by
the Lenders of the Loans and the issuance of the Letters of Credit by the
Issuing Bank regardless of any investigation made by the Secured Parties 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 other fee or amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid, the L/C Exposure does not equal zero or the Commitments and the L/C
Commitment have not been terminated.
(b) In the event any one or more of the provisions contained in this 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 17. Counterparts. This Agreement may be executed in 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 12 hereof. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 18. Rules of Interpretation. The rules of interpretation specified in
Section 1.03 of the Credit Agreement shall be applicable to this Agreement.
SECTION 19. Jurisdiction; Consent to Service of Process.
(a) The Guarantor 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 the City of New York,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding maybe heard and determined in such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Collateral Agent or any other Secured Party may
otherwise have to bring any action
G-5
or proceeding relating to this Agreement or the other Loan Documents against the
Guarantor or its properties in the courts of any jurisdiction.
(b) The Guarantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New York
State or Federal court. 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 Agreement irrevocably consents to service of process in
the manner provided for notices in Section 15 hereof. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 20. 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 AGREEMENT OR 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 AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 20.
SECTION 21. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Secured Party 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 Secured Party to or for
the credit or the account of the Guarantor against any or all the obligations of
the Guarantor now or hereafter existing under this Agreement and the other Loan
Documents held by such Secured Party, irrespective of whether or not the
Collateral Agent or any Secured Party shall have made any demand under this
Agreement or any other Loan Document and although such obligations may be
unmatured. The rights of each Secured Party under this Section 21 are in
addition to other rights and remedies (including other rights of setoff) which
such Secured Party may have.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
SOLA INTERNATIONAL INC.,
a Delaware corporation,
as Borrower
By:
--------------------------------------
Name:
Title:
[INSERT NAME OF GUARANTOR],
as Guarantor
By:
--------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Collateral Agent
By:
--------------------------------------
Name:
Title:
G-7
SCHEDULE 1
TO THE GUARANTEE AGREEMENT
Guarantor Address
--------- -------
Attention: (Fax No.: ( ) )
with copies to:
Attention: (Fax No.: ( ) )
G-8
EXHIBIT H-1
FORM OF
COMPANY COUNSEL
(to be attached)
H-1-1
EXHIBIT H-2
FORM OF
FOREIGN COUNSEL OPINION
(to be attached)
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇ ▇▇
▇▇▇▇ NOTE
$_______________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, SOLA INTERNATIONAL INC., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of [ ] (the
"Lender") on the Term Loan Maturity Date (as defined in the Credit Agreement
referred to below) in lawful money of the United States and in immediately
available funds, the principal amount of ____________ DOLLARS ($____________),
or, if less, the aggregate unpaid principal amount of all Term Loans of the
Lender outstanding under the Credit Agreement referred to below, which sum shall
be due and payable in such amounts and on such dates as are set forth in the
Credit Agreement. Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time from the date
hereof at the rates, and on the dates, specified in Section 2.06 of such Credit
Agreement. The holder of this Note may endorse and attach a schedule to reflect
the date, Type and amount of each Term Loan of the Lender outstanding under the
Credit Agreement, the date and amount of each payment or prepayment of principal
hereof, and the date of each interest rate conversion or continuation pursuant
to Section 2.10 of the Credit Agreement and the principal amount subject
thereto; provided that the failure of the Lender to make any such recordation
(or any error in such recordation) shall not affect the obligations of Borrower
hereunder or under the Credit Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement dated as
of December 11, 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Borrower,
the Lenders, (as defined in Article I thereof), UBS SECURITIES LLC and ▇.▇.
▇▇▇▇▇▇ SECURITIES INC., as Joint Lead Arrangers and Bookrunners, UBS SECURITIES
LLC and JPMORGAN CHASE BANK, as Co-Syndication Agents, UNION BANK OF CALIFORNIA,
N.A., as Administrative Agent and Collateral Agent and the other financial
institutions party thereto, is subject to the provisions thereof and is subject
to optional and mandatory prepayment in whole or in part as provided therein.
Terms used herein which are defined in the Credit Agreement shall have such
defined meanings unless otherwise defined herein or unless the context otherwise
requires.
This Note is secured and guaranteed as provided in the Credit Agreement and the
Security Documents. Reference is hereby made to the Credit Agreement and the
Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.
J-1-1
Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable all as provided therein.
All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[Signature Page Follows]
J-1-2
SOLA INTERNATIONAL INC.,
as Borrower
By:
---------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF
REVOLVING NOTE
$_________________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, SOLA INTERNATIONAL INC., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of [ ] (the
"Lender") on the Revolving Credit Maturity Date (as defined in the Credit
Agreement referred to below), in lawful money of the United States and in
immediately available funds, the principal amount of the lesser of (a)
____________ DOLLARS ($____________) and (b) the aggregate unpaid principal
amount of all Revolving Loans of the Lender outstanding under the Credit
Agreement. Borrower further agrees to pay interest in like money at such office
on the unpaid principal amount hereof from time to time from the date hereof at
the rates, and on the dates, specified in Section 2.06 of such Credit Agreement.
The holder of this Note may endorse and attach a schedule to reflect the date,
Type and amount of each Revolving Loan of the Lender outstanding under the
Credit Agreement, the date and amount of each payment or prepayment of principal
hereof, and the date of each interest rate conversion or continuation pursuant
to Section 2.10 of the Credit Agreement and the principal amount subject
thereto; provided that the failure of the Lender to make any such recordation
(or any error in such recordation) shall not affect the obligations of Borrower
hereunder or under the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of December 11, 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Borrower,
the Lenders (as defined in Article I thereof), UBS SECURITIES LLC and ▇.▇.
▇▇▇▇▇▇ SECURITIES INC., as Joint Lead Arrangers, UBS SECURITIES LLC and JPMORGAN
CHASE BANK, as Co-Syndication Agents, and UNION BANK OF CALIFORNIA, N.A., as
Administrative Agent and Collateral Agent and the other financial institutions
party thereto, is subject to the provisions thereof and is subject to optional
and mandatory prepayment in whole or in part as provided therein. Terms used
herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.
This Note is secured and guaranteed as provided in the Credit Agreement and the
Security Documents. Reference is hereby made to the Credit Agreement and the
Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.
J-2-1
Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided therein.
All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[Signature Page Follows]
J-2-2
SOLA INTERNATIONAL INC.,
as Borrower
By:
---------------------------------------
Name:
Title:
J-2-3
EXHIBIT K
FORM OF NOTICE TO BAILEE OF SECURITY INTEREST IN INVENTORY
CERTIFIED MAIL -- RETURN RECEIPT REQUESTED
[ ], 200[ ]
TO: [Bailee's Name]
[Bailee's Address]
Re: SOLA International Inc.
Ladies and Gentlemen:
In connection with that certain Security Agreement, dated as of December 11,
2003 (as amended, the "Security Agreement"), made by SOLA International Inc. and
Union Bank of California, N.A. ("Union Bank"), as Collateral Agent, we have
granted to Union Bank a security interest in certain of our personal property,
including our inventory.
This letter constitutes notice to you, and your signature below will constitute
your acknowledgment, of Union Bank's continuing first priority security interest
in all goods with respect to which you are acting as bailee. Until you are
notified in writing to the contrary by Union Bank, however, you may continue to
accept instructions from us regarding the delivery of goods stored by you.
Your acknowledgment also constitutes a waiver and release, for Union Bank's
benefit, of any and all claims, liens, including bailee's liens, and demands of
every kind which you have or may later have against such property (including,
without limitation, any right to include such property in any secured financing
to which you may become party). In order to complete our records, kindly have a
duplicate of this letter signed by an officer of your company and return same to
us at your earliest convenience.
Very truly yours,
Receipt acknowledged,
confirmed and approved:
[BAILEE] SOLA INTERNATIONAL INC.
By: By:
-------------------------------- -----------------------------
Name: Name:
Title: Title:
cc: UNION BANK OF CALIFORNIA, N.A.