EXHIBIT 10(1)
EXECUTION
CREDIT AND GUARANTY AGREEMENT
DATED AS OF APRIL 30, 2004
AMONG
AAH HOLDINGS CORPORATION,
AMSCAN HOLDINGS, INC.,
CERTAIN SUBSIDIARIES OF AMSCAN HOLDINGS, INC.,
AS GUARANTORS,
VARIOUS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS JOINT LEAD ARRANGER, JOINT BOOKRUNNER AND CO-SYNDICATION AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
AND
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
AS JOINT LEAD ARRANGER AND JOINT BOOKRUNNER AND CO-SYNDICATION AGENT
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$255,000,000 SENIOR SECURED CREDIT FACILITIES
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND INTERPRETATION............................................ 2
1.1. DEFINITIONS.............................................................. 2
1.2. ACCOUNTING TERMS......................................................... 33
1.3. INTERPRETATION, ETC...................................................... 33
SECTION 2. LOANS AND LETTERS OF CREDIT............................................... 33
2.1. TERM LOANS............................................................... 33
2.2. REVOLVING LOANS.......................................................... 34
2.3. SWING LINE LOANS......................................................... 35
2.4. ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS THEREIN..... 37
2.5. PRO RATA SHARES; AVAILABILITY OF FUNDS................................... 41
2.6. USE OF PROCEEDS.......................................................... 42
2.7. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES............ 42
2.8. INTEREST ON LOANS........................................................ 43
2.9. CONVERSION/CONTINUATION.................................................. 45
2.10. DEFAULT INTEREST......................................................... 46
2.11. FEES..................................................................... 46
2.12. SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS................................. 47
2.13. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.............................. 48
2.14. MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.............................. 51
2.15. APPLICATION OF PREPAYMENTS/REDUCTIONS.................................... 54
2.16. GENERAL PROVISIONS REGARDING PAYMENTS.................................... 55
2.17. RATABLE SHARING.......................................................... 56
2.18. MAKING OR MAINTAINING LIBOR LOANS........................................ 56
2.19. INCREASED COSTS; CAPITAL ADEQUACY........................................ 58
2.20. TAXES; WITHHOLDING, ETC.................................................. 60
2.21. OBLIGATION TO MITIGATE................................................... 62
2.22. DEFAULTING LENDERS....................................................... 62
2.23. REMOVAL OR REPLACEMENT OF A LENDER....................................... 63
SECTION 3. CONDITIONS PRECEDENT...................................................... 64
3.1. CLOSING DATE............................................................. 64
3.2. CONDITIONS TO EACH CREDIT EXTENSION...................................... 69
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................ 70
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION............... 70
4.2. CAPITAL STOCK AND OWNERSHIP.............................................. 71
4.3. DUE AUTHORIZATION........................................................ 71
4.4. NO CONFLICT.............................................................. 71
4.5. GOVERNMENTAL CONSENTS.................................................... 71
4.6. BINDING OBLIGATION....................................................... 72
4.7. HISTORICAL FINANCIAL STATEMENTS.......................................... 72
4.8. PROJECTIONS.............................................................. 72
4.9. NO MATERIAL ADVERSE CHANGE............................................... 72
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4.10. NO RESTRICTED JUNIOR PAYMENTS............................................ 72
4.11. ADVERSE PROCEEDINGS, ETC................................................. 72
4.12. PAYMENT OF TAXES......................................................... 73
4.13. PROPERTIES............................................................... 73
4.14. ENVIRONMENTAL MATTERS.................................................... 73
4.15. NO DEFAULTS.............................................................. 74
4.16. MATERIAL CONTRACTS....................................................... 74
4.17. GOVERNMENTAL REGULATION.................................................. 74
4.18. MARGIN STOCK............................................................. 74
4.19. EMPLOYEE MATTERS......................................................... 75
4.20. EMPLOYEE BENEFIT PLANS................................................... 75
4.21. CERTAIN FEES............................................................. 75
4.22. SOLVENCY................................................................. 76
4.23. COMPLIANCE WITH STATUTES, ETC............................................ 76
4.24. DISCLOSURE............................................................... 76
SECTION 5. AFFIRMATIVE COVENANTS..................................................... 76
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS................................... 76
5.2. EXISTENCE................................................................ 80
5.3. PAYMENT OF TAXES AND CLAIMS.............................................. 80
5.4. MAINTENANCE OF PROPERTIES................................................ 81
5.5. INSURANCE................................................................ 81
5.6. INSPECTIONS.............................................................. 81
5.7. LENDERS MEETINGS......................................................... 82
5.8. COMPLIANCE WITH LAWS..................................................... 82
5.9. ENVIRONMENTAL............................................................ 82
5.10. SUBSIDIARIES............................................................. 83
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS................................... 84
5.12. FURTHER ASSURANCES....................................................... 84
5.13. INTEREST RATE PROTECTION................................................. 84
5.14. POST-CLOSING COVENANT.................................................... 84
SECTION 6. NEGATIVE COVENANTS........................................................ 85
6.1. INDEBTEDNESS............................................................. 85
6.2. LIENS.................................................................... 87
6.3. EQUITABLE LIEN........................................................... 89
6.4. NO FURTHER NEGATIVE PLEDGES.............................................. 89
6.5. RESTRICTED JUNIOR PAYMENTS............................................... 90
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS................................. 90
6.7. INVESTMENTS.............................................................. 91
6.8. FINANCIAL COVENANTS...................................................... 92
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS................. 93
6.10. DISPOSAL OF SUBSIDIARY INTERESTS......................................... 95
6.11. SALES AND LEASE-BACKS.................................................... 95
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES............................ 95
6.13. CONDUCT OF BUSINESS...................................................... 95
6.14. AMENDMENTS OR WAIVERS OF WITH RESPECT TO SUBORDINATED INDEBTEDNESS....... 96
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6.15. FISCAL YEAR.............................................................. 96
6.16. PERMITTED ACTIVITIES OF HOLDINGS......................................... 96
SECTION 7. GUARANTY.................................................................. 96
7.1. GUARANTY OF THE OBLIGATIONS.............................................. 96
7.2. CONTRIBUTION BY GUARANTORS............................................... 97
7.3. PAYMENT BY GUARANTORS.................................................... 97
7.4. LIABILITY OF GUARANTORS ABSOLUTE......................................... 98
7.5. WAIVERS BY GUARANTORS.................................................... 100
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC..................... 100
7.7. SUBORDINATION OF OTHER OBLIGATIONS....................................... 101
7.8. CONTINUING GUARANTY...................................................... 101
7.9. AUTHORITY OF GUARANTORS OR COMPANY....................................... 101
7.10. FINANCIAL CONDITION OF COMPANY........................................... 101
7.11. BANKRUPTCY, ETC.......................................................... 102
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR............................. 102
SECTION 8. EVENTS OF DEFAULT......................................................... 103
8.1. EVENTS OF DEFAULT......................................................... 103
SECTION 9. AGENTS.................................................................... 105
9.1. APPOINTMENT OF AGENTS.................................................... 106
9.2. POWERS AND DUTIES........................................................ 106
9.3. GENERAL IMMUNITY......................................................... 106
9.4. AGENTS ENTITLED TO ACT AS LENDER......................................... 107
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.................. 107
9.6. RIGHT TO INDEMNITY....................................................... 108
9.7. SUCCESSOR ADMINISTRATIVE AGENT AND SWING LINE LENDER..................... 108
9.8. COLLATERAL DOCUMENTS AND GUARANTY........................................ 109
SECTION 10. MISCELLANEOUS............................................................ 110
10.1. NOTICES.................................................................. 110
10.2. EXPENSES................................................................. 110
10.3. INDEMNITY................................................................ 111
10.4. SET-OFF.................................................................. 111
10.5. AMENDMENTS AND WAIVERS................................................... 112
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS................................... 114
10.7. INDEPENDENCE OF COVENANTS................................................ 117
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS................... 117
10.9. NO WAIVER; REMEDIES CUMULATIVE........................................... 117
10.10. MARSHALLING; PAYMENTS SET ASIDE.......................................... 118
10.11. SEVERABILITY............................................................. 118
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS............... 118
10.13. HEADINGS................................................................. 118
10.14. APPLICABLE LAW........................................................... 118
10.15. CONSENT TO JURISDICTION.................................................. 119
10.16. WAIVER OF JURY TRIAL..................................................... 119
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10.17. CONFIDENTIALITY.......................................................... 120
10.18. USURY SAVINGS CLAUSE..................................................... 120
10.19. COUNTERPARTS............................................................. 121
10.20. EFFECTIVENESS............................................................ 121
10.21. USA PATRIOT ACT.......................................................... 121
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APPENDICES: A-1 Term Loan Commitments
A-2 Revolving Commitments
B Notice Addresses
SCHEDULES: 1.1(a) Consolidated Adjusted EBITDA
1.1(b) Existing Letters of Credit
1.1(c) Management Investors
1.1(d) Phase 1 Reports
3.1(c) Management Structure
3.1(f) Closing Date Mortgaged Properties
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.13 Real Estate Assets
4.16 Material Contracts
5.14 Post-Closing Covenants
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.12 Certain Affiliate Transactions
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
A-3 Issuance Notice
B-1 Term Loan Note
B-2 Revolving Loan Note
B-3 Swing Line Note
C Compliance Certificate
D Opinions of Counsel
E Assignment Agreement
F Certificate Re Non-bank Status
G-1 Closing Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement
I Pledge and Security Agreement
J Mortgage
K Landlord Waiver and Consent Agreement
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of April 30, 2004, is entered
into by and among AMSCAN HOLDINGS, INC., a Delaware corporation ("COMPANY"), AAH
HOLDINGS CORPORATION, a Delaware corporation ("HOLDINGS") CERTAIN SUBSIDIARIES
OF COMPANY, as Guarantors, the Lenders party hereto from time to time, ▇▇▇▇▇▇▇
▇▇▇▇▇ CREDIT PARTNERS L.P. ("GSCP"), as Joint Lead Arranger, Joint Bookrunner
and Co-Syndication Agent, GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent (together with its permitted successors in such capacity,
"ADMINISTRATIVE AGENT") and Collateral Agent (in such capacity, "COLLATERAL
AGENT"), and ▇.▇. ▇▇▇▇▇▇ SECURITIES INC. ("JPMSI"), as Joint Lead Arranger,
Joint Bookrunner and Co-Syndication Agent (together with GSCP in such
capacities, the "CO-SYNDICATION AGENTS").
RECITALS:
WHEREAS, capitalized terms used in these Recitals and not otherwise
defined herein shall have the respective meanings set forth for such terms in
Section 1.1 hereof;
WHEREAS, Holdings, a corporation newly formed by Sponsor was formed to own
all of the Capital Stock of Company;
WHEREAS, (i) Holdings and AAH Acquisition Corporation, a Delaware
corporation ("MERGER CO.") have entered into the Merger Agreement with the
Sellers pursuant to which Holdings has agreed to acquire Company through a
merger in which Merger Co., a wholly-owned subsidiary of Holdings, will merge
with and into Company with Company being the surviving corporation and a
wholly-owned subsidiary of Holdings (the "MERGER"); (ii) in connection with the
transactions contemplated by the Merger Agreement, Management Investors intend
to exchange certain of their outstanding common stock of Company (or options to
acquire common stock) representing the remaining amount of common stock of
Company for common stock of Holdings; and (iii) Company will make cash payments
to Sellers in consideration of (i) above;
WHEREAS, Company has requested that Lenders extend certain credit
facilities in an aggregate principal amount of $255,000,000 consisting of
$205,000,000 aggregate principal amount of Term Loans and up to $50,000,000
aggregate principal amount of Revolving Loans, the proceeds of which will be
used, together with (i) not less than $175,000,000 in cash proceeds of the
Senior Subordinated Notes and (ii) the proceeds of the Equity Financing, to
satisfy the Merger Financing Requirements and to provide financing for the
working capital and general corporate requirements of Company and its
Subsidiaries;
WHEREAS, Holdings and Company have agreed to secure all of their
Obligations by granting to Collateral Agent, for the benefit of Secured Parties,
a First Priority Lien on substantially all of its assets, including a pledge of
all of the Capital Stock of Company and of each of Company's Domestic
Subsidiaries and 65% of all the Capital Stock of each of
Company's first-tier Foreign Subsidiaries and all intercompany debt of Domestic
Subsidiaries; and
WHEREAS, Guarantors have agreed to guarantee the obligations of Company
hereunder and to secure their respective Obligations by granting to Collateral
Agent, for the benefit of Secured Parties, a First Priority Lien on
substantially all of their respective assets, including a pledge of all of the
Capital Stock of each of their respective Domestic Subsidiaries (including
Company) and 65% of all the Capital Stock of each of their respective first-tier
Foreign Subsidiaries and all intercompany debt.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Company or any of its Subsidiaries, threatened against or
affecting Company or any of its Subsidiaries or any property of Company or any
of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.18(b).
"AFFECTED LOANS" as defined in Section 2.18(b).
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 10% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.
"AGENT" means each of the Co-Syndication Agents, Administrative
Agent and Collateral Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.17.
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"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as of
April 30, 2004, as it may be amended, supplemented or otherwise modified from
time to time.
"APPLICABLE MARGIN" shall mean (i) with respect to Term Loans that
are LIBOR Loans, 2.75% per annum; provided that if the Leverage Ratio in effect
from time to time is less than 4.50:1.00 the Applicable Margin with respect to
Term Loans that are LIBOR Loans shall be 2.50% per annum; (ii) with respect to
Revolving Loans that are LIBOR Loans, (a) from the Closing Date until the date
of delivery of the Compliance Certificate and the financial statements for the
period ending December 31, 2004, a percentage, per annum, determined by
reference to the following table as if the Leverage Ratio then in effect were
4.50:1.00; and (b) thereafter, a percentage, per annum, determined by reference
to the Leverage Ratio in effect from time to time as set forth below:
APPLICABLE MARGIN FOR
LEVERAGE RATIO REVOLVING LOANS
> or = 4.50:1.00 2.50%
< 4.50:1.00 2.25%
> 4.00:1.00
< 4.00:1.00 2.00%
> or = 3.50:1.00
< 3.50:1.00 1.75%
and (iii) with respect to Swing Line Loans and Term Loans and Revolving Loans
that are Index Rate Loans, an amount equal to (a) the Applicable Margin for
LIBOR Loans as set forth in clause (i), (ii)(a) or (ii)(b) above, as applicable,
minus (b) 1.00% per annum. No change in the Applicable Margin shall be effective
until three Business Days after the date on which Administrative Agent shall
have received the applicable financial statements and a Compliance Certificate
pursuant to Section 5.1(d) calculating the Leverage Ratio. At any time Company
has not submitted to Administrative Agent the applicable information as and when
required under Section 5.1(d), the Applicable Margin shall be determined as if
the Leverage Ratio were in excess of 4.50:1.00 until the date Company shall
deliver such Compliance Certificate. Within one Business Day of receipt of the
applicable information under Section 5.1(d), Administrative Agent shall give
each Lender telefacsimile or telephonic notice (confirmed in writing) of the
Applicable Margin in effect from such date.
"ASSET SALE" means the sale by Company or any of its Subsidiaries to
any Person other than Company or any of its wholly-owned Subsidiaries of (i) any
of the Capital Stock of any of Company's Subsidiaries, (ii) substantially all of
the assets of any division or line of business of Company or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Company or any of its Subsidiaries (other than (a) inventory sold in the
ordinary course of business (b) sales of Cash Equivalents for the fair market
value thereof, and (c) any
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such other assets to the extent that the aggregate value of such assets sold in
any single transaction or related series of transactions is equal to $750,000 or
less).
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or modifications as
may be approved by Administrative Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer or treasurer.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BENEFICIARY" means each Agent, Issuing Bank, Lender and Lender
Counterparty.
"BERKSHIRE" means Berkshire Partners LLC and shall include any fund
affiliated with Berkshire Partners LLC.
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection with the LIBOR Rate
or any LIBOR Loans, the term "BUSINESS DAY" shall mean any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the London interbank market.
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand or
Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within
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one year after such date; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof, in each case maturing within one year
after such date and having, at the time of the acquisition thereof, a rating of
at least A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇; (iii) commercial paper
maturing no more than one year from the date of creation thereof and having, at
the time of the acquisition thereof, a rating of at least A-1 from S&P or at
least P-1 from ▇▇▇▇▇'▇; (iv) certificates of deposit or bankers' acceptances
maturing within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that has Tier 1 capital (as
defined in such regulations) of not less than $100,000,000 (each Lender and each
commercial bank referred to herein as a "CASH EQUIVALENT BANK"); (v) shares of
any money market mutual fund that (a) has substantially all of its assets
invested continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating obtainable from either S&P or ▇▇▇▇▇'▇; and (vi) with respect to
Foreign Subsidiaries, investments of the types described in clause (iv) above
issued by a Cash Equivalent Bank or any commercial bank of recognized
international standing chartered in the country where such Foreign Subsidiary is
domiciled having unimpaired capital and surplus of at least $500,000,000.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of Exhibit F.
"CHANGE OF CONTROL" means, at any time, (i) if the Sponsor shall
cease to beneficially own and control 51% or more of the combined voting power
of all of the Capital Stock of Holdings, (ii) any Person or "group" (within the
meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than the Sponsor
shall have after the Closing Date obtained the power (whether or not exercised)
to elect a majority of the members of the board of directors (or similar
governing body) of Holdings, (iii) the majority of the seats (other than vacant
seats) on the board of directors (or similar governing body) of Holdings cease
to be occupied by Persons who either (a) were members of the board of directors
of Holdings on the Closing Date or (b) were nominated for election by a majority
of the board of directors of Holdings, who were either (I) directors on the
Closing Date or (II) whose election or nomination for election was previously
approved by a majority of such directors or by the Sponsor, (iv) Holdings shall
cease to own 100% of the Capital Stock of Company or (v) any "change of control"
or similar event under the Senior Subordinated Notes Indenture shall occur.
"CHESTER DISTRIBUTION CENTER" means the distribution center located
at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇.
"CHESTER DISTRIBUTION CENTER COLLATERAL" means the land and
improvements comprising the Chester Distribution Center.
"CHESTER DISTRIBUTION CENTER PERMANENT FINANCING" means Indebtedness
of Company pursuant to that certain mortgage dated December 20, 2001 with the
New York Job Development Authority in an individual principal amount, as of the
Closing Date, of $8,839,500,
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the proceeds of which have been used by Company to finance a portion of the
construction and development of the ▇▇▇▇▇▇▇ Distribution Center.
"CLASS" means (i) with respect to Lenders, each of the following
classes of Lenders: (a) Lenders having Term Loan Exposure and (b) Lenders having
Revolving Exposure (including Swing Line Lender); and (ii) with respect to
Loans, each of the following classes of Loans: (a) Term Loans and (b) Revolving
Loans (including Swing Line Loans).
"CLOSING DATE" means the date on which the Term Loans are made.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit G-1.
"CLOSING DATE MORTGAGED PROPERTY" as defined in Section 3.1(f).
"COLLATERAL" means, collectively, all of the real, personal and
mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL AGENT" as defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Mortgages, if any, the Landlord Personal Property Collateral Access Agreements,
if any, and all other instruments, documents and agreements delivered by any
Credit Party pursuant to this Agreement or any of the other Credit Documents in
order to grant to Collateral Agent, for the benefit of Lenders, a Lien on any
real, personal or mixed property of that Credit Party as security for the
Obligations as provided for in such documents.
"COLLATERAL QUESTIONNAIRE" means a certificate in form satisfactory
to the Collateral Agent that provides information with respect to the personal
or mixed property of each Credit Party.
"COMPANY" as defined in the preamble hereto.
"COMMITMENT" means any Revolving Commitment or Term Loan Commitment.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount
determined for Holdings and its Subsidiaries on a consolidated basis equal to
(i) the sum, without duplication, of the amounts for such period of (a)
Consolidated Net Income, (b) Consolidated Interest Expense, (c) taxes paid and
provisions for taxes based on income or profits, (d) total depreciation expense,
(e) total amortization expense, (f) other non-Cash items reducing Consolidated
Net Income including provisions for minority interests, items resulting from
purchase accounting and from compensation charges due to stock awards or stock
options
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(excluding any such non-Cash item to the extent that it represents an accrual or
reserve for potential Cash items in any future period or amortization of a
prepaid Cash item that was paid in a prior period), (g) to the extent deducted
in calculating Consolidated Net Income, Transaction Costs and any non-recurring
or unusual Cash costs incurred in the relevant period; provided that the
aggregate amount of such non-recurring or unusual Cash costs included in this
clause (g) incurred during the term of this Agreement shall not exceed
$5,000,000, (h) Management Fees accrued or paid in such period (excluding any
Management Fees paid in such period to the extent they represent an accrual in a
prior period), (i) to the extent excluded from Consolidated Interest Expense,
any amounts referred to in Section 2.11(d) and (j) to the extent not included in
Consolidated Interest Expense, any gains or losses with respect to hedging
obligations, minus (ii) other non-Cash items increasing Consolidated Net Income
for such period (excluding any such non-Cash item to the extent it represents
the reversal of an accrual or reserve for potential Cash item in any prior
period); provided that the foregoing shall be subject to the adjustments
described in Schedule 1.1(a).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Holdings and its Subsidiaries during such
period determined on a consolidated basis that, in accordance with GAAP, are or
should be included in "purchase of property and equipment" or similar items
reflected in the consolidated statement of cash flows of Holdings and its
Subsidiaries. Notwithstanding the foregoing, Consolidated Capital Expenditures
shall not include any amounts reinvested from Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds or any amounts spent in connection with
Investments permitted pursuant to Section 6.7 and Permitted Acquisitions
permitted pursuant to Section 6.9(f).
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period, excluding any amount not payable
currently in Cash.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Holdings and its Subsidiaries on a
consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Holdings and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, excluding all Revolving Loans and the current portion of
long term debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to: (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working
Capital Adjustment, minus (ii) the sum, without duplication, of the amounts for
such period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding (i) repayments of Revolving Loans or Swing Line Loans except to the
extent the Revolving Commitments are permanently reduced in connection with such
repayments and (ii) repurchases of Term Loans made pursuant to Section 2.13(c)),
(b) Consolidated Capital Expenditures (net of any proceeds of (y) any related
financings with respect to such expenditures and (z) any sales of assets used to
finance such
7
expenditures), (c) Consolidated Cash Interest Expense, (d) any expenditures
during such period relating to Permitted Acquisitions (net of any proceeds of
any related financings with respect to such expenditures), (e) any non-recurring
restructuring or unusual charges and charges related to cost savings paid in
Cash during such period, (f) taxes based on income or profits of Holdings and
its Subsidiaries payable in Cash with respect to such period, (g) Management
Fees paid in Cash, (h) distributions to Holdings pursuant to Section 6.5(b)(i),
(i) Cash contributions to Pension Plans which were not deducted in computing
Consolidated Net Income for such period in an amount not in excess of $2,000,000
in any Fiscal Year and (j) any amounts referred to in Section 2.11(d) paid in
Cash during such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Holdings and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Holdings
and its Subsidiaries, including all (i) commissions, discounts and other fees
and charges owed with respect to letters of credit and net costs under Interest
Rate Agreements, but excluding, however, any amounts referred to in Section
2.11(d) payable on or before the Closing Date and (ii) commitment fees on the
unused portion of the Revolving Commitments as set forth in Section 2.11(a).
"CONSOLIDATED NET INCOME" means, for any period, (i) the net income
(or loss) of Holdings and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
provided, that there shall be excluded (ii) (a) the income (or loss) of any
Person (other than a Subsidiary of Company and other than Amscan de Mexico, S.A.
de C.V. for so long as it is treated as a consolidated subsidiary of Company in
accordance with GAAP) in which any other Person (other than Holdings or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Holdings or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Holdings or is
merged into or consolidated with Holdings or any of its Subsidiaries or that
Person's assets are acquired by Holdings or any of its Subsidiaries, (c) the
income of any Subsidiary of Holdings to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (d) any after-tax gains or losses
attributable to Asset Sales or returned surplus assets of any Pension Plan, and
(e) (to the extent not included in clauses (a) through (d) above) any (i) net
extraordinary gains or net extraordinary losses and (ii) any non-recurring
non-Cash gains or non-recurring non-Cash losses; provided, further that,
notwithstanding GAAP and the provisions of clause (b) above, Consolidated Net
Income shall include for all purposes of this Agreement other than the
calculation of Consolidated Excess Cash Flow, the income (or loss) of any Person
that is acquired by Holdings or any of its Subsidiaries in a Permitted
Acquisition for any portion of such period prior to the consummation of the
applicable Permitted Acquisition.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Holdings and
its Subsidiaries determined on a consolidated basis in accordance with GAAP.
8
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) equal to
Consolidated Working Capital as of the beginning of such period minus
Consolidated Working Capital as of the end of such period.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a Conversion/Continuation
Notice substantially in the form of Exhibit A-2.
"CO-SYNDICATION AGENTS" as defined in the preamble hereto.
"COUNTERPART AGREEMENT" means a Counterpart Agreement substantially
in the form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if any,
the Collateral Documents, any documents or certificates executed by Company in
favor of Issuing Bank relating to Letters of Credit, and all other documents,
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent, Issuing Bank or any Lender in connection herewith.
"CREDIT EXTENSION" means the making of a Loan or the issuing of a
Letter of Credit.
"CREDIT PARTY" means each Person (other than any Agent, Issuing Bank
or any Lender or any other representative thereof) from time to time party to a
Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party, each of which is for the purpose of hedging the foreign currency risk
associated with Company's and its Subsidiaries' operations and not for
speculative purposes.
9
"DEFAULT" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the
excess, if any, of such Defaulting Lender's Pro Rata Share of the aggregate
outstanding principal amount of Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Loans) over the aggregate outstanding principal amount of
all Loans of such Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender, the
period commencing on the date of the applicable Funding Default and ending on
the earliest of the following dates: (i) the date on which all Commitments are
cancelled or terminated and/or the Obligations are declared or become
immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by
the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting
Lender or by the non-pro rata application of any voluntary or mandatory
prepayments of the Loans in accordance with the terms of Section 2.13 or Section
2.14 or by a combination thereof) and (b) such Defaulting Lender shall have
delivered to Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations hereunder with respect to its Commitments,
and (iii) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing.
"DEFAULTING LENDER" as defined in Section 2.22.
"DEFAULTED LOAN" as defined in Section 2.22.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws
of the United States of America, any State thereof or the District of Columbia.
"EDEN PRAIRIE FACILITY" means that certain facility located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans as one of its businesses; provided, no
Affiliate of Holdings shall be an Eligible Assignee.
10
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, Company, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other requirements of Governmental Authorities relating to (i)
environmental matters, including those relating to any Hazardous Materials
Activity; (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials; or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare,
in any manner applicable to Company or any of its Subsidiaries or any Facility.
"EQUITY FINANCING" means the issuance of Securities by Amscan
Holdings to Holdings and rollovers of existing equity investments in Amscan
Holdings by the Management Investors on the Closing Date in connection with the
Merger in an aggregate amount equal to no less than $140,400,000; provided that
up to $500,000 of Equity Financing provided by Management Investors may be
deferred for a period of two weeks following the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; and (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member. Any former ERISA Affiliate of Company or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Company or any such Subsidiary
within the meaning of this definition with respect to the period such entity was
an ERISA Affiliate of Company or such Subsidiary to the extent that the Company
or such Subsidiary would reasonably be expected to have any liability with
respect to obligations of such former ERISA Affiliate which arose during such
period under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal
11
Revenue Code with respect to any Pension Plan (whether or not waived in
accordance with Section 412(d) of the Internal Revenue Code) or the failure to
make by its due date a required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure to make any
required contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a
notice of intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability to Company, any of its Subsidiaries or any of their
respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could reasonably be expected to give rise
to the imposition on Company, any of its Subsidiaries or any of their respective
ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43
of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan with a material
likelihood of success; (x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the conditions or events set forth
in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCHANGE RATE" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of the applicable Issuing Bank in the New
York foreign exchange market for the purchase by such Issuing Lender (by cable
transfer) of such currency in exchange for Dollars at
12
12:00 noon (New York time) one Business Day prior to such date, expressed as a
number of units of such currency per one Dollar.
"EXISTING CREDIT AGREEMENT" means the Second Amended and Restated
Credit and Guaranty Agreement, dated as of December 20, 2002, among Amscan
Holdings, certain subsidiaries of Amscan Holdings, as guarantors, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Credit Partners L.P., as sole lead arranger and syndication agent, General
Electric Capital Corporation, as administrative agent and as collateral agent,
and Fleet National Bank, as documentation agent.
"EXISTING LETTERS OF CREDIT" means the Letters of Credit made
pursuant to the Existing Credit Agreement and listed on Schedule 1.1(b).
"EXISTING NOTES" means the $110,000,000 in the aggregate principal
amount of 9.875% Senior Subordinated Notes of Amscan Holdings due 2007.
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or, except with
respect to Sections 5 and 6, heretofore owned, leased, operated or used by
Company or any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FAIR SHARE SHORTFALL" as defined in Section 7.2.
"FEDERAL FUNDS RATE" means, for any day, a floating rate equal to
the weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Administrative Agent in
its sole discretion, which determination shall be final, binding and conclusive
(absent manifest error).
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such certification is required, the certification
of the chief financial officer of Company that such financial statements fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.
"FINANCIAL PLAN" as defined in Section 5.1(i).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien is
the only Lien to which such Collateral is subject, other than any Permitted
Lien.
13
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its Subsidiaries
ending on December 31 of each calendar year.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to a
mortgage in favor of Collateral Agent, for the benefit of Lenders, and located
in an area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FUNDING DEFAULT" as defined in Section 2.22.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of Exhibit
A-1.
"GAAP" means, subject to the limitations on the application thereof
set forth in ▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ generally accepted accounting principles
in effect as of the date of determination thereof.
"GECC" as defined in the preamble hereto.
"GOVERNMENTAL ACTS" means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
Governmental Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GSCP" as defined in the preamble hereto.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means Holdings and each Domestic Subsidiary of Company.
"GUARANTOR SUBSIDIARY" means each Guarantor other than Holdings.
14
"GUARANTY" means the guaranty of each Guarantor set forth in Section
7.
"HAZARDOUS MATERIALS" means any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any Governmental
Authority or which may or could pose a hazard to the health and safety of the
owners, occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement entered into with a Lender Counterparty in the ordinary course of
Company's or any of its Subsidiaries' businesses.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if
any, that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing Date, (i)
the audited financial statements of Company and its Subsidiaries, for the
immediately preceding three year period ending December 31, 2003, consisting of
balance sheets and the related consolidated statements of income, stockholders'
equity and cash flows for such period and (ii) the unaudited financial
statements of Company its Subsidiaries for the three month period ended March
31, 2004, consisting of a balance sheet and the related consolidated statements
of income, stockholders' equity and cash flows for such period and, in the case
of clauses (i) and (ii), certified by the chief financial officer of Company
that they fairly present, in all material respects, the financial condition of
Company and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments and in the case of interim
financial statements, the absence of footnotes.
"IMMATERIAL SUBSIDIARY" means, as of any date, any Subsidiary whose
total assets, as of that date, are less than $100,000 and whose total revenues
for the most recent twelve-month period do not exceed $100,000; provided that
the total asset value and total revenues of all Subsidiaries designated as such
shall not exceed $500,000 in the aggregate.
"INCREASED-COST LENDERS" as defined in Section 2.23.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases
15
that is properly classified as a liability on a balance sheet in conformity with
GAAP; (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money; (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
(excluding any such obligations incurred under ERISA), which purchase price is
(a) due more than six months from the date of incurrence of the obligation in
respect thereof or twelve months in the case of a bona fide trade payable or (b)
evidenced by a note or similar written instrument; (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person; (vi) the face amount of any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; (vii) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; (viii) any obligation of
such Person the primary purpose or intent of which is to provide assurance to an
obligee that the obligation of the obligor thereof will be paid or discharged,
or any agreement relating thereto will be complied with, or the holders thereof
will be protected (in whole or in part) against loss in respect thereof; and
(ix) any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise) or (b) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under subclauses (a) or (b)
of this clause (ix), the primary purpose or intent thereof is as described in
clause (viii) above; and (x) all obligations of such Person in respect of any
exchange traded or over the counter derivative transaction, including, without
limitation, any Interest Rate Agreement and Currency Agreement, whether entered
into for hedging or speculative purposes; provided, in no event shall
obligations under any Interest Rate Agreement and any Currency Agreement be
deemed "Indebtedness" for any purpose under Section 6.8. Any contingent earnout
obligations incurred pursuant to any acquisition agreements shall not constitute
Indebtedness until actually earned and thereafter shall constitute Indebtedness
until paid but shall not be treated as Indebtedness for Section 6.8 unless such
earned obligations remain unpaid for more than 30 days.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), costs (including the
reasonable costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any reasonable fees or expenses incurred by
Indemnitees in enforcing this indemnity), whether direct, indirect or
consequential and whether based on any federal, state or foreign laws, statutes,
rules or regulations (including securities and commercial laws, statutes, rules
or regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may
16
be imposed on, incurred by, or asserted against any such Indemnitee, in any
manner relating to or arising out of (i) this Agreement or the other Credit
Documents or the transactions contemplated hereby or thereby (including Lenders'
agreement to make Credit Extensions or the use or intended use of the proceeds
thereof, or any enforcement of any of the Credit Documents (including any sale
of, collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); (ii) the statements contained in the commitment
letter delivered by any Lender to Company with respect to the transactions
contemplated by this Agreement; or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INDEX RATE" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "Index Rate on corporate loans posted by at least 75% of the nation's 30
largest banks" (or, if The Wall Street Journal ceases quoting a Index Rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.
"INDEX RATE LOAN" means a Loan bearing interest at a rate determined
by reference to the Index Rate.
"INSTALLMENT" as defined in Section 2.12(a).
"INSTALLMENT DATE" as defined in Section 2.12(a).
"INTEREST COVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
Period then ended, to (ii) Consolidated Cash Interest Expense for such
four-Fiscal Quarter Period.
"INTEREST PAYMENT DATE" means with respect to (i) any Index Rate
Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date, and the final
maturity date of such Loan; and (ii) any LIBOR Loan, the last day of each LIBOR
Period applicable to such Loan; provided, in the case of each LIBOR Period of
longer than three months "Interest Payment Date" shall also include each date
that is three months, or an integral multiple thereof, after the commencement of
such LIBOR Period.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedging agreement or other similar agreement or arrangement to which Company or
any of its Subsidiaries is a party, each of which is for the purpose of hedging
the interest rate exposure associated with Company's and its Subsidiaries'
operations and not for speculative purposes.
17
"INTEREST RATE DETERMINATION DATE" means, with respect to any LIBOR
Period, the date that is two Business Days prior to the first day of such LIBOR
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than the Company
or a Guarantor Subsidiary); (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by any Subsidiary of Holdings from any
Person (other than Holdings, the Company or any Guarantor Subsidiary), of any
Capital Stock of such Subsidiary; and (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by Holdings or any of its Subsidiaries to any other Person
(other than Holdings, the Company or any Guarantor Subsidiary), including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"ISSUANCE NOTICE" means an Issuance Notice substantially in the form
of Exhibit A-3.
"ISSUING BANK" means (i) for any Existing Letters of Credit
outstanding and issued prior to the Closing Date, GECC and (ii) for any Letters
of Credit issued on or after the Closing Date, GECC, as Issuing Bank hereunder,
together with its permitted successors and assigns in such capacity.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"JPMSI" as defined in the preamble hereto.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, pursuant to which, among other things, the landlord
consents to the granting of a Mortgage on such Leasehold Property by the Credit
Party tenant, such Landlord Consent and Estoppel to be in form and substance
acceptable to the Collateral Agent in its reasonable discretion, but in any
event sufficient for the Collateral Agent to obtain a Title Policy with respect
to such Mortgage.
"LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT" means a
Landlord Waiver and Consent Agreement substantially in the form of Exhibit K
with such amendments or modifications as may be approved by Collateral Agent.
18
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit
Party as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Collateral Agent in its sole discretion
as not being required to be included in the Collateral.
"LENDER" means each financial institution listed on the signature
pages hereto as a Lender, and any other Person that becomes a party hereto
pursuant to an Assignment Agreement.
"LENDER COUNTERPARTY" means each Lender or any Affiliate of a Lender
counterparty to a Hedge Agreement (including any Person who is a Lender as of
the Closing Date but subsequently, whether before or after entering into a Hedge
Agreement, ceases to be a Lender) including, without limitation, each such
Affiliate that enters into a joinder agreement with the Collateral Agent.
"LETTER OF CREDIT" means a commercial or standby letter of credit
issued or to be issued by Issuing Bank pursuant to this Agreement.
"LETTER OF CREDIT SUBLIMIT" means the lesser of (i) $15,000,000 and
(ii) the aggregate unused amount of the Revolving Commitments then in effect.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Bank and not theretofore reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to subsection
2.4(d)). For purposes of this definition, any amount described in clause (i) or
(ii) of the preceding sentence which is denominated in a currency other than
Dollars shall be valued based on the applicable Exchange Rate for such currency
as of the applicable date of determination.
"LEVERAGE RATIO" means the ratio as of the last day of any Fiscal
Quarter or other date of determination of (i) Consolidated Total Debt as of such
day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period
ending on such date (or if such date of determination is not the last day of a
Fiscal Quarter, for the four-Fiscal Quarters period ending as of the most
recently concluded Fiscal Quarter).
"LIBOR BUSINESS DAY" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR LOANS" means a Loan or any portion thereof bearing interest
by reference to the LIBOR Rate.
"LIBOR PERIOD" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day and ending one, two, three or six months
thereafter, as
19
selected by Company in the applicable Funding Notice or Conversion/Continuation
Notice; provided, that the foregoing provision relating to LIBOR Periods is
subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the date
set forth in clause (i) of the definition of "Revolving Commitment
Termination Date" shall end two (2) LIBOR Business Days prior to such
date;
(c) any LIBOR Period that begins on the last LIBOR 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 LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Company shall select LIBOR Periods so that there shall be no
more than 5 separate LIBOR Loans in existence at any one time; and
(e) no LIBOR Period with respect to any portion of the Term Loans
shall extend beyond the Term Loan Maturity Date.
"LIBOR RATE" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in Dollars for the applicable
LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m. (London time),
on the second full LIBOR Business Day next preceding the first day of such LIBOR
Period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board) that
are required to be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be available to Administrative Agent.
"LIEN" means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and
any lease in the nature thereof) and any
20
option, trust or other preferential arrangement having the practical effect of
any of the foregoing and (ii) in the case of Securities, any purchase option,
call or similar right of a third party with respect to such Securities.
"LOAN" means each of a Term Loan, a Revolving Loan and a Swing Line
Loan.
"MANAGEMENT AGREEMENT" means the management agreement by and among
Berkshire Partners LLC, Weston Presidio Service Company LLC and Company dated
April 30, 2004.
"MANAGEMENT FEES" means the fees paid by Company to Berkshire
Partners LLC and Weston Presidio Service Company LLC under the Management
Agreement in exchange for services provided to Company under the Management
Agreement.
"MANAGEMENT INVESTORS" means the management officers and employees
of Company and its Subsidiaries identified as "Management Investors" on Schedule
1.1(c) annexed hereto.
"MARGIN STOCK" as defined in Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse change in the
condition (business, financial or otherwise), assets or results of operations of
Holdings or any of its Subsidiaries, taken as a whole, or (ii) the impairment
(other than as a result of circumstances of the type described in clause (i)
above) in any material respect of the ability of the Credit Parties, taken as a
whole, to perform, or of Administrative Agent, Collateral Agent or Lenders to
enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Credit Documents
or other agreements evidencing or relating to Indebtedness) for which breach,
nonperformance, cancellation or failure to renew could reasonably be expected to
have a Material Adverse Effect.
"MATERIAL REAL ESTATE ASSET" means (i) any fee-owned Real Estate
Asset (other than the Old ▇▇▇▇▇▇▇ Facility and the Eden Prairie Facility) or
(ii) any Real Estate Asset (other than the Old ▇▇▇▇▇▇▇ Facility and the Eden
Prairie Facility) not included in clause (i) above that the Requisite Lenders
have determined is material to the condition (business, financial or otherwise),
assets or results of operations of Holdings and its Subsidiaries taken as a
whole thereof; provided, however, that (i) no Leasehold Property with respect to
which the aggregate payments under the lease are during any one Fiscal Year less
than $500,000 and (ii) no fee-owned Real Estate Asset having a fair market value
of less than $1,000,000 as of the date of acquisition thereof shall be a
"Material Real Estate Asset".
"MERGER" as defined in the recitals hereto.
21
"MERGER AGREEMENT" means that certain Agreement and Plan of Merger
dated as of March 26, 2004, by and among Holdings, Company and Amscan Holdings.
"MERGER CO." as defined in the recitals hereto.
"MERGER FINANCING REQUIREMENTS" means the amounts necessary (I) to
pay the cash portion of the purchase price to be paid in connection with the
Merger, (II) to repay in full all Indebtedness outstanding under the Existing
Credit Agreement, (III) to redeem all the issued and outstanding preferred stock
of Amscan Holdings, (IV) to purchase and discharge the Existing Notes tendered
pursuant to the Tender Offer or called for redemption on or about the Closing
Date; (V) to pay all other amounts payable as of the Closing Date pursuant to
the Merger Agreement and (VI) to pay Transaction Costs.
"MOODY'S" means ▇▇▇▇▇'▇ Investor Services, Inc.
"MORTGAGE" means a Mortgage substantially in the form of Exhibit J,
as it may be amended, supplemented or otherwise modified from time to time or in
such other form as may be approved by Collateral Agent in its sole discretion,
in each case with such changes thereto as may be recommended by Collateral
Agent's local counsel based on local laws or customary local mortgage or deed of
trust practice. "MORTGAGES" means all such instruments collectively.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance Commissioners,
and any successor thereto.
"NARRATIVE REPORT" means, with respect to the financial statements
for which such narrative report is required, a narrative report describing the
operations of Holdings and its Subsidiaries in the form prepared for
presentation to senior management thereof for the applicable Fiscal Quarter or
Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such period to which such financial statements relate.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an
amount equal to: (i) Cash payments (including any Cash received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by Holdings or any of its
Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs
(including, without limitation, transaction costs) incurred in connection with
such Asset Sale, including (a) all income or gains taxes payable at any time by
the seller as a result of any gain recognized in connection with such Asset
Sale, (b) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale and (c) a reasonable
reserve for any indemnification payments (fixed or contingent) attributable to
seller's indemnities and representations and warranties to purchaser in respect
of such Asset Sale undertaken by Holdings or any of its Subsidiaries in
connection with such Asset Sale.
22
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to: (i)
any Cash payments or proceeds received by Holdings or any of its Subsidiaries
(a) under any casualty insurance policy in respect of a covered loss thereunder
or (b) as a result of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain, condemnation
or otherwise, or pursuant to a sale of any such assets to a purchaser with such
power under threat of such a taking, minus (ii) (a) any actual and reasonable
costs incurred by Holdings or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of Holdings or such Subsidiary in respect
thereof, and (b) any bona fide direct costs incurred in connection with any sale
of such assets as referred to in clause (i)(b) of this definition, including
income taxes payable as a result of any gain recognized in connection therewith
and (c) any amounts required to be applied to the repayment of any Indebtedness
secured by a Lien which is prior to any Liens of the Lenders on the asset or
assets that are subject to the taking, condemnation or casualty but excluding,
however, in each case any payments or proceeds relating to assets having a value
of $750,000 or less in any single transaction or related series of transactions.
"NON-CONSENTING LENDER" as defined in Section 2.23.
"NON-US LENDER" as defined in Section 2.20(c).
"NOTE" means each of a Term Loan Note, a Revolving Loan Note or a
Swing Line Note.
"NOTICE" means each of a Funding Notice, an Issuance Notice, or a
Conversion/Continuation Notice.
"OBLIGATIONS" means all obligations of every nature of each Credit
Party from time to time owed to the Agents, the Lenders or any of them and
Lender Counterparties, under any Credit Document or Hedge Agreement (including,
without limitation, with respect to a Hedge Agreement, obligations owed
thereunder to any person who was a Lender or an Affiliate of a Lender at the
time such Hedge Agreement was entered into), whether for principal, interest
(including interest which, but for the filing of a petition in bankruptcy with
respect to such Credit Party, would have accrued on any Obligation, whether or
not a claim is allowed against such Credit Party for such interest in the
related bankruptcy proceeding), reimbursement of amounts drawn under Letters of
Credit, payments for early termination of Hedge Agreements, fees, expenses,
indemnification or otherwise.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"OFFER" as defined in Section 2.13(c)(ii).
"OFFER LOANS" as defined in Section 2.13(c)(ii).
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer; provided that every
23
Officers' Certificate with respect to the compliance with a condition precedent
to the making of any Revolving Loans hereunder shall include (i) a statement
that the officer or officers making or giving such Officers' Certificate have
read such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion as
to whether or not such condition has been complied with, and (iii) a statement
as to whether, in the opinion of the signers, such condition has been complied
with.
"OLD CHESTER FACILITY" means that certain facility located at ▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"OLD CHESTER SALE AND LEASEBACK" means a sale and leaseback of the
Old Chester Facility.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ACQUISITION" means any acquisition by Company or any of
its Subsidiaries, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, all or substantially all of the Capital
Stock of, or a business line or unit or a division of, any Person; provided,
(i) immediately prior to, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom;
(ii) all transactions in connection therewith shall be
consummated, in all material respects, in accordance with all applicable laws
and in conformity with all applicable Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, all of
the Capital Stock (except for any such Securities in the nature of directors'
qualifying shares required
24
pursuant to applicable law) acquired or otherwise issued by such Person or any
newly formed Subsidiary of Company in connection with such acquisition shall be
owned substantially all by Company or a Subsidiary thereof, and Company shall
have taken, or caused to be taken, as of the date such Person becomes a
Subsidiary of Company, each of the actions set forth in Sections 5.10 and/or
5.11, as applicable;
(iv) Holdings and its Subsidiaries shall be in compliance with
the financial covenants set forth in Section 6.8 on a Pro Forma Basis after
giving effect to such acquisition as of the last day of the Fiscal Quarter most
recently ended;
(v) Company shall have delivered to Administrative Agent at
least ten (10) Business Days prior to such acquisition, a Compliance Certificate
evidencing compliance with Section 6.8 as required under clause (iv) above,
together with (A) all relevant financial information with respect to such
acquired assets, including, without limitation, the aggregate consideration for
such acquisition and any other information required to demonstrate compliance
with clause (iv) above and (B) an Officers' Certificate stating that any related
incurrence of Indebtedness is permitted pursuant to this Agreement; and
(vi) any Person or assets or division as acquired in
accordance herewith shall be in same business or lines of business in which
Holdings and/or its Subsidiaries are engaged as of the Closing Date or similar
or related businesses.
"PERMITTED LIENS" means each of the Liens permitted pursuant to
Section 6.2.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PHASE I REPORT" means, with respect to any Facility, the reports
listed on Schedule 1.1(d) hereto and a report that (i) conforms to the ASTM
Standard Practice for Environmental Site Assessments: Phase I Environmental Site
Assessment Process, E 1527, (ii) was conducted no more than six months prior to
the date such report is required to be delivered hereunder, by one or more
environmental consulting firms reasonably satisfactory to Administrative Agent,
(iii) includes an assessment of asbestos-containing materials at such Facility,
(iv) is accompanied by (a) an estimate of the reasonable worst-case cost of
investigating and remediating any Hazardous Materials Activity identified in the
Phase I Report as giving rise to an actual or potential material violation of
any Environmental Law or as presenting a material risk of giving rise to a
material Environmental Claim, and (b) a current compliance audit setting forth
an assessment of Company's, its Subsidiaries' and such Facility's current and
past compliance with Environmental Laws and an estimate of the cost of
rectifying any non-compliance with current Environmental Laws identified therein
and the cost of compliance with reasonably anticipated future Environmental Laws
identified therein.
25
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement to be executed by Company and each Guarantor substantially in the form
of Exhibit I, as it may be amended, supplemented or otherwise modified from time
to time.
"PRINCIPAL OFFICE" means, for each of Administrative Agent, Swing
Line Lender and Issuing Bank, such Person's "Principal Office" as set forth on
Appendix B, or such other office as such Person may from time to time designate
in writing to Company, Administrative Agent and each Lender.
"PROJECTIONS" as defined in Section 4.8.
"PRO FORMA BASIS" means with respect to determining compliance with
the financial covenants set forth in Section 6.8 after giving effect to
Permitted Acquisitions and incurrence or assumption of any Indebtedness and
Asset Sales (each, a "SUBJECT TRANSACTION") in connection therewith,
Consolidated Adjusted EBITDA shall be calculated with respect to such period on
a pro forma basis (including pro forma adjustments arising out of events which
are directly attributable to such Subject Transactions or which are to be
implemented by the business subject to the Subject Transaction or by the Company
and its Subsidiaries as a result of the Subject Transaction, are factually
supportable and are expected to have a continuing impact, which would include
cost savings resulting from head count reduction, closure of facilities and
similar restructuring charges and raw material and other cost savings expected
to be realized in connection with the Subject Transaction, which pro forma
adjustments are certified by an Officers' Certificate and which are determined
(i) on a basis consistent with Article 11 of Regulation S-X promulgated under
the Securities Act and as interpreted by the staff of the Securities and
Exchange Commission or (ii) solely in the case of additional pro forma
adjustments to Consolidated Adjusted EBITDA not determined in a manner
consistent with clause (i) above (for all Subject Transactions during the period
of determination) not to exceed 5.0% of pro forma Consolidated Adjusted EBITDA
(as reformulated) for the period of determination, on such other basis as may be
certified by Officers' Certificate to be in compliance with the requirements of
this definition) using the historical financial statements of any business so
acquired or to be acquired or sold or to be sold and the consolidated financial
statements of Company and its Subsidiaries which shall be reformulated as if
such Subject Transaction, and any Indebtedness incurred or repaid in connection
therewith, had been consummated or incurred or repaid at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Loans incurred
during such period). In addition, in calculating compliance with Section 6.8,
discontinued operations will be given pro forma effect as follows: (1)
Consolidated Adjusted EBITDA attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of or
discontinued on or prior to the calculation date, shall be excluded, and (2)
Consolidated Interest Expense attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of on
or prior to the calculation date, shall be excluded, but only to the extent that
the obligations giving rise to such Consolidated Interest Expense will not be
obligations of the Company or any of its Subsidiaries following the calculation
date.
26
For purposes of such calculations any Indebtedness incurred under
Section 6.1(n) or otherwise incurred or assumed in connection with a Permitted
Acquisitions subsequent to the beginning of the four quarter calculation period,
but on or prior to the date of calculation of the Leverage Ratio or the Senior
Leverage Ratio, as the case may be, shall be deemed to have been incurred or
assumed at the beginning of such four quarter calculation period. In addition,
Permitted Acquisitions that have been made or are being made by the Company or
any of its Subsidiaries during the four-quarter reference period or subsequent
to such reference period and on or prior to the calculation date (including
through mergers or consolidations and including any related financing
transactions) shall be deemed to have occurred on the first day of the
four-quarter reference period.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Term Loan of any Lender, the
percentage obtained by dividing (a) the Term Loan Exposure of that Lender by (b)
the aggregate Term Loan Exposure of all Lenders; and (ii) with respect to all
payments, computations and other matters relating to the Revolving Commitment or
Revolving Loans of any Lender or any Letters of Credit issued or participations
purchased therein by any Lender or any participations in any Swing Line Loans
purchased by any Lender, the percentage obtained by dividing (a) the Revolving
Exposure of that Lender by (b) the aggregate Revolving Exposure of all Lenders.
For all other purposes with respect to each Lender, "Pro Rata Share" means the
percentage obtained by dividing (A) an amount equal to the sum of the Term Loan
Exposure and the Revolving Exposure of that Lender, by (B) an amount equal to
the sum of the aggregate Term Loan Exposure and the aggregate Revolving Exposure
of all Lenders.
"REAL ESTATE ASSET" means, at any time of determination, any
interest (fee, leasehold or otherwise) then owned by any Credit Party in any
real property.
"RECORD DOCUMENT" means, with respect to any Leasehold Property, (i)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (ii)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give constructive notice upon recordation and otherwise in form reasonably
satisfactory to Collateral Agent.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document has been recorded in all places necessary or
desirable, in Administrative Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrancers of
the affected real property.
"REFINANCED TERM LOAN" as defined in Section 10.5(e).
"REFUNDED SWING LINE LOANS" as defined in Section 2.3(b)(iv).
"REGISTER" as defined in Section 2.7(b).
27
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" as defined in Section 2.4(d).
"RELATED AGREEMENTS" means the Merger Agreement, the Management
Agreement, the Senior Subordinated Note Indenture, the Stockholders Agreement
and the Tender Offer Documents.
"RELATED FUND" means, with respect to any Lender that is an
investment fund, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of any Hazardous Material into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Material), including the
movement of any Hazardous Material through the air, soil, surface water or
groundwater.
"REPLACEMENT LENDER" as defined in Section 2.23.
"REPLACEMENT TERM LOANS" as defined in Section 10.5(e).
"REQUISITE CLASS LENDERS" means, at any time of determination, (i)
for the Class of Lenders having Term Loan Exposure, Lenders holding more than
50% of the aggregate Term Loan Exposure of all Lenders; and (ii) for the Class
of Lenders having Revolving Exposure, Lenders holding more than 50% of the
aggregate Revolving Exposure of all Lenders.
"REQUISITE LENDERS" means one or more Lenders having or holding Term
Loan Exposure and/or Revolving Exposure and representing more than 50% of the
sum of (i) the aggregate Term Loan Exposure of all Lenders and (ii) the
aggregate Revolving Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Holdings or Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class; (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Holdings or Company now or hereafter outstanding; (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of Holdings or Company now
or hereafter outstanding; and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to the Senior Subordinated Notes.
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"REVOLVING COMMITMENT" means the commitment of a Lender to make or
otherwise fund any Revolving Loan and to acquire participations in Letters of
Credit and Swing Line Loans hereunder and "REVOLVING COMMITMENTS" means such
commitments of all Lenders in the aggregate. The amount of each Lender's
Revolving Commitment, if any, is set forth on Appendix A-2 or in the applicable
Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Revolving Commitments
as of the Closing Date is $50,000,000.
"REVOLVING COMMITMENT PERIOD" means the period from the Closing Date
to but excluding the Revolving Commitment Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to occur
of (i) July 25, 2004, if the full amount of the Term Loans are not made on or
before that date; (ii) ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) the date the Revolving Commitments
are permanently reduced to zero pursuant to Section 2.13(b) or 2.14, and (iv)
the date of the termination of the Revolving Commitments pursuant to Section
8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of any
date of determination, (i) prior to the termination of the Revolving
Commitments, that Lender's Revolving Commitment; and (ii) after the termination
of the Revolving Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender, (b) in the event such Lender is
the Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (net of any participations by Lenders in such
Letters of Credit or any unreimbursed drawings thereunder), (c) the aggregate
amount of all participations by that Lender in any outstanding Letters of Credit
or any unreimbursed drawing under any Letter of Credit, (d) in the event such
Lender is the Swing Line Lender, the aggregate outstanding principal amount of
all Swing Line Loans (net of any participations therein by other Lenders), and
(e) the aggregate amount of all participations therein by that Lender in any
outstanding Swing Line Loans.
"REVOLVING LOAN" means a Loan made by a Lender to Company pursuant
to Section 2.2(b).
"REVOLVING LOAN NOTE" means a promissory note in the form of Exhibit
B-2, as it may be amended, supplemented or otherwise modified from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"SECURED PARTIES" has the meaning assigned to that term in the
Pledge and Security Agreement.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments
29
commonly known as "securities" or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing; provided that "Securities" shall not include any earnout agreement or
obligation or any employee bonus or other incentive compensation plan or
agreement.
"SELLERS" means GS Capital Partners II, L.P., GS Capital Partners II
Offshore, L.P., ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
L.P., Bridge Street Fund 1997, L.P. and certain other shareholders of Amscan
Holdings.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture pursuant to
which the Senior Subordinated Notes are issued, as such indenture may hereafter
be amended from time to time to the extent permitted under subsection 6.15.
"SENIOR SUBORDINATED NOTES" means the $175,000,000 in the aggregate
principal amount of 8.75% Senior Subordinated Notes due 2014 of Company issued
pursuant to the Senior Subordinated Note Indenture.
"SOLVENCY CERTIFICATE" means a Solvency Certificate of the chief
financial officer of Company substantially in the form of Exhibit G-2.
"SOLVENT" means, with respect to any Credit Party, that as of the
date of determination both (i) (a) the sum of such Credit Party's debt
(including contingent liabilities) does not exceed the present fair saleable
value of such Credit Party's present assets; (b) such Credit Party's capital is
not unreasonably small in relation to its business as contemplated on the
Closing Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Person is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No. 5).
"SPONSOR" means collectively Berkshire and Weston.
"SPONSOR EQUITY CONTRIBUTIONS" means equity contributions made by
Sponsor or its Affiliates and any other stockholder of Holdings on the Closing
Date to Holdings.
"STOCKHOLDERS AGREEMENT" means the stockholders agreement dated
April 30, 2004 by and among Holdings and the Stockholders (as defined therein).
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"SUBORDINATED INDEBTEDNESS" means (i) Indebtedness of Company
evidenced by the Senior Subordinated Notes and (ii) any other Indebtedness of
Company subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in form
and substance satisfactory to Administrative Agent and Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
"SWING LINE LENDER" means GECC in its capacity as Swing Line Lender
hereunder, together with its permitted successors and assigns in such capacity.
"SWING LINE LOAN" means a Loan made by Swing Line Lender to Company
pursuant to Section 2.3.
"SWING LINE NOTE" means a promissory note in the form of Exhibit
B-3, as it may be amended, supplemented or otherwise modified from time to time.
"SWING LINE SUBLIMIT" means the lesser of (i) $2,000,000, and (ii)
the aggregate unused amount of Revolving Commitments then in effect.
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided, "Tax on the overall net income" of a Person
shall be (i) construed as a reference to a tax imposed by the jurisdiction in
which that Person is organized or any political subdivision thereof or in which
that Person's applicable principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business (a "RELEVANT TAX
JURISDICTION") on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income (or franchise or other taxes imposed
in lieu thereof), profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the case of a
Lender, its applicable lending office) and (ii) include all franchise taxes,
branch taxes, taxes on doing business or taxes on the overall capital or net
worth of any such Person (and/or in the case of a Lender, its Principal Office),
in each case imposed by any Relevant Tax Jurisdiction in lieu of income, profits
or gains taxes.
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"TENDER OFFER" means the offer by Amscan Holdings to purchase 100%
of the outstanding Existing Notes pursuant to the Tender Offer Documents.
"TENDER OFFER DOCUMENTS" means the Offer to Purchase and Consent
Solicitation Statement, dated April 2, 2004.
"TERM LOAN" means a Loan made by a Lender to Company pursuant to
Section 2.1(b).
"TERM LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate. The amount of each Lender's Term Loan Commitment, if any, is set
forth on Appendix A-1 or in the applicable Assignment Agreement, subject to any
adjustment or reduction pursuant to the terms and conditions hereof. The
aggregate amount of the Term Loan Commitments as of the Closing Date is
$205,000,000.
"TERM LOAN EXPOSURE" means, with respect to any Lender, as of any
date of determination, the outstanding principal amount of the Term Loans of
such Lender; provided, at any time prior to the making of the Term Loans, the
Term Loan Exposure of any Lender shall be equal to such Lender's Term Loan
Commitment.
"TERM LOAN MATURITY DATE" means the earlier of (i) April 30, 2012,
and (ii) the date that all Term Loans shall become due and payable in full
hereunder, whether by acceleration or otherwise.
"TERM LOAN NOTE" means a promissory note in the form of Exhibit B-1,
as it may be amended, supplemented or otherwise modified from time to time.
"TERMINATED LENDER" as defined in Section 2.23.
"TITLE POLICY" shall have the meaning set forth in Section
3.1(f)(iv).
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing Issuing Bank for any
amount drawn under any Letter of Credit, but not yet so applied), (ii) the
aggregate principal amount of all outstanding Swing Line Loans, and (iii) the
Letter of Credit Usage.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Company on or before November 30, 2004 in connection with the transactions
contemplated by the Credit Documents and the Related Agreements.
"TYPE OF LOAN" means (i) with respect to either Term Loans or
Revolving Loans, a Index Rate Loan or a LIBOR Loan, and (ii) with respect to
Swing Line Loans, a Index Rate Loan.
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"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNREINVESTED NET ASSET SALE PROCEEDS" shall have the meaning set
forth in Section 2.14(a).
"WESTON" means Weston Presidio Service Company LLC and shall include
any fund affiliated with Weston Presidio Service Company LLC.
1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the Historical Financial Statements for the period
ending December 31, 2003.
1.3. INTERPRETATION, ETC. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1. TERM LOANS.
(a) Term Loan Commitments. Subject to the terms and conditions
hereof, each Lender severally agrees to make, on the Closing Date, a Term Loan
to Company in an amount equal to such Lender's Term Loan Commitment. Company may
make only one borrowing under the Term Loan Commitments which shall be on the
Closing Date. Any amount borrowed under this Section 2.1(b) and subsequently
repaid or prepaid may not be reborrowed. Subject to Sections 2.13(a) and 2.14,
all amounts owed hereunder with respect to the Term Loans shall be paid in full
no later than the Term Loan Maturity Date. Each Lender's Term Loan Commitment
shall terminate immediately and without further action on the Closing Date after
giving effect to the funding of such Lender's Term Loan Commitment on such date.
(b) Borrowing Mechanics for Term Loans.
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(i) Company shall deliver to Administrative Agent a fully
executed Closing Date Certificate (which shall be deemed to be a Funding
Notice with respect to the Term Loans for all purposes hereof) no later
than one (1) day prior to the Closing Date. Promptly upon receipt by
Administrative Agent of the Closing Date Certificate, Administrative Agent
shall notify each Lender of the proposed borrowing.
(ii) Each Lender shall make its Term Loan available to
Administrative Agent not later than 12:00 p.m. (New York City time) on the
Closing Date, by wire transfer of same day funds in Dollars, at
Administrative Agent's Principal Office. Upon satisfaction or waiver of
the conditions precedent specified herein, Administrative Agent shall make
the proceeds of the Term Loans available to Company on the Closing Date by
causing an amount of same day funds in Dollars equal to the proceeds of
all such Loans received by Administrative Agent from Lenders to be
credited to the account of Company at Administrative Agent's Principal
Office or to such other account as may be designated in writing to
Administrative Agent by Company.
2.2. REVOLVING LOANS.
(a) Revolving Commitments. During the Revolving Commitment Period,
subject to the terms and conditions hereof, each Lender severally agrees to make
Revolving Loans to Company in the aggregate amount up to but not exceeding such
Lender's Revolving Commitment; provided, after giving effect to the making of
any Revolving Loans in no event shall the Total Utilization of Revolving
Commitments exceed the Revolving Commitments then in effect. Amounts borrowed
pursuant to this Section 2.2(a) may be repaid and reborrowed during the
Revolving Commitment Period. Each Lender's Revolving Commitment shall expire on
the Revolving Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the Revolving
Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Except pursuant to 2.4(d), Revolving Loans that are Index
Rate Loans shall be made in an aggregate minimum amount of $100,000 and
integral multiples of $100,000 in excess of that amount, and Revolving
Loans that are LIBOR Loans shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of that amount.
(ii) Whenever Company desires that Lenders make Revolving
Loans, Company shall deliver to Administrative Agent a fully executed and
delivered Funding Notice no later than 10:00 a.m. (New York City time) at
least three Business Days in advance of the proposed Credit Date in the
case of a LIBOR Loan, and at least one Business Day in advance of the
proposed Credit Date in the case of a Revolving Loan that is a Index Rate
Loan. Except as otherwise provided herein, a Funding Notice for a
Revolving Loan that is a LIBOR Loan shall be irrevocable on and after the
related Interest Rate Determination Date, and Company shall be bound to
make a borrowing in accordance therewith.
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(iii) Notice of receipt of each Funding Notice in respect of
Revolving Loans, together with the amount of each Lender's Pro Rata Share
thereof, if any, together with the applicable interest rate, shall be
provided by Administrative Agent to each applicable Lender by
telefacsimile with reasonable promptness, but (provided Administrative
Agent shall have received such notice by 10:00 a.m. (New York City time))
not later than 2:00 p.m. (New York City time) on the same day as
Administrative Agent's receipt of such Notice from Company.
(iv) Each Lender shall make the amount of its Revolving Loan
available to Administrative Agent not later than 12:00 p.m. (New York City
time) on the applicable Credit Date by wire transfer of same day funds in
Dollars, at the Administrative Agent's Principal Office. Except as
provided herein, upon satisfaction or waiver of the conditions precedent
specified herein, Administrative Agent shall make the proceeds of such
Revolving Loans available to Company on the applicable Credit Date by
causing an amount of same day funds in Dollars equal to the proceeds of
all such Revolving Loans received by Administrative Agent from Lenders to
be credited to the account of Company at the Administrative Agent's
Principal Office or such other account as may be designated in writing to
Administrative Agent by Company.
2.3. SWING LINE LOANS.
(a) Swing Line Loans Commitments. During the Revolving
Commitment Period, subject to the terms and conditions hereof, Swing Line Lender
hereby agrees to make Swing Line Loans to Company in the aggregate amount up to
but not exceeding the Swing Line Sublimit; provided, after giving effect to the
making of any Swing Line Loan, in no event shall the Total Utilization of
Revolving Commitments exceed the Revolving Commitments then in effect. Amounts
borrowed pursuant to this Section 2.3 may be repaid and reborrowed during the
Revolving Commitment Period. Swing Line Lender's Revolving Commitment shall
expire on the Revolving Commitment Termination Date and all Swing Line Loans and
all other amounts owed hereunder with respect to the Swing Line Loans and the
Revolving Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Swing Line Loans.
(i) Swing Line Loans shall be made in an aggregate
minimum amount of $100,000 and integral multiples of $100,000 in excess of
that amount.
(ii) Whenever Company desires that Swing Line Lender
make a Swing Line Loan, Company shall deliver to Administrative Agent a
Funding Notice no later than 12:00 p.m. (New York City time) on the
proposed Credit Date.
(iii) Swing Line Lender shall make the amount of its
Swing Line Loan available to Administrative Agent not later than 2:00
p.m.(New York City time) on the applicable Credit Date by wire transfer of
same day funds in Dollars, at the Administrative Agent's Principal Office.
Except as provided herein, upon satisfaction or
35
waiver of the conditions precedent specified herein, Administrative Agent
shall make the proceeds of such Swing Line Loans available to Company on
the applicable Credit Date by causing an amount of same day funds in
Dollars equal to the proceeds of all such Swing Line Loans received by
Administrative Agent from Swing Line Lender to be credited to the account
of Company at the Administrative Agent's Principal Office, or to such
other account as may be designated in writing to Administrative Agent by
Company.
(iv) With respect to any Swing Line Loans which have not
been voluntarily prepaid by Company pursuant to Section 2.13, Swing Line
Lender may at any time in its sole and absolute discretion, deliver to
Administrative Agent (with a copy to Company), no later than 11:00 a.m.
(New York City time) at least one (1) Business Day in advance of the
proposed Credit Date, a notice (which shall be deemed to be a Funding
Notice given by Company) requesting that each Lender holding a Revolving
Commitment make Revolving Loans that are Index Rate Loans to Company on
such Credit Date in an amount equal to the amount of such Swing Line Loans
(the "REFUNDED SWING LINE LOANS") outstanding on the date such notice is
given which the Swing Line Lender requests Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding, (1) the
proceeds of such Revolving Loans made by the Lenders other than Swing Line
Lender shall be immediately delivered by the Administrative Agent to Swing
Line Lender (and not to Company) and applied to repay a corresponding
portion of the Refunded Swing Line Loans and (2) on the day such Revolving
Loans are made, Swing Line Lender's Pro Rata Share of the Refunded Swing
Line Loans shall be deemed to be paid with the proceeds of a Revolving
Loan made by Swing Line Lender to Company, and such portion of the Swing
Line Loans deemed to be so paid shall no longer be outstanding as Swing
Line Loans and shall no longer be due under the Swing Line Note of Swing
Line Lender but shall instead constitute part of Swing Line Lender's
outstanding Revolving Loans to Company and shall be due under the
Revolving Loan Note issued by Company to Swing Line Lender. Company hereby
authorizes Administrative Agent and Swing Line Lender to charge Company's
accounts with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line
Lender the amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by Lenders, including the Revolving
Loan deemed to be made by the Swing Line Lender, are not sufficient to
repay in full the Refunded Swing Line Loans. If any portion of any such
amount paid (or deemed to be paid) to Swing Line Lender should be
recovered by or on behalf of Company from Swing Line Lender in bankruptcy,
by assignment for the benefit of creditors or otherwise, the loss of the
amount so recovered shall be ratably shared among all Lenders in the
manner contemplated by Section 2.17.
(v) If for any reason Revolving Loans are not made pursuant to
Section 2.3(b)(iv) in an amount sufficient to repay any amounts owed to
Swing Line Lender in respect of any outstanding Swing Line Loans on or
before the third Business Day after demand for payment thereof by Swing
Line Lender, each Lender holding a Revolving Commitment shall be deemed
to, and hereby agrees to, have purchased a participation in such
outstanding Swing Line Loans, and in an amount equal to its Pro Rata Share
of the
36
applicable unpaid amount together with accrued interest thereon. Upon one
(1) Business Day's notice from Swing Line Lender, each Lender holding a
Revolving Commitment shall deliver to Swing Line Lender an amount equal to
its respective participation in the applicable unpaid amount in same day
funds at the Principal Office of Swing Line Lender. In order to evidence
such participation each Lender holding a Revolving Commitment agrees to
enter into a participation agreement at the request of Swing Line Lender
in form and substance reasonably satisfactory to Swing Line Lender. In the
event any Lender holding a Revolving Commitment fails to make available to
Swing Line Lender the amount of such Lender's participation as provided in
this paragraph, Swing Line Lender shall be entitled to recover such amount
on demand from such Lender together with interest thereon for three
Business Days at the rate customarily used by Swing Line Lender for the
correction of errors among banks and thereafter at the Index Rate, as
applicable.
(vi) Notwithstanding anything contained herein to the
contrary, (1) each Lender's obligation to make Revolving Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and shall not be
affected by any circumstance, including without limitation (A) any
set-off, counterclaim, recoupment, defense or other right which such
Lender may have against Swing Line Lender, any Credit Party or any other
Person for any reason whatsoever; (B) the occurrence or continuation of a
Default or Event of Default; (C) any adverse change in the business,
operations, properties, assets, condition (financial or otherwise) or
prospects of any Credit Party; (D) any breach of this Agreement or any
other Credit Document by any party thereto; or (E) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing; provided that such obligations of each Lender are subject to
the condition that Swing Line Lender believed in good faith that all
conditions under Section 3.2 to the making of the applicable Refunded
Swing Line Loans or other unpaid Swing Line Loans, were satisfied at the
time such Refunded Swing Line Loans or unpaid Swing Line Loans were made,
or the satisfaction of any such condition not satisfied had been waived by
Requisite Lenders prior to or at the time such Refunded Swing Line Loans
or other unpaid Swing Line Loans were made; and (2) Swing Line Lender
shall not be obligated to make any Swing Line Loans (A) if it has elected
not to do so after the occurrence and during the continuation of a Default
or Event of Default or (B) at a time when a Funding Default exists unless
Swing Line Lender has entered into arrangements satisfactory to it and
Company to eliminate Swing Line Lender's risk with respect to the
Defaulting Lender's participation in such Swing Ling Loan, including by
cash collateralizing such Defaulting Lender's Pro Rata Share of the
outstanding Swing Line Loans.
2.4. ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS
THEREIN.
(a) Letters of Credit. During the Revolving Commitment Period,
subject to the terms and conditions hereof, Issuing Bank agrees to issue Letters
of Credit for the account of Company in the aggregate amount up to but not
exceeding the Letter of Credit Sublimit;
37
provided, (i) the stated amount of each Letter of Credit shall not be less than
$10,000 or such lesser amount as is acceptable to Issuing Bank; (ii) after
giving effect to such issuance, in no event shall the Total Utilization of
Revolving Commitments exceed the Revolving Commitments then in effect; (iii)
after giving effect to such issuance, in no event shall the Letter of Credit
Usage exceed the Letter of Credit Sublimit then in effect; (iv) in no event
shall any standby Letter of Credit have an expiration date later than the
earlier of (1) the Revolving Commitment Termination Date and (2) the date which
is one year from the date of issuance of such standby Letter of Credit; and (v)
in no event shall any commercial Letter of Credit (x) have an expiration date
later than the earlier of (1) the Revolving Loan Commitment Termination Date and
(2) the date which is 180 days from the date of issuance of such commercial
Letter of Credit or (y) be issued if such commercial Letter of Credit is
otherwise unacceptable to the Issuing Bank in its reasonable discretion. Subject
to the foregoing, Issuing Bank may agree that a standby Letter of Credit will
automatically be extended for one or more successive periods not to exceed one
year each, unless Issuing Bank elects not to extend for any such additional
period; provided, Issuing Bank shall not extend any such Letter of Credit if it
has received written notice that an Event of Default has occurred and is
continuing at the time Issuing Bank must elect to allow such extension;
provided, further, in the event a Funding Default exists, Issuing Bank shall not
be required to issue any Letter of Credit unless Issuing Bank has entered into
arrangements satisfactory to it and Company to eliminate Issuing Bank's risk
with respect to the participation in Letters of Credit of the Defaulting Lender,
including by cash collateralizing such Defaulting Lender's Pro Rata Share of the
Letter of Credit Usage.
Company acknowledges and confirms that Issuing Bank has issued
Existing Letters of Credit in the respective principal amounts outstanding as of
the Closing Date set forth opposite its name on Schedule 1.1(b) annexed hereto.
Company hereby represents, warrants, agrees, covenants and (1) reaffirms that it
is not aware of any defense, set off, claim or counterclaim against any Agent or
Issuing Bank in regard to its Obligations in respect of such Existing Letters of
Credit and (2) reaffirms its obligation to pay such Existing Letters of Credit
in accordance with the terms and conditions of this Agreement and the other
Credit Documents. Based on the foregoing, Company and each Lender agree that,
other than any amounts owed (whether or not presently due and payable, and
including all interest and fees accrued to the Closing Date) by Company to
Issuing Bank or in respect of the Existing Letters of Credit as of the Closing
Date, all Existing Letters of Credit as of the Closing Date shall, as of the
Closing Date, be converted to, maintained as, and owed by Company under or in
respect of Letters of Credit hereunder and shall constitute Letter of Credit
Usage hereunder for purposes of the Letter of Credit Sublimit.
(b) Notice of Issuance. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent an Issuance Notice no
later than 12:00 p.m. (New York City time) at least three Business Days (in the
case of standby letters of credit) or five Business Days (in the case of
commercial letters of credit), or in each case such shorter period as may be
agreed to by Issuing Bank in any particular instance, in advance of the proposed
date of issuance. Upon satisfaction or waiver of the conditions set forth in
Section 3.2, Issuing Bank shall issue the requested Letter of Credit only in
accordance with Issuing Bank's standard operating procedures. Upon the issuance
of any Letter of Credit or amendment or modification to a Letter of Credit,
Issuing Bank shall promptly notify each Lender of such issuance, which notice
shall be accompanied by a copy of such Letter of Credit or amendment or
modification to
38
a Letter of Credit and the amount of such Lender's respective participation in
such Letter of Credit pursuant to Section 2.4(e). In the event of any conflict
between the terms of a Letter of Credit application and this Agreement, the
terms of this Agreement shall govern and control.
(c) Responsibility of Issuing Bank With Respect to Requests for
Drawings and Payments. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, Issuing Bank shall be responsible
only to examine the documents delivered under such Letter of Credit with
reasonable care so as to ascertain whether they appear on their face to be in
accordance with the terms and conditions of such Letter of Credit. As between
Company and Issuing Bank, Company assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit issued by Issuing Bank, by the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, Issuing Bank shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of Issuing Bank, including any Governmental Acts; and none of the above
shall affect or impair, or prevent the vesting of, any of Issuing Bank's rights
or powers hereunder. Without limiting the foregoing and in furtherance thereof,
any action taken or omitted by Issuing Bank under or in connection with the
Letters of Credit or any documents and certificates delivered by it thereunder,
if taken or omitted in good faith, shall not give rise to any liability on the
part of Issuing Bank to Company. Notwithstanding anything to the contrary
contained in this Section 2.4(c), Company shall retain any and all rights it may
have against Issuing Bank for any liability arising solely out of the gross
negligence or willful misconduct of Issuing Bank.
(d) Reimbursement by Company of Amounts Drawn or Paid Under Letters
of Credit. In the event Issuing Bank has determined to honor a drawing under a
Letter of Credit, it shall immediately notify Company and Administrative Agent,
and Company shall reimburse Issuing Bank on or before the Business Day
immediately following the date on which such drawing is honored (the
"REIMBURSEMENT DATE") in an amount in Dollars (which amount, in the case of a
drawing under a Letter of Credit which is denominated in a currency other than
Dollars, shall be calculated by reference to the applicable Exchange Rate) and
in same day funds equal to the amount of such honored drawing; provided,
anything contained herein to the contrary notwithstanding, (i) unless Company
shall have notified Administrative Agent and Issuing Bank prior to 10:00 a.m.
(New York City time) on the date such drawing is honored that Company intends to
reimburse Issuing Bank for the amount of such honored drawing with funds
39
other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Funding Notice to Administrative Agent requesting Lenders to make
Revolving Loans that are Index Rate Loans on the Reimbursement Date in an amount
in Dollars (which amount, in the case of a drawing under a Letter of Credit
which is denominated in a currency other than Dollars, shall be calculated by
reference to the applicable Exchange Rate) equal to the amount of such honored
drawing, and (ii) subject to satisfaction or waiver of the conditions specified
in Section 3.2, Lenders shall, on the Reimbursement Date, make Revolving Loans
that are Index Rate Loans in the amount of such honored drawing, the proceeds of
which shall be applied directly by Administrative Agent to reimburse Issuing
Bank for the amount of such honored drawing; and provided further, if for any
reason proceeds of Revolving Loans are not received by Issuing Bank on the
Reimbursement Date in an amount equal to the amount of such honored drawing,
Company shall reimburse Issuing Bank, on demand, in an amount in same day funds
equal to the excess of the amount of such honored drawing over the aggregate
amount of such Revolving Loans, if any, which are so received. Nothing in this
Section 2.4(d) shall be deemed to relieve any Lender from its obligation to make
Revolving Loans on the terms and conditions set forth herein, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this Section 2.4(d).
(e) Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Commitment shall be deemed to have purchased, and hereby agrees to
irrevocably purchase, from Issuing Bank a participation in such Letter of Credit
and any drawings honored thereunder in an amount equal to such Lender's Pro Rata
Share (with respect to the Revolving Commitments) of the maximum amount which is
or at any time may become available to be drawn thereunder. In the event that
Company shall fail for any reason to reimburse Issuing Bank as provided in
Section 2.4(d), Issuing Bank shall promptly notify each Lender of the
unreimbursed amount of such honored drawing and of such Lender's respective
participation therein based on such Lender's Pro Rata Share of the Revolving
Commitments. Each Lender shall make available to Issuing Bank an amount equal to
its respective participation, in Dollars (calculated in the case of a drawing of
a Letter of Credit denominated in a currency other than Dollars, by reference to
the applicable Exchange Rate) and in same day funds, at the office of Issuing
Bank specified in such notice, not later than 12:00 p.m. (New York City time) on
the first Business Day (under the laws of the jurisdiction in which such office
of Issuing Bank is located) after the date notified by Issuing Bank. In the
event that any Lender fails to make available to Issuing Bank on such Business
Day the amount of such Lender's participation in such Letter of Credit as
provided in this Section 2.4(e), Issuing Bank shall be entitled to recover such
amount on demand from such Lender together with interest thereon for three
Business Days at the rate customarily used by Issuing Bank for the correction of
errors among banks and thereafter at the Index Rate. Nothing in this Section
2.4(e) shall be deemed to prejudice the right of any Lender to recover from
Issuing Bank any amounts made available by such Lender to Issuing Bank pursuant
to this Section in the event that it is determined that the payment with respect
to a Letter of Credit in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of Issuing Bank.
In the event Issuing Bank shall have been reimbursed by other Lenders pursuant
to this Section 2.4(e) for all or any portion of any drawing honored by Issuing
Bank under a Letter of Credit, such Issuing Bank shall distribute to each Lender
which has paid all amounts payable by it under this Section 2.4(e) with respect
to such honored drawing such
40
Lender's Pro Rata Share of all payments subsequently received by Issuing Bank
from Company in reimbursement of such honored drawing when such payments are
received. Any such distribution shall be made to a Lender at its primary address
set forth below its name on Appendix B or at such other address as such Lender
may request.
(f) Obligations Absolute. The obligation of Company to reimburse
Issuing Bank for drawings honored under the Letters of Credit issued by it and
to repay any Revolving Loans made by Lenders pursuant to Section 2.4(d) and the
obligations of Lenders under Section 2.4(e) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms hereof under
all circumstances including any of the following circumstances: (i) any lack of
validity or enforceability of any Letter of Credit; (ii) the existence of any
claim, set-off, defense or other right which Company or any Lender may have at
any time against a beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), Issuing Bank, Lender or any
other Person or, in the case of a Lender, against Company, whether in connection
herewith, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Company or one of its Subsidiaries
and the beneficiary for which any Letter of Credit was procured); (iii) any
draft or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) payment by Issuing Bank
under any Letter of Credit against presentation of a draft or other document
which does not substantially comply with the terms of such Letter of Credit; (v)
any adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries;
(vi) any breach hereof or any other Credit Document by any party thereto; (vii)
any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing; or (viii) the fact that an Event of Default or a Default shall
have occurred and be continuing; provided, in each case, that payment by Issuing
Bank under the applicable Letter of Credit shall not have constituted gross
negligence or willful misconduct of Issuing Bank under the circumstances in
question.
(g) Indemnification. Without duplication of any obligation of
Company under Section 10.2 or 10.3, in addition to amounts payable as provided
herein, Company hereby agrees to protect, indemnify, pay and save harmless
Issuing Bank from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which Issuing
Bank may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit by Issuing Bank, other than as a result of the
gross negligence or willful misconduct of Issuing Bank, (ii) the wrongful
dishonor by Issuing Bank of a proper demand for payment under any Letter of
Credit issued by it or (iii) the failure of Issuing Bank to honor a drawing
under any such Letter of Credit as a result of any Governmental Act.
2.5. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all participations
purchased, by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder or purchase a participation required
41
hereby nor shall any Term Loan Commitment or any Revolving Commitment of any
Lender be increased or decreased as a result of a default by any other Lender in
such other Lender's obligation to make a Loan requested hereunder or purchase a
participation required hereby.
(b) Availability of Funds. Unless Administrative Agent shall have
been notified by any Lender prior to the applicable Credit Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender's Loan requested on such Credit Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on such
Credit Date and Administrative Agent may, in its sole discretion, but shall not
be obligated to, make available to Company a corresponding amount on such Credit
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Index Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor, Administrative
Agent shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Credit Date until the date such amount is paid to
Administrative Agent, at the rate payable hereunder for Index Rate Loans for
such Class of Loans. Nothing in this Section 2.5(b) shall be deemed to relieve
any Lender from its obligation to fulfill its Term Loan Commitments and
Revolving Commitments hereunder or to prejudice any rights that Company may have
against any Lender as a result of any default by such Lender hereunder.
2.6. USE OF PROCEEDS. The proceeds of the Term Loans and up to
$27,000,000 of the Revolving Loans, if any, made on the Closing Date shall be
applied by Company to pay a portion of the Merger Financing Requirements.
Revolving Loans, Swing Line Loans and Letters of Credit made after the Closing
Date shall be applied by Company for working capital and general corporate
purposes of Company which may include Permitted Acquisitions and the making of
intercompany loans to any of Company's wholly-owned Subsidiaries, in accordance
with Section 6.1(b), for their own working capital and general corporate
purposes; provided, however, that in no event will the proceeds of Revolving
Loans be used for the purposes of repurchasing Term Loans as permitted under
Section 2.13(c) hereof. No portion of the proceeds of any Credit Extension shall
be used in any manner that causes or might cause such Credit Extension or the
application of such proceeds to violate Regulation T, Regulation U or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation thereof or to violate the Exchange Act.
2.7. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Indebtedness of Company
to such Lender, including the amounts of the Loans made by it and each repayment
and prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided, failure to make any such
recordation, or any error in such recordation, shall not
42
affect any Lender's Revolving Commitments or Company's Obligations in respect of
any applicable Loans; and provided further, in the event of any inconsistency
between the Register and any Lender's records, the recordations in the Register
shall govern.
(b) Register. Administrative Agent shall maintain at its Principal
Office a register for the recordation of the names and addresses of Lenders and
the Revolving Commitments and Loans of each Lender from time to time (the
"REGISTER"). The Register shall be available for inspection by Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice. Administrative Agent shall record in the Register the Revolving
Commitments and the Loans, and each repayment or prepayment in respect of the
principal amount of the Loans, and any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided, failure to
make any such recordation, or any error in such recordation, shall not affect
any Lender's Revolving Commitments or Company's Obligations in respect of any
Loan. Company hereby designates GSCP to serve as Company's agent solely for
purposes of maintaining the Register as provided in this Section 2.7, and
Company hereby agrees that, to the extent GSCP serves in such capacity, GSCP and
its officers, directors, employees, agents and affiliates shall constitute
"Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date, or at any time after the Closing Date, Company shall
execute and deliver to such Lender (and/or, if applicable and if so specified in
such notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Company's receipt of such notice) a Note or Notes to
evidence such Lender's Term Loan, Revolving Loan or Swing Line Loan, as the case
may be.
2.8. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Class of Loan shall
bear interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:
(i) in the case of Term Loans and Revolving Loans:
(1) if a Index Rate Loan, at the Index Rate plus the
Applicable Margin; or
(2) if a LIBOR Loan, at the LIBOR Rate plus the
Applicable Margin; and
(ii) in the case of Swing Line Loans, at the Index Rate plus
the Applicable Margin.
(b) The basis for determining the rate of interest with respect to
any Loan (except a Swing Line Loan which can be made and maintained as Index
Rate Loans only), and the LIBOR Period with respect to any LIBOR Loan, shall be
selected by Company and notified to Administrative Agent and Lenders pursuant to
the applicable Funding Notice or
43
Conversion/Continuation Notice, as the case may be; provided, the Term Loans
initially shall be made as Index Rate Loans and until the earlier of (i) the
date which is twenty-one (21) days following the Closing Date and (ii) the date
that Co-Syndication Agents notify Company that the primary syndication of the
Loans and Revolving Commitments has been completed, as determined by Syndication
Agent, the Term Loans shall be maintained as either (1) LIBOR Loans having an
LIBOR Period of no longer than one month or (2) Index Rate Loans. If on any day
a Loan is outstanding with respect to which a Funding Notice or
Conversion/Continuation Notice has not been delivered to Administrative Agent in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Loan shall be a Index Rate Loan.
(c) In connection with LIBOR Loans there shall be no more than five
(5) LIBOR Periods outstanding at any time. In the event Company fails to specify
between a Index Rate Loan or a LIBOR Loan in the applicable Funding Notice or
Conversion/Continuation Notice, such Loan (if outstanding as a LIBOR Loan) will
be automatically converted into a Index Rate Loan on the last day of the
then-current LIBOR Period for such Loan (or if outstanding as a Index Rate Loan
will remain as, or (if not then outstanding) will be made as, a Index Rate
Loan). In the event Company fails to specify an LIBOR Period for any LIBOR Loan
in the applicable Funding Notice or Conversion/Continuation Notice, Company
shall be deemed to have selected an LIBOR Period of one month. As soon as
practicable after 10:00 a.m. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties)
the interest rate that shall apply to the LIBOR Loans for which an interest rate
is then being determined for the applicable LIBOR Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
(d) Interest payable pursuant to Section 2.8(a) shall be computed
(i) in the case of Index Rate Loans on the basis of a 365-day or 366-day year,
as the case may be, and (ii) in the case of LIBOR Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an LIBOR Period applicable to such Loan
or, with respect to a Index Rate Loan being converted from a LIBOR Loan, the
date of conversion of such LIBOR Loan to such Index Rate Loan, as the case may
be, shall be included, and the date of payment of such Loan or the expiration
date of an LIBOR Period applicable to such Loan or, with respect to a Index Rate
Loan being converted to a LIBOR Loan, the date of conversion of such Index Rate
Loan to such LIBOR Loan, as the case may be, shall be excluded; provided, if a
Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan
shall be payable (i) in arrears on and to each Interest Payment Date applicable
to that Loan; (ii) upon any prepayment of that Loan, whether voluntary or
mandatory, to the extent accrued on the amount being prepaid; and (iii) at
maturity, including final maturity; provided, however, with respect to any
voluntary prepayment of a Index Rate Loan, accrued interest on such Loan through
the date of such prepayment shall instead be payable on the next succeeding
Interest Payment Date.
44
(f) Company agrees to pay to Issuing Bank, with respect to drawings
honored under any Letter of Credit, interest on the amount paid by Issuing Bank
in respect of each such honored drawing from the date such drawing is honored to
but excluding the date such amount is reimbursed by or on behalf of Company at a
rate equal to (i) for the period from the date such drawing is honored to but
excluding the applicable Reimbursement Date, the rate of interest otherwise
payable hereunder with respect to Revolving Loans that are Index Rate Loans, and
(ii) thereafter, a rate which is 2% per annum in excess of the rate of interest
otherwise payable hereunder with respect to Revolving Loans that are Index Rate
Loans.
(g) Interest payable pursuant to Section 2.8(f) shall be computed on
the basis of a 365/366-day year for the actual number of days elapsed in the
period during which it accrues, and shall be payable on demand or, if no demand
is made, on the date on which the related drawing under a Letter of Credit is
reimbursed in full. Promptly upon receipt by Issuing Bank of any payment of
interest pursuant to Section 2.8(f), Issuing Bank shall distribute to each
Lender, out of the interest received by Issuing Bank in respect of the period
from the date such drawing is honored to but excluding the date on which Issuing
Bank is reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of any Revolving Loans), the amount that such
Lender would have been entitled to receive in respect of the letter of credit
fee that would have been payable in respect of such Letter of Credit for such
period if no drawing had been honored under such Letter of Credit. In the event
Issuing Bank shall have been reimbursed by Lenders for all or any portion of
such honored drawing, Issuing Bank shall distribute to each Lender which has
paid all amounts payable by it under Section 2.4(e) with respect to such honored
drawing such Lender's Pro Rata Share of any interest received by Issuing Bank in
respect of that portion of such honored drawing so reimbursed by Lenders for the
period from the date on which Issuing Bank was so reimbursed by Lenders to but
excluding the date on which such portion of such honored drawing is reimbursed
by Company.
2.9. CONVERSION/CONTINUATION.
(a) Subject to Section 2.18 and so long as no Default or Event of
Default shall have occurred and then be continuing (which the Requisite Lenders
have notified Company will prevent the following), Company shall have the
option:
(i) to convert at any time all or any part of any Term Loan or
Revolving Loan equal to (y) $1,000,000 and integral multiples of $100,000
in excess of that amount from a Index Rate Loan to a LIBOR Loan and (z)
$100,000 and integral multiples of $100,000 in excess of that amount from
a LIBOR Loan to a Index Rate Loan; provided, a LIBOR Loan may only be
converted on the expiration of the LIBOR Period applicable to such LIBOR
Loan unless Company shall pay all amounts due under Section 2.18 in
connection with any such conversion; or
(ii) upon the expiration of any LIBOR Period applicable to any
LIBOR Loan, to continue all or any portion of such Loan equal to
$1,000,000 and integral multiples of $100,000 in excess of that amount as
a LIBOR Loan.
45
(b) The Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Index Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a LIBOR Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any LIBOR
Loans shall be irrevocable on and after the related Interest Rate Determination
Date, and Company shall be bound to effect a conversion or continuation in
accordance therewith.
2.10. DEFAULT INTEREST. The principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments on the Loans not paid
when due or any fees or other amounts not paid when due, shall thereafter bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate
that is 2% per annum in excess of the interest rate otherwise payable hereunder
with respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Index Rate Loans); provided, in the case of
LIBOR Loans, upon the expiration of the LIBOR Period in effect at the time any
such increase in interest rate is effective such LIBOR Loans shall thereupon
become Index Rate Loans and shall thereafter bear interest payable upon demand
at a rate which is 2% per annum in excess of the interest rate otherwise payable
hereunder for Index Rate Loans. Payment or acceptance of the increased rates of
interest provided for in this Section 2.10 is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.
2.11. FEES.
(a) Company agrees to pay to Lenders having Revolving Exposure:
(i) commitment fees equal to (1) the average of the daily
difference between the Revolving Commitments and (b) the sum of (x) the
aggregate principal amount of outstanding Revolving Loans (but not any
outstanding Swing Line Loans) plus (y) the Letter of Credit Usage), times
(2) 0.50% per annum; and
(ii) letter of credit fees equal to (1) the Applicable Margin
for Revolving Loans that are LIBOR Loans, times (2) the average aggregate
daily maximum amount available to be drawn under all such Letters of
Credit (regardless of whether any conditions for drawing could then be met
and determined as of the close of business on any date of determination).
All fees referred to in this Section 2.11(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.
(b) Company agrees to pay directly to Issuing Bank, for its own
account, the following fees:
46
(i) a fronting fee equal to 0.250%, per annum, times the
average aggregate daily maximum amount available to be drawn under all
Letters of Credit (determined as of the close of business on any date of
determination); and
(ii) such documentary and processing charges for any issuance,
amendment, transfer or payment of a Letter of Credit as are in accordance
with Issuing Bank's standard schedule for such charges and as in effect at
the time of such issuance, amendment, transfer or payment, as the case may
be.
(c) All fees referred to in Section 2.11(a) and 2.11(b)(i) shall be
calculated on the basis of a 360-day year and the actual number of days elapsed
and shall be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year during the Revolving Commitment Period, commencing on
the first such date to occur after the Closing Date, and on the Revolving
Commitment Termination Date.
(d) In addition to any of the foregoing fees, Company agrees to pay
to Agents such other fees in the amounts and at the times separately agreed
upon.
2.12. SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS.
Scheduled Installments. The principal amounts of the Term Loans
shall be repaid in consecutive quarterly installments (each, an "INSTALLMENT")
in the aggregate amounts set forth below on the last day of each Fiscal Quarter
(each, an "INSTALLMENT DATE"), commencing September 30, 2004:
FISCAL QUARTER TERM LOAN INSTALLMENTS
-------------- ----------------------
September 30, 2004 $ 512,500
December 31, 2004 $ 512,500
March 31, 2005 $ 512,500
June 30, 2005 $ 512,500
September 30, 2005 $ 512,500
December 31, 2005 $ 512,500
March 31, 2006 $ 512,500
June 30, 2006 $ 512,500
September 30, 2006 $ 512,500
December 31, 2006 $ 512,500
March 31, 2007 $ 512,500
June 30, 2007 $ 512,500
September 30, 2007 $ 512,500
December 31, 2007 $ 512,500
47
FISCAL QUARTER TERM LOAN INSTALLMENTS
-------------- ----------------------
March 31, 2008 $ 512,500
June 30, 2008 $ 512,500
September 30, 2008 $ 512,500
December 31, 2008 $ 512,500
March 31, 2009 $ 512,500
June 30, 2009 $ 512,500
September 30, 2009 $ 512,500
December 31, 2009 $ 512,500
March 31, 2010 $ 512,500
June 30, 2010 $ 512,500
September 30, 2010 $24,087,500
December 31, 2010 $24,087,500
March 31, 2011 $24,087,500
June 30, 2011 $24,087,500
September 30, 2011 $24,087,500
December 31, 2011 $24,087,500
March 31, 2012 $24,087,500
Term Loan Maturity Date $24,087,500
Notwithstanding the foregoing, (x) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Term Loans in
accordance with Sections 2.13, 2.14 and 2.15, as applicable; and (y) the Term
Loans, together with all other amounts owed hereunder with respect thereto,
shall, in any event, be paid in full no later than the Term Loan Maturity Date.
2.13. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(1) with respect to Index Rate Loans, Company may
prepay any such Loans on any Business Day in whole or in part, in an
aggregate minimum amount of $1,000,000 and integral multiples of
$100,000 in excess of that amount;
(2) with respect to LIBOR Loans, Company may prepay
any such Loans on any Business Day in
48
whole or in part in an aggregate minimum amount of $1,000,000 and
integral multiples of $100,000 in excess of that amount; and
(3) with respect to Swing Line Loans, Company may
prepay any such Loans on any Business Day in whole or in part in an
aggregate minimum amount of $100,000, and in integral multiples of
$100,000 in excess of that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's prior written
or telephonic notice in the case of Index Rate Loans;
(2) upon not less than three Business Days' prior
written or telephonic notice in the case of LIBOR Loans; and
(3) upon written or telephonic notice on the date of
prepayment, in the case of Swing Line Loans;
in each case given to Administrative Agent or Swing Line Lender, as the case may
be, by 12:00 p.m. (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (and
Administrative Agent will promptly transmit such telephonic or original notice
for Term Loans or Revolving Loans, as the case may be, by telefacsimile or
telephone to each Lender) or Swing Line Lender, as the case may be. Upon the
giving of any such notice, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date specified therein.
Any such voluntary prepayment shall be applied as specified in Section 2.15(a).
(b) Voluntary Commitment Reductions.
(i) Company may, upon not less than three Business Days' prior
written or telephonic notice confirmed in writing to Administrative Agent
(which original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each applicable
Lender), at any time and from time to time terminate in whole or
permanently reduce in part, without premium or penalty, the Revolving
Commitments in an amount up to the amount by which the Revolving
Commitments exceed the Total Utilization of Revolving Commitments at the
time of such proposed termination or reduction; provided, any such partial
reduction of the Revolving Commitments shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $500,000 in excess of that
amount.
(ii) Company's notice to Administrative Agent shall designate
the date (which shall be a Business Day) of such termination or reduction
and the amount of any
49
partial reduction, and such termination or reduction of the Revolving
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Commitment of each Lender proportionately
to its Pro Rata Share thereof. Any such voluntary reduction of the
Revolving Commitments shall be applied as specified in Section 2.15(a).
(c) Certain Permitted Term Loan Repurchases.
Notwithstanding anything to the contrary contained in this
Section 2.13 or any other provision of this Agreement, so long as (i) there is
no Default, (ii) there is no Event of Default and (iii) no Default or Event of
Default would result therefrom, Company may repurchase outstanding Term Loans on
the following basis:
(i) Company may repurchase all or any portion of the Term
Loans of one or more Lenders pursuant to an Assignment Agreement, between
Company and such Lender or Lenders in an aggregate principal amount not to
exceed 35% of the initial aggregate principal amount of Term Loans with
respect to all such repurchases pursuant to this clause (i); provided
that, with respect to such repurchases, Company shall simultaneously
provide a copy of such Assignment Agreement and any other agreements
between Company and such Lender with respect to such repurchase to the
Administrative Agent and Syndication Agent;
(ii) In addition, Company may make one or more offers (each,
an "OFFER") to repurchase all or any portion of the Term Loans (such Term
Loans, the "OFFER LOANS") of the Lenders, provided, (A) Company delivers a
notice of such Offer to the Administrative Agent and all Lenders no later
than noon (New York City time) at least five (5) Business Days in advance
of a proposed consummation date of such Offer indicating (1) the last date
on which such Offer may be accepted, (2) the maximum dollar amount of the
Offer, (3) the repurchase price per dollar of principal amount of such
Offer Loans at which Company is willing to repurchase the Offer Loans and
(4) the instructions, consistent with this Section 2.13(c) with respect to
the Offer (which shall be reasonably acceptable to Company, the
Administrative Agent and the Syndication Agent), that a Lender must follow
in order to have its Offer Loans repurchased; (B) the maximum dollar
amount of the Offer shall be no less than an aggregate of $1,000,000; (C)
Company shall hold the Offer open for a minimum period of two (2) Business
Days; (D) a Lender who elects to participate in the Offer may choose to
tender all or part of such Lender's Offer Loans; and (E) the Offer shall
be made to Lenders holding the Offer Loans on a pro rata basis in
accordance with their Pro Rata Shares; provided, further that, if any
Lender elects not to participate in the Offer, either in whole or in part,
the amount of such Lender's Offer Loans not being tendered shall be
excluded in calculating the pro rata amount applicable to the balance of
such Offer Loans;
(iii) With respect to all repurchases made by Company pursuant
to this Section 2.13(c), (A) Company shall pay all accrued and unpaid
interest, if any, on the repurchased Term Loans to the date of repurchase
of such Term Loans, (B) the repurchase of such Term Loans by Company shall
not be taken into account in the calculation of Consolidated Excess Cash
Flow, (C) Company shall only make such
50
repurchases during the time period which is within thirty (30) days
following the date on which Company files a 10K, 10Q or any other material
filing with the SEC, (D) such repurchases shall not be deemed to be
voluntary prepayments pursuant to this Section 2.13, Section 2.15 or 2.16
hereunder except that the amount of the Loans so repurchased pursuant to
Section 2.13(c)(ii) shall be applied on a pro rata basis to reduce the
scheduled remaining Installments of principal on such Term Loan and (E)
such repurchase of Term Loans pursuant to Section 2.13(c)(ii) shall be
applied on a pro rata basis to Lenders selling Offer Loans in accordance
with the Offer Loans being sold or offered for sale by such Lenders; and
(iv) Following repurchase by Company pursuant to this Section
2.13(c), the Term Loans so repurchased shall be deemed cancelled for all
purposes and no longer outstanding (and may not be resold by Company), for
all purposes of this Agreement and all other Credit Documents, including,
but not limited to (A) the making of, or the application of, any payments
to the Lenders under this Agreement or any other Credit Document, (B) the
making of any request, demand, authorization, direction, notice, consent
or waiver under this Agreement or any other Credit Document or (C) the
determination of Requisite Lenders, or for any similar or related purpose,
under this Agreement or any other Credit Document. Any payment made by
Company in connection with a repurchase permitted by this Section 2.13(c)
shall not be subject to the provisions of either Section 2.16(a) or
Section 2.17. Failure by Company to make any payment to a Lender required
by an agreement permitted by this Section 2.13(c) shall not constitute an
Event of Default under Section 8.1(a).
Notwithstanding any of the provisions set forth in this Agreement to the
contrary, the Company, the Lenders and Agents hereby agree that nothing in this
Agreement shall be understood to mean or suggest that the Term Loans constitute
"securities" for purposes of either the Securities Act or the Exchange Act.
2.14. MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Asset Sales. No later than the first Business Day following the
date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale
Proceeds, Company shall prepay the Loans and/or the Revolving Commitments shall
be permanently reduced as set forth in Section 2.15(b) in an aggregate amount
equal to such Net Asset Sale Proceeds; provided, (i) so long as no Default or
Event of Default shall have occurred and be continuing, and (ii) to the extent
that aggregate Net Asset Sale Proceeds from the Closing Date through the
applicable date of determination do not exceed $10,000,000 in the aggregate
(excluding any proceeds from the Old ▇▇▇▇▇▇▇ Sale and Leaseback), Company shall
have the option, directly or through one or more of its Subsidiaries, to invest
or commit to invest Net Asset Sale Proceeds within three hundred sixty (360)
days of receipt thereof (or, four hundred fifty (450) days with respect to the
receipt of proceeds from the Old ▇▇▇▇▇▇▇ Sale and Leaseback) in long-term
productive assets of the general type used in the business of Company and its
Subsidiaries; provided further, pending any such investment all such Net Asset
Sale Proceeds shall be applied to prepay Revolving Loans to the extent
outstanding (without a reduction in Revolving Commitments); provided, further
that, with respect to an Asset Sale of any asset owned by a Foreign Subsidiary,
any Net
51
Asset Sale Proceeds in respect thereof which have not been reinvested or
committed to be reinvested (the "UNREINVESTED NET ASSET SALE PROCEEDS") shall be
applied (i) first, to the extent such Unreinvested Net Asset Sale Proceeds may
be repatriated to the United States without in the reasonable judgment of the
Company resulting in a material tax liability to Company in relation to the
amount of proceeds to be repatriated, to prepay the Loans and/or permanently
reduce the Revolving Commitments as set forth in Section 2.15(b), (ii) second,
to the extent of any remaining portion of such Unreinvested Net Asset Sale
Proceeds, to finance the general corporate purposes of such Foreign Subsidiary
so long as the aggregate of all such amounts so applied by all Foreign
Subsidiaries with respect to Asset Sales consummated after the Closing Date does
not exceed $5,000,000, and (iii) third, to the extent of any remaining portion
of such Unreinvested Net Asset Sale Proceeds, to prepay the Loans and/or reduce
the Revolving Commitments as set forth in Section 2.15(b). Concurrently with any
determination by Company that any portion of any Unreinvested Net Asset Sale
Proceeds of any Foreign Subsidiary will be applied as described in clause (ii)
of the immediately preceding proviso, Company shall deliver to Agent an
Officers' Certificate (w) certifying that such Unreinvested Net Asset Sale
Proceeds cannot be repatriated to the United States without resulting in a
material tax liability to Company and the reasons therefore, (y) specifying the
amount of Unreinvested Net Asset Sale Proceeds to be retained by such Foreign
Subsidiary as described in said clause (ii) and the cumulative aggregate amount
of all such Unreinvested Net Asset Sale Proceeds so retained by all Foreign
Subsidiaries since the date of this Agreement and (z) demonstrating the
derivation of the Unreinvested Net Asset Sale Proceeds of the correlative Asset
Sale from the gross sales price thereof.
(b) Insurance/Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Holdings or any of its
Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds, Company shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced as set forth in Section
2.15(b) in an aggregate amount equal to such Net Insurance/Condemnation
Proceeds; provided, (i) so long as no Default or Event of Default shall have
occurred and be continuing, and (ii) to the extent that aggregate Net
Insurance/Condemnation Proceeds from the Closing Date through the applicable
date of determination do not exceed $10,000,000 in the aggregate, Company shall
have the option, directly or through one or more of its Subsidiaries to invest
or commit to invest such Net Insurance/Condemnation Proceeds within three
hundred sixty (360) days of receipt thereof in long term productive assets of
the general type used in the business of Company and its Subsidiaries, which
investment may include the repair, restoration or replacement of the applicable
assets thereof; provided further, pending any such investment all such Net
Insurance/Condemnation Proceeds, as the case may be, shall be applied to prepay
Revolving Loans to the extent outstanding (without a reduction in Revolving
Commitments).
(c) Issuance of Equity Securities. On the date of receipt by
Holdings or any of its Subsidiaries of any Cash proceeds from a capital
contribution to, or the issuance of any Capital Stock of, Holdings or any of its
Subsidiaries to any Person other than Holdings or any of its Subsidiaries (other
than with respect to the receipt of any such proceeds pursuant to (i) any
employee stock or stock option compensation plan, (ii) any Sponsor Equity
Contributions or (iii) any equity issued by Holdings or a Foreign Subsidiary in
connection with Permitted Acquisitions including, without limitation, any equity
issued in connection with Section 6.9(f)), Company
52
shall prepay the Loans and/or the Revolving Commitments shall be permanently
reduced as set forth in Section 2.15(b) in an aggregate amount equal to 75% of
such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses; provided, during any period in which the Leverage Ratio
(determined for any such period by reference to the most recent Compliance
Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio)
shall be 4.00:1.00 or less, Company shall only be required to make the
prepayments and/or reductions otherwise required hereby in an amount equal to
50% of such Cash proceeds.
(d) Issuance of Debt. No later than the first Business Day following
receipt by Holdings or any of its Subsidiaries of any Cash proceeds from the
incurrence of any Indebtedness of Holdings or any of its Subsidiaries (other
than with respect to any Indebtedness permitted to be incurred pursuant to
Section 6.1), Company shall prepay the Loans and/or the Revolving Commitments
shall be permanently reduced as set forth in Section 2.15(b) in an aggregate
amount equal to 100% of such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses.
(e) Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year
2004), Company shall, no later than one hundred and five (105) days after the
end of such Fiscal Year, prepay the Loans and/or the Revolving Commitments shall
be permanently reduced as set forth in Section 2.15(b) in an aggregate amount
equal to 75% of such Consolidated Excess Cash Flow; provided, during any period
in which the Leverage Ratio (determined for any such period by reference to the
most recent Compliance Certificate delivered pursuant to Section 5.1(d)
calculating the Leverage Ratio) shall be 4.00:1.00 or less, Company shall only
be required to make the prepayments and/or reductions otherwise required hereby
in an amount equal to 50% of such Consolidated Excess Cash Flow.
(f) Revolving Loans and Swing Loans. Company shall from time to time
prepay first, the Swing Line Loans, and second, the Revolving Loans to the
extent necessary so that the Total Utilization of Revolving Commitments shall
not at any time exceed the Revolving Commitments then in effect.
(g) Prepayment Certificate. Concurrently with any prepayment of the
Loans and/or reduction of the Revolving Commitments pursuant to Sections 2.14(a)
through 2.14(e), Company shall deliver to Administrative Agent a certificate of
an Authorized Officer demonstrating the calculation of the amount of the
applicable net proceeds or Consolidated Excess Cash Flow, as the case may be. In
the event that Company shall subsequently determine that the actual amount
received exceeded the amount set forth in such certificate, Company shall
promptly make an additional prepayment of the Loans and/or the Revolving
Commitments shall be permanently reduced in an amount equal to such excess, and
Company shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.
53
2.15. APPLICATION OF PREPAYMENTS/REDUCTIONS.
(a) Application of Voluntary Prepayments by Type of Loans. Any
prepayment of any Loan pursuant to Section 2.13(a) shall be applied as specified
by Company in the applicable notice of prepayment; provided, in the event
Company fails to specify the Loans to which any such prepayment shall be
applied, such prepayment shall be applied as follows:
first, to repay outstanding Swing Line Loans to the full
extent thereof;
second, to repay outstanding Revolving Loans to the full
extent thereof; and
third, to prepay the remaining installments due on Term Loans
on a pro rata basis in accordance with the amounts thereof.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount required to be paid pursuant to Sections 2.14(a) through 2.14(e) shall be
applied as follows:
first, to prepay the remaining installments due on Term Loans
on a pro rata basis in accordance with the amounts thereof;
second, to prepay the Swing Line Loans to the full extent
thereof and to permanently reduce the Revolving Commitments by the amount of
such prepayment;
third, to prepay the Revolving Loans to the full extent
thereof and to further permanently reduce the Revolving Commitments by the
amount of such prepayment;
fourth, to prepay outstanding reimbursement obligations then
due and payable with respect to Letters of Credit and to further permanently
reduce the Revolving Loan Commitments by the amount of such prepayment;
fifth, to cash collateralize Letters of Credit and to further
permanently reduce the Revolving Loan Commitments by the amount of such cash
collateralization; and
sixth, to further permanently reduce the Revolving Commitments
to the full extent thereof.
(c) Application of Prepayments of Loans to Index Rate Loans and
LIBOR Loans. Considering each Class of Loans being prepaid separately, any
prepayment thereof shall be applied first to Index Rate Loans to the full extent
thereof before application to LIBOR Loans, in each case in a manner which
minimizes the amount of any payments required to be made by Company pursuant to
Section 2.18(c).
54
2.16. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Company of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 p.m. (New York City time) on the date
due at the Administrative Agent's Principal Office for the account of Lenders;
funds received by Administrative Agent after that time on such due date shall be
deemed to have been paid by Company on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any Loan
(other than voluntary prepayments of Revolving Loans) shall include payment of
accrued interest on the principal amount being repaid or prepaid, and all such
payments (and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be applied to the
payment of interest before application to principal.
(c) Administrative Agent shall promptly distribute to each Lender at
such address as such Lender shall indicate in writing, such Lender's applicable
Pro Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due thereto, including, without
limitation, all fees payable with respect thereto, to the extent received by
Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if pursuant to
this Agreement any Conversion/Continuation Notice is withdrawn as to any
Affected Lender or if any Affected Lender makes Index Rate Loans in lieu of its
Pro Rata Share of any LIBOR Loans, Administrative Agent shall give effect
thereto in apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of "LIBOR
Period", whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Revolving Commitment
fees hereunder.
(f) Company hereby authorizes Administrative Agent to charge
Company's accounts with Administrative Agent in order to cause timely payment to
be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(g) Administrative Agent shall deem any payment by or on behalf of
Company hereunder that is not made in same day funds prior to 12:00 p.m. (New
York City time) to be a non-conforming payment. Any such payment shall not be
deemed to have been received by Administrative Agent until the later of (i) the
time such funds become available funds, and (ii) the applicable next Business
Day. Administrative Agent shall give prompt telephonic notice to Company and
each applicable Lender (confirmed in writing) if any payment is non-conforming.
Any non-conforming payment may constitute or become a Default or Event of
Default in accordance with the terms of Section 8.1(a). Interest shall continue
to accrue on any principal as to which a non-conforming payment is made until
such funds become available funds (but in no
55
event less than the period from the date of such payment to the next succeeding
applicable Business Day) at the rate determined pursuant to Section 2.10 from
the date such amount was due and payable until the date such amount is paid in
full.
(h) If an Event of Default shall have occurred and not otherwise
been waived, and the maturity of the Obligations shall have been accelerated
pursuant to Section 8.1, all payments or proceeds received by Agents hereunder
in respect of any of the Obligations, shall be applied in accordance with the
application arrangements described in Section 7.2 of the Pledge and Security
Agreement.
2.17. RATABLE SHARING. Lenders hereby agree among themselves that, except
as otherwise provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the Collateral, if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms hereof),
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to such Lender hereunder or
under the other Credit Documents (collectively, the "AGGREGATE AMOUNTS DUE" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (a) notify Administrative
Agent and each other Lender of the receipt of such payment and (b) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided, if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Company or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without
interest. Company expressly consents to the foregoing arrangement and agrees
that any holder of a participation so purchased may exercise any and all rights
of banker's lien, set-off or counterclaim with respect to any and all monies
owing by Company to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
2.18. MAKING OR MAINTAINING LIBOR LOANS.
(a) Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any LIBOR Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of LIBOR Rate, Administrative Agent shall
on such date give
56
notice (by telefacsimile or by telephone confirmed in writing) to Company and
each Lender of such determination, whereupon (i) no Loans may be made as, or
converted to, LIBOR Loans until such time as Administrative Agent notifies
Company and Lenders that the circumstances giving rise to such notice no longer
exist, and (ii) any Funding Notice or Conversion/Continuation Notice given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
(b) Illegality or Impracticability of LIBOR Loans. In the event that
on any date any Lender shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto but shall be made only after
consultation with Company and Administrative Agent) that the making, maintaining
or continuation of its LIBOR Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful), or (ii) has
become impracticable, as a result of contingencies occurring after the date
hereof which materially and adversely affect the London interbank market or the
position of such Lender in that market, then, and in any such event, such Lender
shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (1) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, LIBOR Loans shall
be suspended until such notice shall be withdrawn by the Affected Lender, (2) to
the extent such determination by the Affected Lender relates to a LIBOR Loan
then being requested by Company pursuant to a Funding Notice or a
Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or
continue such Loan as or convert such Loan to, as the case may be) a Index Rate
Loan, (3) the Affected Lender's obligation to maintain its outstanding LIBOR
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the LIBOR Period then in effect with respect to the Affected Loans
or when required by law, and (4) the Affected Loans shall automatically convert
into Index Rate Loans on the date of such termination. Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a LIBOR Loan then being requested by Company pursuant to a
Funding Notice or a Conversion/Continuation Notice, Company shall have the
option, subject to the provisions of Section 2.18(c), to rescind such Funding
Notice or Conversion/Continuation Notice as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Administrative
Agent shall promptly transmit to each other Lender). Except as provided in the
immediately preceding sentence, nothing in this Section 2.18(b) shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, LIBOR Loans in accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of LIBOR Periods.
Company shall compensate each Lender, upon written request by such Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by such
Lender to lenders of funds borrowed by it to make or carry its LIBOR Loans and
any loss, expense or liability sustained by such Lender in
57
connection with the liquidation or re-employment of such funds but excluding
loss of anticipated profits, including, without limitation, the Applicable
Margin) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender) a borrowing of any LIBOR Loan does not occur on a date
specified therefor in a Funding Notice or a telephonic request for borrowing, or
a conversion to or continuation of any LIBOR Loan does not occur on a date
specified therefor in a Conversion/Continuation Notice or a telephonic request
for conversion or continuation; (ii) if any prepayment or other principal
payment or any conversion of any of its LIBOR Loans occurs on a date prior to
the last day of an LIBOR Period applicable to that Loan (including, without
limitation, pursuant to Section 2.13(c) hereof); or (iii) if any prepayment of
any of its LIBOR Loans is not made on any date specified in a notice of
prepayment given by Company.
(d) Booking of LIBOR Loans. Any Lender may make, carry or transfer
LIBOR Loans at, to, or for the account of any of its branch offices or the
office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of LIBOR Loans. Calculation of
all amounts payable to a Lender under this Section 2.18 and under Section
2.19(a) shall be made as though such Lender had actually funded each of its
relevant LIBOR Loans through the purchase of a LIBOR deposit bearing interest at
the rate obtained pursuant to clause (i) of the definition of LIBOR Rate in an
amount equal to the amount of such LIBOR Loan and having a maturity comparable
to the relevant LIBOR Period and through the transfer of such LIBOR deposit from
an offshore office of such Lender to a domestic office of such Lender in the
United States of America; provided, however, each Lender may fund each of its
LIBOR Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this Section
2.18 and under Section 2.19(a).
2.19. INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.20 (which shall be controlling with respect to the
matters covered thereby and to the extent a Lender is not entitled to payment
under the terms of Section 2.20, it shall not be entitled to such payment
pursuant to this Section 2.19(a)), in the event that any Lender (which term
shall include Issuing Bank for purposes of this Section 2.19(a)) shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or Governmental Authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-Governmental Authority (whether or not having the force of
law): (i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such Lender)
with respect to this Agreement or any of the other Credit Documents or any of
its obligations hereunder or thereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any other amount
payable hereunder; (ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan,
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FDIC insurance or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect to LIBOR
Loans that are reflected in the definition of LIBOR Rate); or (iii) imposes any
other condition (other than with respect to a Tax matter) on or affecting such
Lender (or its applicable lending office) or its obligations hereunder or the
London interbank market; and the result of any of the foregoing is to increase
the cost to such Lender of agreeing to make, making or maintaining Loans
hereunder or to reduce any amount received or receivable by such Lender (or its
applicable lending office) with respect thereto by an amount considered by the
Lender to be material; then, in any such case, Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this Section
2.19(a), which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender (which
term shall include Issuing Bank for purposes of this Section 2.19(b)) shall have
determined that the adoption, effectiveness, phase-in or applicability after the
Closing Date of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Revolving Commitments or Letters of Credit, or
participations therein or other obligations hereunder with respect to the Loans
or the Letters of Credit to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy) by an amount considered by the Lender to be
material, then from time to time, within five Business Days after receipt by
Company from such Lender of the statement referred to in the next sentence,
Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such controlling corporation on an after-tax basis for
such reduction. Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to Lender under this
Section 2.19(b), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
(c) Notification. Notwithstanding the foregoing, the Company shall
not be required to compensate a Lender or the Issuing Bank pursuant to this
Section for any increased costs incurred or reductions suffered more than nine
months prior to the date that such Lender or
59
the Issuing Bank, as the case may be, notifies the Company of the change giving
rise to such increased costs or reductions and of such Lender's or the Issuing
Bank's intention to claim compensation therefor (except that, if the change
giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).
2.20. TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.
(b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by any Credit Party to Administrative Agent or any
Lender (which term shall include Issuing Bank for purposes of this Section
2.20(b)) under any of the Credit Documents: (i) Company shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as Company becomes aware of it; (ii) Company shall pay any
such Tax before the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of Administrative Agent or such
Lender; (iii) the sum payable by such Credit Party in respect of which the
relevant deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction, withholding
or payment, Administrative Agent or such Lender, as the case may be, receives on
the due date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and (iv) within thirty
(30) days after paying any sum from which it is required by law to make any
deduction or withholding, and within thirty (30) days after the due date of
payment of any Tax which it is required by clause (ii) above to pay, Company
shall deliver to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority; provided, no such additional
amount shall be required to be paid to any Lender under clause (iii) above
except to the extent that any change after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after the
effective date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender.
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(c) Evidence of Exemption From U.S. Withholding Tax. Each Lender
that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes
(a "NON-US LENDER") shall deliver to Administrative Agent for transmission to
Company, on or prior to the Closing Date (in the case of each Lender listed on
the signature pages hereof on the Closing Date) or on or prior to the date of
the Assignment Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in the
determination of Company or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue Service
Form W-8BEN or W-8ECI (or any successor forms), properly completed and duly
executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Credit Documents, or (ii) if such
Lender is not a "bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code and cannot deliver either Internal Revenue Service Form
W-8BEN or W-8ECI pursuant to clause (i) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such Lender, and such
other documentation required under the Internal Revenue Code and reasonably
requested by Company to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Credit Documents. Each
Lender required to deliver any forms, certificates or other evidence with
respect to United States federal income tax withholding matters pursuant to this
Section 2.20(c) hereby agrees, from time to time after the initial delivery by
such Lender of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such Lender shall
promptly deliver to Administrative Agent for transmission to Company two new
original copies of Internal Revenue Service Form W-8BEN or W-8ECI , or a
Certificate re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Company to confirm or establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the Credit Documents,
or notify Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence. Company shall not be required to pay any
additional amount to any Non-US Lender under Section 2.20(b)(iii) if such Lender
shall have failed (1) to deliver the forms, certificates or other evidence
referred to in the second sentence of this Section 2.20(c), or (2) to notify
Administrative Agent and Company of its inability to deliver any such forms,
certificates or other evidence, as the case may be; provided, if such Lender
shall have satisfied the requirements of the first sentence of this Section
2.20(c) on the Closing Date or on the date of the Assignment Agreement pursuant
to which it became a Lender, as applicable, nothing in this last sentence of
Section 2.20(c) shall relieve Company of its obligation to pay any additional
amounts pursuant to Section 2.20(b)(iii) in the event that, as a result of any
change in any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application thereof, such
Lender is no longer properly entitled to
61
deliver forms, certificates or other evidence at a subsequent date establishing
the fact that such Lender is not subject to withholding as described herein.
2.21. OBLIGATION TO MITIGATE. Each Lender (which term shall include
Issuing Bank for purposes of this Section 2.21) agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans or Letters of Credit, as the case may be, becomes aware of the occurrence
of an event or the existence of a condition that would cause such Lender to
become an Affected Lender or that would entitle such Lender to receive payments
under Section 2.18, 2.19 or 2.20, it will, to the extent not inconsistent with
the internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts to (a) make, issue, fund or maintain its
Credit Extensions, including any Affected Loans, through another office of such
Lender, or (b) take such other measures as such Lender may deem reasonable, if
as a result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender pursuant to Section 2.18, 2.19
or 2.20 would be materially reduced and if, as determined by such Lender in its
sole discretion, the making, issuing, funding or maintaining of such Revolving
Commitments, Loans or Letters of Credit through such other office or in
accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Revolving Commitments, Loans or Letters of
Credit or the interests of such Lender; provided, such Lender will not be
obligated to utilize such other office pursuant to this Section 2.21 unless
Company agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other office as described in clause (a) above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this Section 2.21 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender to Company (with a copy to Administrative
Agent) shall be conclusive absent manifest error.
2.22. DEFAULTING LENDERS. Anything contained herein to the contrary
notwithstanding, in the event that any Lender, at the direction or request of
any regulatory agency or authority, defaults (a "DEFAULTING LENDER") in its
obligation to fund (a "FUNDING DEFAULT") any Revolving Loan or its portion of
any unreimbursed payment under Section 2.3(b)(iv), 2.3(b)(v) or 2.4(e) (in each
case, a "DEFAULTED LOAN"), then (a) during any Default Period with respect to
such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
"Lender" for purposes of voting on any matters (including the granting of any
consents or waivers) with respect to any of the Credit Documents; (b) to the
extent permitted by applicable law, until such time as the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero, (i) any
voluntary prepayment of the Revolving Loans shall, if Company so directs at the
time of making such voluntary prepayment, be applied to the Revolving Loans of
other Lenders as if such Defaulting Lender had no Revolving Loans outstanding
and the Revolving Exposure of such Defaulting Lender were zero, and (ii) any
mandatory prepayment of the Revolving Loans shall, if Company so directs at the
time of making such mandatory prepayment, be applied to the Revolving Loans of
other Lenders (but not to the Revolving Loans of such Defaulting Lender) as if
such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender,
it being understood and agreed that Company shall be entitled to retain any
portion of any mandatory prepayment of the Revolving Loans that is not paid to
such Defaulting Lender solely as a result of the operation of the provisions of
this clause (ii); (c) such Defaulting Lender's Revolving Commitment and
outstanding Revolving Loans and such Defaulting Lender's Pro Rata Share of
62
the Letter of Credit Usage shall be excluded for purposes of calculating the
Revolving Commitment fee payable to Lenders in respect of any day during any
Default Period with respect to such Defaulting Lender, and such Defaulting
Lender shall not be entitled to receive any Revolving Commitment fee pursuant to
Section 2.11 with respect to such Defaulting Lender's Revolving Commitment in
respect of any Default Period with respect to such Defaulting Lender; and (d)
the Total Utilization of Revolving Commitments as at any date of determination
shall be calculated as if such Defaulting Lender had funded all Defaulted Loans
of such Defaulting Lender. No Revolving Commitment of any Lender shall be
increased or otherwise affected, and, except as otherwise expressly provided in
this Section 2.22, performance by Company of its obligations hereunder and the
other Credit Documents shall not be excused or otherwise modified as a result of
any Funding Default or the operation of this Section 2.22. The rights and
remedies against a Defaulting Lender under this Section 2.22 are in addition to
other rights and remedies which Company may have against such Defaulting Lender
with respect to any Funding Default and which Administrative Agent or any Lender
may have against such Defaulting Lender with respect to any Funding Default.
2.23. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to the
contrary notwithstanding, in the event that: (a)(i) any Lender (an
"INCREASED-COST LENDER") shall give notice to Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.18, 2.19 or 2.20, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five Business Days after Company's request for such withdrawal; or (b)
(i) any Lender shall become a Defaulting Lender, (ii) the Default Period for
such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender
shall fail to cure the default as a result of which it has become a Defaulting
Lender within five Business Days after Company's request that it cure such
default; or (c) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.5(b), the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"NON-CONSENTING LENDER") whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "TERMINATED LENDER"), Company may, by giving written
notice to Administrative Agent and any Terminated Lender of its election to do
so, elect to cause such Terminated Lender (and such Terminated Lender hereby
irrevocably agrees) to assign its outstanding Loans and its Revolving
Commitments, if any, in full to one or more Eligible Assignees (each a
"REPLACEMENT LENDER") in accordance with the provisions of Section 10.6 and
Terminated Lender shall pay any fees payable thereunder in connection with such
assignment; provided, (1) on the date of such assignment, the Replacement Lender
shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal
to the principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, (B) an amount equal to all unreimbursed drawings that have
been funded by such Terminated Lender, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section
2.11; (2) on the date of such assignment, Company shall pay any amounts payable
to such Terminated Lender pursuant to Section 2.18(c), 2.19 or 2.20 or otherwise
as if it were a prepayment; and (3) in the event such Terminated Lender is a
Non-Consenting Lender, each Replacement Lender shall
63
consent, at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender; provided, Company may not make
such election with respect to any Terminated Lender that is also an Issuing Bank
unless, prior to the effectiveness of such election, Company shall have caused
each outstanding Letter of Credit issued thereby to be cancelled. Upon the
prepayment of all amounts owing to any Terminated Lender and the termination of
such Terminated Lender's Revolving Commitments, if any, such Terminated Lender
shall no longer constitute a "Lender" for purposes hereof; provided, any rights
of such Terminated Lender to indemnification hereunder shall survive as to such
Terminated Lender.
SECTION 3. CONDITIONS PRECEDENT
3.1. CLOSING DATE. The obligation of any Lender to make a Credit
Extension on the Closing Date is subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions on or before the
Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent shall
have received (i) sufficient copies of each Organizational Document executed and
delivered by each Credit Party, as applicable, and, to the extent applicable,
certified as of a recent date by the appropriate governmental official, for each
Lender, each dated the Closing Date or a recent date prior thereto; (ii)
signature and incumbency certificates of the officers of such Person executing
the Credit Documents to which it is a party; (iii) resolutions of the Board of
Directors or similar governing body of each Credit Party approving and
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents to which it is a party or by which it or its assets may
be bound as of the Closing Date, certified as of the Closing Date by its
secretary or an assistant secretary as being in full force and effect without
modification or amendment; (iv) a good standing certificate from the applicable
Governmental Authority of each Credit Party's jurisdiction of incorporation,
organization or formation and in each jurisdiction in which it is qualified as a
foreign corporation or other entity to do business, each dated a recent date
prior to the Closing Date; and (v) such other documents as Administrative Agent
may reasonably request.
(c) Organizational and Capital Structure; Management. The
organizational structure and capital structure of Company and its Subsidiaries
shall be as set forth on Schedule 4.1. The management structure of Company shall
be as set forth on Schedule 3.1(c) annexed hereto.
(d) Transaction Costs. On or prior to the Closing Date, Company
shall have delivered to Administrative Agent Company's reasonable best estimate
of the Transactions Costs (other than fees payable to any Agent).
(e) Governmental Authorizations and Consents. All Governmental
Authorizations and all consents of other Persons, in each case that are required
by the Merger
64
Agreement as a condition to closing shall have been obtained by each Credit
Party, or with the approval of the Co-Syndication Agents, waived. All applicable
waiting periods shall have expired without any action being taken or threatened
by any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the transactions contemplated by the Merger Agreement or
the financing thereof and no action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
(f) Real Estate Assets. In order to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording referred to herein, perfected First Priority security interest
in certain Real Estate Assets, Collateral Agent shall have received from Company
and each applicable Guarantor:
(i) fully executed and notarized Mortgages, in proper form for
recording in all appropriate places in all applicable jurisdictions,
encumbering each Real Estate Asset listed in Schedule 3.1(f) (each, a
"CLOSING DATE MORTGAGED PROPERTY");
(ii) an opinion of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) in each state in which a Closing Date
Mortgaged Property is located with respect to the enforceability of the
form(s) of Mortgages to be recorded in such state and such other matters
as Collateral Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Collateral Agent;
(iii) in the case of each Leasehold Property that is a Closing
Date Mortgaged Property, (1) use its best efforts to obtain a Landlord
Consent and Estoppel and (2) evidence that such Leasehold Property is a
Recorded Leasehold Interest;
(iv) (a) ALTA mortgagee title insurance policies or
unconditional commitments therefor issued by one or more title companies
reasonably satisfactory to Collateral Agent with respect to each Closing
Date Mortgaged Property (each, a "TITLE POLICY"), in amounts not less than
the fair market value of each Closing Date Mortgaged Property, together
with a title report issued by a title company with respect thereto, dated
not more than thirty (30) days prior to the Closing Date and copies of all
recorded documents listed as exceptions to title or otherwise referred to
therein, each in form and substance reasonably satisfactory to Collateral
Agent and (B) evidence satisfactory to Collateral Agent that such Credit
Party has paid to the title company or to the appropriate Governmental
Authorities all expenses and premiums of the title company and all other
sums required in connection with the issuance of each Title Policy and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Mortgages for each Closing
Date Mortgaged Property in the appropriate real estate records;
(v) evidence of flood insurance with respect to each Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of
65
Governors of the Federal Reserve System, in form and substance reasonably
satisfactory to Collateral Agent; and
(vi) ALTA surveys of all Closing Date Mortgaged Properties
which are not Leasehold Properties, certified to Collateral Agent and
dated not more than thirty (30) days prior to the Closing Date.
(g) Personal Property Collateral. In order to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid, perfected First
Priority security interest in the personal property Collateral, Collateral Agent
shall have received:
(i) evidence satisfactory to the Collateral Agent of the
compliance by each Credit Party of their obligations under the Pledge and
Security Agreement and the other Collateral Documents (including, without
limitation, their obligations to execute and deliver UCC financing
statements, originals of securities, instruments and chattel paper and any
agreements governing deposit and/or securities accounts as provided
therein).
(ii) A completed Collateral Questionnaire dated the Closing
Date and executed by an Authorized Officer of each Credit Party, together with
all attachments contemplated thereby, including (A) the results of a recent
search, by a Person satisfactory to Collateral Agent, of all effective UCC
financing statements (or equivalent filings) made with respect to any personal
or mixed property of any Credit Party in the jurisdictions specified in the
Collateral Questionnaire, together with copies of all such filings disclosed by
such search, and (B) UCC termination statements (or similar documents) duly
executed by all applicable Persons for filing in all applicable jurisdictions as
may be necessary to terminate any effective UCC financing statements (or
equivalent filings) disclosed in such search (other than any such financing
statements or equivalent filing in respect of Permitted Liens);
(iii) opinions of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) with respect to the creation and perfection of
the security interests in favor of Collateral Agent in any Collateral with an
aggregate value in excess of $500,000 and such other matters governed by the
laws of each jurisdiction in which any Credit Party or any personal property
Collateral is located as Collateral Agent may reasonably request, in each case
in form and substance reasonably satisfactory to Collateral Agent; and
(iv) evidence that each Credit Party shall have taken or
caused to be taken any other action, executed and delivered or caused to be
executed and delivered any other agreement, document and instrument (including
without limitation a Landlord Personal Property Collateral Access Agreement
executed by the landlord of any Leasehold Property and by the applicable Credit
Party) and made or caused to be made any other filing and recording (other than
as set forth herein) reasonably required by Collateral Agent.
66
(h) Environmental Reports. The Agents shall have received reports
and other information, in form, scope and substance satisfactory to the Agents,
as each may reasonably require regarding environmental matters relating to the
Facilities, which reports shall include to the extent available a Phase I Report
for each of the Facilities specified by the Agents confirming the advice orally
provided to the Agents by Company's environmental consultants.
(i) Financial Statements; Projections. Lenders shall have received
from Company (i) the Historical Financial Statements, and (ii) the Projections.
(j) Evidence of Insurance. Collateral Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to Section 5.5 is in full
force and effect and that Collateral Agent, for the benefit of Lenders has been
named as additional insured and loss payee thereunder to the extent required
under Section 5.5.
(k) Equity Financing. On or before the Closing Date, the proceeds of
the Equity Financing shall have been irrevocably committed, simultaneously with
the application of the proceeds of the portion of the Term Loans, the Revolving
Loans and the Senior Subordinated Notes to be made on the Closing Date, to the
payment of a portion of the Merger Financing Requirements. The terms of the
Equity Financing and agreements relating thereto shall be satisfactory in all
respects to the Agents.
(l) Consummation of the Merger.
(i) With respect to the consummation of the Merger,
concurrently with the initial Credit Extension made hereunder, all
conditions to the Merger set forth in Articles VI, VII and VIII of the
Merger Agreement and related documents shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the consent
of the Agents.
(ii) The Agents shall have received evidence reasonably
satisfactory to the Agents that all conditions to the Merger shall have
been satisfied or the fulfillment of any such conditions shall have been
waived with the consent of the Agents such that the Merger is effective
immediately upon filing of a Certificate of Merger in Delaware.
(m) Existing Indebtedness and Related Liens.
(i) On the Closing Date, Company and its Subsidiaries shall
have (X) repaid (or satisfied and discharged as described in clause (ii)
below) in full all Indebtedness of Company and its Subsidiaries other than
the Indebtedness set forth on Schedule 6.1 annexed hereto or otherwise
permitted pursuant to Section 6.1, (Y) terminated any commitments to lend
or make other extensions of credit thereunder and (Z) delivered to
Administrative Agent all documents or instruments necessary to release all
Liens securing such repaid Indebtedness or other obligations of Company
and its Subsidiaries thereunder.
(ii) On or before the Closing Date, (X) all conditions to
payment with respect to the Existing Notes tendered pursuant to the Tender
Offer set forth in the Tender Offer Documents shall have been satisfied or
the fulfillment of any such conditions shall have been
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waived with the consent of the Co-Syndication Agents; (Y) any amounts
under the Existing Notes not tendered as of the Closing Date shall be
called by Amscan Holdings; (Z) the Tender Offer shall have become
effective in accordance with the terms of the Tender Offer Documents and
related documents. Company shall deliver to the Agents copies of all
documents, agreements, opinions and certificates executed in connection
with the Tender Offer.
(n) [Intentionally Omitted].
(o) Maximum Leverage Ratio. The Agents shall have received
satisfactory evidence that as of the Closing Date and after giving effect to the
Merger and the borrowings made on the Closing Date, the Leverage Ratio
determined on a Pro-Forma Basis for the latest twelve-month period ended prior
to the Closing Date (for which financial statements are then available) is not
greater than 5.75:1.00.
(p) Related Agreements. Administrative Agent shall each have
received a fully executed or conformed copy of each Related Agreement and each
Related Agreement shall be in full force and effect and no provision thereof
shall have been modified or waived in any respect reasonably determined by the
Administrative Agent to be material, in each case without the consent of the
Administrative Agent.
(q) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of (i) Ropes & ▇▇▇▇ LLP and (ii) ▇▇▇▇, Plant, ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A., counsel for Credit Parties, in the form of Exhibit D and
as to such other matters as the Agents may reasonably request, dated as of the
Closing Date and otherwise in form and substance reasonably satisfactory to the
Administrative Agent (and each Credit Party hereby instructs such counsel to
deliver such opinions to the Agents and Lenders).
(r) Fees. Company shall have paid to Agents, the fees payable on the
Closing Date referred to in Section 2.11(d).
(s) Solvency. On the Closing Date, Agents shall have received (i) a
Solvency Certificate from Company dated the Closing Date and addressed to Agents
and Lenders, and in form, scope and substance satisfactory to the Co-Syndication
Agents and Administrative Agent, and (ii) a copy of the opinion of a third party
issued in connection with the Merger, in each case with appropriate attachments
and demonstrating that Company and its Subsidiaries when taken as a whole are
Solvent.
(t) Closing Date Certificate. Company shall have delivered to
Administrative Agent an originally executed Closing Date Certificate, together
with all attachments thereto.
(u) Credit Rating. The credit facilities provided for under this
Agreement shall have been assigned a credit rating by S&P and ▇▇▇▇▇'▇.
(v) Closing Date. Lenders shall have made the Term Loans to Company
on or before July 25, 2004.
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(w) No Litigation. There shall be no statute, regulation,
injunction, restraining order or decree of any nature of any court or
governmental authority or body of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the Merger or the financing thereof.
(x) Regulatory Proceedings. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of the Agents, singly or
in the aggregate, materially impairs the transactions contemplated by the Credit
Documents, or that could have a Material Adverse Effect.
(y) No New Information. The Agent shall not have become aware of any
new or inconsistent information or other matter not previously disclosed to the
Agents relating to the Company or the Merger which, the Agents, in their
reasonable judgment, believes has had or is reasonably likely to have a Material
Adverse Effect.
(z) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Agents and their counsel shall be satisfactory in form and
substance to Agents and such counsel, and Agents and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Agents may reasonably request.
(aa) Funds Flow Memo. Administrative Agent shall have received a
funds flow memorandum which contains a description of Company's sources and uses
of funds as of the Closing Date, including Loans and Obligations representing
Letters of Credit to be made or incurred on that date, and detailing how funds
from each source are to be transferred for particular uses.
Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
3.2. CONDITIONS TO EACH CREDIT EXTENSION.
(a) Conditions Precedent. The obligation of each Lender to make any
Loan, or Issuing Bank to issue any Letter of Credit, on any Credit Date,
including the Closing Date, are subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions precedent:
(i) Administrative Agent shall have received a fully executed
and delivered Funding Notice or Issuance Notice, as the case may be;
(ii) after making the Credit Extensions requested on such
Credit Date, the Total Utilization of Revolving Commitments shall not exceed the
Revolving Commitments then in effect;
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(iii) as of such Credit Date, the representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects on and as of that Credit Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date;
(iv) as of such Credit Date, no event shall have occurred and
be continuing or would result from the consummation of the applicable Credit
Extension that would constitute an Event of Default or a Default;
(v) on or before the date of issuance of any Letter of Credit,
Administrative Agent shall have received all other information required by the
applicable Issuance Notice, and such other documents or information as Issuing
Bank may reasonably require in connection with the issuance of such Letter of
Credit; and
(vi) after giving effect to such Credit Extension and the
application of the proceeds thereof, the aggregate Cash and Cash Equivalents of
Company and its Subsidiaries will not exceed $20,000,000.
Any Agent or Requisite Lenders shall be entitled, but not obligated to, request
and receive, prior to the making of any Credit Extension, additional information
reasonably satisfactory to the requesting party confirming the satisfaction of
any of the foregoing if, in the good faith judgment of such Agent or Requisite
Lender such request is warranted under the circumstances.
(b) Notices. Any Notice shall be executed by an Authorized Officer
in a writing delivered to Administrative Agent. In lieu of delivering a Notice,
Company may give Administrative Agent telephonic notice by the required time of
any proposed borrowing, conversion/continuation or issuance of a Letter of
Credit, as the case may be; provided each such notice shall be promptly
confirmed in writing by delivery of the applicable Notice to Administrative
Agent on or before the applicable date of borrowing, continuation/conversion or
issuance. Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized on behalf of Company or for
otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Issuing Bank to enter into this Agreement
and to make each Credit Extension to be made thereby, each Credit Party
represents and warrants to each Lender and Issuing Bank, on the Closing Date and
on each Credit Date, that the following statements are true and correct:
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each of
Holdings and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1, (b) has all requisite power and
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authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Credit Documents to
which it is a party and to carry out the transactions contemplated thereby, and
(c) is qualified to do business and in good standing in every jurisdiction where
its assets are located and wherever necessary to carry out its business and
operations, in each case, except where the failure to be so qualified or in good
standing or a lack of such power and authority has not had, and could not be
reasonably expected to have, a Material Adverse Effect.
4.2. CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each of Holdings
and its Subsidiaries has been duly authorized and validly issued and is fully
paid and non-assessable. Except as set forth on Schedule 4.2, as of the date
hereof, there is no existing option, warrant, call, right, commitment or other
agreement to which Holdings or any of its Subsidiaries is a party requiring, and
there is no membership interest or other Capital Stock of Holdings or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Company or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Holdings or any of its Subsidiaries or other
Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of
Holdings or any of its Subsidiaries. Schedule 4.2 correctly sets forth the
ownership interest of Holdings and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date.
4.3. DUE AUTHORIZATION. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.
4.4. NO CONFLICT. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not (a)
violate any provision of any law or any governmental rule or regulation
applicable to Holdings or any of its Subsidiaries, any of the Organizational
Documents of Holdings or any of its Subsidiaries, or any order, judgment or
decree of any court or other agency of government binding on Holdings or any of
its Subsidiaries; (b) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any Contractual Obligation
of Holdings or any of its Subsidiaries except for any breach or default which
could not reasonably be expected to have a Material Adverse Effect; (c) result
in or require the creation or imposition of any Lien upon any of the properties
or assets of Holdings or any of its Subsidiaries (other than any Liens created
under any of the Credit Documents in favor of Collateral Agent, on behalf of
Secured Parties); or (d) require any approval of stockholders, members or
partners or any approval or consent of any Person under any Contractual
Obligation of Holdings or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders and such consents the failure of which to receive could not
reasonably be expected to have a Material Adverse Effect.
4.5. GOVERNMENTAL CONSENTS. Except for filings and recordings with
respect to the Collateral to be made, or otherwise delivered to Collateral Agent
for filing and/or recordation, as of the Closing Date, the execution, delivery
and performance by Credit Parties of the Credit Documents to which they are
parties and the consummation of the transactions contemplated by
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the Credit Documents do not and will not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any Governmental
Authority except where the failure of which to receive could not reasonably be
expected to cause a Material Adverse Effect.
4.6. BINDING OBLIGATION. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
4.7. HISTORICAL FINANCIAL STATEMENTS. The Historical Financial Statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position, on a consolidated basis, of the Persons
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows, on a consolidated basis, of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments and in the case of interim statements the
absence of footnotes. As of the Closing Date, neither Holdings nor any of its
Subsidiaries has any contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
Historical Financial Statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Holdings and any of its
Subsidiaries taken as a whole.
4.8. PROJECTIONS. On and as of the Closing Date, the Projections of
Company and its Subsidiaries for the period Fiscal Year 2004 through and
including Fiscal Year 2012 (the "PROJECTIONS") are based on good faith estimates
and assumptions made by the management of Holdings; provided, the Projections
are not to be viewed as facts and that actual results during the period or
periods covered by the Projections may differ from such Projections and that the
differences may be material; provided further, as of the Closing Date,
management of Holdings believed that the Projections were reasonable and
attainable.
4.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 2003, no event or
change has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect.
4.10. NO RESTRICTED JUNIOR PAYMENTS. Since December 31, 2003, neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.5.
4.11. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to result in
a Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is
in violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final
72
judgments, writs, injunctions, decrees, rules or regulations of any Government
Authority, domestic or foreign, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
4.12. PAYMENT OF TAXES. Except as otherwise permitted under Section 5.3,
all material tax returns and reports of Holdings and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes shown on such
tax returns to be due and payable and all assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Holdings knows of no proposed
material tax assessment against Holdings or any of its Subsidiaries which is not
being actively contested by Holdings or such Subsidiary in good faith and by
appropriate proceedings; provided, such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
4.13. PROPERTIES.
(a) Title. Each of Holdings and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in their
respective Historical Financial Statements referred to in Section 4.5 or in the
most recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.9. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Real Estate Assets, and (ii) all
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Estate Asset of any Credit Party, regardless of whether such Credit
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. As of the Closing Date,
each agreement listed in clause (ii) of the immediately preceding sentence is in
full force and effect and Holdings does not have knowledge of any material
default that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Credit
Party, enforceable against such Credit Party in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
4.14. ENVIRONMENTAL MATTERS. Neither Holdings nor any of its Subsidiaries
nor any of their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with any
Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither Holdings nor
any of its Subsidiaries has received any letter or request for information under
Section 104 of the
73
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9604) or any comparable state law. There are and, to each of Holdings'
and its Subsidiaries' knowledge, have been, no conditions, occurrences, or
Hazardous Materials Activities which could reasonably be expected to form the
basis of an Environmental Claim against Holdings or any of its Subsidiaries
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries nor, to
any Credit Party's knowledge, any predecessor of Holdings or any of its
Subsidiaries has filed any notice under any Environmental Law indicating past or
present treatment of Hazardous Materials at any Facility, and none of Holdings'
nor any of its Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent except in material compliance with
Environmental Laws. Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not, individually or
in the aggregate, have a reasonable possibility of giving rise to a Material
Adverse Effect. No event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Environmental Law, any
Release of Hazardous Materials, or any Hazardous Materials Activity which
individually or in the aggregate has had, or could reasonably be expected to
have, a Material Adverse Effect.
4.15. NO DEFAULTS. Neither Holdings nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
4.16. MATERIAL CONTRACTS. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts are in full force and
effect and no defaults currently exist thereunder, other than any such defaults
or failure to be in force and effect which could not reasonably be expected to
result in a Material Adverse Effect.
4.17. GOVERNMENTAL REGULATION. Neither Holdings nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. Neither Holdings nor any of its Subsidiaries
is a "registered investment company" or a company "controlled" by a "registered
investment company" or a "principal underwriter" of a "registered investment
company" as such terms are defined in the Investment Company Act of 1940.
4.18. MARGIN STOCK. Neither Holdings nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of the Loans made to such Credit Party will be used to
purchase or carry any such Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any such Margin Stock or for any purpose
74
that violates, or is inconsistent with, the provisions of Regulation T, U or X
of said Board of Governors.
4.19. EMPLOYEE MATTERS. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Holdings or any of its Subsidiaries, or to the best knowledge of
Holdings, threatened against any of them before the National Labor Relations
Board and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement that is so pending against Holdings or any of
its Subsidiaries or to the best knowledge of Holdings, threatened against any of
them, (b) no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect, and (c) to the best knowledge of Holdings, no union
representation question existing with respect to the employees of Holdings or
any of its Subsidiaries and, to the best knowledge of Holdings, no union
organization activity that is taking place, except (with respect to any matter
specified in clause (a), (b) or (c) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
4.20. EMPLOYEE BENEFIT PLANS. Holdings and each of its Subsidiaries are in
compliance with all applicable provisions and requirements of ERISA and the
Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all of
their obligations under each Employee Benefit Plan, other than any noncompliance
that is not reasonably expected to have a Material Adverse Effect. Each Employee
Benefit Plan which is intended to qualify under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the Internal
Revenue Service indicating that such Employee Benefit Plan is so qualified and
to the knowledge of Holdings, nothing has occurred subsequent to the issuance of
such determination letter which would reasonably be expected to cause such
Employee Benefit Plan to lose its qualified status. No liability to the PBGC
(other than required premium payments), the Internal Revenue Service, any
Employee Benefit Plan or any trust established under Title IV of ERISA has been
or is expected to be incurred by Holdings, any of its Subsidiaries or any of
their ERISA Affiliates except as would not reasonably be expected to cause a
Material Adverse Effect. No ERISA Event has occurred or is reasonably expected
to occur which would reasonably be expected to result in liability of Holdings
and its Subsidiaries in excess of $5,000,000 during the term hereof. Except to
the extent required under Section 4980B of the Internal Revenue Code or similar
state laws, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates. Holdings, each of its Subsidiaries and each of their ERISA
Affiliates have complied with the requirements of Section 515 of ERISA with
respect to each Multiemployer Plan and are not in material "default" (as defined
in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan.
4.21. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.
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4.22. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.23. COMPLIANCE WITH STATUTES, ETC. Each of Holdings and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any permits
issued under such Environmental Laws with respect to any such Real Estate Asset
or the operations of Holdings or any of its Subsidiaries), except such
non-compliance that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
4.24. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Holdings or any of
its Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact (known to Holdings, in the case of any document not furnished by either of
them) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Holdings to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Holdings (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Commitment is
in effect and until payment in full of all Obligations and cancellation or
expiration of all Letters of Credit, each Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Company will deliver to
Administrative Agent:
(a) Monthly Reports. As soon as available, and in any event within
thirty (30) days after the end of each month ending after the Closing Date (or
within forty-five (45) days after the end of each month which ends a Fiscal
Quarter), the consolidated balance sheet of Company and its Subsidiaries as at
the end of such month and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for such
month and for the period from the beginning of the then current Fiscal Year to
the end of
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such month, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, to the extent prepared on a monthly basis, all in reasonable detail,
together with a Financial Officer Certification with respect thereto;
(b) Quarterly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, the consolidated and consolidating balance
sheets of Company and its Subsidiaries as at the end of such Fiscal Quarter and
the related consolidated (and with respect to statements of income,
consolidating) statements of income, stockholders' equity and cash flows of
Company 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,
setting forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the Financial Plan for the current Fiscal Year, all in reasonable detail,
together with a Financial Officer Certification and a Narrative Report with
respect thereto;
(c) Annual Financial Statements. As soon as available, and in any
event within ninety (90) days after the end of each Fiscal Year, (i) the
consolidated and consolidating balance sheets of Company and its Subsidiaries as
at the end of such Fiscal Year and the related consolidated (and with respect to
statements of income, consolidating) statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the Financial Plan for
the Fiscal Year covered by such financial statements, in reasonable detail,
together with a Financial Officer Certification and a Narrative Report with
respect thereto; and (ii) with respect such consolidated financial statements a
report thereon of Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by Company, and reasonably
satisfactory to Administrative Agent (which report shall be unqualified as to
going concern and scope of audit, and shall state that such consolidated
financial statements fairly present, in all material respects, the consolidated
financial position of Company and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods indicated
in conformity with accounting principles generally accepted in the United States
and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards) together with a written statement by the
independent certified public accountants giving the report thereon (a) stating
that their audit examination has included a review of the terms of this
Agreement and the other Credit Documents as they relate to accounting matters,
(b) stating whether, in connection with their audit examination, any condition
or event that constitutes an Event of Default or Default has come to their
attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to obtain knowledge of
any such Event of Default or Default that would not be disclosed in the course
of their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to believe
either or both that the information contained in the certificates delivered
therewith pursuant to this Section 5.1(c) above is not correct or that the
matters set forth in the Compliance Certificates delivered therewith
77
pursuant to Section 5.1(d) for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;
(d) Compliance Certificate. Together with each delivery of financial
statements of Company and its Subsidiaries pursuant to Sections 5.1(b) and
5.1(c), a duly executed and completed Compliance Certificate demonstrating in
reasonable detail (1) compliance during and at the end of the applicable
accounting periods with the restrictions contained in Section 6, in each case to
the extent compliance with such restrictions is required to be tested at the end
of the applicable accounting period and (2) with respect to any Net Asset Sale
Proceeds received by Company or any of its Subsidiaries during the second Fiscal
Quarter immediately preceding the Fiscal Quarter in which the applicable
accounting period ends, whether or not all or any portion of such Net Asset Sale
Proceeds have been re-invested or committed to be re-invested pursuant to
Section 2.14(a);
(e) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements for
the period ended December 31, 2003, the consolidated financial statements of
Company and its Subsidiaries delivered pursuant to Section 5.1(b) or 5.1(c) will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then, together with the first
delivery of such financial statements after such change, one or more a
statements of reconciliation in form and substance satisfactory to
Administrative Agent;
(f) Notice of Default. Promptly upon any officer of Company
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to Company with respect
thereto; (ii) that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to any event or condition
set forth in Section 8.1(b); or (iii) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, a certificate of its Authorized Officers specifying the nature
and period of existence of such condition, event or change, or specifying the
notice given or action taken by any such Person and the nature of such claimed
Event of Default, Default, default, event or condition, and what action Company
has taken, is taking and proposes to take with respect thereto;
(g) Notice of Litigation. Promptly upon any officer of Company
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
Adverse Proceeding not previously disclosed in writing by Company to Lenders, or
(ii) any material development in any Adverse Proceeding that, in the case of
either (i) or (ii) if adversely determined, could be reasonably expected to have
a Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to Company to enable Lenders
and their counsel to evaluate such matters;
(h) ERISA. (i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what
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action Company, any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto; and (ii) with reasonable
promptness, copies of (1) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by Company, any of its Subsidiaries or any of
their respective ERISA Affiliates with the Internal Revenue Service with respect
to each Pension Plan; (2) all notices received by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; and (3) copies of such other documents
or governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(i) Financial Plan. As soon as practicable and in any event no later
than thirty (30) days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year and each Fiscal Year (or
portion thereof) through the final maturity date of the Loans (a "FINANCIAL
PLAN"), including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of Company and its Subsidiaries
for each such Fiscal Year, together with pro forma Compliance Certificates for
each such Fiscal Year and an explanation of the assumptions on which such
forecasts are based, (ii) forecasted consolidated statements of income and cash
flows of Company and its Subsidiaries for each month of the first such Fiscal
Year, and (iii) forecasts demonstrating projected compliance with the
requirements of Section 6.8 through the final maturity date of the Loans;
(j) Insurance Report. Together with the financial statements
required by Section 5.1(c) for each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance coverage
maintained as of the date of such report by Company and its Subsidiaries and all
material insurance coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Company;
(l) Notice Regarding Material Contracts. Promptly, and in any event
within ten (10) Business Days (i) after any Material Contract of Company or any
of its Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or (ii) any new
Material Contract is entered into, a written statement describing such event,
with copies of such material amendments or new contracts, to be delivered only
to Administrative Agent (to the extent such delivery is permitted by the terms
of any such Material Contract, provided, no such prohibition on delivery shall
be effective if it were bargained for by Company or its applicable Subsidiary
with the intent of avoiding compliance with this Section 5.1(l)), and an
explanation of any actions being taken with respect thereto to be delivered to
Administrative Agent and Lenders;
(m) [Intentionally Omitted];
(n) Information Regarding Collateral. (a) Company will furnish to
the Collateral Agent prompt written notice of any change (i) in any Credit
Party's corporate name, (ii) in any Credit Party's identity or corporate
structure, (iii) in any Credit Party's jurisdiction of
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organization (to the extent permitted by the Pledge and Security Agreement) or
(iv) in any Credit Party's Federal Taxpayer Identification Number or
organizational identification number. Company agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
the Collateral Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral as
contemplated in the Collateral Documents. Company also agrees promptly to notify
the Collateral Agent if any material portion of the Collateral is damaged or
destroyed;
(o) Annual Collateral Verification. Each year, at the time of
delivery of annual financial statements with respect to the preceding Fiscal
Year pursuant to Section 5.1(c), Company shall deliver to the Collateral Agent
an Officer's Certificate either confirming that there has been no change in such
information since the date of the Collateral Questionnaire delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section and/or identifying such changes; and
(p) Other Information. (A) Promptly upon their becoming available,
copies of (i) all financial statements, reports, notices and proxy statements
sent or made available generally by Company to its security holders acting in
such capacity or by any Subsidiary of Company to its security holders other than
Company or another Subsidiary of Company, (ii) all regular and periodic reports
and all registration statements (other than on Form S-8 or similar form) and
prospectuses, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, (iii) all press releases and other
statements made available generally by Company or any of its Subsidiaries to the
public concerning material developments in the business of Company or any of its
Subsidiaries, and (B) such other information and data with respect to Company or
any of its Subsidiaries as from time to time may be reasonably requested by
Administrative Agent or any Lender.
5.2. EXISTENCE. Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided, no Credit
Party or any of its Subsidiaries shall be required to preserve any such
existence, right or franchise, licenses and permits if such Person's board of
directors (or similar governing body) shall determine that the preservation
thereof is no longer desirable in the conduct of the business of such Person,
and that the loss thereof is not disadvantageous in any material respect to such
Person or to Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all material Taxes imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or
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other appropriate provision, as shall be required in conformity with GAAP shall
have been made therefore, and (b) in the case of a Tax or claim which has or may
become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such Tax or claim. No Credit Party will, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Company or any of its Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Company and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof except where the failure to maintain such
properties could not reasonably be expected in any individual case or in the
aggregate to have a Material Adverse Effect.
5.5. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Company will maintain
or cause to be maintained (a) flood insurance with respect to each Flood Hazard
Property that is located in a community that participates in the National Flood
Insurance Program, in each case in compliance with any applicable regulations of
the Board of Governors of the Federal Reserve System, and (b) replacement value
casualty insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times carried or maintained under similar circumstances by
Persons of established reputation engaged in similar businesses. Each such
policy of insurance shall (i) name Collateral Agent, on behalf of Lenders as an
additional insured thereunder as its interests may appear and (ii) in the case
of each casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Collateral Agent, that names Collateral
Agent, on behalf of Lenders as the loss payee thereunder for any covered loss in
excess of $1,500,000 and provides for at least thirty (30) days' prior written
notice to Collateral Agent of any modification or cancellation of such policy.
5.6. INSPECTIONS. Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of any Credit Party and any of its
respective Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants,
(provided that Company may, if it so chooses, be present at or participate in
any such discussion) all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested;
provided, however that each Lender shall at all times coordinate with
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the Administrative Agent regarding the frequency and timing of such visits and
inspections so as to reasonably minimize the burden imposed on the Credit
Parties.
5.7. LENDERS MEETINGS. Company will, upon the request of Administrative
Agent or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Company and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
5.8. COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall cause
each of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9. ENVIRONMENTAL.
(a) Environmental Disclosure. Company will deliver to Administrative
Agent and Lenders:
(i) as soon as practicable following receipt thereof, copies
of all environmental audits, investigations, analyses and reports of any
kind or character, whether prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, governmental authorities or
any other Persons, with respect to significant environmental matters at
any Facility or with respect to any Environmental Claims that might
reasonably be expected to have a Material Adverse Effect;
(ii) promptly upon the occurrence thereof, written notice
describing in reasonable detail (1) any Release required to be reported by
Company or any of its Subsidiaries to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws,
(2) any remedial action taken by Company or any of its Subsidiaries or any
other Persons of which Company has knowledge in response to (A) any
Hazardous Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (B) any
Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect, and (3)
Company's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that reasonably could be
expected to cause such Facility or any part thereof to be subject to any
material restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws;
(iii) as soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (1) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (2) any Release required to be reported
by Company or any of its Subsidiaries to any federal, state or
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local governmental or regulatory agency, and (3) any request made to
Company or any of its Subsidiaries for information from any governmental
agency that suggests such agency is investigating whether Company or any
of its Subsidiaries may be potentially responsible for any Hazardous
Materials Activity which is reasonably expected to have a Material Adverse
Effect;
(iv) prompt written notice describing in reasonable detail (1)
any proposed acquisition of stock, assets, or property by Company or any
of its Subsidiaries that could reasonably be expected to (A) expose
Company or any of its Subsidiaries to, or result in, Environmental Claims
that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (B) result in Company or any of
its Subsidiaries failing to maintain in full force and effect all material
Governmental Authorizations required under any Environmental Laws for
their respective operations and (2) any proposed action to be taken by
Company or any of its Subsidiaries to modify current operations in a
manner that could reasonably be expected to subject Company or any of its
Subsidiaries to any additional material obligations or requirements under
any Environmental Laws; and
(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to this
Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party shall
promptly take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of applicable Environmental
Laws by such Credit Party or its Subsidiaries that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, and (ii)
make an appropriate response to any Environmental Claim against such Credit
Party or any of its Subsidiaries and discharge any obligations it may have to
any Person thereunder where failure to do so could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.10. SUBSIDIARIES. In the event that any Person becomes a Domestic
Subsidiary of Company, Company shall (a) promptly cause such Domestic Subsidiary
(other than an Immaterial Subsidiary) to become a Guarantor hereunder and a
Grantor under the Pledge and Security Agreement by executing and delivering to
Administrative Agent and Collateral Agent a Counterpart Agreement, and (b) take
all such actions and execute and deliver, or cause to be executed and delivered,
all such documents, instruments, agreements, and certificates as are similar to
those described in Sections 3.1(b), 3.1(h) and 3.1(q). In the event that any
Person becomes a Foreign Subsidiary of Company, and the ownership interests of
such Foreign Subsidiary are owned by Company or by any Domestic Subsidiary
thereof, Company shall, or shall cause such Domestic Subsidiary to, deliver, all
such documents, instruments, agreements, and certificates as are similar to
those described in Sections 3.1(b), and Company shall take, or shall cause such
Domestic Subsidiary to take, all of the actions referred to in Section 3.1(g)(i)
necessary to grant and to perfect a First Priority Lien in favor of Collateral
Agent, for the benefit of Secured Parties, under the Pledge and Security
Agreement in sixty-five percent (65%) of such ownership interests (or such
lesser amount if Company owns less than 65%). With respect to
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each such Subsidiary, Company shall promptly send to Administrative Agent
written notice setting forth with respect to such Person (i) the date on which
such Person became a Subsidiary of Company, and (ii) all of the data required to
be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of
Company; provided, such written notice shall be deemed to supplement Schedule
4.1 and 4.2 for all purposes hereof.
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS. In the event that any Credit
Party acquires a Material Real Estate Asset or a Real Estate Asset owned or
leased on the Closing Date becomes a Material Real Estate Asset and such
interest has not otherwise been made subject to the Lien of the Collateral
Documents in favor of Collateral Agent, for the benefit of Secured Parties, then
such Credit Party, as soon as practicable but in no event later than thirty (30)
days after acquiring such Material Real Estate Asset, shall take all such
actions and execute and deliver, or cause to be executed and delivered, all such
mortgages, documents, instruments, agreements, opinions and certificates similar
to those described in Sections 3.1(f), 3.1(g) and 3.1(h) with respect to each
such Material Real Estate Asset that Collateral Agent shall reasonably request
to create in favor of Collateral Agent, for the benefit of Secured Parties, a
valid and, subject to any filing and/or recording referred to herein, perfected
First Priority security interest in such Material Real Estate Assets. In
addition to the foregoing, Company shall, at the request of Requisite Lenders,
deliver, from time to time, to Administrative Agent such appraisals as are
required by law or regulation of Real Estate Assets with respect to which
Collateral Agent has been granted a Lien.
5.12. FURTHER ASSURANCES. At any time or from time to time upon the
reasonable request of Administrative Agent, each Credit Party will, at its
expense, promptly execute, acknowledge and deliver such further documents and do
such other acts and things as Administrative Agent or Collateral Agent may
reasonably request in order to effect fully the purposes of the Credit
Documents. In furtherance and not in limitation of the foregoing, each Credit
Party shall take such actions as Administrative Agent or Collateral Agent may
reasonably request from time to time to ensure that the Obligations are
guarantied by the Guarantors and are secured by substantially all of the assets
of Company, and its Subsidiaries and all of the outstanding Capital Stock of
Company and its Subsidiaries (subject to limitations contained in the Credit
Documents with respect to Foreign Subsidiaries and certain other specified
assets).
5.13. INTEREST RATE PROTECTION. Within sixty (60) days following the
Closing Date, Company shall obtain protection against fluctuations in interest
rates pursuant to one or more Interest Rate Agreements and otherwise in form and
substance reasonably satisfactory to Administrative Agent, in order to ensure
that not less than 50% of the aggregate principal amount of Consolidated Total
Debt outstanding as of Closing Date is either (i) subject to such Interest Rate
Agreements or (ii) fixed rate Indebtedness, in each case for a period of not
less than three years.
5.14. POST-CLOSING COVENANT. Company shall take all such actions to
deliver and/or execute the certificates or documents set forth on Schedule 5.14
within the time frames specified on Schedule 5.14.
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SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Commitment is
in effect and until payment in full of all Obligations and cancellation or
expiration of all Letters of Credit, such Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 6.
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness of any Subsidiary to Company or to any other
Subsidiary, or of Company to any Subsidiary; provided, (i) all such Indebtedness
shall be evidenced by promissory notes and all such notes shall be subject to a
First Priority Lien pursuant to the Pledge and Security Agreement, (ii) all such
Indebtedness shall be unsecured and subordinated in right of payment to the
Obligations pursuant to the terms of the applicable promissory notes or an
intercompany subordination agreement that in any such case, is reasonably
satisfactory to Administrative Agent, and (iii) any payment by any such
wholly-owned Subsidiary under any guaranty of the Obligations shall result in a
pro tanto reduction of the amount of any Indebtedness owed by such Subsidiary to
Company or to any of its Subsidiaries for whose benefit such payment is made;
(c) the Senior Subordinated Notes;
(d) Indebtedness incurred by Company or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, contingent earnout obligations incurred in
connection with Asset Sales or other sales or purchases of assets, or from
guaranties or letters of credit, surety bonds or performance bonds securing the
performance of the Company or any such Subsidiary pursuant to such agreements,
in connection with Permitted Acquisitions or permitted dispositions of any
business, assets or Subsidiary of Company or any of its Subsidiaries;
(e) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business;
(f) Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with Deposit Accounts;
(g) guaranties in the ordinary course of business of the obligations
of suppliers, customers, franchisees and licensees of Company and its
Subsidiaries;
(h) guaranties by Company of Indebtedness or other obligations of a
Guarantor Subsidiary or guaranties by a Subsidiary of Company of Indebtedness or
other obligations of
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Company or a Guarantor Subsidiary with respect, in each case, to Indebtedness
otherwise permitted to be incurred pursuant to this Section 6.1 or obligations
not prohibited by this Agreement;
(i) Indebtedness described in Schedule 6.1;
(j) Company's Foreign Subsidiaries may become and remain liable with
respect to Indebtedness in an aggregate amount not to exceed $10,000,000
outstanding at any time;
(k) Indebtedness of Company and its Subsidiaries with respect to the
▇▇▇▇▇▇▇ Distribution Center Permanent Financing;
(l) Indebtedness with respect to the Old ▇▇▇▇▇▇▇ Sale and Leaseback;
(m) Indebtedness with respect to Capital Leases and purchase money
Indebtedness, in each case incurred within 180 days of the acquisition or
completion of construction or installation of the assets acquired in connection
with the incurrence of such Indebtedness in an aggregate amount not to exceed at
any time $15,000,000 (including any Indebtedness acquired in connection with a
Permitted Acquisition); provided, any such Indebtedness (i) shall be secured
only to the asset acquired in connection with the incurrence of such
Indebtedness, and (ii) shall constitute not less than 50% of the aggregate
consideration paid with respect to such asset;
(n) Subsidiaries of the Company may become and remain liable with
respect to Indebtedness in aggregate amount not to exceed $10,000,000 at any
time outstanding in respect of Indebtedness of a Person which becomes a
Subsidiary, provided such Indebtedness is recourse only to such Subsidiary, and
neither Company nor any of its other Subsidiaries have any obligation in respect
thereof;
(o) Indebtedness incurred by Holdings to stockholders to repurchase
stock or options from any stockholders; provided that (i) such Indebtedness
shall be subordinated in right of payment to the Obligations and (ii) the
aggregate amount of such Indebtedness shall not exceed $5,000,000 in any Fiscal
Year and $20,000,000 in the aggregate from the Closing Date to the date of
determination;
(p) Company and its Subsidiaries may become and remain liable for
any Indebtedness replacing or refinancing any Indebtedness permitted under
clauses (i), (j), (k), (m), (n) and (t) of this Section 6.1; provided, that (i)
the principal amount of such Indebtedness does not exceed the principal amount
of the Indebtedness being refinanced or replaced, (ii) such Indebtedness has a
final maturity on or later than the final maturity of the Indebtedness being
refinanced or replaced and a weighted average life to maturity equal to or
greater than the weighted average life to maturity of the Indebtedness being
refinanced or replaced, (iii) the interest rate (or, where applicable, interest
rate margin) and fees applicable to such Indebtedness is not higher than those
applicable to the Indebtedness being refinanced or replaced, (iv) the covenants,
defaults and prepayment provisions, taken as a whole, are not more burdensome or
restrictive on Company and its Subsidiaries than those applicable to the
Indebtedness being
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refinanced or replaced, (v) such Indebtedness is secured only by Liens permitted
under Section 6.2 for the Indebtedness being refinanced or replaced, (vi) such
Indebtedness is incurred by Company or the Subsidiary who is the obligor on the
Indebtedness being refinanced or replaced and (vii) if the Indebtedness being
refinanced or replaced is subordinated to the Obligations, such Indebtedness is
subordinated to the Obligations on terms not less favorable to the Lenders than
those applicable to the Indebtedness being refinanced or replaced;
(q) Company and its Domestic Subsidiaries may become and remain
liable with respect to Indebtedness in respect of other commercial letters of
credit in an aggregate amount not to exceed at any time $3,000,000 and
Indebtedness in respect of other standby letters of credit in an aggregate
amount not to exceed at any time $2,000,000; and Foreign Subsidiaries may become
and remain liable with respect to Indebtedness in respect of other commercial
letters of credit obtained in the ordinary course of business in an aggregate
amount not to exceed at any time $2,000,000;
(r) guaranties by Company of Indebtedness of a Foreign Subsidiary
that is permitted to be incurred pursuant to this Section 6.1;
(s) Indebtedness under any hedge agreements entered into for the
purpose of hedging risks associated with Holdings' and its Subsidiaries'
operations and not for speculative purposes; and
(t) other Indebtedness of Company and its Subsidiaries in an aggregate amount
not to exceed at any time $20,000,000.
6.2. LIENS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Collateral Agent for the benefit of Secured
Parties granted pursuant to any Credit Document;
(b) Liens for Taxes not then due or if due obligations with respect
to such Taxes that are not at such time required to be paid pursuant to Section
5.3 or which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted;
(c) statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law (other than any such Lien imposed pursuant to Section 401
(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each case
incurred in the ordinary course of business (i) for amounts not yet overdue or
(ii) for amounts that are overdue and that (in the case of any such
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amounts overdue for a period in excess of fifteen days) are being contested in
good faith by appropriate proceedings, so long as such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made for any such contested amounts;
(d) Liens incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(f) any (i) interest or title of a lessor or sublessor under any
lease of real estate permitted hereunder, (ii) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to, or (iii)
subordination of the interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause (ii), so long as
the holder of such restriction or encumbrance agrees to recognize the rights of
such lessee or sublessee under such lease;
(g) Liens solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made by Company
or any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(k) (i) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the ordinary
course of business and not interfering in any material respect with the ordinary
conduct of the business of Company or such Subsidiary and (ii) leases or
subleases granted by Holdings or any of its Subsidiaries to third parties in
respect of surplus property which is not fundamental to the operation of the
business in the ordinary course of business; provided that such leases and
subleases are on arms-length commercial terms and are otherwise satisfactory to
the Administrative Agent;
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(l) Liens described in Schedule 6.2 or on a title report delivered
pursuant to Section 3.1(g)(iv);
(m) Liens on the ▇▇▇▇▇▇▇ Distribution Center Collateral securing the
▇▇▇▇▇▇▇ Distribution Center Permanent Financing; provided that (i) such Liens
attach only to the ▇▇▇▇▇▇▇ Distribution Center Collateral and (ii) such Liens
shall be on a second priority basis to any Liens granted to the Collateral Agent
on the ▇▇▇▇▇▇▇ Distribution Center Collateral;
(n) Liens securing Indebtedness permitted pursuant to 6.1(k), (l),
(m) or (p) (solely with respect to the permitted refinancing of Indebtedness
permitted pursuant to 6.1(k), (l) and (m)); provided, any such Lien shall
encumber only the asset acquired with the proceeds of such Indebtedness;
(o) Indebtedness incurred pursuant to Section 6.1(n) or (p) (solely
with respect to the permitted refinancing of Indebtedness permitted pursuant to
6.1(n)) may be secured by Liens on assets acquired or financed through the
incurrence of such Indebtedness or on the assets of the newly acquired
Subsidiary, provided that such Indebtedness was not created in contemplation of
the acquisition of such Subsidiary by Company or one of its Subsidiaries;
(p) Liens that are contractual rights of setoff relating to the
establishment of depositary relations with banks not given in connection with
the issuance of Indebtedness;
(q) Liens on foreign assets securing Indebtedness permitted pursuant
to Section 6.1(j);
(r) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or similar
agreements entered into in the ordinary course of business of Company and its
Subsidiaries; and
(s) other Liens on assets securing Indebtedness in an aggregate
amount not to exceed $5,000,000 at any time outstanding.
6.3. EQUITABLE LIEN. If any Credit Party or any of its Subsidiaries shall
create or assume any Lien upon any of its properties or assets, whether now
owned or hereafter acquired, other than Permitted Liens, it shall make or cause
to be made effective provisions whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness secured thereby as
long as any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.
6.4. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale; (b)
restrictions contained in agreements with respect to Indebtedness incurred by
Foreign Subsidiaries in accordance with this Agreement (provided that such
restrictions are limited to the property or assets of such Foreign Subsidiary
and its Subsidiaries); (c) restrictions contained in the Senior Subordinated
Notes Indenture; (d)
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restrictions by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business (provided that such
restrictions are limited to the property or assets secured by such Liens or the
property or assets subject to such leases, licenses or similar agreements, as
the case may be); (e) Liens permitted to be incurred under Section 6.2 and
restrictions in the agreements relating thereto that limit the right of the
Company to dispose of or transfer the assets subject to such Liens; (f)
provisions limiting the disposition or distribution of assets or property in
joint venture agreements, sale-leaseback agreements, stock sale agreements and
other similar agreements, which limitation is applicable only to the assets that
are the subject of such agreements; (g) any encumbrance or restriction in
connection with an acquisition of property, so long as such encumbrance or
restriction relates solely to the property so acquired and was not created in
connection with or in anticipation of such acquisition; and (h) restrictions
imposed by customary provisions in partnership agreements, limited liability
company organizational governance documents, joint venture agreements and other
similar agreements that restrict the transfer of ownership interests in such
partnership, limited liability company, joint venture or similar Person, no
Credit Party nor any of its Subsidiaries shall enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.
6.5. RESTRICTED JUNIOR PAYMENTS. No Credit Party shall, nor shall it
permit any of its Subsidiaries or Affiliates through any manner or means or
through any other Person to, directly or indirectly, declare, order, pay, make
or set apart, or agree to declare, order, pay, make or set apart, any sum for
any Restricted Junior Payment except that (a) Company may make regularly
scheduled payments of interest in respect of any Subordinated Indebtedness in
accordance with the terms of, and only to the extent required by, and subject to
the subordination provisions contained in, the indenture or other agreement
pursuant to which such Subordinated Indebtedness was issued as such indenture or
other agreement may be amended from time to time to the extent permitted under
Section 6.14; (b) so long as no Default or Event of Default shall have occurred
and be continuing or shall be caused thereby, the Company may make Restricted
Junior Payments (i) in an aggregate amount not to exceed $500,000 in any Fiscal
Year, to the extent necessary to permit Holdings to pay general administrative
costs and expenses and (ii) to the extent necessary to permit Holdings to
discharge the consolidated tax liabilities of Holdings and its Subsidiaries, in
each case so long as Holdings applies the amount of any such Restricted Junior
Payment for such purpose; and (c) so long as no Default or Event of Default
shall have occurred and be continuing or be caused thereby, Holdings may
repurchase stock and options from any stockholder (x) in exchange for notes
issued pursuant to Section 6.1(o), (y) in exchange for Capital Stock of Holdings
or (z) in exchange for Cash and Cash Equivalents (and Company may make
Restricted Junior Payments to Holdings) in an amount not to exceed $5,000,000 in
any Fiscal Year and $20,000,000 in the aggregate from the Closing Date to the
date of determination.
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided herein,
in the Senior Subordinated Notes Indenture or (with respect to encumbrances or
restrictions on the ability of any Foreign Subsidiary of Holdings only) in any
documentation evidencing the local lines of credit of Foreign Subsidiaries
expressly permitted by Section 6.1(j) or (f), no Credit Party shall, nor shall
it permit any of its Subsidiaries to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of
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any Subsidiary of Company to (a) pay dividends or make any other distributions
on any of such Subsidiary's Capital Stock owned by Company or any other
Subsidiary of Company, (b) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (c) make loans or
advances to Company or any other Subsidiary of Company, or (d) transfer any of
its property or assets to Company or any other Subsidiary of Company other than
restrictions (i) in agreements evidencing Indebtedness permitted by Section
6.1(k), (l), (m), (n) or (p) solely with respect to the permitted refinancing of
Indebtedness permitted pursuant to 6.1(k), (l), (m) or (n)) that impose
restrictions on the property so acquired and (ii) by reason of customary
provisions restricting assignments, subletting or other transfers contained in
leases, licenses, joint venture agreements and similar agreements entered into
in the ordinary course of business, (iii) that are or were created by virtue of
any transfer of, agreement to transfer or option or right with respect to any
property, assets or Capital Stock not otherwise prohibited under this Agreement;
(iv) in any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition),which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired; provided that, in the case of Indebtedness, such
Indebtedness was permitted by Section 6.1 to be incurred; (v) in any agreement
for the sale or other disposition of a Subsidiary that restricts distributions
by that Subsidiary pending the sale or other disposition; and (vi) in provisions
in agreements or instruments which prohibit the payment of dividends or the
making of other distributions with respect to any class of Capital Stock of a
Person other than on a pro rata basis.
6.7. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) Cash Equivalents;
(b) equity Investments owned as of the Closing Date in any
Subsidiary and Investments made after the Closing Date in wholly-owned
Subsidiaries of Company;
(c) Investments (i) in any Securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors and (ii)
deposits, prepayments and other credits to suppliers made in the ordinary course
of business consistent with the past practices of Company and its Subsidiaries;
(d) intercompany loans to the extent permitted under Section 6.1(b)
and intercompany guaranties to the extent permitted under Sections 6.1(h) and
(r);
(e) Consolidated Capital Expenditures permitted by Section 6.8(c);
(f) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.9;
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(g) Company and its wholly owned Domestic Subsidiaries may make
additional Investments in their respective Foreign Subsidiaries; provided that
the amount of all such Investments does not exceed $7,000,000 in the aggregate
for all such Investments since the Closing Date;
(h) Investments described in Schedule 6.7;
(i) Investments received in lieu of Cash in connection with Asset
Sales expressly permitted by Section 6.9; and
(j) other Investments in an aggregate amount not to exceed at any
time $15,000,000.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
payment not otherwise permitted under the terms of Section 6.5.
6.8. FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. Company shall not permit the Interest
Coverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending September 30, 2004, to be less than the correlative ratio
indicated:
FISCAL QUARTER INTEREST COVERAGE RATIO
------------------ -----------------------
September 30, 2004 2.25:1.00
December 31, 2004 2.25:1.00
March 31, 2005 2.25:1.00
June 30, 2005 2.25:1.00
September 30, 2005 2.50:1.00
December 31, 2005 2.50:1.00
March 31, 2006 2.50:1.00
June 30, 2006 2.50:1.00
September 30, 2006 2.50:1.00
December 31, 2006 2.50:1.00
March 31, 2007 2.50:1.00
June 30, 2007 2.75:1.00
September 30, 2007 2.75:1.00
December 31, 2007 2.75:1.00
March 31, 2008 2.75:1.00
June 30, 2008 2.75:1.00
September 30, 2008 2.75:1.00
December 31, 2008 2.75:1.00
March 31, 2009 2.75:1.00
June 30, 2009 and each Fiscal Quarter 3.00:1.00
ending thereafter
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(b) Leverage Ratio. Company shall not permit the Leverage Ratio as
of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending
September 30, 2004, to exceed the correlative ratio indicated:
FISCAL QUARTER LEVERAGE RATIO
September 30, 2004 6.50:1.00
December 31, 2004 6.50:1.00
March 31, 2005 6.50:1.00
June 30, 2005 6.50:1.00
September 30, 2005 6.25:1.00
December 31, 2005 6.25:1.00
March 31, 2006 6.25:1.00
June 30, 2006 5.75:1.00
September 30, 2006 5.75:1.00
December 31, 2006 5.75:1.00
March 31, 2007 5.75:1.00
June 30, 2007 5.25:1.00
September 30, 2007 5.25:1.00
December 31, 2007 5.25:1.00
March 31, 2008 5.25:1.00
June 30, 2008 4.75:1.00
September 30, 2008 4.75:1.00
December 31, 2008 4.75:1.00
March 31, 2009 4.75:1.00
June 30, 2009 and each Fiscal Quarter 4.25:1.00
ending thereafter
(c) Maximum Consolidated Capital Expenditures. Company shall not,
and shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures, in any Fiscal Year (commencing in Fiscal Year 2004) in an
aggregate amount for Company and its Subsidiaries in excess of $18,000,000;
provided, such amount for any Fiscal Year shall be increased by an amount equal
to the excess, if any, (but in no event more than $5,000,000) of such amount for
the previous Fiscal Year (as adjusted in accordance with this proviso) over the
actual amount of Consolidated Capital Expenditures for such previous Fiscal
Year.
(d) Certain Calculations. With respect to any period during which a
Subject Transaction (as defined in the definition of Pro Forma Basis) has
occurred, for purposes of determining compliance with the financial covenants
set forth in this Section 6.8 (but not for purposes of determining the
Applicable Margin), Consolidated Adjusted EBITDA shall be calculated with
respect to such period on a Pro Forma Basis after giving effect to such Subject
Transaction.
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, enter into
any transaction of merger or
93
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, assets or property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
whether now owned or hereafter acquired, or acquire by purchase or otherwise
(other than purchases or other acquisitions of inventory, materials, supplies
and equipment in the ordinary course of business) the business, property or
fixed assets of, or stock or other evidence of beneficial ownership of, any
Person or any division or line of business or other business unit of any Person,
except:
(a) any Subsidiary of Holdings may be merged with or into Company or
any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all or any
part of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to Company or any Guarantor Subsidiary; provided, in the case of
such a merger, Company or such Guarantor Subsidiary, as applicable shall be the
continuing or surviving Person;
(b) any Foreign Subsidiary of Company may be merged with or into any
other Foreign Subsidiary of Company, or be liquidated, wound up or dissolved, or
all or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series of
transactions to Company or any wholly-owned Subsidiary; provided, in the case of
such a merger, a wholly-owned Subsidiary shall be the continuing or surviving
Person; provided, further, in the case of a merger of a Foreign Subsidiary with
or into a Domestic Subsidiary, a Domestic Subsidiary shall be the continuing or
surviving Person;
(c) sales or other dispositions of assets that do not constitute
Asset Sales;
(d) Asset Sales, the proceeds of which (valued at the 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) when aggregated with the proceeds of all other Asset Sales made within
the same Fiscal Year, are less than $5,000,000; provided (1) the consideration
received for such assets shall be in an amount at least equal to the fair market
value thereof (determined in good faith by the board of directors of Company (or
similar governing body)), (2) no less than 75% thereof shall be paid in Cash or
Cash Equivalents, and (3) the Net Asset Sale Proceeds thereof shall be applied
as required by Section 2.14(a);
(e) disposals of obsolete, worn out or surplus property and any
assets acquired in connection with the acquisition of another person or a
division or line of business of such Person which the Company reasonably
determines are surplus assets;
(f) Permitted Acquisitions; provided that such Permitted
Acquisitions shall be financed in whole or in part with (i) Cash, Cash
Equivalents and Indebtedness in an amount not to exceed $15,000,000 in the
aggregate in any Fiscal Year, (ii) Capital Stock of Holdings (or in the case of
a Foreign Subsidiary who acquires all or any part of another foreign entity, the
Capital Stock of such Foreign Subsidiary) issued or transferred to the seller,
and/or (iii) proceeds of additional cash Sponsor Equity Contributions to
Holdings; provided, that immediately
94
following any Permitted Acquisition, Company shall have unutilized Revolving
Commitments of no less than $5,000,000;
(g) Other acquisitions or expenditures that constitute (i) Capital
Expenditures that are permitted to be incurred pursuant to Section 6.8(c) or
(ii) Investments that are permitted to be made pursuant to Section 6.7; and
(h) Consolidated Capital Expenditures made in accordance with
Section 6.8(c).
6.10. DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale of all of its
interests in the Capital Stock of any of its Subsidiaries in compliance with the
provisions of Section 6.9 and except for issuances of Capital Stock by Foreign
Subsidiaries to make Permitted Acquisitions, no Credit Party shall, nor shall it
permit any of its Subsidiaries to, (a) directly or indirectly sell, assign,
pledge or otherwise encumber or dispose of any Capital Stock of any of its
Subsidiaries, except to qualify directors if required by applicable law; or (b)
permit any of its Subsidiaries directly or indirectly to sell, assign, pledge or
otherwise encumber or dispose of any Capital Stock of any of its Subsidiaries,
except to another Credit Party (subject to the restrictions on such disposition
otherwise imposed hereunder), or to qualify directors if required by applicable
law.
6.11. SALES AND LEASE-BACKS. No Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to sell or
to transfer to any other Person (other than Company or any of its Subsidiaries),
or (b) intends to use for substantially the same purpose as any other property
which has been or is to be sold or transferred by such Credit Party to any
Person (other than Company or any of its Subsidiaries) in connection with such
lease; provided that notwithstanding the foregoing to the contrary, the Credit
Parties may enter into the Old ▇▇▇▇▇▇▇ Sale and Leaseback.
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 10% or more of any class of Capital Stock of Company or any of its
Subsidiaries or with any Affiliate of Company or of any such holder, on terms
that are less favorable to Company or that Subsidiary, as the case may be, than
those that might be obtained at the time from a Person who is not such a holder
or Affiliate; provided, the foregoing restriction shall not apply to (a) any
transaction between Company and any Subsidiary or between Subsidiaries; (b)
reasonable and customary fees paid to members of the board of directors (or
similar governing body) of Company and its Subsidiaries; (c) compensation
arrangements for officers and other employees of Company and its Subsidiaries
entered into in the ordinary course of business; (d) transactions permitted in
Section 6.1(o) and Section 6.5(c); and (e) transactions described in Schedule
6.12.
6.13. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, engage in any
business other than (i) the businesses
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engaged in by any Credit Party on the Closing Date and similar or related
businesses and (ii) such other lines of business as may be consented to by
Requisite Lenders.
6.14. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Except as set
forth in Section 6.15, no Credit Party shall nor shall it permit any of its
Subsidiaries to, agree to any material amendment, restatement, supplement or
other modification to, or waiver of, any of its material rights under (i) any
Related Agreement (other than the Stockholders Agreement); and (ii) under the
Stockholders Agreement in a manner that is materially adverse to the Lenders, in
each case after the Closing Date without in each case obtaining the prior
written consent of Requisite Lenders to such amendment, restatement, supplement
or other modification or waiver.
6.15. AMENDMENTS OR WAIVERS OF WITH RESPECT TO SUBORDINATED INDEBTEDNESS.
No Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions of such Subordinated Indebtedness (or of any guaranty
thereof), or if the effect of such amendment or change, together with all other
amendments or changes made, is to increase materially the obligations of the
obligor thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to any Credit Party or Lenders.
6.16. FISCAL YEAR. No Credit Party shall, nor shall it permit any of its
Subsidiaries to change its Fiscal Year-end from December 31.
6.17. PERMITTED ACTIVITIES OF HOLDINGS. Holdings shall not (a) incur,
directly or indirectly, any Indebtedness or any other obligation or liability
whatsoever other than the Indebtedness and obligations under the Related
Agreements and as may be permitted under Section 6.1; (b) create or suffer to
exist any Lien upon any property or assets now owned or hereafter acquired by it
other than the Liens created under the Collateral Documents to which it is a
party or permitted to it pursuant to Section 6.2; (c) engage in any business or
activity or own any assets other than (i) holding 100% of the Capital Stock of
Company, (ii) performing its obligations and activities incidental thereto under
the Credit Documents, and to the extent not inconsistent therewith, the Related
Agreements; and (iii) making Restricted Junior Payments and Investments to the
extent permitted to it by this Agreement; (d) consolidate with or merge with or
into, or convey, transfer or lease all or substantially all its assets to, any
Person; (e) sell or otherwise dispose of any Capital Stock of any of its
Subsidiaries; (f) create or acquire any Subsidiary or make or own any Investment
in any Person other than Company; or (g) fail to hold itself out to the public
as a legal entity separate and distinct from all other Persons.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty to Administrative Agent
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for the ratable benefit of the Beneficiaries the due and punctual payment in
full of all Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a))
(collectively, the "GUARANTEED OBLIGATIONS").
7.2. CONTRIBUTION BY GUARANTORS. All Guarantors desire to allocate among
themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"FUNDING GUARANTOR") under this Guaranty that exceeds its Fair Share as of such
date, such Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor's Fair Share Shortfall as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments to
equal its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "FAIR
SHARE SHORTFALL" means, with respect to a Contributing Guarantor as of any date
of determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the "FAIR SHARE CONTRIBUTION AMOUNT" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.
7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the
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failure of Company to pay any of the Guaranteed Obligations when and as the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)), Guarantors will upon demand pay,
or cause to be paid, in Cash, to Administrative Agent for the ratable benefit of
Beneficiaries, an amount equal to the sum of the unpaid principal amount of all
Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on
such Guaranteed Obligations (including interest which, but for Company's
becoming the subject of a case under the Bankruptcy Code, would have accrued on
such Guaranteed Obligations, whether or not a claim is allowed against Company
for such interest in the related bankruptcy case) and all other Guaranteed
Obligations then owed to Beneficiaries as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and to the extent permitted by applicable law shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Guaranteed Obligations. In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) the obligations of each Guarantor hereunder are independent of
the obligations of Company and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Company, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against Company or any of such other guarantors and whether or
not Company is joined in any such action or actions;
(c) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guaranteed Obligations;
(d) any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability
hereof or giving rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from time to time may (i)
renew, extend, accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment of the Guaranteed Obligations; (ii)
settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guaranteed Obligations or
any agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request
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and accept other guaranties of the Guaranteed Obligations and take and hold
security for the payment hereof or the Guaranteed Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of the Guaranteed Obligations, any other guaranties of the Guaranteed
Obligations, or any other obligation of any Person (including any other
Guarantor) with respect to the Guaranteed Obligations provided that no Credit
Document to which such Guarantor is a party may be amended without its written
consent; (v) enforce and apply any security now or hereafter held by or for the
benefit of such Beneficiary in respect hereof or the Guaranteed Obligations and
direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as
such Beneficiary in its discretion may determine consistent herewith or the
applicable Hedge Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor against
Company or any security for the Guaranteed Obligations; and (vi) exercise any
other rights available to it under the Credit Documents or the Hedge Agreements;
and
(e) this Guaranty and the obligations of Guarantors hereunder shall
be valid and enforceable and to the extent permitted by applicable law shall not
be subject to any reduction, limitation, impairment, discharge or termination
for any reason (other than payment in full of the Guaranteed Obligations),
including the occurrence of any of the following, whether or not any Guarantor
shall have had notice or knowledge of any of them: (i) any failure or omission
to assert or enforce or agreement or election not to assert or enforce, or the
stay or enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Credit Documents or the Hedge Agreements, at law, in
equity or otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) hereof, any of
the other Credit Documents, any of the Hedge Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or such Credit Document, such Hedge Agreement or any agreement
relating to such other guaranty or security; (iii) the Guaranteed Obligations,
or any agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect; (iv) the application of payments
received from any source (other than payments received pursuant to the other
Credit Documents or any of the Hedge Agreements or from the proceeds of any
security for the Guaranteed Obligations, except to the extent such security also
serves as collateral for indebtedness other than the Guaranteed Obligations) to
the payment of indebtedness other than the Guaranteed Obligations, even though
any Beneficiary might have elected to apply such payment to any part or all of
the Guaranteed Obligations; (v) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or existence of Company
or any of its Subsidiaries and to any corresponding restructuring of the
Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a
security interest in any collateral which secures any of the Guaranteed
Obligations; (vii) any defenses, set-offs or counterclaims which Company may
allege or assert
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against any Beneficiary in respect of the Guaranteed Obligations, including
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury; and (viii) any other
act or thing or omission, or delay to do any other act or thing, which may or
might in any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Guaranteed Obligations.
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the benefit
of Beneficiaries: to the extent permitted by applicable law (a) any right to
require any Beneficiary, as a condition of payment or performance by such
Guarantor, to (i) proceed against Company, any other guarantor (including any
other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any such other guarantor or
any other Person, (iii) proceed against or have resort to any balance of any
Deposit Account or credit on the books of any Beneficiary in favor of Company or
any other Person, or (iv) pursue any other remedy in the power of any
Beneficiary whatsoever; (b) any defense arising by reason of the incapacity,
lack of authority or any disability or other defense of Company or any other
Guarantor including any defense based on or arising out of the lack of validity
or the unenforceability of the Guaranteed Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
Company or any other Guarantor from any cause other than payment in full of the
Guaranteed Obligations; (c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (d) any
defense based upon any Beneficiary's errors or omissions in the administration
of the Guaranteed Obligations, except behavior which amounts to bad faith; (e)
(i) any principles or provisions of law, statutory or otherwise, which are or
might be in conflict with the terms hereof and any legal or equitable discharge
of such Guarantor's obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that any Beneficiary protect, secure,
perfect or insure any security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest, notices of
dishonor and notices of any action or inaction, including acceptance hereof,
notices of default hereunder, the Hedge Agreements or any agreement or
instrument related thereto, notices of any renewal, extension or modification of
the Guaranteed Obligations or any agreement related thereto, notices of any
extension of credit to Company and notices of any of the matters referred to in
Section 7.4 and any right to consent to any thereof; and (g) any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the terms
hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guaranteed Obligations shall have been indefeasibly paid in full and the
Revolving Commitments shall have terminated and all Letters of Credit shall have
expired or been cancelled or collateralized with cash, each Guarantor hereby
waives any claim, right or remedy, direct or indirect, that such Guarantor now
has or may hereafter have against Company or any other Guarantor or any of its
assets in connection with this Guaranty or the performance by such Guarantor of
its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter
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have against Company with respect to the Guaranteed Obligations, (b) any right
to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against Company, and (c) any benefit
of, and any right to participate in, any collateral or security now or hereafter
held by any Beneficiary. In addition, until the Guaranteed Obligations shall
have been indefeasibly paid in full and the Revolving Commitments shall have
terminated and all Letters of Credit shall have expired or been cancelled or
collateralized with cash, each Guarantor shall withhold exercise of any right of
contribution such Guarantor may have against any other guarantor (including any
other Guarantor) of the Guaranteed Obligations, including, without limitation,
any such right of contribution as contemplated by Section 7.2. Each Guarantor
further agrees that, to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for Administrative Agent on behalf of
Beneficiaries and shall forthwith be paid over to Administrative Agent for the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Company or
any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR")
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been
paid in full and the Revolving Commitments shall have terminated and all Letters
of Credit shall have expired or been cancelled. Each Guarantor hereby
irrevocably waives any right to revoke this Guaranty as to future transactions
giving rise to any Guaranteed Obligations.
7.9. AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. FINANCIAL CONDITION OF COMPANY. Any Credit Extension may be made to
Company or continued from time to time, and any Hedge Agreements may be entered
into from time to time, in each case without notice to or authorization from any
Guarantor regardless of the
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financial or other condition of Company at the time of any such grant or
continuation or at the time such Hedge Agreement is entered into, as the case
may be. No Beneficiary shall have any obligation to disclose or discuss with any
Guarantor its assessment, or any Guarantor's assessment, of the financial
condition of Company. Each Guarantor has adequate means to obtain information
from Company on a continuing basis concerning the financial condition of Company
and its ability to perform its obligations under the Credit Documents and the
Hedge Agreements, and each Guarantor assumes the responsibility for being and
keeping informed of the financial condition of Company and of all circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations. Each
Guarantor hereby waives and relinquishes any duty on the part of any Beneficiary
to disclose any matter, fact or thing relating to the business, operations or
conditions of Company now known or hereafter known by any Beneficiary.
7.11. BANKRUPTCY, ETC. (a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against Company or any
other Guarantor. The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or any other
Guarantor or by any defense which Company or any other Guarantor may have by
reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should
be determined without regard to any rule of law or order which may relieve
Company of any portion of such Guaranteed Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Administrative Agent, or allow the
claim of Administrative Agent in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guaranteed Obligations for all purposes hereunder.
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the Capital
Stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed
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of (including by merger or consolidation) in accordance with the terms and
conditions hereof, the Guaranty of such Guarantor or such successor in interest,
as the case may be, hereunder shall automatically be discharged and released
without any further action by any Beneficiary or any other Person effective as
of the time of such Asset Sale.
SECTION 8. EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT. If any one or more of the following conditions or
events shall occur:
(a) Failure to Make Payments When Due. Failure by Company to pay (i)
when due any installment of principal of any Loan, whether at stated maturity,
by acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; (ii) when due any amount payable to Issuing Bank in reimbursement of
any drawing under a Letter of Credit; or (iii) any interest on any Loan or any
fee or any other amount due hereunder within five (5) days after the date due;
or
(b) Default in Other Agreements. (i) Failure of any Credit Party or
any of their respective Subsidiaries to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) with an
aggregate principal amount of $7,500,000 or more, in each case beyond the grace
period, if any, provided therefor; or (ii) breach or default by any Credit Party
with respect to any other material term of (1) one or more items of Indebtedness
in the individual or aggregate principal amounts referred to in clause (i) above
or (2) any loan agreement, mortgage, indenture or other agreement relating to
such item(s) of Indebtedness, in each case beyond the grace period, if any,
provided therefor, if the effect of such breach or default is to cause, or to
permit the holder or holders of that Indebtedness (or a trustee on behalf of
such holder or holders), to cause, that Indebtedness to become or be declared
due and payable (or redeemable) prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be; or
(c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.6, Section
5.2 or Section 6; or
(d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein or
any of the other Credit Documents, other than any such term referred to in any
other Section of this Section 8.1, and such default shall not have been remedied
or waived within thirty (30) days after the earlier of (i) an executive officer
of such Credit Party becoming aware of such default or (ii) receipt by Company
of notice from Administrative Agent or any Lender of such default; or
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(f) Involuntary Bankruptcy; Appointment of Receiver, etc.. (i) A
court of competent jurisdiction shall enter a decree or order for relief in
respect of Holdings or any of its Subsidiaries other than an Immaterial
Subsidiary in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
which decree or order is not stayed; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against Holdings or any of its Subsidiaries other than its
Immaterial Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers Holdings or any of its Subsidiaries other than its Immaterial
Subsidiaries, or over all or a substantial part of its property, shall have been
entered; or there shall have occurred the involuntary appointment of an interim
receiver, trustee or other custodian of Holdings or any of its Subsidiaries
other than its Immaterial Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Holdings or any of
its Subsidiaries other than its Immaterial Subsidiaries, and any such event
described in this clause (ii) shall continue for sixty (60) days without having
been dismissed, bonded or discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc.. (i)
Holdings or any of its Subsidiaries shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Holdings or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the board of
directors (or similar governing body) of Holdings or any of its Subsidiaries (or
any committee thereof) shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to herein or in Section 8.1(f); or
(h) Judgments and Attachments. Any money judgment, writ or warrant
of attachment or similar process involving in the aggregate at any time an
amount in excess of $7,500,000 (in either case to the extent not adequately
covered by insurance as to which a solvent and unaffiliated insurance company
has acknowledged coverage) shall be entered or filed against Company or any of
its Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days
(or in any event later than five days prior to the date of any proposed sale
thereunder); or
(i) Dissolution. Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order shall remain undischarged or unstayed for a period in
excess of thirty (30) days; or
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(j) Employee Benefit Plans. (i) There shall occur one or more ERISA
Events which individually or in the aggregate results in or would reasonably be
expected to result in liability of Holdings or any of its Subsidiaries in excess
of $5,000,000 during the term hereof; or (ii) there shall occur the imposition
of a Lien or security interest under Section 412(n) of the Internal Revenue Code
or under ERISA; or
(k) Change of Control. A Change of Control shall occur; or
(l) Guaranties, Collateral Documents and other Credit Documents. At
any time after the execution and delivery thereof, (i) the Guaranty for any
reason, other than the satisfaction in full of all Obligations, shall cease to
be in full force and effect (other than in accordance with its terms) or shall
be declared to be null and void or any Guarantor shall repudiate its obligations
thereunder, (ii) this Agreement or any Collateral Document ceases to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the terms hereof or thereof or the satisfaction in full of the Obligations
in accordance with the terms hereof or any other termination of such Collateral
Document in accordance with the terms thereof) or shall be declared null and
void, or Collateral Agent shall not have or shall cease to have a valid and
perfected Lien in any Collateral purported to be covered by the Collateral
Documents with the priority required by the relevant Collateral Document, in
each case for any reason other than the failure of Collateral Agent or any
Secured Party to take any action within its control, or (iii) any Credit Party
shall contest the validity or enforceability of any Credit Document in writing
or deny in writing that it has any further liability, including with respect to
future advances by Lenders, under any Credit Document to which it is a party;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Company by Administrative Agent, (A) the Revolving Commitments, if
any, of each Lender having such Revolving Commitments and the obligation of
Issuing Bank to issue any Letter of Credit shall immediately terminate; (B) each
of the following shall immediately become due and payable, in each case without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by each Credit Party: (I) the unpaid principal amount of
and accrued interest on the Loans, (II) an amount equal to the maximum amount
that may at any time be drawn under all Letters of Credit then outstanding
(regardless of whether any beneficiary under any such Letter of Credit shall
have presented, or shall be entitled at such time to present, the drafts or
other documents or certificates required to draw under such Letters of Credit),
and (III) all other Obligations; provided, the foregoing shall not affect in any
way the obligations of Lenders under Section 2.3(b)(iv) or Section 2.4(e); (C)
the Administrative Agent may cause the Collateral Agent to enforce any and all
Liens and security interests created pursuant to Collateral Documents; and (D)
Administrative Agent shall direct Company to pay (and Company hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 8.1(f) and (g) to pay) to Administrative Agent such additional
amounts of cash, to be held as security for Company's reimbursement Obligations
in respect of Letters of Credit then outstanding, equal to the Letter of Credit
Usage at such time.
SECTION 9. AGENTS
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9.1. APPOINTMENT OF AGENTS. GSCP and JPMSI are hereby appointed
Co-Syndication Agents hereunder, and each Lender hereby authorizes the
Co-Syndication Agents to act as its agent in accordance with the terms hereof
and the other Credit Documents. GECC is hereby appointed Administrative Agent
hereunder, and each Lender hereby authorizes Administrative Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. GECC
is hereby appointed Collateral Agent hereunder, and each Lender hereby
authorizes Collateral Agent to act as its agent in accordance with the terms
hereof and the other Credit Documents. Each Agent hereby agrees to act upon the
express conditions contained herein and the other Credit Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and no Credit Party shall have any rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties hereunder, each Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
Co-Syndication Agents, without consent of or notice to any party hereto, may
assign any and all of their rights or obligations hereunder to any of their
Affiliates. As of the Closing Date, neither GSCP, in its capacity as a
Co-Syndication Agent, Joint Lead Arranger and Joint Bookrunner, nor JPMSI, in
its capacity as Joint Lead Arranger, Joint Bookrunner and Co-Syndication Agent,
shall have any obligations but shall be entitled to all benefits of this Section
9.
9.2. POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
9.3. GENERAL IMMUNITY.
(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any
Credit Party to any Agent or any Lender in connection with the Credit Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of any Credit Party or any other Person liable for the payment
of any Obligations, nor shall any Agent be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Credit Documents or as to the
use of the proceeds of the Loans or as to
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the existence or possible existence of any Event of Default or Default or to
make any disclosures with respect to the foregoing. Anything contained herein to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the Letter of
Credit Usage or the component amounts thereof.
(b) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting hereunder or any of the
other Credit Documents in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
Section 10.5).
9.4. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection herewith and otherwise
without having to account for the same to Lenders.
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Company and its Subsidiaries. No Agent shall have any duty
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or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this Agreement
and funding its Term Loan, and/or a Revolving Loan on the Closing Date, shall be
deemed to have acknowledged receipt of, and consented to and approved, each
Credit Document and each other document required to be approved by any Agent,
Requisite Lenders or Lenders, as applicable on the Closing Date.
9.6. RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify each Agent, to the extent that such Agent
shall not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Credit Documents; provided, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct. If any indemnity furnished to any Agent
for any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided further, this sentence shall not be deemed
to require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the proviso in the immediately preceding sentence.
9.7. SUCCESSOR ADMINISTRATIVE AGENT AND SWING LINE LENDER. Administrative
Agent may resign at any time by giving thirty (30) days' prior written notice
thereof to Lenders and Company, and Administrative Agent may be removed at any
time with or without cause by an instrument or concurrent instruments in writing
delivered to Company and Administrative Agent and signed by Requisite Lenders.
Upon any such notice of resignation or any such removal, Requisite Lenders shall
have the right, upon five Business Days' notice to Company, to appoint a
successor Administrative Agent. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, that
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed
Administrative Agent and the retiring or removed Administrative Agent shall
promptly (i) transfer to such successor Administrative Agent all sums,
Securities and other items of Collateral held under the Collateral Documents,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent under the Credit Documents, and (ii) execute and deliver to such successor
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Administrative Agent such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Administrative Agent of the security interests
created under the Collateral Documents, whereupon such retiring or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring or removed Administrative Agent's resignation or
removal hereunder 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 Agent hereunder. Any resignation or removal of Administrative Agent
pursuant to this Section shall also constitute the resignation or removal of
GECC or its successor as Swing Line Lender, and any successor Administrative
Agent appointed pursuant to this Section shall, upon its acceptance of such
appointment, become the successor Swing Line Lender for all purposes hereunder.
In such event (a) Company shall prepay any outstanding Swing Line Loans made by
the retiring or removed Administrative Agent in its capacity as Swing Line
Lender, (b) upon such prepayment, the retiring or removed Administrative Agent
and Swing Line Lender shall surrender any Swing Line Note held by it to Company
for cancellation, and (c) Company shall issue, if so requested by successor
Administrative Agent and Swing Line Loan Lender, a new Swing Line Note to the
successor Administrative Agent and Swing Line Lender, in the principal amount of
the Swing Line Loan Sublimit then in effect and with other appropriate
insertions.
9.8. COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents under Collateral Documents and Guaranty. Each Lender
hereby further authorizes Administrative Agent or Collateral Agent, as
applicable, on behalf of and for the benefit of Lenders, to be the agent for and
representative of Lenders with respect to the Guaranty, the Collateral and the
Collateral Documents. Subject to Section 10.5, without further written consent
or authorization from Lenders, Administrative Agent or Collateral Agent, as
applicable may execute any documents or instruments necessary to (i) release any
Lien encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted hereby or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 10.5) have
otherwise consented or (ii) release any Guarantor from the Guaranty pursuant to
Section 7.12 or with respect to which Requisite Lenders (or such other Lenders
as may be required to give such consent under Section 10.5) have otherwise
consented.
(b) Right to Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Credit Documents to the contrary notwithstanding,
Company, Administrative Agent, Collateral Agent and each Lender hereby agree
that (i) no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent, on behalf of Lenders in accordance with the terms hereof and all powers,
rights and remedies under the Collateral Documents may be exercised solely by
Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on
any of the Collateral pursuant to a public or private sale, Collateral Agent or
any Lender may be the purchaser of any or all of such Collateral at any such
sale and Collateral Agent, as agent for and representative of Secured Parties
(but not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding
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and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the
Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1. NOTICES. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given to a Credit
Party, Syndication Agent, Collateral Agent, Administrative Agent, Swing Line
Lender, Issuing Bank or Documentation Agent, shall be sent to such Person's
address as set forth on Appendix B or in the other relevant Credit Document, and
in the case of any Lender, the address as indicated on Appendix B or otherwise
indicated to Administrative Agent in writing. Each notice hereunder shall be in
writing and may be personally served, telexed or sent by telefacsimile or United
States mail or courier service and shall be deemed to have been given when
delivered in person or by courier service and signed for against receipt
thereof, upon receipt of telefacsimile or telex, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided, no notice to any Agent shall be effective until received by
such Agent.
10.2. EXPENSES. Whether or not the transactions contemplated hereby shall
be consummated, Company agrees to pay promptly (a) all the actual and reasonable
costs and expenses of preparation of the Credit Documents and any consents,
amendments, waivers or other modifications thereto; (b) all the costs of
furnishing all opinions by counsel for Company and the other Credit Parties; (c)
the reasonable fees, expenses and disbursements of counsel to Agents (in each
case including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Credit Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Company; (d) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Collateral
Agent, for the benefit of Lenders pursuant hereto, including filing and
recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums and reasonable fees, expenses and disbursements of
counsel to each Agent and of counsel providing any opinions that any Agent or
Requisite Lenders may request in respect of the Collateral or the Liens created
pursuant to the Collateral Documents; (e) all the actual costs and reasonable
fees, expenses and disbursements of any auditors, accountants, consultants or
appraisers retained by any Agent with the prior consent of Company (not to be
unreasonably withheld); (f) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Collateral Agent and
its counsel) in connection with the custody or preservation of any of the
Collateral; (g) all other actual and reasonable costs and expenses incurred by
each Agent in connection with the syndication of the Loans and Commitments and
the negotiation, preparation and execution of the Credit Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (h) after the occurrence of a Default or
an Event of Default, all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by any Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization
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upon any of the Collateral or the enforcement of the Guaranty) or in connection
with any refinancing or restructuring of the credit arrangements provided
hereunder in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy cases or proceedings.
10.3. INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section 10.2,
whether or not the transactions contemplated hereby shall be consummated, each
Credit Party agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless, each Agent and Lender and the officers,
partners, directors, trustees, employees, agents and Affiliates of each Agent
and each Lender (each, an "INDEMNITEE"), from and against any and all
Indemnified Liabilities; provided, no Credit Party shall have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in this Section 10.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(b) To the extent permitted by applicable law, neither Company nor
any of its Subsidiaries or Affiliates shall assert, and hereby waives, any claim
against any Lender or any of their Affiliates, directors, employees, attorneys
or agents, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby, the transactions
contemplated hereby or thereby, any Loan or the use of the proceeds thereof or
any act or omission or event occurring in connection therewith, and Company
hereby waives, releases and agrees not to ▇▇▇ upon any such claim or any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
10.4. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder, the Letters of Credit and participations
therein and under the other Credit Documents, including all claims of any nature
or description arising out of or connected hereto, the Letters of Credit and
participations therein or with any other Credit Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Loans
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or any amounts in respect of the Letters of Credit or any other amounts due
hereunder shall have become due and payable pursuant to Section 2 and although
such obligations and liabilities, or any of them, may be contingent or
unmatured. Each Credit Party hereby further grants to Administrative Agent and
each Lender a security interest in all Deposit Accounts maintained with
Administrative Agent or such Lender as security for the Obligations.
10.5. AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of the Requisite
Lenders.
(b) Affected Lenders' Consent. Without the written consent of each
Lender (other than a Defaulting Lender) that would be affected thereby, no
amendment, modification, termination, or consent shall be effective if the
effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment (but
not prepayment);
(iii) extend the stated expiration date of any Letter of
Credit beyond the Revolving Commitment Termination Date;
(iv) reduce the rate of interest on any Loan (other than any
waiver of any increase in the interest rate applicable to any Loan
pursuant to Section 2.10) or any fee payable under Section 2.11(a);
(v) extend the time for payment of any such interest or fees;
(vi) reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit;
(vii) amend, modify, terminate or waive any provision of this
Section 10.5;
(viii) amend the definition of "REQUISITE LENDERS" or "PRO
RATA SHARE"; provided, with the consent of Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the determination
of "REQUISITE LENDERS" or "PRO RATA SHARE" on substantially the same basis
as the Term Loan Commitments, the Term Loans, the Revolving Commitments
and the Revolving Loans are included on the Closing Date;
(ix) release all or substantially all of the Collateral or all
or substantially all of the Guarantors from the Guaranty except as
expressly provided in the Credit Documents; or
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(x) consent to the assignment or transfer by any Credit Party
of any of its rights and obligations under any Credit Document.
(c) Other Consents. No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall:
(i) increase any Commitment of any Lender over the amount
thereof then in effect without the consent of such Lender; provided, no
amendment, modification or waiver of any condition precedent, covenant,
Default or Event of Default shall constitute an increase in any Commitment
of any Lender;
(ii) amend, modify, terminate or waive any provision hereof
relating to the Swing Line Sublimit or the Swing Line Loans without the
consent of Swing Line Lender;
(iii) amend the definition of "REQUISITE CLASS LENDERS"
without the consent of Requisite Class Lenders of each Class; provided,
with the consent of the Requisite Lenders, additional extensions of credit
pursuant hereto may be included in the determination of such "REQUISITE
CLASS LENDERS" on substantially the same basis as the Term Loan
Commitments, the Term Loans, the Revolving Commitments and the Revolving
Loans are included on the Closing Date;
(iv) alter the required application of any repayments or
prepayments as between Classes pursuant to Section 2.15 without the
consent of Requisite Class Lenders of each Class which is being allocated
a lesser repayment or prepayment as a result thereof; provided, Requisite
Lenders may waive, in whole or in part, any prepayment so long as the
application, as between Classes, of any portion of such prepayment which
is still required to be made is not altered;
(v) amend, modify, terminate or waive any obligation of
Lenders relating to the purchase of participations in Letters of Credit as
provided in Section 2.4(e) without the written consent of Administrative
Agent and of Issuing Bank;
(vi) extend the length of any LIBOR Period or provide for nine
month or twelve month LIBOR Periods without the consent of each Lender
affected thereby; or
(vii) amend, modify, terminate or waive any provision of
Section 9 as the same applies to any Agent, or any other provision hereof
as the same applies to the rights or obligations of any Agent, in each
case without the consent of such Agent.
(d) Execution of Amendments, etc. Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of such Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or
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demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.5
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by a Credit Party, on such Credit Party.
(e) Notwithstanding anything to the contrary contained herein, this
Agreement may be amended with the written consent of the Administrative Agent,
Company, the holders of not less than 50.0% of the Revolving Exposure and the
Lenders providing the relevant Replacement Term Loans to permit the refinancing
of all outstanding Term Loans (the "REFINANCED TERM LOAN") with a replacement
term loan tranche hereunder (the "REPLACEMENT TERM LOANS"), provided that (a)
the aggregate principal amount of such Replacement Term Loans shall not exceed
the aggregate principal amount of such Refinanced Term Loan, (b) the interest
rate for such Replacement Term Loans shall not be higher than the interest rate
for such Refinanced Term Loan, (c) the weighted average life to maturity of such
Replacement Term Loans shall not be shorter than the weighted average life to
maturity of such Refinanced Term Loan at the time of such refinancing and (d)
all other terms applicable to such Replacement Term Loans shall be substantially
identical to, or less favorable to the Lenders providing such Replacement Term
Loans than those applicable to such Refinanced Term Loan, except to the extent
necessary to provide for covenants and other terms applicable to any period
after the latest final maturity of the Term Loans in effect immediately prior to
such refinancing.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders. Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, Affiliates of each of the Agents and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
(b) Register. Company, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or Loan
shall be effective, in each case, unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been delivered to and
accepted by Administrative Agent and recorded in the Register as provided in
Section 10.6(e). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments or
Loans.
(c) Right to Assign. Each Lender shall have the right at any time to
sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of its
Commitment or Loans owing to it or other Obligation (provided,
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however, that each such assignment shall be of a uniform, and not varying,
percentage of all rights and obligations under and in respect of any Loan and
any related Commitments):
(i) to any Person meeting the criteria of clause (i) of the
definition of the term of "Eligible Assignee" upon the giving of notice to
Company and Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of "Eligible Assignee" and, in the case of
assignments of Revolving Loans or Revolving Commitments to any such Person
(except in the case of assignments made by or to GSCP), consented to by
each of Company and Administrative Agent (such consent not to be (x)
unreasonably withheld or delayed or, (y) in the case of Company, required
at any time an Event of Default shall have occurred and then be
continuing); provided, further each such assignment pursuant to this
Section 10.6(c)(ii) shall be in an aggregate amount of not less than (A)
$5,000,000 (or such lesser amount as may be agreed to by Company and
Administrative Agent or as shall constitute the aggregate amount of the
Revolving Commitments and Revolving Loans of the assigning Lender) with
respect to the assignment of the Revolving Commitments and Revolving Loans
and (B) $1,000,000 (or such lesser amount as may be agreed to by Company
and Administrative Agent or as shall constitute the aggregate amount of
the Term Loan of the assigning Lender) with respect to the assignment of
Term Loans.
(d) Mechanics. The assigning Lender and the assignee thereof shall
execute and deliver to Administrative Agent an Assignment Agreement two (2)
Business Days prior to the effective date thereof, together with such (i) a
processing and recordation fee of $3500 (except that (x) no such fee shall be
payable in connection with the primary syndication by the Co-Syndication Agents
and (y) only one fee shall be payable in the case of contemporaneous assignments
to Related Funds), and (ii) forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to Administrative
Agent pursuant to Section 2.20(c).
(e) Notice of Assignment. Upon its receipt of a duly executed and
completed Assignment Agreement (and any forms, certificates or other evidence
required by this Agreement in connection therewith), Administrative Agent shall
record the information contained in such Assignment Agreement in the Register,
shall give prompt notice thereof to Company and shall maintain a copy of such
Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon executing and delivering an Assignment
Agreement, as the case may be, represents and warrants as of the Closing Date or
as of the applicable Effective Date (as defined in the applicable Assignment
Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and
expertise in the making of or investing in commitments or loans such as the
applicable Commitments or Loans, as the case may be; and (iii) it will make or
invest in, as the case may be, its Commitments or Loans for its own account in
the ordinary course of its business and without a view to distribution of such
Commitments or Loans within the meaning of the Securities Act or the Exchange
Act or other federal securities laws (it being understood that,
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subject to the provisions of this Section 10.6, the disposition of such
Commitments or Loans or any interests therein shall at all times remain within
its exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions of
this Section 10.6, as of the "Effective Date" specified in the applicable
Assignment Agreement (which shall be no sooner than two (2) Business Days after
delivery to the Administrative Agent of the Assignment Agreement and related
documents required by subsection (d) above): (i) the assignee thereunder shall
have the rights and obligations of a "Lender" hereunder to the extent such
rights and obligations hereunder have been assigned to it pursuant to such
Assignment Agreement and shall thereafter be a party hereto and a "Lender" for
all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned thereby pursuant to
such Assignment Agreement, relinquish its rights (other than any rights which
survive the termination hereof under Section 10.8) and be released from its
obligations hereunder (and, in the case of an Assignment Agreement covering all
or the remaining portion of an assigning Lender's rights and obligations
hereunder, such Lender shall cease to be a party hereto; provided, anything
contained in any of the Credit Documents to the contrary notwithstanding, (y)
Issuing Bank shall continue to have all rights and obligations thereof with
respect to such Letters of Credit until the cancellation or expiration of such
Letters of Credit and the reimbursement of any amounts drawn thereunder and (z)
such assigning Lender shall continue to be entitled to the benefit of all
indemnities hereunder as specified herein with respect to matters arising out of
the prior involvement of such assigning Lender as a Lender hereunder); (iii) the
Commitments shall be modified to reflect the Commitment of such assignee and any
Revolving Commitment of such assigning Lender, if any; and (iv) if any such
assignment occurs after the issuance of any Note hereunder, the assigning Lender
shall, upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon Company shall issue and deliver new Notes, if so
requested by the assignee and/or assigning Lender, to such assignee and/or to
such assigning Lender, with appropriate insertions, to reflect the new Revolving
Commitments and/or outstanding Loans of the assignee and/or the assigning
Lender.
(h) Participations. Each Lender shall have the right at any time to
sell one or more participations to any Person (other than Company, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Commitments,
Loans or in any other Obligation. The holder of any such participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or waiver that would (i)
extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Revolving Commitment
Termination Date) in which such participant is participating, or reduce the rate
or extend the time of payment of interest or fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations
116
under this Agreement or (iii) release all or substantially all of the Collateral
under the Collateral Documents (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating. The Company agrees that each participant shall be entitled to the
benefits of Sections 2.18(c), 2.19 and 2.20 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (c) of
this Section; provided, (i) a participant shall not be entitled to receive any
greater payment under Section 2.19 or 2.20 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
participant, unless the sale of the participation to such participant is made
with the Company's prior written consent and (ii) a participant that would be a
Non-US Lender if it were a Lender shall not be entitled to the benefits of
Section 2.20 unless the Company is notified of the participation sold to such
participant and such participant agrees, for the benefit of the Company, to
comply with Section 2.20 as though it were a Lender. To the extent permitted by
law, each participant also shall be entitled to the benefits of Section 10.4 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.17 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other assignment
permitted pursuant to this Section 10.6, (i) any Lender may assign and/or pledge
all or any portion of its Loans, the other Obligations owed by or to such
Lender, and its Notes, if any, to secure obligations of such Lender including,
without limitation, any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve Bank; provided, no Lender, as
between Company and such Lender, shall be relieved of any of its obligations
hereunder as a result of any such assignment and pledge, and provided further,
in no event shall the applicable Federal Reserve Bank or trustee be considered
to be a "Lender" or be entitled to require the assigning Lender to take or omit
to take any action hereunder.
10.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17, 9.3(b)
and 9.6 shall survive the payment of the Loans, the cancellation or expiration
of the Letters of Credit and the reimbursement of any amounts drawn thereunder,
and the termination hereof.
10.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
117
privilege. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Credit Documents or any of the Hedge Agreements. Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
10.10. MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Credit Party
or any other Person or against or in payment of any or all of the Obligations.
To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.11. SEVERABILITY. In case any provision in or obligation hereunder or
any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
10.13. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREOF.
118
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT,
OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT
PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES AGENTS AND
LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.
10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO
119
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY
OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17. CONFIDENTIALITY. Each Lender shall hold all non-public information
regarding Company and its business and obtained by such Lender pursuant to the
requirements hereof in accordance with such Lender's customary procedures for
handling confidential information of such nature, it being understood and agreed
by Company that, in any event, a Lender may make (i) disclosures of such
information to Affiliates of such Lender and to their agents and advisors (and
to other persons authorized by a Lender or Agent to organize, present or
disseminate such information in connection with disclosures otherwise made in
accordance with this Section 10.17), (ii) disclosures of such information
reasonably required by any bona fide or potential assignee, transferee or
participant in connection with the contemplated assignment, transfer or
participation by such Lender of any Loans or any participations therein (so long
as such Persons agree in advance in writing to keep such information
confidential) or by any direct or indirect contractual counterparties (or the
professional advisors thereto) in Hedge Agreements (provided, such
counterparties and advisors are advised of and agree to be bound by the
provisions of this Section 10.17), (iii) disclosure to any rating agency when
required by it, provided that, prior to any disclosure, such rating agency shall
undertake in writing to preserve the confidentiality of any confidential
information relating to the Credit Parties received by it from any of the Agents
or any Lender, and (iv) disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal or judicial
process; provided, unless specifically prohibited by applicable law or court
order, each Lender shall make reasonable efforts to notify Company of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition or
other routine examination of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information.
10.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, Company shall pay to Administrative Agent an amount
equal to the difference between the amount of interest paid and the amount of
interest which would have been paid if the Highest Lawful Rate had at all times
been in effect. Notwithstanding the foregoing, it is the intention of Lenders
and Company to conform strictly to any applicable usury laws. Accordingly, if
any Lender contracts for,
120
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such Lender's option be applied to the
outstanding amount of the Loans made hereunder or be refunded to Company.
10.19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
10.20. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
10.21. USA PATRIOT ACT. Each Lender hereby notifies Company that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), it is required to obtain, verify and record
information that identifies Company, which information includes the name and
address of Company and other information that will allow such Lender to identify
Company in accordance with the Act.
[Remainder of page intentionally left blank]
121
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
AAH HOLDINGS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer,
Secretary and Vice President
AMSCAN HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer,
Secretary and Vice President
AMSCAN INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
SSY REALTY CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
JCS REALTY CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
AM SOURCE LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
TRISAR, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
S-1
ANAGRAM INTERNATIONAL HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Assistant
Treasurer and Secretary
ANAGRAM INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Assistant
Treasurer and Secretary
ANAGRAM EDEN PRAIRIE PROPERTY HOLDINGS,
LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer,
Secretary and Vice President
of Amscan Holdings, Inc., its
sole member
M&D INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Assistant
Treasurer and Secretary
S-2
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Joint
Bookrunner, Co-Syndication Agent and
a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
S-3
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Administrative Agent, Collateral
Agent and a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
S-4
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Joint Lead Arranger, Joint Bookrunner
and Co-Syndication Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
S-5
JPMORGAN CHASE BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
S-6
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
S-7
APPENDIX A-1
TO CREDIT AND GUARANTY AGREEMENT
TERM LOAN COMMITMENTS
PRO
LENDER TERM LOAN COMMITMENT RATA SHARE
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. $ 185,000,000.00 90.24%
General Electric Capital Corporation $ 20,000,000.00 9.76%
TOTAL $ 205,000,000.00 100.00%
APPENDIX ▇-▇-▇
▇▇▇▇▇▇▇▇ ▇-▇
TO CREDIT AND GUARANTY AGREEMENT
REVOLVING COMMITMENTS
LENDER REVOLVING COMMITMENT PRO RATA SHARE
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. $10,000,000.00 20.00%
General Electric Capital Corporation $20,000,000.00 40.00%
JPMorgan Chase Bank $10,000,000.00 20.00%
Credit Suisse First Boston, acting through its $10,000,000.00 20.00%
Cayman Islands Branch
TOTAL $50,000,000.00 100.00%
APPENDIX ▇-▇-▇
▇▇▇▇▇▇▇▇ ▇
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
AMSCAN HOLDINGS, INC.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
AMSCAN INC.
JCS REALTY CORP.
SSY REALTY CORP.
TRISAR, INC.
AM-SOURCE LLC
ANAGRAM INTERNATIONAL HOLDINGS, INC.
ANAGRAM INTERNATIONAL, INC.
ANAGRAM INTERNATIONAL LLC
ANAGRAM EDEN PRAIRIE PROPERTY HOLDINGS LLC
M & D INDUSTRIES, INC.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
in each case, with a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
APPENDIX B-1
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Joint Bookrunner,
Co-Syndication Agent and a Lender
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
APPENDIX B-2
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, Collateral Agent,
Swing Line Lender, Issuing Bank and a Lender
Administrative Agent's Principal Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Swing Line Lender's Principal Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Issuing Bank's Principal Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
in each case, with a copy to:
Winston & ▇▇▇▇▇▇
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
APPENDIX B-3
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Joint Lead Arranger, Joint Bookrunner
and Co-Syndication Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention; ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
JPMORGAN CHASE BANK,
as a Lender
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
APPENDIX B-4