1
EXHIBIT 10.20
EXECUTION COPY
$962,250,000
CREDIT AGREEMENT
among
RENTERS CHOICE, INC.,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
COMERICA BANK,
as Documentation Agent,
NATIONSBANK, N.A.,
as Syndication Agent,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of August 5, 1998
2
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 23
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 23
2.1 Term Commitments and LC/MD Commitments 23
2.2 Revolving Commitments 24
2.3 Swingline Commitment 24
2.4 Procedure for A/B/C Term Loan Borrowing 24
2.5 Procedure for LC/MD Term Loan and Revolving Loan Borrowing 25
2.6 Procedure for Swingline Borrowing; Refunding of Swingline Loans 25
2.7 Repayment of Loans; Scheduled Commitment Reductions 27
2.8 Commitment Fees, etc. 28
2.9 Termination or Reduction of Commitments 28
2.10 Optional Prepayments 29
2.11 Mandatory Prepayments 29
2.12 Conversion and Continuation Options 30
2.13 Limitations on Eurodollar Tranches 31
2.14 Interest Rates and Payment Dates 31
2.15 Computation of Interest and Fees 31
2.16 Inability to Determine Interest Rate 32
2.17 Pro Rata Treatment and Payments 32
2.18 Requirements of Law 34
2.19 Taxes 35
2.20 Indemnity 36
2.21 Change of Lending Office 37
2.22 Replacement of Lenders 37
SECTION 3. LETTERS OF CREDIT 37
3.1 LC Commitment 37
3.2 Procedure for Issuance of Letter of Credit 38
3.3 Fees and Other Charges 38
3.4 LC Participations 39
3.5 Reimbursement Obligation of the Borrower 40
3.6 Obligations Absolute 40
3.7 Letter of Credit Payments 41
3.8 Applications 41
SECTION 4. REPRESENTATIONS AND WARRANTIES 41
4.1 Financial Condition 41
4.2 No Change 42
4.3 Corporate Existence; Compliance with Law 42
3
Page
----
4.4 Corporate Power; Authorization; Enforceable Obligations 42
4.5 No Legal Bar 42
4.6 Litigation 43
4.7 No Default 43
4.8 Ownership of Property; Liens 43
4.9 Intellectual Property 43
4.10 Taxes 43
4.11 Federal Regulations 43
4.12 Labor Matters 43
4.13 ERISA 44
4.14 Investment Company Act; Other Regulations 44
4.15 Subsidiaries 44
4.16 Use of Proceeds 44
4.17 Environmental Matters 45
4.18 Accuracy of Information, etc 45
4.19 Security Documents 46
4.20 Solvency 46
4.21 Senior Indebtedness 46
4.22 Year 2000 Matters 46
4.23 Regulation H 47
SECTION 5. CONDITIONS PRECEDENT 47
5.1 Conditions to Initial Extension of Credit 47
5.2 Conditions to Each Extension of Credit 49
SECTION 6. AFFIRMATIVE COVENANTS 50
6.1 Financial Statements 50
6.2 Certificates; Other Information 50
6.3 Payment of Obligations 51
6.4 Maintenance of Existence; Compliance. 52
6.5 Maintenance of Property; Insurance 52
6.6 Inspection of Property; Books and Records; Discussions 52
6.7 Notices 52
6.8 Environmental Laws 53
6.9 Interest Rate Protection 53
6.10 Additional Collateral, etc 53
6.11 Permitted Acquisitions 54
6.12 Real Estate Matters 55
SECTION 7. NEGATIVE COVENANTS 56
7.1 Financial Condition Covenants 56
7.2 Indebtedness 57
7.3 Liens 58
7.4 Fundamental Changes 59
7.5 Disposition of Property 59
7.6 Restricted Payments 60
- 2 -
4
Page
----
7.7 Capital Expenditures 60
7.8 Investments 61
7.9 Payments and Modifications of Certain Debt Instruments and Preferred Stock. 61
7.10 Transactions with Affiliates 62
7.11 Sales/Leaseback Transactions 62
7.12 Changes in Fiscal Periods 62
7.13 Negative Pledge Clauses 62
7.14 Clauses Restricting Subsidiary Distributions 62
7.15 Lines of Business 62
7.16 Amendments to Acquisition Documents 62
SECTION 8. EVENTS OF DEFAULT 63
SECTION 9. THE AGENTS 66
9.1 Appointment 66
9.2 Delegation of Duties 66
9.3 Exculpatory Provisions 66
9.4 Reliance by Administrative Agent 66
9.5 Notice of Default 67
9.6 Non-Reliance on Agents and Other Lenders 67
9.7 Indemnification 67
9.8 Agent in Its Individual Capacity 68
9.9 Successor Administrative Agent 68
9.10 Authorization to Release Guarantees and Liens 68
9.11 Documentation Agent and Syndication Agent 68
SECTION 10. MISCELLANEOUS 68
10.1 Amendments and Waivers 68
10.2 Notices 69
10.3 No Waiver; Cumulative Remedies 70
10.4 Survival of Representations and Warranties 70
10.5 Payment of Expenses and Taxes 70
10.6 Successors and Assigns; Participations and Assignments 71
10.7 Adjustments; Setoff 73
10.8 Counterparts 73
10.9 Severability 74
10.10 Integration 74
10.11 GOVERNING LAW 74
10.12 Submission To Jurisdiction; Waivers 74
10.13 Acknowledgements 74
10.14 Confidentiality 75
10.15 WAIVERS OF JURY TRIAL 76
- 3 -
5
Page
----
ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Property
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4.15 Subsidiaries
4.19(a) UCC and Other Filings / Jurisdictions and Offices
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.14 Existing Restrictions
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
F-2 Form of Legal Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
F-3 Form of Legal Opinion of ▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
G Form of Addendum
H Form of Prepayment Option Notice
I Form of Exemption Certificate
- 4 -
6
CREDIT AGREEMENT, dated as of August 5, 1998, among RENTERS CHOICE,
INC., a Delaware corporation (the "Borrower"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "Lenders"), COMERICA BANK, as documentation agent (in such capacity, the
"Documentation Agent"), NATIONSBANK, N.A., as syndication agent (in such
capacity, the "Syndication Agent"), and THE CHASE MANHATTAN BANK ("Chase"), as
administrative agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth
in this Section 1.1.
"A/B/C Term Loans": the collective reference to the Tranche A Term
Loans, the Tranche B Term Loans and the Tranche C Term Loans.
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean the rate of interest per annum publicly announced from
time to time by the Reference Lender as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to be the
lowest rate of interest charged by the Reference Lender in connection with
extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month Secondary
CD Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding Business Day) by the
Reference Lender from three New York City negotiable certificate of deposit
dealers of recognized standing selected by it. Any change in the ABR due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
7
"Acquired Company": Thorn Americas, Inc., a Delaware corporation.
"Acquired Vehicles": the vehicles acquired by the Borrower pursuant to
the Acquisition.
"Acquisition": as defined in Section 5.1(b)(i).
"Acquisition Agreement": the Stock Purchase Agreement, dated as of June
16, 1998, among the Borrower, the Seller and Thorn plc, in each case as amended,
supplemented or otherwise modified from time to time in accordance with Section
7.16.
"Acquisition Documentation": collectively, the Acquisition Agreement
and all schedules, exhibits and annexes thereto and all side letters and
agreements affecting the terms thereof or entered into in connection therewith,
in each case as amended, supplemented or otherwise modified from time to time in
accordance with Section 7.16.
"Addendum": an Addendum, substantially in the form of Exhibit G,
pursuant to which each Lender becomes a party to this Agreement effective as of
the Closing Date.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": The Chase Manhattan Bank, together with its
affiliates, as the arranger of the Commitments and as the administrative agent
for the Lenders under this Agreement and the other Loan Documents, together with
any of its successors.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent, the
Documentation Agent and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an amount
equal to (a) until the Closing Date, the aggregate amount of such Lender's
Commitments at such time and (b) thereafter, the sum of (i) the aggregate then
unpaid principal amount of such Lender's A/B/C Term Loans, (ii) the amount of
such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding and (iii) the amount of such Lender's
LC/MD Commitment then in effect or, if the LC/MD Commitments have been
terminated, the amount of such Lender's LC/MD Extensions of Credit then
outstanding.
-2-
8
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum set
forth under the relevant column heading in the Pricing Grid.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Approved Fund": with respect to any Lender that is a fund that invests
in commercial loans, any other fund that invests in commercial loans and is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c), (d) or (f) of Section 7.5 and any Disposition of Cash
Equivalents) that yields gross proceeds to the Borrower or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of $500,000.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit E.
"Assignor": as defined in Section 10.6(c).
"Assumed Indebtedness": Indebtedness assumed in connection with a
Permitted Acquisition, provided that (a) such Indebtedness is outstanding at the
time of such acquisition and was not incurred in connection therewith or in
contemplation thereof and (b) in the event that such Permitted Acquisition
constitutes an acquisition of property other than Capital Stock, such
Indebtedness was incurred in order to acquire or improve such property.
"Available Revolving Commitment": as to any Revolving Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect over (b) such Lender's Revolving Extensions of Credit
then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal amount
of Swingline Loans then outstanding shall be deemed to be zero.
-3-
9
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans hereunder.
"Business": as defined in Section 4.17(b).
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, provided, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures (other than those made pursuant to Permitted
Acquisitions) by such Person and its Subsidiaries for the acquisition or leasing
(pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period but excluding merchandise inventory acquired during such period)
that should be capitalized under GAAP on a consolidated balance sheet of such
Person and its Subsidiaries.
"Capital Expenditures (Expansion)": for any period, with respect to any
Person, any Capital Expenditures made by such Person in connection with the
opening of new stores to be operated by such Person.
"Capital Expenditures (Maintenance)": for any period, with respect to
any Person, any Capital Expenditures which do not constitute Capital
Expenditures (Expansion) of such Person.
"Capital Lease Obligations": as to any Person, 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, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
-4-
10
"Cash/Debt Consideration": with respect to any Permitted Acquisition,
the portion of the Purchase Price with respect thereto that is payable in the
forms referred to in clauses (a) and (d) of the definition of "Purchase Price"
set forth in Section 1.1.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day that is payable by a member of the
Bank Insurance Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") classified as well-capitalized and within supervisory subgroup "B" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. ss. 327.4 (or any successor provision) to the FDIC (or any successor) for
the FDIC's (or such successor's) insuring time deposits at offices of such
institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied, which date is August 5, 1998.
-5-
11
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Commitment": as to any Lender, the sum of the Tranche A Term
Commitment, the Tranche B Term Commitment, the Tranche C Term Commitment, the
LC/MD Commitment and the Revolving Commitment of such Lender.
"Commitment Fee Rate": the rate per annum set forth under the relevant
column heading in the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum regarding the Borrower dated July 1998 and furnished to the Lenders.
"Consolidated Current Assets": at any date, (a) all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date and
(b) without duplication of clause (a) above, the book value of all rental
merchandise inventory of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Loans
or Swingline Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge or
reduction in the statement of such Consolidated Net Income for such period, the
sum of (a) income tax expense, (b) interest expense, amortization or writeoff of
debt discount and debt issuance costs and commissions and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation (excluding
depreciation of rental merchandise) and amortization expense, including, without
limitation, amortization of intangibles (including, but not limited to,
goodwill) and organization costs, (d) any
-6-
12
extraordinary, unusual or non-recurring non-cash expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, non-cash losses on sales of assets
outside of the ordinary course of business) and (e) any other non-cash charges,
and minus, to the extent included in the statement of such Consolidated Net
Income for such period, the sum of (a) interest income, (b) any extraordinary,
unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, gains on the sales of assets outside of the ordinary course of
business) and (c) any other non-cash income earned outside the ordinary course
of business, all as determined on a consolidated basis; provided that, (i) in
determining Consolidated EBITDA for the fiscal quarters ending December 31,
1998, March 31, 1999, June 30, 1999 and September 30, 1999, $16,800,000,
$12,275,000, $7,750,000 and $3,875,000, respectively, shall be added to the
amounts otherwise determined as set forth above, in order to take into account
certain quantifiable synergies with respect to the Acquisition and the
acquisition of Central Rents, Inc., and (ii) in determining Consolidated EBITDA,
the portion thereof attributable to the operations of the Acquired Company and
its Subsidiaries prior to the Closing Date shall include only the rent-to-own
businesses of the Acquired Company and its Subsidiaries. For the purposes of
calculating Consolidated EBITDA for any Reference Period pursuant to any
determination of the Consolidated Leverage Ratio, if during such Reference
Period the Borrower or any Subsidiary shall have made a Material Disposition or
Material Acquisition, Consolidated EBITDA for such Reference Period shall be
calculated after giving pro forma effect thereto as if such Material Disposition
or Material Acquisition occurred on the first day of such Reference Period. As
used in this definition, "Material Acquisition" means any acquisition of
property or series of related acquisitions of property that (a) constitutes
assets comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and (b)
involves the payment of consideration by the Borrower and its Subsidiaries in
excess of $15,000,000 (or such lesser amount as the Borrower may determine in
its discretion); and "Material Disposition" means any Disposition of property or
series of related Dispositions of property that yields gross proceeds to the
Borrower or any of its Subsidiaries in excess of $15,000,000 (or such lesser
amount as the Borrower may determine in its discretion).
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
of (a) the sum of Consolidated EBITDA for such period and, to the extent
reducing Consolidated Net Income for such period, Consolidated Lease Expense for
such period, less the aggregate amount actually paid by the Borrower and its
Subsidiaries during such period on account of Capital Expenditures (Maintenance)
to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Lease Expense for such period and (c) regular, scheduled payments
made during such period on account of principal of Indebtedness of the Borrower
or any of its Subsidiaries (including scheduled principal payments in respect of
the Term Loans but excluding prepayments thereof); provided, that for the
purposes of determining the Consolidated Fixed Charge Coverage Ratio for the
fiscal quarters of the Borrower ending December 31, 1998, March 31, 1999 and
June 30, 1999, Consolidated Interest Expense for the relevant period
-7-
13
shall be deemed to equal Consolidated Interest Expense for such fiscal quarter
(and, in the case of the latter two such determinations, each previous fiscal
quarter commencing after the Closing Date) multiplied by 4, 2 and 4/3,
respectively.
"Consolidated Funded Debt": at any date, the aggregate principal amount
of all Funded Debt (which, for purposes of the calculation of Consolidated
Funded Debt, shall be deemed to include any unfunded portion of the NJ Letter of
Credit (but not other Letters of Credit)) of the Borrower and its Subsidiaries
at such date, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"Consolidated Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations), net of cash
interest income, of the Borrower and its Subsidiaries for such period with
respect to all outstanding Indebtedness of the Borrower and its Subsidiaries
(including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, commitment fees
payable pursuant to Section 2.8(a) and net costs under Hedge Agreements in
respect of such Indebtedness to the extent such net costs are allocable to such
period in accordance with GAAP); provided, that for the purposes of determining
the Consolidated Interest Coverage Ratio for the fiscal quarters of the Borrower
ending December 31, 1998, March 31, 1999 and June 30, 1999, Consolidated
Interest Expense for the relevant period shall be deemed to equal Consolidated
Interest Expense for such fiscal quarter (and, in the case of the latter two
such determinations, each previous fiscal quarter commencing after the Closing
Date) multiplied by 4, 2 and 4/3, respectively.
"Consolidated Lease Expense": for any period, the aggregate amount of
fixed and contingent rentals payable by the Borrower and its Subsidiaries for
such period with respect to leases of real and personal property (other than
certain properties associated with operations to be discontinued in connection
with the restructuring related to the Acquisition), determined on a consolidated
basis in accordance with GAAP.
"Consolidated Leverage Ratio": as at the last day of any period, the
ratio of (a) Consolidated Funded Debt on such day to (b) Consolidated EBITDA for
such period.
"Consolidated Net Income": for any period, the consolidated net income
(or loss) of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the
-8-
14
Borrower to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.
"Consolidated Net Worth": at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.
"Consolidated Working Capital": at any date, the excess of Consolidated
Current Assets on such date over Consolidated Current Liabilities on such date.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control Investment Affiliate": as to any Person, any other Person that
(a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition, "control" of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied (including, in any event, a "Default" under and as defined in the
Senior Subordinated Note Indenture).
"Disposition": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agent": as defined in the preamble hereto.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
-9-
15
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Dow ▇▇▇▇▇ Markets screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Dow ▇▇▇▇▇ Markets screen (or otherwise on
such screen), the "Eurodollar Base Rate" shall be determined by reference to
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied (including, in any event, an "Event of Default" under and as
defined in the Senior Subordinated Note Indenture).
-10-
16
"Excess Cash Flow": for any fiscal year of the Borrower, the excess, if
any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) an amount equal to the amount of all non-cash charges
(including depreciation (other than depreciation of rental merchandise) and
amortization) deducted in arriving at such Consolidated Net Income, (iii)
decreases in Consolidated Working Capital for such fiscal year, and (iv) an
amount equal to the aggregate net non-cash loss on the Disposition of property
by the Borrower and its Subsidiaries during such fiscal year (other than sales
of inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Net Income, over (b) the sum, without duplication,
of (i) an amount equal to the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount actually
paid by the Borrower and its Subsidiaries in cash during such fiscal year on
account of Capital Expenditures (excluding the principal amount of Indebtedness
incurred in connection with such expenditures and any such expenditures financed
with the proceeds of any Reinvestment Deferred Amount), (iii) the aggregate
amount actually paid by the Borrower in cash during such fiscal year on account
of Permitted Acquisitions, (iv) the aggregate amount of all prepayments of
Revolving Loans and Swingline Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Commitments and all
optional prepayments of the Term Loans during such fiscal year, (v) the
aggregate amount of all regularly scheduled principal payments of Funded Debt
(including the Term Loans) of the Borrower and its Subsidiaries made during such
fiscal year, (vi) increases in Consolidated Working Capital for such fiscal
year, and (vii) an amount equal to the aggregate net non-cash gain on the
Disposition of property by the Borrower and its Subsidiaries during such fiscal
year (other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income.
"Excess Cash Flow Application Date": as defined in Section 2.11(d).
"Excess Senior Subordinated Note Amount": as defined in Section
2.11(b)(ii).
"Excluded Foreign Subsidiary": any Foreign Subsidiary in respect of
which either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would,
in the good faith judgment of the Borrower, result in adverse tax consequences
to the Borrower.
"Existing Credit Agreement": that certain Credit Agreement, dated as of
November 27, 1996, as amended, among the Borrower, Comerica Bank, as
administrative agent, and others.
"Facility": each of (a) the Tranche A Term Commitments and the Tranche
A Term Loans made thereunder (the "Tranche A Term Facility"), (b) the Tranche B
Term Commitments and the Tranche B Term Loans made thereunder (the "Tranche B
Term Facility"), (c) the Tranche C Term Commitments and the Tranche C Term Loans
made thereunder (the "Tranche C Term Facility"), (d) the Revolving Commitments
and the extensions of credit made thereunder (the "Revolving Facility") and (e)
the LC/MD Commitments and the extensions of credit thereunder (the "LC/MD
Facility").
-11-
17
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funded Debt": as to any Person, on any date, (a) all Indebtedness of
such Person that matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year from such date or arises
under a revolving credit or similar agreement that obligates the lender or
lenders to extend credit during a period of more than one year from such date,
including all current maturities and current sinking fund payments in respect of
such Indebtedness whether or not required to be paid within one year from the
date of its creation and, in the case of the Borrower, Indebtedness in respect
of the Loans and the Reimbursement Obligations (but excluding, in the case of
the Borrower, any Guarantee Obligations of the Borrower in respect of
Indebtedness of franchisees, to the extent permitted by Section 7.2(h)), minus
(b) (i) for purposes of calculating the Consolidated Leverage Ratio in order to
determine the Applicable Margin or the Commitment Fee Rate as set forth on the
Pricing Grid, the sum of (x) the $30,000,000 of cash on the consolidated balance
sheet of the Borrower and its Subsidiaries on the Closing Date, to the extent
remaining on the balance sheet on such date (plus any interest earned thereon,
to the extent remaining on the balance sheet on such date), and (y) 50% of the
Net Cash Proceeds of any Excess Senior Subordinated Note Amount received by the
Borrower since the Closing Date, to the extent remaining on the balance sheet on
such date (plus any interest earned thereon, to the extent remaining on the
balance sheet on such date), and (ii) otherwise, the aggregate amount of cash
and Cash Equivalents on the consolidated balance sheet of the Borrower and its
Subsidiaries on such date, but in no event exceeding the sum of (x) $30,000,000
and (y) 50% of the Net Cash Proceeds of any Excess Senior Subordinated Note
Amount received by the Borrower since the Closing Date.
"Funding Office": the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements delivered pursuant to Section 4.1(b). In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then the Borrower and the Administrative Agent agree to enter
into negotiations in order to amend such
-12-
18
provisions of this Agreement so as to equitably reflect such Accounting Changes
with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. Until such time as such an amendment shall
have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or, if applicable, the SEC.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) 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 (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
-13-
19
"Hedge Agreements": all swaps, caps, collars or similar arrangements
providing for protection against fluctuations in interest rates, currency
exchange rates or commodities prices or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) the
liquidation value of all redeemable preferred Capital Stock of such Person
(other than any such preferred Capital Stock that is not redeemable until a date
that is no earlier than one year and one day after the final maturity of the
Loans and the Preferred Stock), (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above;
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation; and (j) for the
purposes of Section 8(e) only, all obligations of such Person in respect of
Hedge Agreements.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to ▇▇▇ at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than three
months, each day that is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period and
(d) as to any Loan (other than any Revolving Loan
-14-
20
that is an ABR Loan and any Swingline Loan), the date of any repayment or
prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(ii) the Borrower may not select an Interest Period for a
particular Facility that would extend beyond the final
maturity date applicable thereto;
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business
Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during
an Interest Period for such Loan.
"Investments": as defined in Section 7.8.
"Issuing Lender": The Chase Manhattan Bank (or any of its Affiliates,
including, without limitation, Chase Manhattan Bank of Delaware), in its
capacity as issuer of any Letter of Credit.
"LC Fee Payment Date": the last day of each March, June, September and
December and the last day of the Revolving Commitment Period.
-15-
21
"LC/MD Commitment": as to any Lender, the collective reference to such
Lender's LC/MD LC Commitment and LC/MD Term Commitment.
"LC/MD Extensions of Credit": as to any LC/MD Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all LC/MD Loans
held by such Lender then outstanding and (b) such Lender's LC/MD Percentage of
the LC/MD LC Obligations then outstanding.
"LC/MD LC Commitment": as to any Lender, the obligation of such Lender,
if any, to participate in the NJ Letter of Credit in an aggregate face amount
not to exceed the amount set forth under the heading "LC/MD LC Commitment"
opposite such Lender's name on Schedule 1.1A or in the Assignment and Acceptance
pursuant to which such Lender became a party hereto, as the same may be changed
from time to time pursuant to the terms hereof. The original aggregate amount of
the LC/MD LC Commitments is $122,250,000.
"LC/MD LC Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the NJ Letter of Credit and
(b) the aggregate amount of drawings under the NJ Letter of Credit that have not
then been reimbursed by the Borrower or pursuant to Section 3.5 (but only, in
the case of this clause (b), until the refunding procedure contemplated by
Section 3.5 has been completed).
"LC/MD Lender": each Lender that has a LC/MD Commitment or that holds
LC/MD Loans.
"LC/MD Loans": the collective reference to LC/MD Reimbursement Loans
and LC/MD Term Loans.
"LC/MD Percentage": as to any LC/MD Lender at any time, the percentage
which such Lender's LC/MD Commitment then constitutes of the Total LC/MD
Commitments (or, at any time after the LC/MD Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
LC/MD Loans then outstanding constitutes of the aggregate principal amount of
the LC/MD Loans then outstanding).
"LC/MD Reimbursement Loans": any participating interest in any
unreimbursed payment under the NJ Letter of Credit funded by an LC/MD Lender, it
being understood that LC/MD Reimbursement Loans are referred to as "Loans"
hereunder for convenience of reference only, and such references shall not be
construed to imply that any proceeds of LC/MD Reimbursement Loans are to be
received by the Borrower.
"LC/MD Scheduled Termination Date": as defined in Section 2.1(b).
"LC/MD Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make LC/MD Term Loans in an aggregate principal amount not to
exceed the amount set forth
-16-
22
under the heading "LC/MD Term Commitment" opposite such Lender's name on
Schedule 1.1A or in the Assignment and Acceptance pursuant to which such Lender
became a party hereto, as the same may be changed from time to time pursuant to
the terms hereof. The original aggregate amount of the LC/MD Term Commitments
is $85,000,000.
"LC/MD Term Commitment Period": the period from and including the NJ LC
Termination Date to the LC/MD Scheduled Termination Date.
"LC/MD Term Loans": as defined in Section 2.1(b).
"LC Participants": (a) in the case of the Revolving Letters of Credit,
the collective reference to all Revolving Lenders (including the Issuing Lender)
and (b) in the case of the NJ Letter of Credit, the collective reference to all
LC/MD Lenders (including the Issuing Lender).
"Lenders": as defined in the preamble hereto.
"Letters of Credit": the collective reference to the NJ Letter of
Credit and the Revolving Letters of Credit.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents and the Notes.
"Loan Parties": the Borrower and each Subsidiary of the Borrower that
is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Term Loans, the
Total Revolving Extensions of Credit or the Total LC/MD Extensions of Credit, as
the case may be, outstanding under such Facility (or (a) in the case of the
Revolving Facility, prior to any termination of the Revolving Commitments, the
holders of more than 50% of the Total Revolving Commitments and (b) in the case
of the LC/MD Facility, prior to any termination of the LC/MD Commitments, the
holders of more than 50% of the Total LC/MD Commitments).
"Material Adverse Effect": a material adverse effect on (a) the
business, property, operations, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken
-17-
23
as a whole or (b) the validity or enforceability of this Agreement or any of
the other Loan Documents or the rights or remedies of the Administrative Agent
or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Mortgaged Properties": the real properties listed on Schedule 1.1B, as
to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages in accordance with Section 6.12.
"Mortgages": each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit D (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be recorded), as the same may be amended,
supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset that is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable currently
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
"NJ LC Termination Date": as defined in Section 2.1(b).
"NJ Letter of Credit": as defined in Section 3.1(a).
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(d).
-18-
24
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Hedge Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Hedge Agreement
entered into with any Lender or any affiliate of any Lender in connection with
this Agreement or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": any acquisition, consisting of a single
transaction or a series of related transactions, by the Borrower or any one or
more of its Wholly Owned Subsidiary Guarantors of all of the Capital Stock of,
or all or a substantial part of the assets of, or of a business, unit or
division of, any Person organized under the laws of the United States or any
state thereof (such business, unit or division, the "Acquired Business"),
provided that (a) the consideration paid by the Borrower or such Subsidiary or
Subsidiaries pursuant to such acquisition shall be solely in a form referred to
in clause (a), (b), (c) or (d) of the definition of "Purchase Price" set forth
in Section 1.1 (or some combination thereof), (b) the requirements of Section
6.11 have been satisfied with respect to such acquisition, (c) the Borrower
shall be in compliance, on a pro forma basis after giving effect to such
acquisition, with the covenants contained in Section 7.1, in each case
recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower as if such acquisition had occurred on the first day of each relevant
period for testing such compliance, (d) no Default or Event of Default shall
have occurred and be continuing, or would occur after giving effect to such
acquisition, (e) all actions required to be taken with respect to any acquired
or newly formed Subsidiary or otherwise with respect to the Acquired Business in
such acquisition under Section 6.10 shall have been taken, (f) the aggregate
Purchase Prices in respect of such acquisition and all other
-19-
25
Permitted Acquisitions consummated in accordance with this Agreement shall not
exceed (i) during the Borrower's fiscal years 1998 and 1999, $50,000,000 in
each such fiscal year (or, in the case of fiscal 1998, the portion thereof
occurring after the Closing Date), and (ii) thereafter, in any fiscal year of
the Borrower, the sum of (A) $100,000,000 (or, if the Consolidated Leverage
Ratio as of the last day of any fiscal quarter during such fiscal year is less
than 3.50 to 1.0, $150,000,000) and (B) an additional up to $25,000,000 to the
extent not expended as Capital Expenditures (Expansion) during such fiscal year
pursuant to 7.7(b), (g) the Cash/Debt Consideration in respect of such
acquisition and all other Permitted Acquisitions consummated in accordance with
this Agreement shall not exceed (i) during the Borrower's fiscal years 1998 and
1999, $50,000,000 in each such fiscal year (or, in the case of fiscal 1998, the
portion thereof occurring after the Closing Date), and (ii) thereafter, in any
fiscal year of the Borrower, $70,000,000 (plus any amounts available pursuant
to the foregoing clause (f)(ii)(B)), and (h) any such acquisition shall have
been approved by the Board of Directors or such comparable governing body of
the Person (or whose business, unit or division is, as the case may be) being
acquired.
"Permitted Investors": the collective reference to (i) the Sponsor,
(ii) the ▇▇▇▇▇▇ Persons and (iii) the ▇▇▇▇▇▇ Persons.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is covered
by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Preferred Stock": as defined in Section 5.1(b)(ii).
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Financial Statements": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17(a).
"Purchase Price": with respect to any Permitted Acquisition, the sum
(without duplication) of (a) the amount of cash paid by the Borrower and its
Subsidiaries in connection with such acquisition, (b) the value (as determined
for purposes of such acquisition in accordance with the applicable acquisition
agreement) of all Capital Stock of the Borrower issued or given as consideration
in connection with such acquisition, (c) the Qualified Net Cash Equity Proceeds
-20-
26
applied to finance such acquisition and (d) the principal amount (or, if less,
the accreted value) at the time of such acquisition of all Assumed Indebtedness
with respect thereto.
"Qualified Net Cash Equity Proceeds": the Net Cash Proceeds of any
offering of Capital Stock of the Borrower, provided that (a) such offering was
made in express contemplation of a Permitted Acquisition, (b) such Capital Stock
is not mandatorily redeemable and (c) such Permitted Acquisition is consummated
within 90 days after receipt by the Borrower of such Net Cash Proceeds.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of the Borrower or any of its Subsidiaries. "Reference Lender": The
Chase Manhattan Bank.
"Reference Period": with respect to any date, the period of four
consecutive fiscal quarters of the Borrower immediately preceding such date or,
if such date is the last day of a fiscal quarter, ending on such date.
"Refunded Swingline Loans": as defined in Section 2.6(b).
"Refunding Date": as defined in Section 2.6(c).
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to reimburse
the Issuing Lender pursuant to Section 3.5 for amounts paid under Letters of
Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment Event,
the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith that are not applied to prepay the Term
Loans or reduce the Revolving Commitments pursuant to Section 2.11(c) as a
result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or
Recovery Event to acquire assets useful in its business.
-21-
27
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire assets
useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment Event,
the earlier of (a) the date occurring twelve months after such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire assets useful in the Borrower's business
with all or any portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
ss. 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments then in effect and (b) thereafter, the
sum of (i) the aggregate unpaid principal amount of the A/B/C Term Loans then
outstanding, (ii) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding and (iii) the Total LC/MD Commitments then in effect or,
if the LC/MD Commitments have been terminated, the Total LC/MD Extensions of
Credit then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders in respect
of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer, president, chief
financial officer or treasurer of the Borrower, but in any event, with respect
to financial matters, the chief financial officer or president of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans and
Revolving Letters of Credit in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading
-22-
28
"Revolving Commitment" opposite such Lender's name on Schedule 1.1A or in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original amount of the Total Revolving Commitments is $120,000,000.
"Revolving Commitment Period": the period from and including the
Closing Date to the Revolving Scheduled Commitment Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the Revolving LC Obligations then outstanding and (c)
such Lender's Revolving Percentage of the aggregate principal amount of
Swingline Loans then outstanding.
"Revolving LC Commitment": $75,000,000.
"Revolving LC Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Revolving Letters of Credit and (b) the aggregate amount of drawings under
Revolving Letters of Credit that have not then been reimbursed pursuant to
Section 3.5.
"Revolving Lender": each Lender that has a Revolving Commitment or that
holds Revolving Loans.
"Revolving Letters of Credit": as defined in Section 3.1.
"Revolving Loans": as defined in Section 2.2.
"Revolving Percentage": as to any Revolving Lender at any time, the
percentage which such Lender's Revolving Commitment then constitutes of the
Total Revolving Commitments (or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender's Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding).
"Revolving Scheduled Commitment Termination Date": July 31, 2004.
"Sale/Leaseback Transaction": any arrangement providing for the leasing
to the Borrower or any Subsidiary of real or personal property that has been or
is to be (a) sold or transferred by the Borrower or any Subsidiary or (b)
constructed or acquired by a third party in anticipation of a program of leasing
to the Borrower or any Subsidiary.
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
-23-
29
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
"Seller": Thorn International BV.
"Senior Subordinated Note Indenture": the Indenture to be entered into
by the Borrower and certain of its Subsidiaries in connection with the issuance
of the Senior Subordinated Notes, together with all instruments and other
agreements entered into by the Borrower or such Subsidiaries in connection
therewith, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the Borrower to
be issued pursuant to the Senior Subordinated Note Indenture.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as defined in the
Subordinated Bridge Facility or the Senior Subordinated Note Indenture.
"▇▇▇▇▇▇ Persons": the collective reference to ▇▇▇▇ ▇. ▇▇▇▇▇▇, any
person having a relationship with ▇▇▇▇ ▇. ▇▇▇▇▇▇ by blood, marriage or adoption
not more remote than first cousin and any trust established for the benefit of
any such person.
-24-
30
"Sponsor": Apollo Management IV, L.P., Apollo Investment Fund IV, L.P.,
Apollo Overseas Partners IV, L.P. and their Control Investment Affiliates.
"Subordinated Bridge Facility": the collective reference to (i) the
Senior Subordinated Credit Agreement, dated as of the date hereof, among the
Borrower, the lenders from time to time parties thereto and Chase, as
administrative agent for such lenders, together with the Indenture referred to
therein, and (ii) any other document governing Indebtedness (other than the
Senior Subordinated Notes) incurred pursuant to Section 7.2(f)(i)(A)(y).
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower. All references to Subsidiaries
of the Borrower applicable on the Closing Date and thereafter shall include the
Acquired Company and its Subsidiaries.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than any
Excluded Foreign Subsidiary.
"Swingline Commitment": the obligation of the Swingline Lender to make
Swingline Loans pursuant to Section 2.6 in an aggregate principal amount at any
one time outstanding not to exceed $20,000,000.
"Swingline Lender": The Chase Manhattan Bank, in its capacity as the
lender of Swingline Loans.
"Swingline Loans": as defined in Section 2.3.
"Swingline Participation Amount": as defined in Section 2.6(c).
"Syndication Agent": as defined in the preamble hereto.
"▇▇▇▇▇▇ Persons": the collective reference to J. ▇▇▇▇▇▇ ▇▇▇▇▇▇, any
person having a relationship with J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ by blood, marriage or
adoption not more remote than first cousin (other than his children) and any
trust established for the benefit of any person having a relationship with J.
▇▇▇▇▇▇ ▇▇▇▇▇▇ by blood, marriage or adoption not more remote than first cousin.
"Term Lenders": the collective reference to the Tranche A Term Lenders,
the Tranche B Term Lenders, the Tranche C Term Lenders and the LC/MD Lenders.
-25-
31
"Term Loans": the collective reference to the A/B/C Term Loans and the
LC/MD Loans.
"Total LC/MD Commitments": at any time, (a) until the NJ LC Termination
Date, the aggregate amount of the LC/MD LC Commitments then in effect and (b)
thereafter, the aggregate amount of the LC/MD Term Commitments then in effect.
"Total LC/MD Extensions of Credit": at any time, the aggregate amount
of the LC/MD Extensions of Credit of the LC/MD Lenders outstanding at such time.
"Total Revolving Commitments": at any time, the aggregate amount of the
Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Tranche A Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Tranche A Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading "Tranche A
Term Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Tranche A Term Commitments is $120,000,000.
"Tranche A Term Lender": each Lender that has a Tranche A Term
Commitment or is the holder of a Tranche A Term Loan.
"Tranche A Term Loan": as defined in Section 2.1(a).
"Tranche A Term Percentage": as to any Tranche A Term Lender at any
time, the percentage which such Lender's Tranche A Term Commitment then
constitutes of the aggregate Tranche A Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding).
"Tranche B Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Tranche B Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading "Tranche B
Term Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Tranche B Term Commitments is $270,000,000.
"Tranche B Term Lender": each Lender that has a Tranche B Term
Commitment or that holds a Tranche B Term Loan.
"Tranche B Term Loan": as defined in Section 2.1(b).
-26-
32
"Tranche B Term Percentage": as to any Tranche B Term Lender at any
time, the percentage which such Lender's Tranche B Term Commitment then
constitutes of the aggregate Tranche B Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"Tranche C Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Tranche C Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading "Tranche C
Term Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Tranche C Term Commitments is $330,000,000.
"Tranche C Term Lender": each Lender that has a Tranche C Term
Commitment or that holds a Tranche C Term Loan.
"Tranche C Term Loan": as defined in Section 2.1(c).
"Tranche C Term Percentage": as to any Tranche C Term Lender at any
time, the percentage which such Lender's Tranche C Term Commitment then
constitutes of the aggregate Tranche C Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche C Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche C Term Loans then outstanding).
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"United States": the United States of America.
"Voting Stock": with respect to any Person, any class or series of
Capital Stock of such Person that is ordinarily entitled to vote in the election
of directors thereof at a meeting of stockholders called for such purpose,
without the occurrence of any additional event or contingency.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a
Wholly Owned Subsidiary of the Borrower.
-27-
33
1.2 Other Definitional Provisions. Unless otherwise specified
therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any
certificate or other document made or delivered pursuant
hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered
pursuant hereto or thereto, (i) accounting terms
relating to the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly
defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under
GAAP, (ii) the words "include", "includes" and
"including" shall be deemed to be followed by the
phrase "without limitation" and (iii) the words "asset"
and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible
and intangible assets and properties, including cash,
Capital Stock, securities, revenues, accounts,
leasehold interests and contract rights.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural
forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments and LC/MD Commitments. (a) Subject to the
terms and conditions hereof, (i) each Tranche A Term Lender
severally agrees to make a term loan (a "Tranche A Term
Loan") to the Borrower on the Closing Date in an amount not
to exceed the amount of the Tranche A Term Commitment of such
Lender, (ii) each Tranche B Term Lender severally agrees to
make a term loan (a "Tranche B Term Loan") to the Borrower on
the Closing Date in an amount not to exceed the amount of the
Tranche B Term Commitment of such Lender and (iii) each
Tranche C Term Lender severally agrees to make a term loan (a
"Tranche C Term Loan") to the Borrower on the Closing Date in
an amount not to exceed the amount of the Tranche C Term
Commitment of such Lender
-28-
34
(b) Subject to the terms and conditions hereof, each LC/MD Lender
severally agrees to make LC/MD Reimbursement Loans upon the occurrence of any
drawing under the NJ Letter of Credit to the extent contemplated by Section 3.5
in an aggregate amount not to exceed the amount of the LC/MD LC Commitment of
such Lender. In addition, after the date (the "NJ LC Termination Date") on which
the NJ Letter of Credit has expired or otherwise been terminated or on which the
full amount available thereunder has been drawn, subject to the terms and
conditions hereof, each LC/MD Lender severally agrees to make term loans ("LC/MD
Term Loans") to the Borrower from time to time to the extent, but only to the
extent, of any remaining LC/MD Term Commitment of such Lender as in effect
immediately prior to the making of the relevant LC/MD Term Loan. The obligation
of the LC/MD Lenders to make LC/MD Term Loans shall terminate on the date (the
"LC/MD Scheduled Termination Date") that is the earlier of (i) the later of (x)
September 30, 2000 and (y) the date that is 90 days after the NJ LC Termination
Date and (ii) March 30, 2004. The LC/MD LC Commitments shall automatically be
permanently reduced by the principal amount of any LC/MD Reimbursement Loans
created hereunder. The LC/MD LC Commitments shall terminate on the NJ LC
Termination Date. The LC/MD Term Commitments shall automatically be permanently
reduced by the principal amount of any LC/MD Reimbursement Loans or LC/MD Term
Loans borrowed hereunder. The LC/MD Term Commitments shall terminate on the
LC/MD Scheduled Termination Date.
(c) The Term Loans may from time to time be Eurodollar Loans or ABR
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.4, 2.5 and 2.12.
2.2 Revolving Commitments. Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make
revolving credit loans ("Revolving Loans") to the Borrower
from time to time during the Revolving Commitment Period in
an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Percentage of
the sum of (a) the Revolving LC Obligations then outstanding
and (b) the aggregate principal amount of the Swingline Loans
then outstanding, does not exceed the amount of such Lender's
Revolving Commitment. During the Revolving Commitment Period
the Borrower may use the Revolving Commitments by borrowing,
prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions
hereof. The Revolving Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower
and notified to the Administrative Agent in accordance with
Sections 2.5 and 2.12.
2.3 Swingline Commitment. Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the
credit otherwise
-29-
35
available to the Borrower under the Revolving Commitments
from time to time during the Revolving Commitment Period by
making swing line loans ("Swingline Loans") to the Borrower;
provided that (a) the aggregate principal amount of Swingline
Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline
Loans outstanding at any time, when aggregated with the
Swingline Lender's other outstanding Revolving Loans
hereunder, may exceed the Swingline Commitment then in
effect) and (b) the Borrower shall not request, and the
Swingline Lender shall not make, any Swingline Loan if, after
giving effect to the making of such Swingline Loan, the
aggregate amount of the Available Revolving Commitments would
be less than zero. During the Revolving Commitment Period,
the Borrower may use the Swingline Commitment by borrowing,
repaying and reborrowing, all in accordance with the terms
and conditions hereof. Swingline Loans shall be ABR Loans
only.
2.4 Procedure for A/B/C Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to
10:00 A.M., New York City time, one Business Day prior to the
anticipated Closing Date) requesting that the relevant Term
Lenders make the A/B/C Term Loans on the Closing Date and
specifying the amount to be borrowed. The A/B/C Term Loans
made on the Closing Date shall initially be ABR Loans and,
unless otherwise agreed by the Administrative Agent in its
sole discretion, (A) no such Term Loan may be converted into
or continued as a Eurodollar Loan prior to the date that is
30 days after the Closing Date and (B) no such Term Loan may
be converted into or continued as a Eurodollar Loan having an
Interest Period in excess of one month prior to the date that
is 90 days after the Closing Date. Upon receipt of such
notice the Administrative Agent shall promptly notify each
relevant Term Lender thereof. Not later than 12:00 Noon, New
York City time, on the Closing Date each relevant Term Lender
shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal
to the A/B/C Term Loan(s) to be made by such Lender. The
Administrative Agent shall credit the account of the Borrower
on the books of such office of the Administrative Agent with
the aggregate of the amounts so made available to the
Administrative Agent by the Term Lenders in immediately
available funds.
-30-
36
2.5 Procedure for LC/MD Term Loan and Revolving Loan Borrowing.
The Borrower may borrow under the LC/MD Term Commitments
during the LC/MD Term Commitment Period or under the
Revolving Commitments during the Revolving Commitment Period
on any Business Day, provided that the Borrower shall give
the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent prior to 12:00
Noon, New York City time, (a) three Business Days prior to
the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) one Business Day prior to the requested
Borrowing Date, in the case of ABR Loans), specifying (i) the
amount and Type of Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Period therefor.
Any Revolving Loans made on the Closing Date shall initially
be ABR Loans and, unless otherwise agreed by the
Administrative Agent in its sole discretion, (A) no Revolving
Loan may be made as, converted into or continued as a
Eurodollar Loan prior to the date that is 30 days after the
Closing Date and (B) no Revolving Loan may be made as,
converted into or continued as a Eurodollar Loan having an
Interest Period in excess of one month prior to the date that
is 90 days after the Closing Date. Each borrowing under the
LC/MD Term Commitments shall be in an amount equal to (x) in
the case of ABR Loans, $4,000,000 or a whole multiple of
$500,000 in excess thereof (or, if the then aggregate LC/MD
Term Commitments are less than $4,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $5,000,000
or a whole multiple of $1,000,000 in excess thereof. Each
borrowing under the Revolving Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $4,000,000 or a
whole multiple of $500,000 in excess thereof (or, if the then
aggregate Available Revolving Commitments are less than
$4,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; provided, that the Swingline
Lender may request, on behalf of the Borrower, borrowings
under the Revolving Commitments that are ABR Loans in other
amounts pursuant to Section 2.6. Upon receipt of any such
notice from the Borrower, the Administrative Agent shall
promptly notify each relevant Lender thereof. Each relevant
Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to 12:00
Noon, New York City time, on the Borrowing Date requested by
the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made
available
-31-
37
to the Borrower by the Administrative Agent crediting the
account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative
Agent by the relevant Lenders and in like funds as received
by the Administrative Agent.
2.6 Procedure for Swingline Borrowing; Refunding of Swingline
Loans. Whenever the Borrower desires that the Swingline
Lender make Swingline Loans it shall give the Swingline
Lender irrevocable telephonic notice confirmed promptly in
writing (which telephonic notice must be received by the
Swingline Lender not later than 1:00 P.M., New York City
time, on the proposed Borrowing Date), specifying (i) the
amount to be borrowed and (ii) the requested Borrowing Date
(which shall be a Business Day during the Revolving
Commitment Period). Each borrowing under the Swingline
Commitment shall be in an amount equal to $500,000 or a whole
multiple of $100,000 in excess thereof. Not later than 3:00
P.M., New York City time, on the Borrowing Date specified in
a notice in respect of Swingline Loans, the Swingline Lender
shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal
to the amount of the Swingline Loan to be made by the
Swingline Lender. The Administrative Agent shall make the
proceeds of such Swingline Loan available to the Borrower on
such Borrowing Date by depositing such proceeds in the
account of the Borrower with the Administrative Agent on such
Borrowing Date in immediately available funds.
(b) The Swingline Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of
the Borrower (which hereby irrevocably directs the
Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline Lender no later
than 12:00 Noon, New York City time (with a copy of
such notice being provided to the Borrower), request
each Revolving Lender to make, and each Revolving
Lender hereby agrees to make, a Revolving Loan, in an
amount equal to such Revolving Lender's Revolving
Percentage of the aggregate amount of the Swingline
Loans (the "Refunded Swingline Loans") outstanding on
the date of such notice, to repay the Swingline Lender.
Each Revolving Lender shall make the amount of such
Revolving Loan available to the Administrative Agent at
the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business
Day
-32-
38
after the date of such notice. The proceeds of such
Revolving Loans shall be immediately made available by
the Administrative Agent to the Swingline Lender for
application by the Swingline Lender to the repayment of
the Refunded Swingline Loans. The Borrower irrevocably
authorizes the Swingline Lender to charge the
Borrower's accounts with the Administrative Agent (up
to the amount available in each such account) in order
to immediately pay the amount of such Refunded
Swingline Loans to the extent amounts received from the
Revolving Lenders are not sufficient to repay in full
such Refunded Swingline Loans (with notice of such
charge being provided to the Borrower, provided that
the failure to give such notice shall not affect the
validity of such charge).
(c) If prior to the time a Revolving Loan would have
otherwise been made pursuant to Section 2.6(b), one of
the events described in Section 8(f) shall have
occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the
Swingline Lender in its sole discretion, Revolving
Loans may not be made as contemplated by Section
2.6(b), each Revolving Lender shall, on the date such
Revolving Loan was to have been made pursuant to the
notice referred to in Section 2.6(b) (the "Refunding
Date"), purchase for cash an undivided participating
interest in the then outstanding Swingline Loans by
paying to the Swingline Lender an amount (the
"Swingline Participation Amount") equal to (i) such
Revolving Lender's Revolving Percentage times (ii) the
sum of the aggregate principal amount of Swingline
Loans then outstanding that were to have been repaid
with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has
received from any Revolving Lender such Lender's
Swingline Participation Amount, the Swingline Lender
receives any payment on account of the Swingline Loans,
the Swingline Lender will distribute to such Lender its
Swingline Participation Amount (appropriately adjusted,
in the case of interest payments, to reflect the period
of time during which such Lender's participating
interest was outstanding and funded and, in the case of
principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such
payment is not sufficient to pay the principal of and
interest on all Swingline Loans then due); provided,
however, that in the event that such payment received
by the Swingline Lender is
-33-
39
required to be returned, such Revolving Lender will
return to the Swingline Lender any portion thereof
previously distributed to it by the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Loans
referred to in Section 2.6(b) and to purchase
participating interests pursuant to Section 2.6(c)
shall be absolute and unconditional and shall not be
affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that
such Revolving Lender or the Borrower may have against
the Swingline Lender, the Borrower or any other Person
for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions
specified in Section 5; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower;
(iv) any breach of this Agreement or any other Loan
Document by the Borrower, any other Loan Party or any
other Revolving Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar
to any of the foregoing.
2.7 Repayment of Loans; Scheduled Commitment Reductions. (a) The
Tranche A Term Loan of each Tranche A Lender shall mature in
9 installments, each of which shall be in an amount equal to
such Lender's Tranche A Term Percentage multiplied by the
amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
September 30, 2000 $12,000,000
March 31, 2001 10,000,000
September 30, 2001 10,000,000
March 31, 2002 12,000,000
September 30, 2002 12,000,000
March 31, 2003 14,000,000
September 30, 2003 14,000,000
March 31, 2004 18,000,000
July 31, 2004 18,000,000
(b) The Tranche B Term Loan of each Tranche B Lender shall mature in 12
installments, each of which shall be in an amount equal to such Lender's Tranche
B Term Percentage multiplied by the amount set forth below opposite such
installment:
-34-
40
Installment Principal Amount
----------- ----------------
September 30, 1999 $1,000,000
September 30, 2000 1,000,000
September 30, 2001 1,000,000
September 30, 2002 1,000,000
September 30, 2003 1,000,000
September 30, 2004 1,000,000
December 31, 2004 44,000,000
March 31, 2005 44,000,000
June 30, 2005 44,000,000
September 30, 2005 44,000,000
December 31, 2005 44,000,000
January 31, 2006 44,000,000
(c) The Tranche C Term Loan of each Tranche C Lender shall mature in 13
installments, each of which shall be in an amount equal to such Lender's Tranche
C Term Percentage multiplied by the amount set forth below opposite such
installment:
Installment Principal Amount
----------- ----------------
September 30, 1999 $1,000,000
September 30, 2000 1,000,000
September 30, 2001 1,000,000
September 30, 2002 1,000,000
September 30, 2003 1,000,000
September 30, 2004 1,000,000
September 30, 2005 1,000,000
December 31, 2005 1,000,000
March 31, 2006 64,400,000
June 30, 2006 64,400,000
September 30, 2006 64,400,000
December 31, 2006 64,400,000
January 31, 2007 64,400,000
(d) The LC/MD Loans of each LC/MD Lender shall mature in equal
quarterly installments (determined on the basis of the aggregate outstanding
principal amount of such LC/MD Loans on the LC/MD Scheduled Termination Date),
which installments shall be payable on the last day of each calendar quarter
ending after the LC/MD Scheduled Termination Date (provided that the last such
installment shall be payable on July 31, 2004). Notwithstanding anything to the
contrary in this Agreement, in the event that, on any date (an "Excess Date"),
the aggregate principal amount of the LC/MD Reimbursement Loans exceeds (such
excess, "Excess LC/MD Reimbursement Loans") the Total LC/MD Term Commitments in
effect immediately prior to the
-35-
41
creation of such LC/MD Reimbursement Loans, such Excess LC/MD Reimbursement
Loans shall be due and payable on the date that is 30 days after such Excess
Date.
(e) The Borrower shall repay all outstanding Revolving Loans and
Swingline Loans on the Revolving Scheduled Commitment Termination Date.
2.8 Commitment Fees, etc. The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender
a commitment fee for the period from and including the
Closing Date to the last day of the Revolving Commitment
Period, computed at a per annum rate equal to the Commitment
Fee Rate on the average daily amount of the Available
Revolving Commitment of such Lender during the period for
which payment is made, payable quarterly in arrears on the
last day of each March, June, September and December and on
the Revolving Scheduled Commitment Termination Date,
commencing on the first of such dates to occur after the date
hereof.
(b) The Borrower agrees to pay to the Administrative Agent
for the account of each LC/MD Lender a commitment fee
for the period from and including the NJ LC Termination
Date to the last day of the LC/MD Term Commitment
Period, computed at the Commitment Fee Rate on the
average daily amount of the LC/MD Term Commitment of
such Lender during the period for which payment is
made, payable quarterly in arrears on the last day of
each March, June, September and December and on the
LC/MD Scheduled Termination Date, commencing on the
first of such dates to occur after the NJ LC
Termination Date.
(c) The Borrower agrees to pay to the Administrative Agent
the fees in the amounts and on the dates previously
agreed to in writing by the Borrower and the
Administrative Agent.
2.9 Termination or Reduction of Commitments. The Borrower shall
have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the
Revolving Commitments or the LC/MD Commitments or, from time
to time, to reduce the amount of the Revolving Commitments or
the LC/MD Commitments; provided that (i) no such termination
or reduction of Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the
Revolving Loans and Swingline Loans made on the effective
date thereof, the Total Revolving Extensions of
-36-
42
Credit would exceed the Total Revolving Commitments and (ii)
no such termination or reduction of LC/MD Commitments shall
be permitted if, after giving effect thereto, the LC/MD LC
Obligations would exceed the Total LC/MD Commitments. Any
such partial reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce
permanently the relevant Commitments then in effect.
2.10 Optional Prepayments. Subject to Section 2.17, the Borrower
may at any time and from time to time prepay the Loans, in
whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent at
least three Business Days prior thereto in the case of
Eurodollar Loans and at least one Business Day prior thereto
in the case of ABR Loans, which notice shall specify the date
and amount of prepayment and whether the prepayment is of
Eurodollar Loans or ABR Loans; provided, that if a Eurodollar
Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also
pay any amounts owing pursuant to Section 2.20. Upon receipt
of any such notice the Administrative Agent shall promptly
notify each relevant Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except
in the case of Revolving Loans that are ABR Loans and
Swingline Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Term Loans and Revolving
Loans shall be in an aggregate principal amount of $1,000,000
or a whole multiple thereof. Partial prepayments of Swingline
Loans shall be in an aggregate principal amount of $100,000
or a whole multiple thereof.
2.11 Mandatory Prepayments. Unless the Required Prepayment Lenders
shall otherwise agree, if any Capital Stock (other than any
Capital Stock issued by the Borrower to finance any Permitted
Acquisition or to refinance the Subordinated Bridge Facility)
shall be issued by the Borrower or any of its Subsidiaries,
an amount equal to 75% (the "Equity Percentage") of the Net
Cash Proceeds thereof shall be applied within two Business
Days following the date of such issuance toward the
prepayment of the Term Loans; provided that the Equity
Percentage shall instead equal 50% if the Consolidated
Leverage Ratio, determined as at the end of the most recent
period of four consecutive fiscal quarters ended prior to the
required date of prepayment for which the relevant financial
information is available
-37-
43
on a pro forma basis as if such issuance had occurred on the
first day of such period, is less than 3.50 to 1.0.
(b) (i) Unless the Required Prepayment Lenders shall
otherwise agree, if any Indebtedness shall be incurred
by the Borrower or any of its Subsidiaries (excluding
any Indebtedness incurred in accordance with Section
7.2 as in effect on the date of this Agreement), an
amount equal to 100% of the Net Cash Proceeds thereof
shall be applied on the date of such incurrence toward
the prepayment of the Term Loans.
(ii) Notwithstanding Section 2.11(b)(i) and anything to the contrary in
Section 2.17, if the Borrower shall issue an aggregate principal amount of
Senior Subordinated Notes in excess of $175,000,000 (any such excess amount, the
"Excess Senior Subordinated Note Amount"), (A) an amount equal to 50% of the Net
Cash Proceeds of such excess issuance shall be applied on the date of such
issuance toward the prepayment of the Tranche A Term Loans in reduction of the
then remaining installments thereof pro rata based upon the then remaining
principal amount thereof and (B) an amount equal to 50% of the Net Cash Proceeds
of such excess issuance shall be applied on the date of such issuance toward the
permanent reduction of the Revolving Commitments. Any such reduction of the
Revolving Commitments shall be accompanied by prepayment of the Revolving Loans
and/or Swingline Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Commitments as so
reduced, provided that if the aggregate principal amount of Revolving Loans and
Swingline Loans then outstanding is less than the amount of such excess (because
Revolving LC Obligations constitute a portion thereof), the Borrower shall, to
the extent of the balance of such excess, replace outstanding Revolving Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Lenders on
terms and conditions satisfactory to the Administrative Agent.
(c) Unless the Required Prepayment Lenders shall otherwise
agree, if on any date the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any
Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect
thereof, an amount equal to 75% of such Net Cash
Proceeds shall be applied within two Business Days
following such date toward the prepayment of the Term
Loans; provided, that, notwithstanding the foregoing,
(i) the aggregate Net Cash Proceeds of Asset Sales that
may be excluded from the foregoing requirement pursuant
to a Reinvestment Notice shall not exceed (x) during
the period from the Closing Date to the second
anniversary of the Closing Date, $45,000,000, and (y)
thereafter, $15,000,000 in any fiscal year of the
Borrower (or, in the case of the period
-38-
44
commencing on the second anniversary of the Closing
Date, the remaining portion of the fiscal year in which
such second anniversary falls), and (ii) on each
Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the
prepayment of the Term Loans; provided, further, that,
notwithstanding the foregoing, the Borrower and its
Subsidiaries shall not be required to prepay the Term
Loans in accordance with this paragraph (c) except to
the extent that the Net Cash Proceeds from all Asset
Sales which have not been so applied equals or exceeds
$5,000,000 in the aggregate.
(d) Unless the Required Prepayment Lenders shall otherwise
agree, if, for any fiscal year of the Borrower
commencing with the fiscal year ending December 31,
1999, there shall be Excess Cash Flow, the Borrower
shall, on the relevant Excess Cash Flow Application
Date, apply 75% (or, if the Consolidated Leverage Ratio
as of the last day of such fiscal year is not greater
than 3.50 to 1.0, 50%) of such Excess Cash Flow toward
the prepayment of the Term Loans. Each such prepayment
and commitment reduction shall be made on a date (an
"Excess Cash Flow Application Date") no later than five
Business Days after the earlier of (i) the date on
which the financial statements of the Borrower referred
to in Section 6.1(a), for the fiscal year with respect
to which such prepayment is made, are required to be
delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(e) The application of any prepayment under a Facility
pursuant to Section 2.11 shall be made, first, to ABR
Loans and, second, to Eurodollar Loans. Each prepayment
of the Loans under Section 2.11 (except in the case of
Revolving Loans that are ABR Loans and Swingline Loans)
shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid.
2.12 Conversion and Continuation Options. The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by
giving the Administrative Agent at least two Business Days'
prior irrevocable notice of such election, provided that any
such conversion of Eurodollar Loans may only be made on the
last day of an Interest
-39-
45
Period with respect thereto. The Borrower may elect from time
to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior
irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor),
provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default
has occurred and is continuing and the Administrative Agent
or the Majority Facility Lenders in respect of such Facility
have determined in its or their sole discretion not to permit
such conversions. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant
Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with
respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent, in accordance with
the applicable provisions of the term "Interest Period"
set forth in Section 1.1, of the length of the next
Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan under a particular
Facility may be continued as such when any Event of
Default has occurred and is continuing and the
Administrative Agent has or the Majority Facility
Lenders in respect of such Facility have determined in
its or their sole discretion not to permit such
continuations, and provided, further, that if the
Borrower shall fail to give any required notice as
described above in this paragraph or if such
continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to
ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each
relevant Lender thereof.
2.13 Limitations on Eurodollar Tranches. Notwithstanding anything
to the contrary in this Agreement, all borrowings,
conversions and continuations of Eurodollar Loans hereunder
and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that,
(a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than 15
Eurodollar Tranches shall be outstanding at any one time.
-40-
46
2.14 Interest Rates and Payment Dates. Each Eurodollar Loan shall
bear interest for each day during each Interest Period with
respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when
due (whether at the stated maturity, by acceleration or
otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear
interest at a rate per annum equal to (x) in the case
of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions
of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to ABR
Loans under the Revolving Facility or the LC/MD
Facility, as the case may be, plus 2%, and (ii) if all
or a portion of any interest payable on any Loan or
Reimbursement Obligation or any commitment fee or other
amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at
a rate per annum equal to the rate then applicable to
ABR Loans under the relevant Facility plus 2% (or, in
the case of any such other amounts that do not relate
to a particular Facility, the rate then applicable to
ABR Loans under the Revolving Facility plus 2%), in
each case, with respect to clauses (i) and (ii) above,
from the date of such non-payment until such amount is
paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant
to paragraph (c) of this Section shall be payable from
time to time on demand.
2.15 Computation of Interest and Fees. Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day
year for the actual days elapsed, except that, with respect
to ABR Loans the rate of interest on which is calculated on
the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may
be) day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower
-41-
47
and the relevant Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the ABR or the
Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on
which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower
and the relevant Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this
Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest
error. The Administrative Agent shall, at the request
of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent
in determining any interest rate pursuant to Section
2.15(a).
2.16 Inability to Determine Interest Rate. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting
the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice
from the Majority Facility Lenders in respect of the
relevant Facility that the Eurodollar Rate determined
or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making
or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then-current
Interest Period, to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans under the relevant Facility
shall be made or
-42-
48
continued as such, nor shall the Borrower have the right to convert Loans under
the relevant Facility to Eurodollar Loans.
2.17 Pro Rata Treatment and Payments. Each borrowing by the
Borrower from the Lenders hereunder, each payment by the
Borrower on account of any commitment fee and any reduction
of the Commitments of the Lenders shall be made pro rata
according to the respective Tranche A Term Percentages,
Tranche B Term Percentages, Tranche C Term Percentages,
Revolving Percentages or LC/MD Percentages, as the case may
be, of the relevant Lenders.
(b) Except for payments made pursuant to Section 2.7, each
payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans
shall be made pro rata according to the respective
outstanding principal amounts of the Term Loans then
held by the Term Lenders (except as otherwise provided
in Section 2.17(c)). The amount of each principal
prepayment of the Term Loans shall be applied to reduce
the then remaining installments of the Tranche A Term
Loans, Tranche B Term Loans, Tranche C Term Loans or
LC/MD Loans, as the case may be, pro rata based upon
the then remaining principal amount thereof. Amounts
prepaid on account of the Term Loans may not be
reborrowed.
(c) Notwithstanding anything to the contrary in this
Agreement, with respect to the amount of any optional
or mandatory prepayment that would otherwise be
allocated to Tranche B Term Loans or Tranche C Term
Loans (such amounts, the "Tranche B Prepayment Amount"
and the "Tranche C Prepayment Amount", respectively),
at any time when Tranche A Term Loans and/or LC/MD
Loans remain outstanding, the Borrower will, in lieu of
applying such amount to the prepayment of Tranche B
Term Loans and Tranche C Term Loans, on the date
specified for such prepayment, give the Administrative
Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and
provide to each Tranche B Lender and Tranche C Lender a
notice (each, a "Prepayment Option Notice") as
described below. As promptly as practicable after
receiving such notice from the Borrower, the
Administrative Agent will send to each Tranche B Lender
and Tranche C Lender a Prepayment Option Notice, which
shall
-43-
49
be in the form of Exhibit H, and shall include an offer
by the Borrower to prepay, on the date (each a
"Prepayment Date") that is 10 Business Days after the
date of the Prepayment Option Notice, the relevant Term
Loans of such Lender by an amount equal to the portion
of the Prepayment Amount indicated in such Lender's
Prepayment Option Notice as being applicable to such
Lender's Tranche B Term Loans or Tranche C Term Loans,
as the case may be. On the Prepayment Date, (i) the
Borrower shall pay to the relevant Tranche B Lenders
and Tranche C Lenders the aggregate amount necessary to
prepay that portion of the outstanding relevant Term
Loans in respect of which such Lenders have accepted
prepayment as described above (such Lenders, the
"Accepting Lenders") and (ii) the Borrower shall pay to
the Tranche A Lenders and the LC/MD Lenders an amount
equal to the portion of the Tranche B Prepayment Amount
and the Tranche C Prepayment Amount not accepted by the
Accepting Lenders, and such amount shall be applied pro
rata to the prepayment of the then outstanding Tranche
A Term Loans and the LC/MD Loans.
(d) Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the
Revolving Loans shall be made pro rata according to the
respective outstanding principal amounts of the
Revolving Loans then held by the Revolving Lenders.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal,
interest, fees or otherwise, shall be made without
setoff or counterclaim and shall be made prior to 12:00
Noon, New York City time, on the due date thereof to
the Administrative Agent, for the account of the
Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent
shall distribute such payments to the Lenders promptly
upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to
the next succeeding Business Day unless the result of
such
-44-
50
extension would be to extend such payment into another
calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the
case of any extension of any payment of principal
pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate
during such extension.
(f) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing
that such Lender will not make the amount that would
constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available
to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If
such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at
a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes
such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts
owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of
such borrowing is not made available to the
Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum
applicable to ABR Loans under the relevant Facility, on
demand, from the Borrower.
(g) Unless the Administrative Agent shall have been
notified in writing by the Borrower prior to the date
of any payment being made hereunder that the Borrower
will not make such payment to the Administrative Agent,
the Administrative Agent may assume that the Borrower
is making such payment, and the Administrative Agent
may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount.
If such payment is not made to the Administrative Agent
by the Borrower within three Business Days of such
required date, the Administrative Agent shall be
-45-
51
entitled to recover, on demand, from each Lender to
which any amount which was made available pursuant to
the preceding sentence, such amount with interest
thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the
Administrative Agent or any Lender against the
Borrower.
2.18 Requirements of Law. If the adoption of or any change in any
Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent
to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.19
and changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender that is not otherwise included in the determination of the
Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this paragraph, it shall
promptly notify (no more frequently than quarterly) the Borrower (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not
having the force of law) from any
-46-
52
Governmental Authority made subsequent to the date
hereof shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital
as a consequence of its obligations hereunder or under
or in respect of any Letter of Credit to a level below
that which such Lender or such corporation could have
achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such
corporation's policies with respect to capital
adequacy) by an amount deemed by such Lender to be
material, then from time to time, after submission by
such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor
(which may be submitted no more frequently than
quarterly), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such
Lender for such reduction; provided that the Borrower
shall not be required to compensate a Lender pursuant
to this paragraph for any amounts incurred more than
six months prior to the date that such Lender notifies
the Borrower of such Lender's intention to claim
compensation therefor; and provided further that, if
the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be
extended to include the period of such retroactive
effect.
(c) In determining any additional amounts payable pursuant
to this Section 2.18, each Lender will act reasonably
and in good faith and will use averaging and
attribution methods which are reasonable, provided that
such Lender's determination of compensation owing under
this Section 2.18 shall, absent manifest error, be
final and conclusive and binding on all the parties
hereto. Each Lender, upon determining that any
additional amounts will be payable pursuant to this
Section 2.18, shall give prompt written notice of such
determination to the Borrower, which notice shall show
the basis for calculation of such additional amounts.
The obligations of the Borrower pursuant to this
Section 2.18 shall survive the termination of this
Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.19 Taxes. Subject to the last proviso of this paragraph (a), all
payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or
other taxes, levies,
-47-
53
imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income
taxes and franchise taxes imposed on the Administrative Agent
or any Lender as a result of a present or former connection
between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax
or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from
the Administrative Agent or such Lender having executed,
delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan
Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be
withheld from any amounts payable to the Administrative Agent
or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Agreement,
provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect
to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph
(d) or (e) of this Section or (ii) that are United States
withholding taxes imposed on amounts payable to such Lender
at the time the Lender becomes a party to this Agreement,
except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional
amounts from the Borrower with respect to such Non-Excluded
Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with
applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the
Administrative Agent for its own account or for the
account of the relevant Lender, as the case may be, a
certified copy of an original official receipt received
by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes or Other
Taxes when due to the appropriate taxing authority or
fails to remit to the Administrative Agent the required
receipts or
-48-
54
other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for
any incremental taxes, interest or penalties that may
become payable by the Administrative Agent or any
Lender as a result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a
corporation, partnership or other entity created or
organized in or under the laws of the United States of
America (or any state thereof), or any estate or trust
that is subject to federal income taxation regardless
of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent
(or, in the case of a Participant, to the Lender from
which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue
Service Form 1001 or Form 4224, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the
Code with respect to payments of "portfolio interest",
a statement substantially in the form of Exhibit I and
a Form W-8, or any subsequent versions thereof or
successors thereto, properly completed and duly
executed by such Non- U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower under
this Agreement and the other Loan Documents. Such forms
shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in
the case of any Participant, on or before the date such
Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms
promptly upon the request of the Borrower as a result
of the obsolescence, inaccuracy or invalidity of any
form previously delivered by such Non-U.S. Lender. Each
Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer qualified
to provide or capable of providing any previously
delivered certificate to the Borrower (or any other
form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender
shall not be required to deliver any form pursuant to
this paragraph that such Non-U.S. Lender is not legally
able to deliver.
-49-
55
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. 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 or reasonably requested by the Borrower, such
properly completed and executed documentation
prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced
rate, provided that such Lender is legally entitled to
complete, execute and deliver such documentation and in
such Lender's judgment such completion, execution or
submission would not materially prejudice the legal
position of such Lender.
(f) If any Lender receives a refund of any Non-Excluded
Taxes or Other Taxes paid or indemnified by the
Borrower under this Section 2.19, such Lender shall pay
the amount of such refund to the Borrower within 15
days of the date it received such refund.
(g) The agreements in this Section shall survive the
termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
2.20 Indemnity. The Borrower agrees to indemnify each Lender and
to hold each Lender harmless from any loss or expense that
such Lender may sustain or incur as a consequence of (a)
default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower
has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in
making any prepayment of or conversion from Eurodollar Loans
after the Borrower has given a notice thereof in accordance
with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last
day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest that would have accrued on
the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or
of such failure to borrow, convert or continue to the last
day of such Interest Period (or, in the case of a failure to
borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at
the applicable
-50-
56
rate of interest for such Loans provided for herein
(excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such
Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank
eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable
hereunder.
2.21 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of
Section 2.18 or 2.19(a) with respect to such Lender, it will
use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending
office for any Loans affected by such event with the object
of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment
of such Lender, cause such Lender and its lending office(s)
to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.18 or 2.19(a).
2.22 Replacement of Lenders. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for
amounts owing pursuant to Section 2.18 or 2.19(a) or (b)
defaults in its obligation to make Loans hereunder, with a
replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law,
(ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to
any such replacement, such Lender shall have taken no action
under Section 2.21 so as to eliminate the continued need for
payment of amounts owing pursuant to Section 2.18 or 2.19(a),
(iv) the replacement financial institution shall purchase, at
par, all Loans and other amounts owing to such replaced
Lender on or prior to the date of replacement, (v) the
Borrower shall be liable to such replaced Lender under
Section 2.20 if any Eurodollar Loan owing to such replaced
Lender shall be purchased other than on the last day of the
Interest Period relating thereto, (vi) the replacement
financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii)
the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of
-51-
57
Section 10.6 (provided that the Borrower shall be obligated
to pay the registration and processing fee referred to
therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts
(if any) required pursuant to Section 2.18 or 2.19(a), as the
case may be, and (ix) any such replacement shall not be
deemed to be a waiver of any rights that the Borrower, the
Administrative Agent or any other Lender shall have against
the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 LC Commitment. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the LC
Participants, as set forth in Section 3.4(a), agrees to issue
(i) on the Closing Date, a letter of credit (the "NJ Letter
of Credit") for the benefit of the Superior Court of New
Jersey supporting a potential liability with respect to a
judgment rendered in the case of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Americas,
Inc. in the State of New Jersey and (ii) on any Business Day
during the Revolving Commitment Period, other letters of
credit ("Revolving Letters of Credit"), in each case for the
account of the Borrower (including the account of the
Borrower acting on behalf of any of its Subsidiaries) and in
such form as may be approved from time to time by the Issuing
Lender; provided that the Issuing Lender shall have no
obligation to issue any Revolving Letter of Credit if, after
giving effect to such issuance, (i) the Revolving LC
Obligations would exceed the Revolving LC Commitment or (ii)
the aggregate amount of the Available Revolving Commitments
would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance
and (y) the date that is five Business Days prior to the
Revolving Scheduled Commitment Termination Date or, in the
case of the NJ Letter of Credit, March 30, 2004, provided
that any Letter of Credit with a one-year term may provide
for the renewal thereof for additional one-year periods
(which shall in no event extend beyond the date referred to
in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith,
the laws of the State of New York.
(c) The Issuing Lender shall not at any time be obligated
to issue any Letter of Credit hereunder if such
issuance would conflict with, or cause the Issuing
Lender or any LC
-52-
58
Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may
from time to time request that the Issuing Lender issue a
Letter of Credit by delivering to the Issuing Lender at its
address for notices specified herein an Application therefor,
completed to the satisfaction of the Issuing Lender, and such
other certificates, documents and other papers and
information as the Issuing Lender may request. Upon receipt
of any Application, the Issuing Lender will process such
Application and the certificates, documents and other papers
and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly
issue the Letter of Credit requested thereby (but in no event
shall the Issuing Lender be required to issue any Letter of
Credit earlier than three Business Days after its receipt of
the Application therefor and all such other certificates,
documents and other papers and information relating thereto)
by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower
promptly following the issuance thereof. The Issuing Lender
shall promptly furnish to the Administrative Agent, which
shall in turn promptly furnish to the Lenders, notice of the
issuance of each Letter of Credit (including the amount
thereof).
3.3 Fees and Other Charges. The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to
the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Facility or, in the case
of the NJ Letter of Credit, the LC/MD Facility, shared
ratably among the Lenders under the relevant Facility and
payable quarterly in arrears on each LC Fee Payment Date
after the issuance date. In addition, the Borrower shall pay
to the Issuing Lender for its own account a fronting fee of
0.25% per annum on the undrawn and unexpired amount of each
Letter of Credit, payable quarterly in arrears on each LC Fee
Payment Date after the Issuance Date.
(b) In addition to the foregoing fees, the Borrower shall
pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged
by the Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise
administering any Letter of Credit.
-53-
59
3.4 LC Participations. The Issuing Lender irrevocably agrees to
grant and hereby grants to each LC Participant, and, to
induce the Issuing Lender to issue Letters of Credit
hereunder, each LC Participant irrevocably agrees to accept
and purchase and hereby accepts and purchases from the
Issuing Lender, on the terms and conditions hereinafter
stated, for such LC Participant's own account and risk an
undivided interest equal to such LC Participant's Revolving
Percentage or LC/MD Percentage, as the case may be, in the
Issuing Lender's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by
the Issuing Lender thereunder. Each LC Participant
unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit
for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such
LC Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an
amount equal to such LC Participant's Revolving Percentage or
LC/MD Percentage, as the case may be, of the amount of such
draft, or any part thereof, that is not so reimbursed (which
payments shall constitute LC/MD Reimbursement Loans to the
extent contemplated by Section 3.5).
(b) If any amount required to be paid by any LC Participant
to the Issuing Lender pursuant to Section 3.4(a) in
respect of any unreimbursed portion of any payment made
by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days
after the date such payment is due, such LC Participant
shall pay to the Issuing Lender on demand an amount
equal to the product of such amount, times the daily
average Federal Funds Effective Rate during the period
from and including the date such payment is required to
the date on which such payment is immediately available
to the Issuing Lender, times a fraction the numerator
of which is the number of days that elapse during such
period and the denominator of which is 360. If any such
amount required to be paid by any LC Participant
pursuant to Section 3.4(a) is not made available to the
Issuing Lender by such LC Participant within three
Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such
LC Participant, on demand, such amount with interest
thereon calculated from such due date at the rate per
annum applicable to ABR Loans under the Revolving
Facility or the LC/MD Facility, as the case may be. A
-54-
60
certificate of the Issuing Lender submitted to any LC
Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received
from any LC Participant its pro rata share of such
payment in accordance with Section 3.4(a), the Issuing
Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied
thereto by the Issuing Lender), or any payment of
interest on account thereof, the Issuing Lender will
distribute to such LC Participant its pro rata share
thereof; provided, however, that in the event that any
such payment received by the Issuing Lender shall be
required to be returned by the Issuing Lender, such LC
Participant shall return to the Issuing Lender the
portion thereof previously distributed by the Issuing
Lender to it.
(d) Each LC Participant's obligation to purchase
participating interests pursuant to Section 3.4(a)
(including participating interests that constitute
LC/MD Reimbursement Loans) shall be absolute and
unconditional and shall not be affected by any
circumstance, including (i) any setoff, counterclaim,
recoupment, defense or other right that such LC
Participant or the Borrower may have against the
Issuing Lender, the Borrower or any other Person for
any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions
specified in Section 5; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower;
(iv) any breach of this Agreement or any other Loan
Document by the Borrower, any other Loan Party or any
other Lender; or (v) any other circumstance, happening
or event whatsoever, whether or not similar to any of
the foregoing.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees
to reimburse the Issuing Lender in accordance with the
immediately following sentence upon notification of the
Borrower of the date and amount of a draft presented under
any Revolving Letter of Credit and paid by the Issuing Lender
for the amount of (a) such draft so paid and (b) any taxes,
fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. If the
Borrower
-55-
61
is notified as provided in the immediately preceding sentence
by 2:00 P.M., New York City time, on any day, then the
Borrower shall so reimburse the Issuing Lender by 12:00 Noon,
New York City time, on the next succeeding Business Day, and,
if so notified after 2:00 P.M., New York City time, on any
day, the Borrower shall so reimburse the Issuing Lender by
12:00 Noon, New York City time, on the second succeeding
Business Day. Each such payment shall be made to the Issuing
Lender at its address for notices specified herein in lawful
money of the United States and in immediately available
funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section from the
date such amounts become payable (whether at stated maturity,
by acceleration or otherwise) until payment in full at the
rate set forth in (i) until the second Business Day following
the date of payment of the applicable drawing, Section
2.14(b) and (ii) thereafter, Section 2.14(c) (but only, in
the case of the NJ Letter of Credit, to the extent such
payment of such drawing has not been refunded by the LC
Participants as contemplated in the next succeeding
sentence). Notwithstanding anything to the contrary herein,
in the case of any payment of any drawing under the NJ Letter
of Credit, the Issuing Lender shall notify the relevant LC
Participants that such payment of such drawing is to be
refunded by such LC Participants through the purchase of
participating interests pursuant to Section 3.4 that will
constitute LC/MD Reimbursement Loans, with the funding date
thereof to be the second Business Day after the date of
payment of such drawing. Any such LC/MD Reimbursement Loans
shall initially be ABR Loans and may from time to time
thereafter be Eurodollar Loans or ABR Loans, as contemplated
by Section 2.1. In the event that, for any reason, any
portion of the LC/MD Reimbursement Loans required to be
funded by the relevant LC Participants as provided above are
not so funded, the Borrower shall be obligated to reimburse
the Issuing Lender for such unfunded amounts no later than
the date that is three Business Days after the date such
funding by the LC Participants was otherwise required to be
made.
3.6 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff,
counterclaim or defense to payment that the Borrower may have
or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also
agrees with the Issuing Lender that the Issuing Lender shall
not be responsible for, and the Borrower's Reimbursement
Obligations under Section 3.5 shall not be affected
-56-
62
by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or
forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or any claims
whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions constituting gross
negligence or willful misconduct of the Issuing Lender. The
Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of
Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in the
Uniform Customs and, to the extent not inconsistent
therewith, the Uniform Commercial Code of the State of New
York, shall be binding on the Borrower and shall not result
in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender
shall promptly notify the Borrower of the date and amount
thereof. The responsibility of the Issuing Lender to the
Borrower in connection with any draft presented for payment
under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit,
be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection
with such presentment are substantially in conformity with
such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent
with the provisions of this Section 3, the provisions of this
Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:
-57-
63
4.1 Financial Condition. The unaudited pro forma consolidated
balance sheet and statement of operations of the Borrower and
its consolidated Subsidiaries as at, or for the period of
four consecutive fiscal quarters ended, March 31, 1998 (the
"Pro Forma Financial Statements"), copies of which have
heretofore been furnished to each Lender, have been prepared
giving effect (as if such events had occurred on such date or
at the beginning of such period, as the case may be) to (i)
the consummation of the Acquisition, (ii) the Loans to be
made and the Senior Subordinated Notes (or the Subordinated
Bridge Facility to be funded, as the case may be) and
Preferred Stock to be issued on the Closing Date and the use
of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma
Financial Statements have been prepared based on the best
information available to the Borrower as of the date of
delivery thereof, and present fairly on a pro forma basis the
estimated financial position of Borrower and its consolidated
Subsidiaries as at, or for the period of four consecutive
fiscal quarters ended, March 31, 1998, assuming that the
events specified in the preceding sentence had actually
occurred at such date or at the beginning of such period, as
the case may be.
(b) The audited consolidated balance sheets of the Borrower
as at December 31, 1995, December 31, 1996 and December
31, 1997, and the related consolidated statements of
operations, stockholder's equity and cash flows for the
fiscal years ended on such dates, reported on by and
accompanied by an unqualified report from ▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, present fairly the consolidated financial
condition of the Borrower as at such date, and the
consolidated results of its operations and its
consolidated cash flows for the respective fiscal years
then ended. The unaudited consolidated balance sheet of
the Borrower as at March 31, 1998, and the related
unaudited consolidated statements of operations,
stockholder's equity and cash flows for the three-month
period ended on such date, present fairly the
consolidated financial condition of the Borrower as at
such date, and the consolidated results of its
operations and its consolidated cash flows for the
three-month period then ended (subject to normal
year-end audit adjustments). All such financial
statements have been prepared in accordance with GAAP
applied consistently throughout the periods involved
(except as approved by the aforementioned firm of
accountants and disclosed therein). The Borrower and
its Subsidiaries do not have any material
-58-
64
Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including any
interest rate or foreign currency swap or exchange
transaction or other obligation in respect of
derivatives, that are not reflected in the most recent
financial statements referred to in this paragraph.
During the period from December 31, 1997 to and
including the date hereof there has been no Disposition
by the Borrower or any of its Subsidiaries of any
material part of its business or property.
(c) The Borrower has provided to the Lenders the audited
consolidated balance sheets of the Acquired Company as
at March 31, 1996, March 31, 1997 and March 31, 1998,
and the related consolidated statements of operations,
stockholder's equity and cash flows for the fiscal
years ended on such dates, reported on by and
accompanied by an unqualified report from Ernst & Young
LLP (the "Audited Acquired Company Financials"), as
adjusted in certain respects by the Borrower in order
to achieve consistency with the Borrower's customary
presentation of financial information. Such adjustments
do not unfairly present the consolidated financial
condition of the Acquired Company as at such date, and
the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years
then ended, in each case as reflected in the Audited
Acquired Company Financials.
4.2 No Change. Since March 31, 1998 there has been no development
or event that has had or could reasonably be expected to have
a Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is
duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the
failure to be so qualified and in good standing could not, in
the aggregate, reasonably be expected to have a Material
Adverse Effect, and (d) is in compliance with all
-59-
65
Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each
Loan Party has the corporate power and authority, and the
legal right, to make, deliver and perform the Loan Documents
to which it is a party and, in the case of the Borrower, to
borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and,
in the case of the Borrower, to authorize the borrowings on
the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or
in respect of, any Governmental Authority or any other Person
is required in connection with the Acquisition and the
borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or
any of the Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule
4.4, which consents, authorizations, filings and notices have
been obtained or made and are in full force and effect and
(ii) the filings referred to in Section 4.19. Each Loan
Document has been duly executed and delivered on behalf of
each Loan Party party thereto. This Agreement constitutes,
and each other Loan Document upon execution will constitute,
a legal, valid and binding obligation of each Loan Party
party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in
equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of
Letters of Credit, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law
or any material Contractual Obligation of the Borrower or any
of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or
any such Contractual Obligation (other than the Liens created
by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of
its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
-60-
66
4.6 Litigation. Except as set forth on Schedule 4.6, no
litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the
Borrower or any of its Subsidiaries or against any of their
respective properties or revenues (a) with respect to any of
the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected
to have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries
is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected
to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its material real property, and good title
to, or a valid leasehold interest in, all its other material
property, and none of such property is subject to any Lien
except as permitted by Section 7.3.
4.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual
Property necessary for the conduct of its business as
currently conducted. No material claim has been asserted and
is pending by any Person challenging or questioning the use
of any Intellectual Property or the validity or effectiveness
of any Intellectual Property, nor does the Borrower know of
any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Subsidiaries does not
infringe on the rights of any Person in any material respect.
4.10 Taxes. Each of the Borrower and each of its Subsidiaries has
filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has
paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any
of its property by any Governmental Authority to the extent
due and payable (other than any the amount or validity of
that are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the
Borrower or its Subsidiaries, as the case may be); no
material tax Lien has been filed, and, to the
-61-
67
knowledge of the Borrower, no claim is being asserted, with
respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "buying" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in
effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR
Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
4.12 Labor Matters. Except as set forth on Schedule 4.6 and as, in
the aggregate, could not reasonably be expected to have a
Material Adverse Effect: (a) there are no strikes or other
labor disputes against the Borrower or any of its
Subsidiaries pending or, to the knowledge of the Borrower,
threatened; (b) hours worked by and payment made to employees
of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other
applicable Requirement of Law dealing with such matters; and
(c) all payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare
insurance have been paid or accrued as a liability on the
books of the Borrower or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or
Section 302 of ERISA) has occurred during the five-year
period prior to the date on which this representation is made
or deemed made with respect to any Plan, and each Plan has
complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single
Employer Plan has occurred, and no Lien against the Borrower
or any Commonly Controlled Entity and in favor of the PBGC or
a Plan has arisen, during such five-year period. The present
value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such Plans) did not,
as of the last annual valuation date prior to the date on
which this representation is made or deemed made, exceed the
value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or
could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any
-62-
68
Commonly Controlled Entity would become subject to any
material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization
or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is
an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment
Company Act of 1940, as amended. No Loan Party is subject to
regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur
Indebtedness.
4.15 Subsidiaries. Except as disclosed to the Administrative Agent
by the Borrower in writing from time to time after the
Closing Date, Schedule 4.15 sets forth the name and
jurisdiction of incorporation of each Subsidiary and, as to
each such Subsidiary, the percentage of each class of Capital
Stock owned by any Loan Party and there are no outstanding
subscriptions, options, warrants (other than any warrants
issued in connection with the funding under the Subordinated
Bridge Facility), calls, rights or other agreements or
commitments (other than stock options granted to employees or
directors and directors' qualifying shares) of any nature
relating to any Capital Stock of the Borrower or any
Subsidiary, except as created by the Loan Documents.
4.16 Use of Proceeds. The proceeds of the A/B/C Term Loans shall
be used to finance a portion of the Acquisition, to repay
certain existing Indebtedness of the Borrower and its
Subsidiaries and to pay related fees and expenses. The
proceeds of the LC/MD Term Loans shall be used for general
corporate purposes (other than financing acquisitions,
capital expenditures or the working capital needs of the
Borrower and its Subsidiaries). The proceeds of the Revolving
Loans and the Swingline Loans, and the Revolving Letters of
Credit, shall be used for general corporate purposes. The NJ
Letter of Credit shall be used for the purpose specified in
Section 3.1.
4.17 Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain, and have
not previously contained, any
-63-
69
Materials of Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could give rise
to liability under, any Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has received or is
aware of any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the business operated
by the Borrower or any of its Subsidiaries (the "Business"), nor does the
Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
that could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could give rise to liability under Environmental
Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the Business; and
(g) neither the Borrower nor any of its Subsidiaries has assumed any
liability of any other Person under Environmental Laws.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other document,
certificate or statement furnished by or on behalf of any
Loan Party to the Administrative Agent or the Lenders, or any
of them, for use in
-64-
70
connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was
so furnished (or, in the case of the Confidential Information
Memorandum, as of the date of this Agreement), any untrue
statement of a material fact or omitted to state a material
fact necessary to make the statements contained herein or
therein not misleading. The projections and pro forma
financial information contained in the materials referenced
above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at
the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not
to be viewed as fact and that actual results during the
period or periods covered by such financial information may
differ from the projected results set forth therein by a
material amount. As of the date hereof, the representations
and warranties made by the Borrower and, to the Borrower's
knowledge, made by the Seller and Thorn plc, in the
Acquisition Documentation are true and correct in all
material respects. There is no fact known to any Loan Party
that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the
other Loan Documents, in the Confidential Information
Memorandum or in any other documents, certificates and
statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
4.19 Security Documents. The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for
the benefit of the Lenders, a legal, valid and enforceable
security interest in the Collateral described in paragraphs
(a) through (k), inclusive, (m) and (n) of Section 3 thereof
and proceeds of such Collateral. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement,
when stock certificates representing such Pledged Stock are
delivered to the Administrative Agent, and in the case of the
other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings
specified on Schedule 4.19(a) (or otherwise notified to the
Administrative Agent) in appropriate form are filed in the
offices specified on Schedule 4.19(a) (or otherwise notified
to the Administrative Agent), the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the
Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and
-65-
71
Collateral Agreement), in each case prior and superior in
right to any other Person (except, in the case of Collateral
other than Pledged Stock, Liens permitted by Section 7.3).
(b) Each of the Mortgages (if any) is effective to create
in favor of the Administrative Agent, for the benefit
of the Lenders, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds
thereof, and when filed in the offices specified on
Schedule 4.19(b), each such Mortgage shall constitute a
fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such
Mortgaged Properties and the proceeds thereof, as
security for the Obligations (as defined in the
relevant Mortgage), in each case prior and superior in
right to any other Person except Liens permitted by
Section 7.3.
4.20 Solvency. Each Loan Party is, and after giving effect to the
Acquisition and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and
therewith will be and will continue to be, Solvent.
4.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the
Subordinated Bridge Facility and the Senior Subordinated Note
Indenture. The obligations of each Subsidiary Guarantor under
the Guarantee and Collateral Agreement constitute "Guarantor
Senior Indebtedness" of such Subsidiary Guarantor under and
as defined in the Subordinated Bridge Facility and the Senior
Subordinated Note Indenture.
4.22 Year 2000 Matters. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper
functioning would otherwise be impaired by the occurrence of
the year 2000) in and following the year 2000 of computer
systems and other equipment containing embedded microchips,
in either case owned or operated by the Borrower or any of
its Subsidiaries or used or relied upon in the conduct of
their business (including any such systems and other
equipment supplied by others), and the testing of all such
systems and other equipment as so reprogrammed, will be
completed by June 30, 1999. The costs to the Borrower and its
Subsidiaries that have not been incurred as of the date
hereof for such reprogramming and testing and for the other
reasonably foreseeable consequences to them of any improper
functioning of other computer systems and
-66-
72
equipment containing embedded microchips due to the
occurrence of the year 2000 could not reasonably be expected
to result in a Default or Event of Default or to have a
Material Adverse Effect. Except for any reprogramming
referred to above, the computer systems of the Borrower and
its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to
be, sufficient for the conduct of their business as currently
conducted.
4.23 Regulation H. No Mortgage encumbers improved real property
that is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of
1968.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of
each Lender to make the initial extension of credit requested
to be made by it is subject to the satisfaction, prior to or
concurrently with the making of such extension of credit on
the Closing Date, of the following conditions precedent:
(a) Credit Agreement; Addenda; Guarantee and Collateral
Agreement. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by the
Agents and the Borrower, (ii) an Addendum, executed and
delivered by each Person listed on Schedule 1.1A, (iii)
the Guarantee and Collateral Agreement, executed and
delivered by the Borrower and each Subsidiary Guarantor
and (iv) an Acknowledgement and Consent in the form
attached to the Guarantee and Collateral Agreement,
executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party.
In the event that an Addendum has not been duly executed and delivered
by each Person listed on Schedule 1.1A on the date scheduled to be the Closing
Date, the condition referred to in clause (ii) above shall nevertheless be
deemed satisfied if on such date the Borrower and the Administrative Agent shall
have designated one or more Persons (the "Designated Lenders") to assume, in the
aggregate, all of the Commitments that would have been held by the Persons
listed on Schedule 1.1A (the "Non-Executing Persons") which have not so executed
and delivered an Addendum (subject to each such Designated Lender's consent and
its execution and delivery of an Addendum). Schedule 1.1A shall automatically
-67-
73
be deemed to be amended to reflect the respective Commitments of the Designated
Lenders and the omission of the Non-Executing Persons as Lenders hereunder.
(b) Acquisition, etc. The following transactions shall have
been consummated prior to or concurrently with the
funding of the initial Loans hereunder:
(i) the Borrower shall have acquired 100% of the
outstanding Capital Stock of the Acquired
Company in accordance with the terms and
conditions of the Acquisition Agreement (the
"Acquisition") for a purchase price (including
approximately $27,000,000 of change of control
bonuses paid on the Closing Date on behalf of
Thorn plc) not exceeding $900,000,000;
(ii) the Borrower shall have received at least
$235,000,000 in gross cash proceeds from the
issuance of preferred stock (the "Preferred
Stock") to the Sponsor;
(iii) the Borrower shall have received at least
$175,000,000 in gross cash proceeds from the
issuance of the Senior Subordinated Notes or the
funding under the Subordinated Bridge Facility;
(iv) the transaction fees and expenses to be incurred
in connection with the Acquisition and the
financing thereof shall not exceed $40,000,000;
and
(v) (i) the Administrative Agent shall have received
satisfactory evidence that the Existing Credit
Agreement shall have been terminated and all
amounts thereunder shall have been paid in full
and (ii) satisfactory arrangements shall have
been made for the termination of all Liens
granted in connection therewith.
-68-
74
(c) Pro Forma Financial Statements; Financial Statements.
The Lenders shall have received (i) the Pro Forma
Financial Statements and (ii) the consolidated
financial statements of the Borrower and the Acquired
Company referred to in Sections 4.1(b) and 4.1(c).
(d) Approvals. All governmental and material third party
approvals (including landlords' and other consents)
necessary in connection with the Acquisition, the
continuing operations of the Borrower and its
Subsidiaries and the transactions contemplated hereby
shall have been obtained and be in full force and
effect, and all applicable waiting periods shall have
expired without any action being taken by any competent
authority that would restrain, prevent or otherwise
impose materially adverse conditions on the Acquisition
or the financing contemplated hereby.
(e) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of
the jurisdictions where material assets of the Loan
Parties are located, and such search shall reveal no
liens on any of the assets of the Borrower or its
Subsidiaries except for liens permitted by Section 7.3
or discharged on or prior to the Closing Date pursuant
to documentation satisfactory to the Administrative
Agent.
(f) Fees. The Lenders and the Administrative Agent shall
have received all fees required to be paid by the
Borrower, and all expenses for which invoices have been
presented (including the reasonable fees and expenses
of legal counsel to the Administrative Agent only), on
or before the Closing Date. All such amounts may be
paid with proceeds of Loans made on the Closing Date
and, to the extent paid in such manner, will be
reflected in the funding instructions given by the
Borrower to the Administrative Agent on or before the
Closing Date.
(g) Closing Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a
certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with
appropriate insertions and attachments.
-69-
75
(h) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.,
counsel to the Borrower and its Subsidiaries, substantially in the form of
Exhibit F-1;
(ii) the legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, New York counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit F-2;
(iii) the legal opinion of ▇▇▇▇▇▇▇, Mag & Fizzell, P.C., Kansas
counsel to the Borrower and its Subsidiaries, substantially in the form of
Exhibit F-3; and
(iv) to the extent consented to by the relevant counsel, each
legal opinion, if any, delivered in connection with the Acquisition Agreement,
accompanied by a reliance letter in favor of the Lenders.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(i) Pledged Stock; Stock Powers; Pledged Notes. The
Administrative Agent shall have received (i) the
certificates representing the shares of Capital Stock
pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for
each such certificate executed in blank by a duly
authorized officer of the pledgor thereof and (ii) each
promissory note (if any) pledged to the Administrative
Agent pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by
the pledgor thereof.
(j) Filings, Registrations and Recordings. Each document
(including any Uniform Commercial Code financing
statement) required by the Security Documents or under
law or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create
in favor of the Administrative Agent, for the benefit
of the Lenders, a perfected Lien on the Collateral
described therein, prior and superior in right to any
other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper
form for filing, registration or recordation.
-70-
76
(k) Solvency Opinion. The Administrative Agent shall have
received a solvency opinion from Valuation Research
Corporation.
(l) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of
Section 5.2(b) of the Guarantee and Collateral
Agreement.
5.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made
by it on any date (including its initial extension of credit)
is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party
in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date
as if made on and as of such date (unless such
representations expressly relate to an earlier date, in
which case they shall be true and correct in all
material respects on and as of such earlier date).
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving
effect to the extensions of credit requested to be made
on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or the Administrative Agent hereunder, the Borrower shall
and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent
with sufficient copies for each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a
copy of the audited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated
statements of income and of cash flows for such year,
setting forth in each case
-71-
77
in comparative form the figures for the previous year,
reported on without a "going concern" or like
qualification or exception, or qualification arising
out of the scope of the audit, by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or
other independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later than
45 days after the end of each of the first three
quarterly periods of each fiscal year of the Borrower,
the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the
end of such quarter and the related unaudited
consolidated statements of income and of cash flows for
such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in
comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal
year-end audit adjustments and the absence of notes
thereto).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to the
Administrative Agent with sufficient copies for each Lender
(or, in the case of clause (g), to the relevant Lender):
(a) concurrently with the delivery of the financial
statements referred to in Section 6.1(a), a certificate
of the independent certified public accountants
reporting on such financial statements stating that in
making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except
as specified in such certificate;
(b) concurrently with the delivery of any financial
statements pursuant to Section 6.1, (i) a certificate
of a Responsible Officer stating that, to the best of
each such Responsible Officer's knowledge, each Loan
Party during such period has observed or performed all
of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the
other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such
certificate and (ii) in the
-72-
78
case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information and
calculations necessary for determining compliance by
the Borrower and its Subsidiaries with the provisions
of this Agreement referred to therein as of the last
day of the fiscal quarter or fiscal year of the
Borrower, as the case may be, and (y) to the extent not
previously disclosed to the Administrative Agent, a
listing of each new Subsidiary of any Loan Party, of
any new county or state within the United States where
any Loan Party keeps material inventory or equipment
and of any new fee-owned real property or material
Intellectual Property acquired by any Loan Party since
the date of the most recent list delivered pursuant to
this clause (y) (or, in the case of the first such list
so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower,
a detailed consolidated budget for the following fiscal
year (including a projected consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of
the following fiscal year, the related consolidated
statements of projected cash flow, projected changes in
financial position and projected income and a
description of the underlying assumptions applicable
thereto), and, as soon as available, significant
revisions, if any, of such budget and projections with
respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer
stating that such Projections are based on reasonable
estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such
Projections are incorrect or misleading in any material
respect;
(d) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, a
narrative discussion and analysis of the financial
condition and results of operations of the Borrower and
its Subsidiaries for such fiscal quarter and for the
period from the beginning of the then current fiscal
year to the end of such fiscal quarter, as compared to
the portion of the Projections covering such periods
and to the comparable periods of the previous year;
provided that delivery of the Report on Form 10-Q filed
with the SEC with respect to such fiscal quarter shall
be deemed to satisfy the foregoing requirement;
(e) no later than five Business Days prior to the
effectiveness thereof, copies of substantially final
drafts of any proposed amendment,
-73-
79
supplement, waiver or other modification with respect
to (i) the Acquisition Documentation or (ii) the Senior
Subordinated Note Indenture or the Subordinated Bridge
Facility as to which the Senior Subordinated Note
Indenture or the Subordinated Bridge Facility requires
the approval of any percentage of the holders of
Indebtedness thereunder;
(f) within five Business Days after the same are sent,
copies of all financial statements and reports that the
Borrower sends to the holders of any class of its debt
securities or public equity securities and, within five
Business Days after the same are filed, copies of all
financial statements and reports that the Borrower may
make to, or file with, the SEC; and
(g) promptly, such additional financial and other
information as any Lender may from time to time
reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as
the case may be, all its material obligations of whatever
nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or
its Subsidiaries, as the case may be.
6.4 Maintenance of Existence; Compliance. (i) Preserve, renew and
keep in full force and effect its corporate existence and
(ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the
normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;
and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to
comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all property useful
and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain
with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and
against at least such risks (but including in any event
public liability, product liability and business interruption
expense coverage) as are usually insured against in the
-74-
80
same general area by companies engaged in the same or a
similar business.
6.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities and
(b) subject to the provisions of Section 10.14, permit
representatives of any Lender, upon reasonable prior notice,
to visit and inspect any of its properties and examine and
make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and
to discuss the business, operations, properties and financial
and other condition of the Borrower and its Subsidiaries with
officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.
6.7 Notices. Promptly give notice to the Administrative Agent
with sufficient copies for each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its
Subsidiaries or (ii) litigation, investigation or
proceeding that may exist at any time between the
Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not
cured or if reasonably expected to be adversely
determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount claimed is
$5,000,000 or more and not covered by insurance or in
which injunctive or similar relief is sought which
could reasonably be expected to be granted and which,
if granted, could reasonably be expected to have a
Material Adverse Effect;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has
reason to know thereof: (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation
of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other
-75-
81
action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Single Employer
Plan or Multiemployer Plan; and
(e) any development or event that has had or could
reasonably be expected to have a Material Adverse
Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 Environmental Laws. Except as could not reasonably be
expected to have a Material Adverse Effect:
(a) Comply with, and contractually require compliance by
all tenants and subtenants, if any, with, all
applicable Environmental Laws, and obtain and comply
with and maintain, and contractually require that all
tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals,
notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and
promptly comply with all lawful orders and directives
of all Governmental Authorities regarding Environmental
Laws.
6.9 Interest Rate Protection. In the case of the Borrower, within
90 days after the Closing Date, enter into Hedge Agreements
to the extent necessary to provide that at least 50% of the
aggregate principal amount of the A/B/C Term Loans is subject
to either a fixed interest rate or interest rate protection
for a period of not less than three years, which Hedge
Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc. With respect to any property
acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than (w) any vehicles and any immaterial
inventory and equipment, (x) any property described in
paragraph (b), (c) or (d) below, (y) any property subject to
a Lien expressly permitted by Section 7.3(g) or (j) and (z)
property acquired by any Excluded Foreign Subsidiary) as to
which the Administrative Agent, for the
-76-
82
benefit of the Lenders, does not have a perfected Lien,
promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or
such other documents as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent,
for the benefit of the Lenders, a security interest in such
property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in such
property, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may
be requested by the Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of
at least $750,000 acquired after the Closing Date by
the Borrower or any of its Subsidiaries (other than (x)
any such real property subject to a Lien expressly
permitted by Section 7.3(g) or (j) and (z) real
property acquired by any Excluded Foreign Subsidiary),
promptly (i) execute and deliver a first priority
Mortgage, in favor of the Administrative Agent, for the
benefit of the Lenders, covering such real property,
(ii) if requested by the Administrative Agent, provide
the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at
least equal to the purchase price of such real property
(or such other amount as shall be reasonably specified
by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate
and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in
connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably
satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in
form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an
Excluded Foreign Subsidiary) created or acquired after
the Closing Date by the Borrower (which, for the
purposes of this paragraph (c), shall include any
existing Subsidiary that ceases to be an Excluded
Foreign Subsidiary), the Borrower or any of its
Subsidiaries, promptly (i)
-77-
83
execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as
the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit
of the Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary
that is owned by the Borrower or any of its
Subsidiaries, (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed
and delivered by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, and
(iii) cause such new Subsidiary (A) to become a party
to the Guarantee and Collateral Agreement, (B) to take
such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a
perfected first priority security interest in the
Collateral described in the Guarantee and Collateral
Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or
by law or as may be requested by the Administrative
Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the
form of Exhibit C, with appropriate insertions and
attachments.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the
Borrower or any of its Subsidiaries, promptly (i)
execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as
the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit
of the Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary
that is owned by the Borrower or any of its
Subsidiaries (provided that in no event shall more than
65% of the total outstanding Capital Stock of any such
new Subsidiary be required to be so pledged), and (ii)
deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a
duly authorized officer of the Borrower or such
Subsidiary, as the case may be, and take such other
action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the
Administrative Agent's security interest therein.
6.11 Permitted Acquisitions. Deliver to the Lenders, within ten
Business Days following the closing date of any Permitted
Acquisition involving a Purchase Price less than $20,000,000,
each of the
-78-
84
following: (i) a description of the property, assets and/or
equity interest being purchased, in reasonable detail; and
(ii) a copy of the purchase agreement pursuant to which such
acquisition is to be consummated or a term sheet or other
description setting forth the essential terms and the basic
structure of such acquisition.
(b) Deliver to the Lenders, (i) within ten Business Days
following the closing date of any Permitted Acquisition
involving a Purchase Price greater than or equal to
$20,000,000 but less than $30,000,000 and (ii) not less
than five Business Days prior to the closing date of
any Permitted Acquisition involving a Purchase Price
greater than or equal to $30,000,000, each of the
following: (A) a description of the property, assets
and/or equity interest being purchased, in reasonable
detail; (B) a copy of the purchase agreement pursuant
to which such acquisition is to be consummated or a
term sheet or other description setting forth the
essential terms and the basic structure of such
acquisition; (C) projected statements of income for the
entity that is being acquired (or the assets, if an
acquisition of assets) for at least a two-year period
following such acquisition (including a summary of
assumptions or pro forma adjustments for such
projections); (D) to the extent made available to the
Borrower, historical financial statements for the
entity that is being acquired (or the assets, if an
acquisition of assets) (including balance sheets and
statements of income, retained earnings and cash flows
for at least a two-year period prior to such
acquisition); and (E) confirmation, supported by
detailed calculations, that the Borrower and its
Subsidiaries would have been in compliance with all the
covenants in Section 7.1 for the fiscal quarter ending
immediately prior to the consummation of such
acquisition, with such compliance determined on a pro
forma basis as if such acquisition had been consummated
on the first day of the Reference Period ending on the
last day of such fiscal quarter.
6.12 Real Estate Matters. Except in the case of any Mortgaged
Property as to which the Borrower (or its relevant
Subsidiary, as the case may be) shall have obtained a written
commitment for the sale thereof in a transaction otherwise in
accordance with the terms of this Agreement, within 90 days
after the Closing Date:
-79-
85
(a) Furnish to the Administrative Agent a Mortgage with
respect to each Mortgaged Property, executed and
delivered by a duly authorized officer of each party
thereto.
(b) If requested by the Administrative Agent, furnish to
the Administrative Agent and the title insurance
company issuing the policy referred to in paragraph (c)
below (the "Title Insurance Company"), maps or plats of
an as-built survey of the sites of the Mortgaged
Properties certified to the Administrative Agent and
the Title Insurance Company in a manner satisfactory to
them, dated a date satisfactory to the Administrative
Agent and the Title Insurance Company by an independent
professional licensed land surveyor satisfactory to the
Administrative Agent and the Title Insurance Company,
which maps or plats and the surveys on which they are
based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land
Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting
the generality of the foregoing, there shall be
surveyed and shown on such maps, plats or surveys the
following: (i) the locations on such sites of all the
buildings, structures and other improvements and the
established building setback lines; (ii) the lines of
streets abutting the sites and width thereof; (iii) all
access and other easements appurtenant to the sites;
(iv) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded,
apparent from a physical inspection of the sites or
otherwise known to the surveyor; (v) any encroachments
on any adjoining property by the building structures
and improvements on the sites; (vi) if the site is
described as being on a filed map, a legend relating
the survey to said map; and (vii) the flood zone
designations, if any, in which the Mortgaged Properties
are located.
(c) Furnish to the Administrative Agent in respect of each
Mortgaged Property a mortgagee's title insurance policy
(or policies) or marked up unconditional binder for
such insurance. Each such policy shall (i) be in an
amount satisfactory to the Administrative Agent; (ii)
be issued at ordinary rates; (iii) insure that the
Mortgage insured thereby creates a valid first Lien on
such Mortgaged Property free and clear of all defects
and encumbrances, except as disclosed therein; (iv)
name the Administrative Agent for the benefit of the
Lenders as the insured thereunder; (v) be in the form
of ALTA Loan Policy - 1970 (Amended 10/17/70 and
10/17/84) (or equivalent policies); (vi)
-80-
86
contain such endorsements and affirmative coverage as
the Administrative Agent may reasonably request and
(vii) be issued by title companies satisfactory to the
Administrative Agent (including any such title
companies acting as co-insurers or reinsurers, at the
option of the Administrative Agent). The Administrative
Agent shall have received evidence satisfactory to it
that all premiums in respect of each such policy, all
charges for mortgage recording tax, and all related
expenses, if any, have been paid.
(d) If requested by the Administrative Agent, furnish to
the Administrative Agent (i) a policy of flood
insurance that (A) covers any parcel of improved real
property that is encumbered by any Mortgage, (B) is
written in an amount not less than the outstanding
principal amount of the indebtedness secured by such
Mortgage that is reasonably allocable to such real
property or the maximum limit of coverage made
available with respect to the particular type of
property under the National Flood Insurance Act of
1968, whichever is less, and (C) has a term ending not
later than the maturity of the Indebtedness secured by
such Mortgage and (ii) confirmation that the Borrower
has received the notice required pursuant to Section
208(e)(3) of Regulation H of the Board.
(e) Furnish to the Administrative Agent a copy of all
recorded documents referred to, or listed as exceptions
to title in, the title policy or policies referred to
in paragraph (c) above and a copy of all other material
documents affecting the Mortgaged Properties.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or the Administrative Agent hereunder, the Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower ending with
any fiscal quarter during any period set forth below to
exceed the ratio set forth below opposite such period:
-81-
87
Consolidated
Period Leverage Ratio
------ --------------
Fiscal quarter ending 12/31/98
to fiscal quarter ending 9/30/99 5.60 to 1.00
Fiscal quarter ending 12/31/99
to fiscal quarter ending 3/31/00 5.50 to 1.00
Fiscal quarter ending 6/30/00 5.25 to 1.00
Fiscal quarter ending 9/30/00 5.00 to 1.00
Fiscal quarter ending 12/31/00 4.75 to 1.00
Fiscal quarter ending 3/31/01
to fiscal quarter ending 6/30/01 4.50 to 1.00
Fiscal quarter ending 9/30/01
to fiscal quarter ending 12/31/01 4.25 to 1.00
Fiscal year 2002 3.75 to 1.00
Fiscal year 2003 and thereafter 3.00 to 1.00.
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of
four consecutive fiscal quarters of the Borrower ending
with any fiscal quarter during any period set forth
below to be less than the ratio set forth below
opposite such period:
Consolidated Interest
Period Coverage Ratio
------ --------------
Fiscal quarter ending 12/31/98
to fiscal quarter ending 12/31/99 2.00 to 1.00
Fiscal year 2000 2.15 to 1.00
Fiscal year 2001 2.50 to 1.00
Fiscal year 2002 3.00 to 1.00
Fiscal year 2003 3.50 to 1.00
Fiscal year 2004 and thereafter 4.00 to 1.00.
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period
of four consecutive fiscal quarters of the Borrower
ending with any fiscal quarter during the period set
forth below to be less than the ratio set forth below
opposite such period:
Consolidated Fixed
Period Charge Coverage Ratio
------ ---------------------
Fiscal quarter ending 12/31/98
and thereafter 1.30 to 1.00.
-82-
88
7.2 Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of
any Wholly Owned Subsidiary Guarantor to the Borrower
or any other Subsidiary;
(c) Guarantee Obligations incurred in the ordinary course
of business by the Borrower or any of its Subsidiaries
of obligations of any Wholly Owned Subsidiary
Guarantor;
(d) Indebtedness outstanding on the date hereof and listed
on Schedule 7.2(d) and any refinancings, refundings,
renewals or extensions thereof (without increasing, or
shortening the maturity of, the principal amount
thereof);
(e) Indebtedness (including, without limitation, Capital
Lease Obligations) secured by Liens permitted by
Section 7.3(g) in an aggregate principal amount not to
exceed $15,000,000 at any one time outstanding;
(f) either (i) (A) Indebtedness of the Borrower (x) in
respect of the Subordinated Bridge Facility or (y) the
proceeds of which are used solely to refinance the
Subordinated Bridge Facility, provided that any
Indebtedness incurred pursuant to this clause (y) shall
be subordinated to the Obligations and shall have a
final stated maturity no earlier than one year and one
day after the final maturity of the Loans and (B)
Guarantee Obligations of any Subsidiary Guarantor in
respect of Indebtedness incurred pursuant to clause
(i), provided that such Guarantee Obligations are
subordinated to the same extent as the obligations of
the Borrower in respect of such Indebtedness, or (ii)
(A) Indebtedness of the Borrower in respect of the
Senior Subordinated Notes in an aggregate principal
amount not to exceed $300,000,000 and (B) Guarantee
Obligations of any Subsidiary Guarantor in respect of
such Indebtedness, provided that such Guarantee
Obligations are subordinated to the same extent as the
obligations of the Borrower in respect of the Senior
Subordinated Notes;
(g) Assumed Indebtedness incurred pursuant to Permitted
Acquisitions;
-83-
89
(h) Guarantee Obligations of the Borrower in respect of
Indebtedness of franchisees not to exceed $50,000,000
at any one time outstanding; and
(i) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the
Borrower and all Subsidiaries) not to exceed
$25,000,000 at any one time outstanding.
7.3 Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired,
except for:
(a) Liens for taxes not yet due or that are being contested
in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained
on the books of the Borrower or its Subsidiaries, as
the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary
course of business that are not overdue for a period of
more than 30 days or that are being contested in good
faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business that, in the aggregate, are not substantial in
amount and that do not in any case materially detract
from the value of the property subject thereto or
materially interfere with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on
Schedule 7.3(f), securing Indebtedness permitted by
Section 7.2(d), provided that no such Lien is spread to
cover any additional property after the Closing Date
(other than "products" and "proceeds" thereof, as each
such term is defined in the Uniform Commercial Code of
the State of New York) and that the amount of
Indebtedness secured thereby is not increased;
-84-
90
(g) Liens securing Indebtedness of the Borrower or any
other Subsidiary incurred pursuant to Section 7.2(e) to
finance the acquisition of fixed or capital assets,
provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at
any time encumber any property other than the property
financed by such Indebtedness (including the "products"
and "proceeds" thereof, as each such term is defined in
the Uniform Commercial Code of the State of New York)
and (iii) the amount of Indebtedness secured thereby is
not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease
entered into by the Borrower or any other Subsidiary in
the ordinary course of its business and covering only
the assets so leased;
(j) Liens securing Assumed Indebtedness, provided that such
Liens (i) were not incurred in contemplation of the
Permitted Acquisition consummated in conjunction with
the assumption of such Assumed Indebtedness and (ii) do
not encumber any property other than the property
acquired pursuant to such acquisition; and
(k) Liens not otherwise permitted by this Section so long
as neither (i) the aggregate outstanding principal
amount of the obligations secured thereby nor (ii) the
aggregate fair market value (determined as of the date
such Lien is incurred) of the assets subject thereto
exceeds (as to the Borrower and all Subsidiaries)
$10,000,000 at any one time.
7.4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of, all or
substantially all of its property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that
the Borrower shall be the continuing or surviving
corporation) or with or into any Wholly Owned
Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or
surviving corporation);
-85-
91
(b) any Subsidiary of the Borrower may Dispose of any or
all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any Wholly Owned
Subsidiary Guarantor; and
(c) any Permitted Acquisition may be structured as a merger
with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or
with or into any Wholly Owned Subsidiary Guarantor
(provided that such Wholly Owned Subsidiary Guarantor
shall be the continuing or surviving corporation).
7.5 Disposition of Property. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of
any Subsidiary, issue or sell any shares of such Subsidiary's
Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of
business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock
to the Borrower or any Wholly Owned Subsidiary
Guarantor;
(e) (i) Dispositions of the Acquired Vehicles otherwise
permitted by this Agreement and (ii) the Disposition of
other property having a fair market value not to exceed
(A) during the period from the Closing Date to and
including the date that is two years after the Closing
Date, $60,000,000 in the aggregate, and (B) thereafter,
$20,000,000 for any fiscal year of the Borrower;
provided, in the case of each of the foregoing clauses
(i) and (ii), that the requirements of Section 2.11(c)
are complied with in connection therewith; and
(f) Dispositions referred to in Section 7.8(g).
7.6 Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in (i) common stock of the Person
making such dividend or (ii) the same class of Capital Stock
of the Person making such dividend on which such dividend is
being declared or paid) on, or make any payment on account
of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of
-86-
92
the Borrower or any Subsidiary, whether now or hereafter
outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or
property or in obligations of the Borrower or any Subsidiary
(collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Wholly Owned Subsidiary Guarantor; and
(b) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may purchase
the Borrower's common stock or common stock options
from present or former officers or employees of the
Borrower or any Subsidiary upon the death, disability
or termination of employment of such officer or
employee, provided, that the aggregate amount of
payments under this paragraph (b) after the date hereof
(net of any proceeds received by the Borrower after the
date hereof in connection with resales of any common
stock or common stock options so purchased) shall not
exceed $10,000,000; provided, further, that the
Borrower shall be permitted to make additional payments
under this paragraph (b) not in excess of $25,000,000
in the aggregate in order to purchase shares owned by
the ▇▇▇▇▇▇ Persons in connection with the Acquisition.
7.7 Capital Expenditures. (a) Make or commit to make any Capital
Expenditure (Maintenance) (in addition to restructuring
charges in an amount up to $10,000,000 in connection with the
Acquisition), except (i) Capital Expenditures (Maintenance)
of the Borrower and its Subsidiaries not exceeding in the
aggregate (x) during the period from the Closing Date to the
end of fiscal 1998, $16,700,000, and (y) during each fiscal
year thereafter, $40,000,000; provided, that (A) up to
$10,000,000 of any such amount, if not so expended in the
fiscal year for which it is permitted, may be carried over
for expenditure in the next succeeding fiscal year and (B)
Capital Expenditures (Maintenance) made pursuant to this
clause (i) during any fiscal year shall be deemed made,
first, in respect of amounts permitted for such fiscal year
as provided in clauses (x) and (y) above and, second, in
respect of amounts carried over from the prior fiscal year
pursuant to subclause (A) above and (ii) Capital Expenditures
(Maintenance) made with the proceeds of any Reinvestment
Deferred Amount.
(b) Make or commit to make any Capital Expenditure (Expansion), except
(i) Capital Expenditures (Expansion) of the Borrower and its Subsidiaries not
exceeding in the aggregate for any fiscal year $25,000,000; provided, that (A)
up to $10,000,000 of such amount, if not so expended
-87-
93
in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (B) Capital Expenditures
(Expansion) made pursuant to this clause (i) during any fiscal year shall be
deemed made, first, in respect of the $25,000,000 initially permitted for such
fiscal year as provided above and, second, in respect of amounts carried over
from the prior fiscal year pursuant to subclause (A) above and (ii) Capital
Expenditures (Expansion) made with the proceeds of any Reinvestment Deferred
Amount.
7.8 Investments. Make any advance, loan, extension of credit (by
way of guaranty or otherwise) or capital contribution to, or
purchase any Capital Stock, bonds, notes, debentures or other
debt securities of, or any assets constituting a business
unit of, or make any other investment in, any other Person
(all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Borrower or any
Subsidiary of the Borrower in the ordinary course of
business (including for travel, entertainment and
relocation expenses) in an aggregate amount for the
Borrower and its Subsidiaries not to exceed $5,000,000
at any one time outstanding;
(e) the Acquisition;
(f) intercompany Investments in the ordinary course of
business by the Borrower or any of its Subsidiaries in
the Borrower or any Person that, prior to such
investment, is a Wholly Owned Subsidiary Guarantor;
(g) in addition to Investments otherwise expressly
permitted by this Section, Investments by the Borrower
or any of its Subsidiaries in an aggregate amount
(valued at cost) not to exceed $10,000,000 (net of the
amount of any Net Cash Proceeds received by the
Borrower and its Subsidiaries in respect of a
Disposition of any such Investment; provided, that such
amount shall not exceed the original amount of such
Investment) during the term of this Agreement;
(h) Investments not in excess of $40,000,000 in the
aggregate during the period from the Closing Date to
the end of the 1999 fiscal year
-88-
94
constituting purchases of franchisees of the Borrower
and its Subsidiaries; and
(i) additional Investments constituting Permitted
Acquisitions.
7.9 Payments and Modifications of Certain Debt Instruments and
Preferred Stock. (a) Make or offer to make any payment,
prepayment, repurchase or redemption of or otherwise defease
or segregate funds with respect to the Senior Subordinated
Notes or Indebtedness under the Subordinated Bridge Facility,
other than interest payments expressly required by the terms
thereof and pursuant to mandatory prepayment provisions
contained in the Subordinated Bridge Facility, (b) amend,
modify, waive or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of
the terms of the Senior Subordinated Notes or the
Subordinated Bridge Facility (other than any such amendment,
modification, waiver or other change that (i) would extend
the maturity or reduce the amount of any payment of principal
thereof or reduce the rate or extend any date for payment of
interest thereon and (ii) does not involve the payment of a
consent fee), (c) amend, modify, waive or otherwise change,
or consent or agree to any amendment, modification, waiver or
other change to, any of the terms of the Preferred Stock
(other than any such amendment, modification, waiver or other
change that (i) would extend the scheduled redemption date or
reduce the amount of any scheduled redemption payment or
reduce the rate or extend any date for payment of dividends
thereon and (ii) does not involve the payment of a consent
fee) or (d) designate any Indebtedness (other than
obligations of the Loan Parties pursuant to the Loan
Documents) as "Designated Senior Indebtedness" for the
purposes of the Senior Subordinated Note Indenture or the
Subordinated Bridge Facility.
7.10 Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property,
the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate
(other than the Borrower or any Wholly Owned Subsidiary
Guarantor) unless such transaction is (a) otherwise permitted
under this Agreement, (b) in the ordinary course of business
of the Borrower or such Subsidiary, as the case may be, and
(c) upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary, as the case may be, than it
would obtain in a comparable arm's length transaction with a
Person that is not an Affiliate.
-89-
95
7.11 Sales/Leaseback Transactions. Enter into any Sale/Leaseback
Transaction, except for any Sale/Leaseback Transaction with
respect to the Acquired Vehicles pursuant to which such
Acquired Vehicles are leased under an operating lease.
7.12 Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
7.13 Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create,
incur, assume or suffer to exist any Lien upon any of its
property or revenues, whether now owned or hereafter
acquired, other than (a) this Agreement and the other Loan
Documents and (b) any agreements governing any purchase money
Liens or Capital Lease Obligations otherwise permitted hereby
(in which case, any prohibition or limitation shall only be
effective against the assets financed thereby).
7.14 Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary
of the Borrower to (a) make Restricted Payments in respect of
any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary of
the Borrower, (b) make loans or advances to, or other
Investments in, the Borrower or any other Subsidiary of the
Borrower or (c) transfer any of its assets to the Borrower or
any other Subsidiary of the Borrower, except for such
encumbrances or restrictions existing under or by reason of
(i) any restrictions existing under the Loan Documents, (ii)
restrictions in effect on the date hereof and listed on
Schedule 7.14, (iii) in the case of clause (c) above,
customary non-assignment clauses in leases and other
contracts entered into in the ordinary course of business and
(iv) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all
of the Capital Stock or assets of such Subsidiary.
7.15 Lines of Business. Enter into any business, either directly
or through any Subsidiary, except for those businesses in
which the Borrower and its Subsidiaries are engaged on the
date of this Agreement (after giving effect to the
Acquisition) or that are reasonably related or incidental
thereto.
-90-
96
7.16 Amendments to Acquisition Documents. (a) Amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) the
terms and conditions of the indemnities and licenses
furnished to the Borrower or any of its Subsidiaries pursuant
to the Acquisition Documentation or any other document
delivered by the Seller or any of its affiliates in
connection therewith such that after giving effect thereto
such indemnities or licenses shall be materially less
favorable to the interests of the Loan Parties or the Lenders
with respect thereto or (b) otherwise amend, supplement or
otherwise modify the terms and conditions of the Acquisition
Documentation or any such other documents except for any such
amendment, supplement or modification that could not
reasonably be expected to have a Material Adverse Effect.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the
terms hereof; or the Borrower shall fail to pay any interest
on any Loan or Reimbursement Obligation, or any other amount
payable hereunder or under any other Loan Document, within
five days after any such interest or other amount becomes due
in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is
contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document shall
prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or performance
of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Borrower only), Section 6.7(a) or
Section 7 of this Agreement or Section 5.7(b) of the
Guarantee and Collateral Agreement; or
(d) any Loan Party shall default in the observance or performance
of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a)
through (c) of
-91-
97
this Section), and such default shall continue unremedied for
a period of 30 days after notice to the Borrower from the
Administrative Agent or the Required Lenders; or
(e) the Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness
(including any Guarantee Obligation, but excluding the Loans)
on the scheduled or original due date with respect thereto;
or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance
or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or
(in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a
default, event or condition described in clause (i), (ii) or
(iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in
clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the
aggregate $10,000,000; or
(f) (i) the Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or
any substantial part of its assets, or the Borrower or any of
its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced
against the Borrower or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause
(i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
-92-
98
undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of
an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower
or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 and 408 of ERISA or
Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to
any Plan or any Lien in favor of the PBGC or a Plan shall
arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence under Title IV of
ERISA to have a trustee appointed, or a trustee shall be
appointed under Title IV of ERISA, to administer or to
terminate, any Single Employer Plan, which Reportable Event
or commencement of proceedings or appointment of a trustee
is, in the reasonable opinion of the Required Lenders, likely
to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall
terminate in a "distress termination" or an "involuntary
termination", as such terms are defined in Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Required Lenders is likely
to, incur any liability in connection with a withdrawal from,
or the Insolvency or Reorganization of, a Multiemployer Plan
or (vi) any other event or condition shall occur or exist
with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with
all other such events or conditions, if any, could, in the
sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance
as to which the
-93-
99
relevant insurance company has acknowledged coverage) of
$10,000,000 or more, and all such judgments or decrees shall
not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to
be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien
created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to
be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than,
with respect to the guarantee of a Subsidiary, (i) as a
result of a merger of such Subsidiary into the Borrower in
accordance with the terms of this Agreement or (ii) as a
result of a release pursuant to Section 8.15(b) of the
Guarantee and Collateral Agreement), to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party
shall so assert; or
(k) (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), excluding the
Permitted Investors, shall at any time become, or obtain
rights (whether by means of warrants, options or otherwise)
to become, the "beneficial owner" (as defined in Rules 13(d)
3 and 13(d) 5 under the Exchange Act), directly or
indirectly, of a percentage (the "Third Party Stock
Percentage") equal to 33-1/3% or more of the Voting Stock of
the Borrower unless at such time (x) the percentage of
outstanding Voting Stock of the Borrower beneficially owned
by the Permitted Investors (determined on a fully diluted
basis) is equal to or greater than the Third Party Stock
Percentage and (y) the Sponsor owns of record and
beneficially at least 35% of the Voting Stock of the Borrower
then owned by the Permitted Investors; (ii) the Sponsor at
any time shall cease to own of record and beneficially an
amount of Voting Stock of the Borrower equal to at least 50%
of the amount of Voting Stock of the Borrower owned by the
Sponsor of record and beneficially as of the Closing Date
immediately after giving effect to the Acquisition; (iii) the
▇▇▇▇▇▇ Persons at any time shall cease to own of record and
beneficially an amount of Voting Stock of the Borrower equal
to at least 50% of the amount of Voting Stock of the Borrower
owned by the ▇▇▇▇▇▇ Persons of record and beneficially as of
the Closing Date immediately after giving effect to the
Acquisition (excluding the
-94-
100
shares of Voting Stock to be repurchased by the Borrower from
the ▇▇▇▇▇▇ Persons for $25,000,000 on or about the date of
issuance of the Senior Subordinated Notes); (iv) the ▇▇▇▇▇▇
Persons at any time shall cease to own of record and
beneficially an amount of Voting Stock of the Borrower equal
to at least 50% of the amount of Voting Stock of the Borrower
owned by the ▇▇▇▇▇▇ Persons of record and beneficially as of
the Closing Date immediately after giving effect to the
Acquisition; or (v) a Specified Change of Control shall
occur; or
(l) the Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the
Obligations or the obligations of the Subsidiary Guarantors
under the Guarantee and Collateral Agreement, as the case may
be, as provided in the Senior Subordinated Note Indenture, or
any Loan Party, any Affiliate of any Loan Party, the trustee
in respect of the Senior Subordinated Notes or the holders of
at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of LC Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Revolving Commitments to be terminated forthwith, whereupon the Revolving
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of LC Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other
-95-
101
obligations of the Borrower hereunder and under the other Loan Documents shall
have been paid in full, the balance, if any, in such cash collateral account
shall be returned to the Borrower (or such other Person as may be lawfully
entitled thereto). Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind (other than
notices expressly required pursuant to this Agreement and any other Loan
Document) are hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender
under this Agreement and the other Loan Documents, and each
such Lender irrevocably authorizes the Administrative Agent,
in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with
such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement
or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters
pertaining to such duties. The Administrative Agent shall not
be responsible for the negligence or misconduct of any agents
or attorneys in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the
foregoing are found by a final and nonappealable decision of
a court of competent jurisdiction to have resulted from its
or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for
any recitals,
-96-
102
statements, representations or warranties made by any Loan
Party or any officer thereof contained in this Agreement or
any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this
Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform
its obligations hereunder or thereunder. The Agents shall not
be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or
any other Loan Document, or to inspect the properties, books
or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in
relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants
and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note
as the owner thereof for all purposes unless a written notice
of assignment, negotiation or transfer thereof shall have
been filed with the Administrative Agent. The Administrative
Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement,
all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any
and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of
the Required Lenders (or, if so specified by this Agreement,
all Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the
Administrative Agent has
-97-
103
received notice from a Lender, the Borrower referring to this
Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice,
the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so
specified by this Agreement, all Lenders); provided that
unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default
as it shall deem advisable in the best interests of the
Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations
or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of a Loan Party or
any affiliate of a Loan Party, shall be deemed to constitute
any representation or warranty by any Agent to any Lender.
Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property,
financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision
to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and
without reliance upon any Agent 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
analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and
to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial
and other condition and creditworthiness of the Loan Parties
and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative
Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning
the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party
or any affiliate of a Loan Party that may come into the
possession of the Administrative
-98-
104
Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective Aggregate
Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have
been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at
any time (whether before or after the payment of the Loans)
be imposed on, incurred by or asserted against such Agent in
any way relating to or arising out of, the Commitments, this
Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action
taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this
Section shall survive the payment of the Loans and all other
amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and
generally engage in any kind of business with any Loan Party
as though such Agent was not an Agent. With respect to its
Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have
the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as
though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual
capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the
Lenders and the Borrower. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the
other Loan
-99-
105
Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under
Section 8(a) or Section 8(f) with respect to the Borrower
shall have occurred and be continuing) be subject to approval
by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall
succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent"
shall mean such successor agent effective upon such
appointment and approval, and the former Administrative
Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed
on the part of such former Administrative Agent or any of the
parties to this Agreement or any holders of the Loans. If no
successor agent has accepted appointment as Administrative
Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall assume and
perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative
Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and
the other Loan Documents.
9.10 Authorization to Release Guarantees and Liens.
Notwithstanding anything to the contrary contained herein or
in any other Loan Document, the Administrative Agent is
hereby irrevocably authorized by each of the Lenders (without
requirement of notice to or consent of any Lender except as
expressly required by Section 10.1) to take any action
requested by the Borrower having the effect of releasing any
Collateral or guarantee obligations to the extent necessary
to permit consummation of any transaction not prohibited by
any Loan Document or that has been consented to in accordance
with Section 10.1.
9.11 Documentation Agent and Syndication Agent. Neither the
Documentation Agent nor the Syndication Agent shall have any
duties or responsibilities hereunder in its capacity as such.
-100-
106
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with
the provisions of this Section 10.1. The Required Lenders and
each Loan Party party to the relevant Loan Document may, or,
with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the
relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and
to the other Loan Documents for the purpose of adding any
provisions to this Agreement or the other Loan Documents or
changing in any manner the rights of the Lenders or of the
Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and
its consequences; provided, however, that no such waiver and
no such amendment, supplement or modification shall (i)
forgive the principal amount or extend the final scheduled
date of maturity of any Loan, extend the scheduled date of
any amortization payment in respect of any Term Loan, reduce
the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof, or increase
the amount or extend the expiration date of any Lender's
Revolving Commitment or LC/MD Commitment, in each case
without the consent of each Lender directly affected thereby;
(ii) amend, modify or waive any provision of this Section
10.1 or reduce any percentage specified in the definition of
Required Lenders or Required Prepayment Lenders, consent to
the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the
Collateral or release all or substantially all of the
Subsidiary Guarantors from their obligations under the
Guarantee and Collateral Agreement, in each case without the
written consent of all Lenders; (iii) reduce the percentage
specified in the definition of Majority Facility Lenders with
respect to any Facility without the written consent of all
Lenders under such Facility; (iv) amend, modify or waive any
provision of Section 9 without the written consent of the
Administrative Agent; (v) amend, modify or waive any
provision of Section 2.3 or 2.6 without the written consent
of the Swingline Lender; or (vi) amend, modify or waive any
provision of Section 3 without the written consent of the
Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Loan Parties, the
-101-
107
Lenders, the Administrative Agent and all future holders of
the Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Administrative Agent shall be restored to
their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or
made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, addressed as follows in the
case of the Borrower and the Administrative Agent, and as set
forth in an administrative questionnaire delivered to the
Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective
parties hereto:
The Borrower: Renters Choice, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: The Chase Manhattan Bank
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services,
▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-102-
108
with copies to: Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
and
Chase Manhattan Bank Delaware
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Letter of Credit Department,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ / ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent
or any Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other
Loan Documents and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall
survive the execution and delivery of this Agreement and the
making of the Loans and other extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all its
out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any
amendment, supplement or modification to,
-103-
109
this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and
the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable
fees and disbursements of counsel to the Administrative Agent
and filing and recording fees and expenses, with statements
with respect to the foregoing to be submitted to the Borrower
prior to the Closing Date (in the case of amounts to be paid
on the Closing Date) and from time to time thereafter on a
quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b) to pay or
reimburse each Lender and the Administrative Agent (in the
case of each Lender, after the occurrence and during the
continuance of an Event of Default) for all its costs and
expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other
Loan Documents and any such other documents, including the
fees and disbursements of counsel (including the allocated
fees and expenses of in-house counsel (but not both outside
and in-house counsel)) to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and
all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, that may be payable or
determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect
of, this Agreement, the other Loan Documents and any such
other documents, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent and their respective
officers, directors, trustees, employees, affiliates, agents
and controlling persons (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other
Loan Documents and any such other documents, including any of
the foregoing relating to the use of proceeds of the Loans or
the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the
Borrower any of its Subsidiaries or any of the Properties and
the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any
Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), provided, that the
-104-
110
Borrower shall have no obligation hereunder to any Indemnitee
with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities arise from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the
foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its
Subsidiaries to so waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands,
penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this
Section 10.5 shall be payable not later than 10 Business Days
after written demand therefor. Statements payable by the
Borrower pursuant to this Section 10.5 shall be submitted to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Telephone No. ▇▇▇-▇▇▇-▇▇▇▇) (Telecopy No.
972-701-0360), at the address of the Borrower set forth in
Section 10.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to
the Administrative Agent. The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts
payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. This
Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Administrative Agent, all
future holders of the Loans and their respective successors
and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one
or more banks, financial institutions or other entities
(each, a "Participant") participating interests in any
Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder
and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all
purposes under this Agreement and the other Loan
Documents, and the
-105-
111
Borrower and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this
Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have
any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Loans or
any fees payable hereunder, or postpone the date of the
final maturity of the Loans, in each case to the extent
subject to such participation. The Borrower agrees that
if amounts outstanding under this Agreement and the
Loans are due or unpaid, or shall have been declared or
shall have become due and payable upon the occurrence
of an Event of Default, each Participant shall, to the
maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its
participating interest in amounts owing under this
Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a
Lender under this Agreement, provided that, in
purchasing such participating interest, such
Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in
Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of
Sections 2.18, 2.19 and 2.20 with respect to its
participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender;
provided that, in the case of Section 2.19, such
Participant shall have complied with the requirements
of said Section and provided, further, that no
Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect
of the amount of the participation transferred by such
transferor Lender to such Participant had no such
transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time
assign to any Lender, any affiliate thereof or an
Approved Fund with respect thereto or, with the consent
of the Borrower and the Administrative Agent (which, in
each case, shall not be unreasonably withheld or
delayed), to an additional bank, financial institution
or other entity (an "Assignee") all or any part of
-106-
112
its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, executed by
such Assignee, such Assignor and any other Person whose
consent is required pursuant to this paragraph, and
delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that
no such assignment to an Assignee (other than any
Lender, any affiliate thereof or an Approved Fund with
respect thereto) shall be in an aggregate principal
amount of less than $5,000,000 (other than in the case
of an assignment of all of a Lender's interests under
this Agreement), unless otherwise agreed by the
Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities.
Upon such execution, delivery, acceptance and
recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder with a
Commitment and/or Loans as set forth therein, and (y)
the Assignor thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all of an
Assignor's rights and obligations under this Agreement,
such Assignor shall cease to be a party hereto).
Notwithstanding any provision of this Section 10.6, the
consent of the Borrower shall not be required for any
assignment that occurs when an Event of Default
pursuant to Section 8(f) shall have occurred and be
continuing with respect to the Borrower.
(d) The Administrative Agent shall, on behalf of the
Borrower, maintain at its address referred to in
Section 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders
and the Commitment of, and the principal amount of the
Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, each other
Loan Party, the Administrative Agent and the Lenders
shall treat each Person whose name is recorded in the
Register as the owner of the Loans and any Notes
evidencing the Loans recorded therein for all purposes
of this Agreement. Any assignment of any Loan, whether
or not evidenced by a Note, shall be effective only
upon appropriate entries with respect thereto being
made in the Register (and each Note shall expressly so
provide).
-107-
113
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor, an Assignee and any other
Person whose consent is required by Section 10.6(c),
together with payment to the Administrative Agent of a
registration and processing fee of $3,500, the
Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) record the
information contained therein in the Register on the
effective date determined pursuant thereto; provided,
however, that no such fee shall be payable in the case
of an assignment by a Lender to an affiliate of such
Lender or an Approved Fund with respect to such Lender;
and provided, further, that, in the case of
contemporaneous assignments by a Lender to more than
one fund managed by the same investment advisor (which
funds are not then Lenders hereunder), only a single
such fee shall be payable for all such contemporaneous
assignments.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6
concerning assignments of Loans and Notes relate only
to absolute assignments and that such provisions do not
prohibit assignments creating security interests,
including any pledge or assignment by a Lender of any
Loan or Note to any Federal Reserve Bank in accordance
with applicable law.
(g) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender
requiring Notes to facilitate transactions of the type
described in paragraph (f) above.
10.7 Adjustments; Setoff. Except to the extent that this Agreement
expressly provides for payments to be allocated to a
particular Lender or to the Lenders under a particular
Facility, if any Lender (a "Benefitted Lender") shall, at any
time after the Loans and other amounts payable hereunder
shall immediately become due and payable pursuant to Section
8, receive any payment of all or part of the Obligations
owing to it, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by setoff, pursuant to
events or proceedings of the nature referred to in Section
8(f), or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if
any, in respect of the Obligations owing to such other
Lender, such Benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of
the Obligations owing to each such other Lender, or shall
provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such
collateral ratably with each of the
-108-
114
Lenders; provided, however, that if all or any portion of
such excess payment or benefits is thereafter recovered from
such Benefitted Lender, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of
such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right,
without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming
due and payable by the Borrower hereunder (whether at
the stated maturity, by acceleration or otherwise), to
set off and appropriate and apply against such amount
any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency,
in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to
or for the credit or the account of the Borrower. Each
Lender agrees promptly 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.
10.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement 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 of this Agreement by
facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of
this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that 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, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative
Agent and the Lenders with respect to the subject matter
hereof, and there
-109-
115
are no promises, undertakings, representations or warranties
by the Administrative Agent or any Lender relative to
subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other
Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of
the courts of the State of New York, the courts of the
United States for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it
may now or hereafter have to the venue of any such
action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Borrower
at its address set forth in Section 10.2 or at such
other address of which the Administrative Agent shall
have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted
by law or shall limit the right to ▇▇▇ in any other
jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.
-110-
116
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other
Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower
arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship
between Administrative Agent and Lenders, on one hand,
and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Lenders or
among the Borrower and the Lenders.
10.14 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public
information provided to it by any Loan Party pursuant to
this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other
Lender or any affiliate or Approved Fund of any Lender, (b)
to any Transferee or prospective Transferee that agrees to
comply with the provisions of this Section, (c) to its
employees, directors, trustees, agents, attorneys,
accountants, investment advisors and other professional
advisors or those of any of its affiliates, (d) upon the
request or demand of any Governmental Authority, (e) in
response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in
connection with any litigation or similar proceeding,
provided that in the case of any such request or
requirement, the Administrative Agent or Lender (as
applicable) so requested or required to make such disclosure
shall as soon as practicable notify the Borrower thereof,
(g) that has been publicly disclosed, (h) to the National
Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that
requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to
such Lender, or (i) in connection with the exercise of any
remedy hereunder or under any other Loan Document.
-111-
117
10.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
-112-
118
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
RENTERS CHOICE, INC.
By:
------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By:
------------------------------------
Name:
Title:
NATIONSBANK, N.A., as Syndication Agent
and as a Lender
By:
------------------------------------
Name:
Title:
COMERICA BANK, as Documentation Agent
and as a Lender
By:
------------------------------------
Name:
Title:
-113-
119
Annex A
PRICING GRID
---------------------------------------------------------------------------------------------------
Consolidated Applicable Margin for Applicable Margin for Commitment
Leverage Ratio Eurodollar Loans ABR Loans Fee Rate
---------------------------------------------------------------------
A/RC/LCMD B C A/RC/LCMD B C
---------------------------------------------------------------------------------------------------
Greater than or 2.25% 2.50% 2.75% 1.25% 1.50% 1.75% 0.500%
equal to
4.00 to 1.0
Greater than or 2.00% 2.25% 2.50% 1.00% 1.25% 1.50% 0.375%
equal to
3.50 to 1.0
and less than
4.00 to 1.0
Greater than or 1.75% 2.25% 2.50% 0.75% 1.25% 1.50% 0.375%
equal to
3.00 to 1.0
and less than
3.50 to 1.0
Greater than or 1.50% 2.00% 2.25% 0.50% 1.00% 1.25% 0.300%
equal to
2.50 to 1.0
and less than
3.00 to 1.0
Less than 1.25% 1.75% 2.00% 0.25% 0.75% 1.00% 0.250%
2.50 to 1.0
---------------------------------------------------------------------------------------------------
As used above, "A/RC/LCMD" refers to Tranche A Term Loans, Revolving
Credit Loans, Swing Line Loans and LC/MD Loans, "B" refers to Tranche B Term
Loans and "C" refers to Tranche C Term Loans.
Changes in the Applicable Margin resulting from changes in the
Consolidated Leverage Ratio shall become effective on the date (the "Adjustment
Date") on which financial statements are delivered to the Lenders pursuant to
Section 6.1 (but in any event not later than the 45th day after the end of each
of the first three quarterly periods of each fiscal year or the 90th day after
the end of each fiscal year, as the case may be) and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Consolidated Leverage Ratio as at the end of the fiscal period that would have
been covered thereby shall for the purposes of this definition be deemed to be
greater than 4.00 to 1.0. In addition, at any time prior to the first Adjustment
Date occurring after two full fiscal quarters have been completed after the
Closing Date and at all times while an Event of Default shall have occurred and
be continuing, the Consolidated Leverage Ratio shall for the purposes of this
definition be deemed to be greater than 4.00 to 1.0. Each determination of the
Consolidated Leverage Ratio pursuant to this pricing grid shall be made with
respect to (or, in the case of Consolidated Funded Debt, as at the end of) the
period of four consecutive fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements.
-114-