EXHIBIT 10.34
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
dated as of December 19, 2003
among,
THL BEDDING COMPANY,
as Company,
THL-SC BEDDING COMPANY AND CERTAIN SUBSIDIARIES OF COMPANY,
as Guarantors,
THE FINANCIAL INSTITUTIONS LISTED HEREIN,
as Lenders,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Sole Bookrunner, a Joint Lead Arranger and as Co-Syndication Agent,
UBS SECURITIES LLC,
as a Joint Lead Arranger and as Co-Syndication Agent,
and
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Administrative Agent
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$140,000,000 TERM LOAN FACILITY
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS; INTERPRETATION ......................................... 2
1.1 Defined Terms ..................................................... 2
1.2 Accounting Terms .................................................. 32
1.3 Interpretation, etc................................................ 33
SECTION 2. TERM LOANS .......................................................... 33
2.1 Term Loans ........................................................ 33
2.2 [Reserved] ........................................................ 33
2.3 [Reserved] ........................................................ 33
2.4 Pro Rata Shares ................................................... 33
2.5 Use of Proceeds ................................................... 34
2.6 Term Loan Notes; Register; Lenders' Books and Records ............. 34
2.7 Interest Payments ................................................. 35
2.8 Conversion; Continuation .......................................... 36
2.9 Post-Maturity Interest ............................................ 36
2.10 Fees .............................................................. 37
2.11 Repayment of Term Loans ........................................... 37
2.12 Voluntary Prepayments ............................................. 37
2.13 Mandatory Prepayments ............................................. 37
2.14 [Reserved] ........................................................ 38
2.15 Guaranty Payments ................................................. 38
2.16 General Provisions Regarding Payments ............................. 38
2.17 Ratable Sharing ................................................... 39
2.18 Making or Maintaining Eurodollar Rate Loans ....................... 39
2.19 Increased Costs; Capital Adequacy ................................. 41
2.20 Taxes; Withholding, Etc............................................ 42
2.21 Capital Adequacy Adjustment ....................................... 45
2.22 Obligation to Mitigate ............................................ 46
2.23 [Reserved] ........................................................ 47
2.24 Removal or Replacement of a Lender ................................ 47
SECTION 3. CONDITIONS PRECEDENT ................................................ 47
3.1 Closing Date ...................................................... 47
SECTION 4. REPRESENTATIONS AND WARRANTIES ...................................... 51
4.1 Organization and Powers ........................................... 51
4.2 Qualification and Good Standing ................................... 51
4.3 Subsidiaries ...................................................... 52
4.4 Authorization of Borrowing; No Conflict ........................... 52
4.5 Governmental Consents ............................................. 53
4.6 Binding Obligation ................................................ 53
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4.7 Valid Issuance of the Senior Subordinated Notes .............................. 53
4.8 Financial Condition .......................................................... 53
4.9 No Material Adverse Change ................................................... 53
4.10 Litigation; Adverse Facts .................................................... 53
4.11 Payment of Taxes ............................................................. 54
4.12 Title to Properties; Real Property ........................................... 54
4.13 [Reserved] ................................................................... 54
4.14 Environmental ................................................................ 54
4.15 No Defaults .................................................................. 55
4.16 Governmental Regulation ...................................................... 55
4.17 Margin Stock ................................................................. 55
4.18 Employee Matters ............................................................. 55
4.19 Employee Benefit Plans ....................................................... 55
4.20 [Reserved] ................................................................... 56
4.21 Solvency ..................................................................... 56
4.22 Certain Related Agreements ................................................... 56
4.23 [Reserved] ................................................................... 56
4.24 Disclosure ................................................................... 56
4.25 Intellectual Property ........................................................ 57
SECTION 5. AFFIRMATIVE COVENANTS .......................................................... 57
5.1 Financial Statements and Other Reports ....................................... 57
5.2 Legal Existence, etc. ........................................................ 60
5.3 Payment of Taxes and Claims .................................................. 60
5.4 Maintenance of Properties .................................................... 61
5.5 Insurance .................................................................... 61
5.6 Inspection Rights; Lender Meeting ............................................ 61
5.7 Compliance with Laws, Etc. ................................................... 62
5.8 Environmental Matters ........................................................ 62
5.9 Subsidiaries ................................................................. 63
5.10 Execution of Credit Documents ................................................ 63
5.11 Designated Senior Debt ....................................................... 63
SECTION 6. NEGATIVE COVENANTS ............................................................. 64
6.1 Indebtedness and Issuance of Disqualified Stock and Preferred
Stock ........................................................................ 64
6.2 Liens ........................................................................ 65
6.3 Investments .................................................................. 66
6.4 [Reserved] ................................................................... 69
6.5 Restricted Junior Payments ................................................... 69
6.6 [Reserved] ................................................................... 73
6.7 Fundamental Changes .......................................................... 73
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6.8 Asset Sales .................................................................. 74
6.9 [Reserved] ................................................................... 76
6.10 Transactions with Shareholders and Affiliates ................................ 76
6.11 Amendments or Waivers of Certain Documents ................................... 76
6.12 Conduct of Company Business .................................................. 77
6.13 Special Covenants of Holdings ................................................ 77
6.14 Fiscal Year .................................................................. 77
6.15 Restriction on Burdensome Agreements ......................................... 77
SECTION 7. GUARANTY ....................................................................... 78
7.1 Guaranty of the Obligations .................................................. 78
7.2 Limitation on Amount Guarantied .............................................. 78
7.3 Payment by Guarantors ........................................................ 79
7.4 Liability of Guarantors Absolute ............................................. 79
7.5 Waivers by Guarantors ........................................................ 82
7.6 Guarantors' Rights of Subrogation. Contribution, Etc. ........................ 82
7.7 Subordination of Other Obligations ........................................... 83
7.8 Continuing Guaranty .......................................................... 83
7.9 Authority of Guarantors or Company ........................................... 83
7.10 Financial Condition of Company and Guarantors ................................ 83
7.11 Bankruptcy, Etc. ............................................................. 84
7.12 Discharge of Guaranty Upon Sale of Guarantor ................................. 84
SECTION 8. EVENTS OF DEFAULT .............................................................. 85
8.1 Events of Default ............................................................ 85
8.2 Certain Option of Lenders .................................................... 87
SECTION 9. AGENTS ......................................................................... 88
9.1 Appointment of Agents ........................................................ 88
9.2 Powers and Duties ............................................................ 88
9.3 General Immunity ............................................................. 89
9.4 Agent Entitled to Act as Lender .............................................. 89
9.5 Lenders' Representations and Warranties ...................................... 90
9.6 Right to Indemnity ........................................................... 90
9.7 Successor Administrative Agent ............................................... 91
SECTION 10. MISCELLANEOUS ................................................................. 91
10.1 Notices ....................................................................... 91
10.2 Expenses ...................................................................... 91
10.3 Indemnity ..................................................................... 92
10.4 [Reserved] .................................................................... 93
10.5 Amendments and Waivers ........................................................ 93
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10.6 Successors and Assigns; Participations ........................................ 94
10.7 Independence of Covenants ..................................................... 97
10.8 Survival of Representations, Warranties and Agreements ........................ 97
10.9 No Waiver; Remedies Cumulative ................................................ 97
10.10 Payments Set Aside ............................................................ 97
10.11 Severability .................................................................. 97
10.12 Obligations Several; Independent Nature of Lenders' Rights .................... 98
10.13 Headings ...................................................................... 98
10.14 APPLICABLE LAW ................................................................ 98
10.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS ................................ 98
10.16 WAIVER OF JURY TRIAL .......................................................... 99
10.17 Confidentiality ............................................................... 99
10.18 Counterparts; Effectiveness ................................................... 100
10.19 Maximum Amount ................................................................ 100
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SCHEDULES:
1.l(b) Term Loan Amounts
4.1 Subsidiaries of Holdings
6.1 Certain Existing Indebtedness
6.2 Certain Existing Liens
6.3 Certain Existing Investments
EXHIBITS:
A Conversion/Continuation Notice
B Term Loan Note
C-1 Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP
C-2 Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
D Assignment Agreement
E Certificate Re Non-Bank Status
F Solvency Certificate
G Closing Date Certificate
H Counterpart Agreement
I Certain Adjustments to EBITDA
J Assumption Agreement
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SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
This SENIOR UNSECURED TERM LOAN AND GUARANTY AGREEMENT dated as of
December 19, 2003, is entered into by and among THL BEDDING COMPANY, a Delaware
corporation ("COMPANY"),THL-SC BEDDING COMPANY, a Delaware corporation
("HOLDINGS"),CERTAIN SUBSIDIARIES OF COMPANY PARTY HERETO, as Guarantors,
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P. ("GSCP"), as sole bookrunner, joint lead
arranger and as co-syndication agent, THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HERETO (together with each such institution's successors and
permitted assigns, each a "LENDER"),UBS SECURITIES LLC ("UBSS"),as joint lead
arranger and co-syndication agent and DEUTSCHE BANK AG, NEW YORK BRANCH
("DBNY"),as administrative agent for Lenders (together with its permitted
successors in such capacity, "ADMINISTRATIVE AGENT").
RECITALS
WHEREAS, capitalized terms used herein having the meanings assigned to
those terms in Section 1.1;
WHEREAS, the Equity Investors have formed Parent, Holdings and its
wholly- owned Subsidiary, Company, for the purpose of consummating the
transactions described below;
WHEREAS, (i) Company intends to acquire (the "ACQUISITION")not less
than 84% of the outstanding capital stock of ▇▇▇▇▇▇▇ HoldCo, (ii) the Management
Investors intend to exchange certain of their outstanding common stock of
▇▇▇▇▇▇▇ HoldCo (or options to acquire common stock) for common stock of Holdings
or Parent, (iii) Fenway will exchange all of its outstanding common stock of
▇▇▇▇▇▇▇ HoldCo for 10% of common stock of Holdings or Parent, and (iv) Company
will make cash payments to Sellers;
WHEREAS, Company has requested that Lenders extend certain credit
facilities in an aggregate principal amount of $140,000,000 the proceeds of
which will be used, together with (i) the net cash proceeds of the Equity
Financing contributed by Holdings to Company, (ii) not less than $200,000,000 in
cash proceeds of the Senior Subordinated Notes and (iii) not less than
$405,000,000 in cash proceeds of Tranche B Term Loans and not more than
$8,200,000 of Revolving Loans made pursuant to the Credit Agreement, to satisfy
the Acquisition Financing Requirements and to provide financing for the working
capital and general corporate requirements of Holdings and its Subsidiaries;
WHEREAS, concurrently with the consummation of the Acquisition, Company
will merge with and into ▇▇▇▇▇▇▇ HoldCo, with ▇▇▇▇▇▇▇ HoldCo being the surviving
corporation and, immediately following such merger, ▇▇▇▇▇▇▇ Company, a Delaware
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corporation ("PRE-MERGER ▇▇▇▇▇▇▇"),will merge with and into ▇▇▇▇▇▇▇ HoldCo with
▇▇▇▇▇▇▇ HoldCo being the surviving corporation and changing its name to "▇▇▇▇▇▇▇
Company", such surviving company being referred to herein as "▇▇▇▇▇▇▇"
(collectively, the "MERGERS");
WHEREAS, immediately following the consummation of the Mergers, all
references herein to "Company" shall be deemed to be references to ▇▇▇▇▇▇▇, as
the surviving corporation; and
WHEREAS, Holdings and certain Subsidiaries of Company desire to
guarantee the Obligations.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Holdings, Company, each of its
Subsidiaries party hereto, Lenders and Agents agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION
1.1 DEFINED TERMS. The following terms used herein, including
(except to the extent specifically stated otherwise) the preamble, recitals,
exhibits and schedules hereto, shall have the following meanings:
"ACQUISITION" has the meaning assigned to that term in the recitals to
this Agreement.
"ACQUISITION FINANCING REQUIREMENTS" means the amounts necessary (i) to
pay the cash portion of the purchase price for the shares of ▇▇▇▇▇▇▇ HoldCo
stock to be paid in connection with the Acquisition, (ii) to refinance all
Indebtedness outstanding under Company's existing credit agreement, dated as of
October 29, 1998, as amended to date, among ▇▇▇▇▇▇▇ HoldCo, Pre-Merger ▇▇▇▇▇▇▇,
the lenders party thereto and UBS A.G., Stamford Branch, as administrative
agent, (iii) to purchase and discharge the Existing Notes tendered pursuant to
the Tender Offer, (iv) to repay the Junior Note, (v) to pay all other amounts
payable pursuant to the Stock Purchase Agreement and (v) to pay Transaction
Costs.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (i) the offered rate (rounded upward to the nearest
1/16 of one percent) appearing on the Dow ▇▇▇▇▇/Telerate Monitor on Telerate
Access Service Page 3750 (British Bankers Association Settlement Rate) (or if
such page or service is not available, any page reasonably determined by
Administrative Agent to be the successor thereto) at or about 10:00 a.m. (New
York time) on such Interest Rate Determination Date for U.S. dollar deposits of
amounts in same day funds comparable to the principal amount of the Eurodollar
Rate Loan for which the Adjusted Eurodollar Rate is then being determined with
maturities comparable to such Interest Period, by (ii) the difference of (1) a
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percentage equal to 100%, minus (2) the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D). If for any reason the portion of the Adjusted Eurodollar Rate
determined by reference to the mechanics of clause (i) of this definition is
unavailable, as determined by Administrative Agent, such portion of Adjusted
Eurodollar Rate for the applicable Interest Period shall mean the offered
quotation (rounded upward to the nearest 1/16 of one percent) to first class
banks in the London interbank market by DBNY for U.S. dollar deposits of amounts
in same day funds comparable to the principal amount of the Eurodollar Rate Loan
of DBNY for which the Adjusted Eurodollar Rate is then being determined with
maturities comparable to such Interest Period as of approximately 10:00 a.m.
(New York time) on such Interest Rate Determination Date.
"ADJUSTED MAXIMUM AMOUNT" has the meaning assigned to that term in
Section 7.2(b).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term 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 federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims),
whether pending or, to the knowledge of Company or its Material Subsidiaries,
threatened in writing against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries.
"AFFECTED LENDER" has the meaning assigned to that term in Section
2.18(b).
"AFFECTED TERM LOANS" has the meaning assigned to that term in Section
2.18(b).
"AFFILIATE,"as applied to any Person, means 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 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. Notwithstanding the foregoing, neither any Agent or
any Lender shall be deemed to be an Affiliate of any Credit Parties or any
Affiliate thereof.
"AGENT" means each of the Co-Syndication Agents, Joint Lead Arrangers
and Administrative Agent.
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"AGGREGATE PAYMENTS" has the meaning assigned to that term in Section
7.2(b).
"AGREEMENT" means this Senior Unsecured Term Loan and Guaranty
Agreement, as it may be amended, restated, supplemented or otherwise modified
from time to time.
"ASSET SALE" means (i) the sale, lease (other than an operating lease
entered into in the ordinary course of business), conveyance or other
disposition of any assets or rights of Company or any its Subsidiaries; provided
that the sale, conveyance or other disposition of all or substantially all of
the assets of Company and its Subsidiaries taken as a whole will be governed by
Section 6.7 and not by the provisions of Section 6.8 and (ii) the issuance of
equity Securities in any of Company's Subsidiaries or the sale of equity
Securities in any of its Subsidiaries (in each case other than directors'
qualifying equity Securities or equity Securities required by applicable law to
be held by a Person other than Company or a Subsidiary).
Notwithstanding the preceding, the following items will not be deemed
to be Asset Sales:
(a) any single transaction or series of related transactions that
involves assets or rights having a fair market value of less than $5.0 million;
(b) a sale, conveyance or other disposition or transfer of assets
between or among Holdings and its Subsidiaries;
(c) an issuance of equity Securities by, or a sale of equity
Securities in, a Subsidiary of Company to Company or to another Subsidiary of
Company;
(d) the sale, lease, sub-lease, license, sub-license, consignment,
conveyance or other disposition of equipment, inventory or other assets in the
ordinary course of business, including leases with a duration of no greater than
twenty-four (24) months with respect to facilities that are temporarily not in
use or pending their disposition, or accounts receivable in connection with the
compromise, settlement or collection thereof;
(e) the sale, lease, conveyance or other disposition of obsolete,
damaged or worn out equipment or property in the ordinary course of business or
any other property that is uneconomic or no longer useful to the conduct of the
business of Company or its Subsidiaries;
(f) the sale, conveyance or other disposition of Cash or Cash
Equivalents;
(g) sales, conveyances or other dispositions of accounts
receivable and related assets or participations therein in connection with any
Qualified Receivables Transaction;
(h) a Restricted Junior Payment or Investment that is permitted by
Section 6.5 and or Section 6.3;
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(i) the licensing of intellectual property to third Persons on
customary terms as determined in good faith by the Board of Directors of
Company; or
(j) any sale of equity Securities in or Indebtedness or other
securities of a Non-Guarantor Subsidiary.
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption Agreement in
the form of Exhibit D.
"ASSUMPTION AGREEMENT" means an Assumption Agreement in the form of
Exhibit J.
"AUTHORIZED OFFICERS" means, as applied to any Person, (i) its chairman
of the board (if an officer) or president or one of its board-elected vice
presidents, and (ii) its chief financial officer, treasurer or assistant
treasurer.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (i) the Prime Rate, and
(ii) the rate equal to the sum of (a) 0.50%, plus (b) the Federal Funds
Effective Rate.
"BASE RATE LOAN" means a Term Loan bearing interest at a rate
determined by reference to the Base Rate.
"BENEFICIARY" means Administrative Agent, each of the other Agents and
each of the Lenders.
"BOARD OF DIRECTORS" means (i) with respect to a corporation, the board
of directors of the corporation or a committee thereof authorized to exercise
the power of the board of directors of such corporation; (ii) with respect to a
partnership or limited liability company, the managing general partner or
partners or the managing member or members or any controlling committee of
partners or members, as applicable; and (iii) with respect to any other Person,
any similar governing body.
"BUSINESS DAY" means 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 with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate or any Eurodollar Rate Loans, that 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 accounted for as a capital lease on the balance sheet
of that Person.
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"CAPTIVE INSURANCE SUBSIDIARY" has the meaning assigned to that term in
Section 6.3(i).
"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 or instrumentality 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 one year after such date; (ii)marketable general 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 "A" or better from either Standard & Poor's Ratings Group ("S&P") or
▇▇▇▇▇'▇; (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, time deposits, eurodollar time deposits 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 capital and surplus in
excess of $500,000,000; (v) repurchase obligations for underlying securities of
the types described in clauses (i), (ii) and (iv) above entered into with any
financial institution meeting the qualifications specified in clause (iv) above;
and (vi) shares of any money market mutual fund that invests substantially all
of its assets in the types of investments referred to in clauses (i) through
(iv) above or in Dollars.
"CERTIFICATES OF MERGER" means (i) the Certificate of Ownership and
Merger dated as of December 19, 2003 by and between Company and ▇▇▇▇▇▇▇ HoldCo
and (ii) the Certificate of Ownership and Merger dated as of December 19, 2003
by and between ▇▇▇▇▇▇▇ HoldCo and Pre-Merger ▇▇▇▇▇▇▇, in the form delivered to
Administrative Agent prior to or concurrently with the execution of this
Agreement.
"CERTIFICATE RE NON-BANK STATUS" means a certificate in the form of
Exhibit E.
"CFO 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 (in the case of unaudited financial
statements) changes resulting from audit and normal year-end adjustments and, in
the case of monthly financial statements, the absence of footnotes.
"CHANGE OF CONTROL" has the meaning assigned to that term in the Senior
Subordinated Note Indenture.
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"CLOSING DATE" means the date on or before December 19, 2003 on which
the Term Loans are made.
"CLOSING DATE CERTIFICATE" means a certificate in the form of Exhibit
G.
"COMPANY" has the meaning assigned to that term in the preamble hereto.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, without
duplication, the sum of the amounts for such period of (i) Consolidated Net
Income, plus to the extent the following amounts were deducted in calculating
Consolidated Net Income: (ii) Consolidated Interest Expense, plus (iii)
provisions for taxes based on income, plus (iv) total depreciation expense, plus
(v) total amortization expense, plus (vi) Management Fees, plus (vii) ESOP
expenses, PLUS (viii) the aggregate amount of the fees, costs and cash expenses
paid by Company in connection with the consummation of the Acquisition
(including, without limitation, bonus and option payments) for such period, plus
(ix) other non-cash items reducing Consolidated Net Income (including, without
limitation, non-cash purchase accounting adjustments and debt extinguishment
costs but excluding accruals of expenses and the establishment of reserves in
the ordinary course of business), plus (x) the Cure Amount, if any, received by
Company in respect of such period, plus (xi) any extraordinary, unusual or
non-recurring gains or losses or charges or credits, including, but not limited
to, any expenses relating to the Acquisition, the Mergers and the Related
Agreements, plus (xii) any reasonable expenses or charges related to any
issuance of Securities, Investments permitted under Section 6.3, Permitted
Acquisitions, recapitalizations, Asset Sales permitted by Section 6.7 or
Indebtedness permitted to be incurred under Section 6.1 less other non-cash
items increasing Consolidated Net Income (other than accruals of revenue or
reversals of reserves in the ordinary course of business), all of the foregoing
as determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP; provided, that for the periods set forth on Exhibit I,
Consolidated Adjusted EBITDA shall be the amount set forth opposite such period
on Exhibit I.
"CONSOLIDATED CAPITAL EXPENDITURES" has the meaning assigned to that
term in the Credit Agreement.
"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 Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, but excluding any net costs under Interest Rate Agreements. For
purposes of greater clarity, it is understood that "Consolidated Interest
Expense" excludes interest income.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
determined in conformity with GAAP; provided, there shall be excluded the sum of
(i) the income (or
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loss) of any Person (other than a Subsidiary of Company) in which any other
Person (other than Company or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to Company or any of its Subsidiaries by such Person during such period;
plus (ii) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of Company or is merged into or consolidated with Company
or any of its Subsidiaries or that Person's assets are acquired by Company or
any of its Subsidiaries; plus (iii) the income of any Subsidiary of Company 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; plus
(iv) any after-tax gains or losses attributable to Asset Sales or returned
surplus assets of any Pension Plan; plus (v) (to the extent not included in
clauses (i) through (iv) above) any net non-cash extraordinary gains or net
non-cash extraordinary losses; plus (vi) for purposes of Section 6.5 only, any
goodwill impairment charges plus (vii) for purposes of determining the "Senior
Leverage Ratio" and any component part thereof only, any gains, losses or
charges associated with Interest Rate Agreements.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of the type specified
in clauses (a) or (b) of the definition thereof of Company and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
"CONTINGENT OBLIGATION" means, as to any Person, without duplication,
any obligation, contingent or otherwise, of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation
payable or performable by another Person (the "PRIMARY OBLIGOR") in any manner,
whether directly or indirectly, and including any obligation of such Person,
direct or indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation, (ii) to purchase
or lease property, securities or services for the purpose of assuring the
obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
or level of income or cash flow of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other obligation, or (iv) entered
into for the purpose of assuring in any other manner the obligee in respect of
such Indebtedness or other obligation of the payment or performance thereof or
to protect such obligee against loss in respect thereof (in whole or in part).
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any provision
of any equity Security issued by that Person or of any material indenture,
mortgage, deed of trust,
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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" has the meaning assigned to that term in
Section 7.2(b).
"CONVERSION/CONTINUATION NOTICE" means a notice in the form of Exhibit
A.
"CO-OP SUBSIDIARY" means a Person formed by The ▇▇▇▇▇▇▇ Manufacturing
Co., LLC, ▇▇▇▇▇▇▇ Caribbean Bedding, Inc. (or another Subsidiary of Company) and
a third Person formed to operate as a "T corporation" under the Internal Revenue
Code.
"CO-SYNDICATION AGENT" means each of GSCP and UBSS in its capacity as a
co-syndication agent.
"COUNTERPART AGREEMENT" means a counterpart agreement in the form of
Exhibit-H.
"CREDIT AGREEMENT" means that certain Credit Agreement, dated as of
December 19, 2003, by and among Company, the other Persons named therein as
guarantors, ▇▇▇▇▇▇▇ Sachs Credit Partners L.P. and UBS Securities LLC as
co-syndication agents, Deutsche Bank A G, New York Branch, as administrative
agent, and the other agents and lenders named therein, providing for up to
$405,000,000 of Tranche B Term Loans (the "TRANCHE B TERM LOANS"), $75,000,000
revolving credit borrowings (such borrowings, the "REVOLVING LOANS") and up to
$100,000,000 of incremental facilities, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced or
refinanced or otherwise restructured in whole or in part from time to time,
whether by the same or any other agent, lender or group of lenders.
"CREDIT AGREEMENT TERMINATION DATE" means the date upon which all of
the commitments of the lenders under the Credit Agreement have terminated, any
loan or any other non-contingent obligation which is accrued thereunder has been
paid or satisfied and no letters of credit thereunder are then outstanding (as
determined in accordance with the Credit Agreement).
"CREDIT DOCUMENT" means any of this Agreement, the Term Loan Notes, the
Assumption Agreement and all other documents, instruments or agreements executed
and delivered by a Credit Party for the benefit of Agents or any Lender in
connection herewith (in each case, as such other documents, instruments or
agreements may be amended, restated, supplemented or otherwise modified from
time to time).
"CREDIT FACILITIES" means one or more debt facilities, indentures
(including the Credit Agreement) or commercial paper facilities or other
agreements, in each case with banks or other institutional lenders or investors
providing for revolving credit loans, term loans, notes, receivables financing
(including through the sale of receivables to such
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lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, supplemented, renewed, refunded, replaced, restructured or
refinanced in whole or in part from time to time (including any agreement
extending the maturity thereof or increasing the amount of available borrowings
thereunder or adding Subsidiaries of Company as additional borrowers or
guarantors thereunder), whether by the same or any other agent, lender or group
of lenders.
"CREDIT PARTY" means Holdings, Company and the Subsidiary Guarantors.
"CURE AMOUNT" has the meaning assigned to that term in the Credit
Agreement.
"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
and which is designed to hedge against fluctuations in currency values and not
for speculative purposes.
"DBNY" has the meaning assigned to that term in the preamble hereto.
"DEFAULT" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.
"DESIGNATED NONCASH CONSIDERATION" means the fair market value of
noncash consideration received by Company or one or more of its Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an certificate of an Authorized Officer setting forth
the basis of valuation.
"DISQUALIFIED STOCK" means any equity Security that, by its terms (or
by the terms of any Security into which it is convertible, or for which it is
exchangeable or exercisable, in each case at the option of the holder of the
equity Securities), or upon the happening of any event (other than an event
solely within the control of the issuer thereof), matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder of the equity Securities, in whole or in part, on or
prior to the Maturity Date; provided, however, that any class of equity
Securities that, by its terms, authorizes the issuer thereof to satisfy in full
its obligations with respect to payment of dividends or upon maturity,
redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or
otherwise by delivery of equity Securities that are not Disqualified Stock, and
that are not convertible, puttable or exchangeable for Disqualified Stock or
Indebtedness, shall not be deemed Disqualified Stock so long as such issuer
satisfies its obligations with respect thereto solely by the delivery of equity
Securities that are not Disqualified Stock. Notwithstanding the preceding
sentence, any equity Securities that would constitute Disqualified Stock solely
because the holders of the equity Securities have the right to require Company
to repurchase such equity Securities upon the occurrence of a Change of Control
or an Asset Sale will not constitute Disqualified Stock if the terms of such
equity Securities provide that Company may not repurchase or redeem any such
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equity Securities pursuant to such provisions unless Company has first complied
with the provisions of Section 2.13.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary of Company organized under
the laws of any jurisdiction within the United States of America (but excluding
any Foreign Subsidiary).
"ELIGIBLE ASSIGNEE" means (i) a commercial bank, savings and loan
association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses including insurance companies,
mutual funds and lease financing companies and any investment fund that invests
in commercial loans; and (ii) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that is
managed or advised (other than any fund that is managed or advised by Highland
Capital Management, L.P. or any of its Affiliates or Subsidiaries) by the same
investment advisor as such Lender or by an Affiliate of such investment advisor;
provided, Eligible Assignee shall not include (a) any Affiliate of Company or
Holdings or (b) Highland Capital Management, L.P. or any of its Affiliates or
Subsidiaries.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is (currently or hereafter) or within the prior
6 years was maintained or contributed to 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 federal or state (or any
subdivision of either of them), statutes, ordinances, orders, rules,
regulations, guidance documents, 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.
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"EQUITY FINANCING" means the issuance of Securities by Holdings or
Parent to the Equity Investors in connection with the Acquisition.
"EQUITY INVESTORS" means Sponsor and the Management Investors.
"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;
(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; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above 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
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable 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 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 filing 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 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
might 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 that could reasonably be expected to result in material
liability therefor, or the receipt by Company, any of its
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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 give rise to the imposition on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of material fines,
penalties, taxes or related charges under Chapter 43 of the Internal Revenue
Code or under Section 406, 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; (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.
"ESOP" means the ▇▇▇▇▇▇▇ Company Employee Stock Ownership Plan, as
amended and restated effective January 17, 1989 whereby the ▇▇▇▇▇▇▇ Company
Employee Stock Ownership Trust is the record and beneficial owner of the shares
of ▇▇▇▇▇▇▇ HoldCo equity Securities pursuant to the terms thereof.
"EURODOLLAR RATE LOAN" means a Term Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.1.
"EXCESS PROCEEDS" has the meaning assigned to that term in Section 6.8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCLUDED CONTRIBUTIONS" means the Net Cash Proceeds received by
Company after the Closing Date from (a) contributions to its common equity
capital and (b) the sale (other than to a Subsidiary or to any management equity
plan or stock option plan or any other management or employee benefit plan or
agreement of Company or any of its Subsidiaries) of equity Securities (other
than Disqualified Stock) of Company, in each case designated within sixty (60)
days of the receipt of such Net Cash Proceeds as Excluded Contributions pursuant
to an certificate of an Authorized Officer, the Net Cash Proceeds of which are
excluded from the calculation set forth in clause (C)(2) of Section 6.5;
provided that such proceeds may at any time be redesignated by Company so as not
to constitute Excluded Contributions and will thereafter be included in the
calculation set forth in clause (C)(2) of Section 6.5.
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"EXISTING INDENTURE" means that certain Indenture regarding the
Existing Notes dated as of March 16, 1999 by and between Company and SunTrust
Bank, Atlanta, as trustee, as in effect on the Closing Date.
"EXISTING NOTES" means the 10 1/4% Series B Senior Subordinated Notes
due 2009 of Pre-Merger ▇▇▇▇▇▇▇.
"FACILITIES" means any real property (including all buildings, fixtures
or other improvements located thereon) now, hereafter or (except with respect to
Section 5 and Section 6) heretofore owned, leased, operated or used by Company
or any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FAIR SHARE" has the meaning assigned to that term in Section 7.2(b).
"FAIR SHARE SHORTFALL" has the meaning assigned to that term in Section
7.2(b).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FENWAY" means Fenway Partners Capital Fund II, L.P., a Delaware
limited partnership, FPIP, LLC, a Delaware limited liability company and FPIP
Trust, LLC, a Delaware limited liability company.
"FINANCIAL PLAN" has the meaning assigned to that term in Section 5.1
(k).
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on the last Saturday of each calendar year or, at the option of Company,
December 31 of each calendar year.
"FIXED CHARGE COVERAGE RATIO" has the meaning assigned to that term in
the Senior Subordinated Note Indenture.
"FLOOR PLAN SALES" means sales by Company or any of is Subsidiaries of
(i) inventory (other than inventory classified as floor sample inventory) to any
Person for a discount not to exceed 2.5% and (ii) with respect to inventory
classified as floor sample inventory, for a discount not to exceed 5.0%;
provided that the discounts set forth in clauses (i) and (ii) above may be
increased by an additional 0.05% (UP to a maximum amount of 10.0%) for every
0.50% increase to the Base Rate above 7.50% per annum.
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"FOREIGN SUBSIDIARY" means any Subsidiary of Company organized under
the laws of any jurisdiction outside the United States of America (and including
any Subsidiary of a Foreign Subsidiary that is organized under the laws of any
jurisdiction within the United States of America).
"FRAUDULENT TRANSFER LAWS" has the meaning assigned to that term in
Section 7.2(a).
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent located at the address set forth on the Administrative Agent's signature
page hereto, or (ii) such other office of Administrative Agent as may from time
to time hereafter be designated as such in a written notice delivered by
Administrative Agent to Company and each Lender.
"FUNDING GUARANTOR" has the meaning assigned to that term in Section
7.2(b).
"GAAP" means United States of America generally accepted accounting
principles in effect as of the date of determination thereof.
"GOVERNMENTAL ACT" means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"GSCP" has the meaning assigned to that term in the preamble hereto.
"GUARANTEED OBLIGATIONS" has the meaning assigned to that term in
Section 7.1.
"GUARANTOR"means Holdings and each Subsidiary Guarantor.
"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 as defined as such by, or regulated as such under,
any Environmental Law including Hazardous Substances, Oils, Pollutants or
Contaminants as defined in the National Oil and Hazardous Substances Pollution
Contingency Plan, 40 C.F.R. Section 300.5.
"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
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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 designed to hedge against fluctuations in interest rates or currency
values, respectively and not for speculative purposes.
"HISTORICAL FINANCIAL STATEMENTS" means (i) the audited financial
statements of Pre-Merger ▇▇▇▇▇▇▇ and its Subsidiaries for the Fiscal Year ended
December 28, 2002, consisting of a consolidated balance sheet and the related
consolidated statements of operations, changes in stockholders' deficit and cash
flows for such Fiscal Year filed under form 8-K-A on September 16, 2003; and
(ii) unaudited financial statements of Pre-Merger ▇▇▇▇▇▇▇ and its Subsidiaries
for the third Fiscal Quarter of 2003, consisting of a consolidated balance sheet
and the related consolidated statements of operations, changes in stockholders'
deficit and cash flows for the period ending on such date, all in reasonable
detail and 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 the absence of footnotes, in the case
of such unaudited financial statements.
"HOLDINGS" has the meaning assigned to that term in the preamble
hereto.
"INDEBTEDNESS", as applied to any Person, means, without duplication
(a) all indebtedness for borrowed money, (b) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (c) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money, (d) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA or any deferred compensation plan), which purchase price is (i) due
more than six months from the date of incurrence of the obligation in respect
thereof (other than trade payables which are due more than six months from the
date of incurrence in the ordinary course of business) or (ii) evidenced by a
note or similar written debt instrument, (e) all indebtedness secured by any
Lien on any property or a set owned 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, (f) 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; (g) 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;
and (h) Contingent Obligations of such Person in respect of any of the
foregoing; provided, in no event shall obligations under any Interest Rate
Agreement and any Currency Agreement be deemed "Indebtedness" for purposes of
calculating the Senior Leverage Ratio. The amount of Indebtedness of any Person
for purposes of clause (e) shall be deemed to be the lesser of
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(X) the aggregate unpaid principal amount of such Indebtedness and (Y) the fair
market value of the property encumbered thereby as determined by such Person in
good faith.
"INDEMNIFIED LIABILITIES" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
actions, judgments, suits, claims (including Environmental Claims), costs
(including the 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 fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct or indirect 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 be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of this Agreement or the other Credit Documents or
the transactions contemplated hereby or thereby (including Lenders' agreement to
make the Term Loans or the use or intended use of the proceeds thereof or the
use or intended use of any thereof, or any enforcement of any of the Credit
Documents (including the enforcement of the Guaranty)), or 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" has the meaning assigned to that term in Section 10.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks, servicemarks,
tradenames, copyrights, mask works, trade secrets, technology, know-how and
processes and rights of publicity used in or necessary for the conduct of the
business of Company and its Subsidiaries as currently conducted that are
material to the condition (financial or otherwise), business or operations of
Company and its Subsidiaries, individually or in the aggregate.
"INTEREST PAYMENT DATE" means with respect to (i) any Base Rate Loan,
each March 30, June 30, September 30 and December 30 of each year, commencing on
the first such date to occur after the Closing Date; and (ii) any Eurodollar
Rate Loan, the last day of each Interest Period applicable to such Term Loan;
provided, in the case of each Interest 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 Interest Period.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate Loan, an
interest period of one-, two-, three-, six-, nine- or twelve-months, as selected
by Company in the applicable Conversion Continuation Notice, (i) initially,
commencing on the Closing
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Date or the date of any conversion or continuation thereof, as the case may be
(permitted pursuant to Section 2.8); and (ii) thereafter, commencing on the day
on which the immediately preceding Interest Period expires; provided, (a) if an
Interest Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day unless no
further Business Day occurs in such month, in which case such Interest Period
shall expire on the immediately preceding Business Day; (b) any Interest Period
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a calendar month;
and (c) no Interest Period shall extend beyond the Maturity Date.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party
and which is designed to hedge against fluctuations in interest rates and not
for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the Closing Date and from time to time hereafter, and any successor
statute.
"INVESTMENT" means (a) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (including any Subsidiary
of Company); (b) 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 Company or any of its Subsidiaries to any other Person, including all
indebtedness and a counts 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; (c) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements; or (d) the purchase or other acquisition (in one
transaction or a series of transactions) of all or substantially all of the
property and assets or business of another Person or assets constituting a
business unit, line of business or division of any other Person. 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.
"JOINT LEAD ARRANGER" means each of GSCP and UBSS, in its capacity as
joint lead arranger.
"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 Subsidiary of any Person be considered to be a Joint Venture.
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"JUNIOR NOTE" means the Junior Subordinated Note issued by ▇▇▇▇▇▇▇
HoldCo on October 29, 1998 in the original principal amount of $10,000,000.
"LENDER" has the meaning assigned to that term in the preamble hereto.
"LIEN" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"MANAGEMENT AGREEMENT" means that certain Management Agreement dated as
of the Closing Date by and among Company and THL Managers V, LLC, a Delaware
limited liability company, as the same may be amended, restated, supplemented or
otherwise modified from time to time in a manner not prohibited by this
Agreement.
"MANAGEMENT FEES" means the fees payable pursuant to the Management
Agreement.
"MANAGEMENT INVESTORS" means the management officers and employees of
Parent and its Subsidiaries who are investors in Parent or Holdings on the
Closing Date.
"MARGIN STOCK" has the meaning assigned to that term 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 effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of Company and its Subsidiaries, taken as a whole, or (ii) the impairment (other
than as a result of circumstances covered by clause (i) above) of the ability of
Company or any of its Subsidiaries to perform, or the Administrative Agent or
Lenders to enforce, the Obligations in any material respect.
"MATERIAL SUBSIDIARY" means each Subsidiary of Company now existing or
hereafter acquired or formed by Company or its Subsidiaries which, on a
consolidated basis for such Subsidiary and its Subsidiaries, (i) for the most
recent Fiscal Year accounted for more than 5% of the consolidated revenues of
Company and its Subsidiaries or (ii) as at the end of such Fiscal Year, was the
owner of more than 5% of the consolidated assets of Company and its
Subsidiaries.
"MATURITY DATE" means the earlier of (i) the eight and one-half year
anniversary of the Closing Date, and (ii) the date that all Term Loans shall
become due and payable in full hereunder, whether by acceleration or otherwise.
"MAXIMUM AMOUNT" has the meaning assigned to that term in Section
10.19.
"MD&A" means, with respect to financial statements to which it
pertains, management's discussion and analysis of Company's and its
Subsidiaries' financial
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performance for the period covered by such financial statements as compared to
projected financial performance for such period.
"MERGERS" has the meaning assigned to that term in the recitals to this
Agreement.
"MONTHLY REPORTS" has the meaning assigned to that term in Section
5.1(a).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET CASH PROCEEDS" means with respect to any issuance or sale of
equity Securities, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant's and other fees and expenses
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"NET PROCEEDS" has the meaning assigned to that term in the Senior
Subordinated Note Indenture.
"NON-GUARANTOR SUBSIDIARY" means (i) each oft he Subsidiaries
identified as a Non-Guarantor Subsidiary on Schedule 4.1 annexed hereto and (ii)
each Person that becomes a Subsidiary of Company after the Closing Date and in
accordance with Section 5.9, and is not required to become a Subsidiary
Guarantor; provided, however, that any such Domestic Subsidiary shall cease to
be a Non-Guarantor Subsidiary if (x) it is or at any time becomes a Material
Subsidiary or (y) it otherwise ceases to be a Non-Guarantor Subsidiary pursuant
to Section 5.9. Notwithstanding the foregoing, each of Co-op Subsidiary and any
Captive Insurance Subsidiary shall always be a Non-Guarantor Subsidiary.
"NON-RECOURSE DEBT" means Indebtedness (a) as to which neither Company
nor any of its Subsidiaries (i) provides credit support of any kind (including
any undertaking, agreement or instrument that would constitute Indebtedness),
(ii) is directly or indirectly liable as a guarantor or otherwise, or (iii)
constitutes the lender; (b) no default with respect to which (including any
rights that the holders of the Indebtedness may have to take enforcement action
against a Non-Guarantor Subsidiary) would permit upon notice, lapse of time or
both any holder of any other Indebtedness of Company or any of its Subsidiaries
to declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its stated maturity; and (c)
as to which the lenders have been notified or acknowledged in writing that they
will not have any recourse to the equity Securities (other than the equity
Securities of a Non-Guarantor Subsidiary pledged by Company or any of its
Subsidiaries) or assets of Company or any of its Subsidiaries.
"OBLIGATIONS" means, with respect to any Credit Party, obligations of
such Credit Party, whether now existing or hereafter made, incurred or created,
whether absolute or
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contingent, liquidated or unliquidated, whether due or not due, and however
arising under or in connection with this Agreement and any other Credit
Documents, including those arising under successive borrowing transactions
hereunder which shall either continue the Obligations of such Credit Party from
time to time or renew them after they have been satisfied and 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.
"OPERATING LEASE" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time but excluding any such
lease under which that Person is the lessor) of any property (whether real,
personal or mixed) that is not a Capital Lease.
"PARENT" means THL Bedding Holding Company, a Delaware corporation.
"PAYMENT DEFAULT" has the meaning assigned in Section 8.1(b).
"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 Title IV of ERISA.
"PERMITTED ACQUISITION" means an acquisition of Securities or assets
made pursuant to Section 6.3(e).
"PERMITTED DEBT" means:
(a) each of the Credit Parties may become and remain liable with
respect to its respective Obligations;
(b) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 6.1 annexed hereto and any
Permitted Refinancing Indebtedness in respect thereof;
(c) Permitted Subordinated Indebtedness incurred or issued in an
aggregate amount not to exceed $25,000,000 in any Fiscal Year, unless the
proceeds of such excess amount are applied to prepay the loans outstanding under
the Credit Agreement, and Permitted Refinancing Indebtedness in respect thereof
(provided that the proceeds of such Permitted Refinancing Indebtedness in excess
of the amount applied to repay or prepay such Indebtedness are likewise applied
to prepay the loans outstanding under the Credit Agreement);
(d) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness under Capital Leases and purchase money Indebtedness;
provided, that
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the aggregate amount of all Indebtedness outstanding under this clause (d) at
any time shall not exceed $20,000,000;
(e) Indebtedness of (i) any Credit Party owing to any other Credit
Party (other than Indebtedness owed to Holdings), (ii) of any Subsidiary of
Holdings which is not a Credit Party (1) to any other Subsidiary of Holdings
which is not a Credit Party and (2) to any other Subsidiary of Holdings which is
a Credit Party; provided, that any Indebtedness pursuant to this clause (2)
shall have no scheduled amortization or payments of principal prior to the
Maturity Date, (iii) any Credit Party to any Subsidiary of Holdings which is not
a Credit Party in respect of an Investment permitted by Section 6.3(a)(iii),
and (iv) Holdings owed to any of its Subsidiaries in lieu of, and not in excess
of the amount of Restricted Junior Payments to the extent permitted to be made
to Holdings in accordance with Section 6.5; provided, that all such Indebtedness
of any Credit Party pursuant to this clause (e) must be expressly subordinated
to the Obligations on terms not materially less favorable than those set forth
in the Senior Subordinated Notes;
(f) Indebtedness in respect of the Credit Agreement (including any
outstanding commitments thereunder);
(g) Indebtedness of Company and its Subsidiaries existing under
the Existing Notes which remain outstanding after giving effect to the Tender
Offer;
(h) Indebtedness incurred by Company with respect to the Senior
Subordinated Notes and any Permitted Refinancing Indebtedness in respect
thereof;
(i) (i) Indebtedness assumed in connection with Permitted
Acquisitions (so long as such Indebtedness was not incurred in anticipation of
any such Permitted Acquisitions), (ii) Indebtedness of newly acquired
Subsidiaries acquired in such Permitted Acquisitions (so long as such
Indebtedness was not incurred in anticipation of any such Permitted
Acquisition); provided, that the aggregate amount of the Indebtedness incurred
pursuant to (i) and (ii) shall not exceed $25,000,000 in the aggregate at any
time outstanding and Permitted Refinancing Indebtedness in respect thereof, and
(iii) Indebtedness owed to the seller in any Permitted Acquisition constituting
part of the purchase price thereof i n an aggregate amount not to exceed
$50,000,000 at any time outstanding; provided that such Indebtedness permitted
pursuant to this clause (iii) (1) does not provide for any prepayment or
repayment of all or any portion of the principal thereof prior to the Maturity
Date, and (2) is subordinated in right of payment to the Obligations;
(j) Indebtedness of Company and its Subsidiaries in connection
with workmen's compensation obligations and insurance premiums of Company and
its Subsidiaries;
(k) Holdings and its Subsidiaries may incur and permit to remain
outstanding Indebtedness (other than for borrowed money) subject to Liens
permitted by Section 2.6;
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(l) Indebtedness of Holdings and its Subsidiaries representing
deferred compensation to employees of Holdings and its Subsidiaries;
(m) Indebtedness incurred by Holdings and its Subsidiaries to
current or former directors, officers and employees, their respective estates,
spouses or former spouses to finance the purchase or redemption of Capital Stock
of Parent or Holdings permitted by Section 6.5;
(n) Indebtedness incurred by Holdings or its Subsidiaries in a
Permitted Acquisition or an Asset Sale with respect to the adjustment of the
purchase price or similar adjustments;
(o) Indebtedness of Holdings or its Subsidiaries in respect of
netting services, overdraft protection and similar arrangements in each case in
connection with deposit accounts;
(p) Permitted Holdings Indebtedness;
(q) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under Hedge Agreements permitted hereunder;
(r) Indebtedness constituting Contingent Obligations if the
incurrence of the primary obligation is otherwise permitted by Section 6.1
(other than Contingent Obligations by Company and its Subsidiaries with respect
to Indebtedness of Holdings);
(s) Company and its Subsidiaries may become and remain liable with
respect to repurchase obligations with respect to the Floor Plan Sales;
(t) Foreign Subsidiaries may become and remain liable with respect
to Indebtedness in an aggregate principal amount at any time outstanding not
exceeding $30,000,000; and
(u) Indebtedness, Disqualified Stock or the issuance by a
Subsidiary of Company of preferred stock of Company and its Subsidiaries in an
aggregate principal amount at any time outstanding not exceeding $40,000,000.
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed by ERISA):
(a) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by Section 5.3;
(b) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in each case
incurred in the ordinary course of business which are not, at the time, required
to be paid by Section 5.3;
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(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance, old
age pensions and other types of social security, or to secure the performance of
tenders, statutory obligations, surety, stay, customs and appeal bonds, bids,
leases, government contracts, insurance premiums, deductibles or co-insured
amounts, trade contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money);
(d) any attachment or judgment Lien not constituting an Event of
Default under Section 8.1(h);
(e) leases, subleases, licenses or sublicenses granted to third
parties and not interfering in any material respect with the ordinary conduct of
the business of Company or any of its Subsidiaries;
(f) easements, rights-of-way, restrictions, encroachments,
protrusions, 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;
(g) any (i) interest or title of a lessor, sublessor, licensor or
sublicensor, (ii) restriction, Lien or encumbrance that the interest or title of
such lessor or sublessor, licensor, sublicensor may be subject to, or (iii)
subordination of the interest of the lessee, sublessee, licensee or sublicensee
under such lease or license to any restriction, Lien or encumbrance referred to
in the preceding clause (ii);
(h) Liens arising from filing UCC financing statements relating to
operating leases and in connection with consignment arrangements;
(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) 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
(l) 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.
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"PERMITTED HOLDINGS INDEBTEDNESS" means unsecured Indebtedness of
Holdings (and any Permitted Refinancing Indebtedness in respect thereof) that
(i) is not supported by any Contingent Obligations of or Liens granted by
Company or any of its Subsidiaries, (ii) will not mature prior to the Maturity
Date, (iii) does not permit any payments in cash of interest or other amounts in
respect of the principal thereof for at least five (5) years from the date of
the issuance of incurrence thereof, and (iv) has mandatory prepayment,
repurchase or redemption, covenant, default and remedy provisions customary for
senior discount notes of an issuer that is the parent of a borrower under senior
secured credit facilities, and in any event not materially more restrictive than
those contained in the Senior Subordinated Note Indenture, taken as a whole;
provided, any such Indebtedness shall constitute Permitted Holdings Indebtedness
only if both before and after giving effect to the issuance or incurrence
thereof, no Default or Event of Default shall have occurred and be continuing.
"PERMITTED LIENS" means each of the Liens permitted pursuant to Section
6.2.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of
Holdings or any Subsidiary of Holdings issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund (collectively, to "REFINANCE")any Indebtedness of such Person; provided
that (a) the principal amount (or accreted value, if applicable) thereof does
not exceed the principal amount (or accreted value, if applicable) of the
Indebtedness so modified, refinanced, refunded, renewed, replaced, defeased or
extended except by an amount equal to a reasonable premium or other reasonable
amount paid, and fees and expenses reasonably incurred, in connection with such
modification, refinancing, refunding, renewal, replacement, defeasance or
extension and by an amount equal to any existing commitments unutilized
thereunder or as otherwise permitted pursuant to Section 6.1, (b) such
modification, refinancing, refunding, renewal or extension providing for a final
maturity date of such Indebtedness equal to or later than the final maturity
date of, and has a weighted average life equal to or greater than the weighted
average life of, the Indebtedness being modified, refinanced, refunded, renewed
or extended, (c) if the Indebtedness being modified, refinanced, refunded,
renewed, replaced, defeased or extended is subordinated in right of payment to
the Obligations, such modification, refinancing, refunding, renewal, replacement
or extension is subordinated in right of payment to the Obligations on terms not
materially less favorable to the Lenders as those contained in the documentation
governing the Indebtedness being modified, refinanced, refunded, renewed,
replaced, defeased or extended, taken as a whole, (d) the terms, conditions
(including, if applicable, as to collateral) and interest rates of any such
modified, refinanced, refunded, renewed, defeased, replaced or extended
Indebtedness are not materially less favorable to the Credit Parties or the
Lenders than the terms and conditions of the Indebtedness being modified,
refinanced, refunded, renewed, defeased, replaced or extended, taken as a whole,
(e) such modification, refinancing, refunding, renewal, replacement or extension
is incurred only by the Person who is the obligor on the Indebtedness being
modified, refinanced, refunded, renewed, defeased, replaced or extended;
provided, that such Indebtedness may include any new or additional obligors so
long as (i) such new or additional obligors are
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Credit Parties or simultaneously with the incurrence of such Permitted
Refinancing Indebtedness become Credit Parties pursuant to Section 5.9; and (ii)
with respect to Indebtedness being refinanced with Permitted Refinancing
Indebtedness that is Subordinated Indebtedness, the obligations of such new or
additional obligors shall be subordinated in right of payment to the Obligations
on terms not materially less favorable to the Lenders as those contained in the
Senior Subordinated Note Indenture, taken as a whole, and (f) at the time
thereof and after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing.
"PERMITTED SUBORDINATED INDEBTEDNESS" means any unsecured Indebtedness
of Company that (a) is expressly subordinated to the prior payment in full in
cash of the Obligations on terms and conditions not materially less favorable to
the Lenders than the terms and conditions of the Senior Subordinated Notes or
any Permitted Refinancing Indebtedness pertaining thereto, taken as a whole, (b)
will not mature prior to the date that is six (6) months after the Maturity
Date, (c) has no scheduled amortization or payments of principal prior to the
date that is six (6) months after the Maturity Date, and (d) has covenant,
default and remedy provisions not materially more restrictive, or mandatory
prepayment, repurchase, defeasance or redemption provisions no more onerous or
expansive in scope, than those contained in the Senior Subordinated Notes
Indenture or any Permitted Refinancing Indebtedness pertaining thereto, taken as
a whole; provided any such Indebtedness shall constitute Permitted Subordinated
Indebtedness only if both before and after giving effect to the issuance or
incurrence thereof, no Default or Event of Default shall have occurred and be
continuing.
"PERMITTED TAX DISTRIBUTIONS" means the payment of dividends or other
distributions by Company or any Subsidiary of Company to any direct or indirect
parent of Company in amounts required to pay the tax obligations of such parent
attributable to Company and its Subsidiaries determined as if Company and its
Subsidiaries had filed a separate consolidated, combined or unitary return for
the relevant taxing jurisdiction; provided, that any refunds received by such
parent attributable to Company or any of its Subsidiaries shall promptly be
returned by such parent to Company through a contribution to the common equity
of, or the purchase of common equity Securities (other than Disqualified Stock)
of Company from, Company; provided, further, that the amount of such
contribution or purchase shall be excluded from clause (C)(2) of Section 6.5.
"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 governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PRE-MERGER ▇▇▇▇▇▇▇" has the meaning assigned to that term in the
recitals.
"PRIME RATE" means the rate that the Administrative Agent announces
from time to time as its prime lending rate, as in effect from time to time. The
Prime Rate is a
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reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Administrative Agent or any other Lender
may make commercial loans or other loans at rates of interest at, above or below
the Prime Rate.
"PRO RATA SHARE" means the percentage obtained by dividing (a) the Term
Loan Exposure of such Lender by (b) the aggregate Term Loan Exposure of all
Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to Section 10.6. The initial Pro Rata Share of
each Lender for purposes of each of clauses (i) and (ii) of the preceding
sentence is set forth opposite the name of that Lender in Schedule 1.1 (b)
annexed hereto.
"PROJECTIONS" has the meaning assigned to that term in Section 4.24.
"QUALIFIED RECEIVABLES TRANSACTION" means any transaction or series of
transactions entered into by Company or any of its Subsidiaries pursuant to
which Company or any of its Subsidiaries sells, conveys or otherwise transfers
to (i) a Receivables Subsidiary (in the case of a transfer by Company or any of
its Subsidiaries) and (ii) any other Person (in the case of a transfer by a
Receivables Subsidiary), or grants a security interest in, any accounts
receivable (whether now existing or arising in the future) of Company or any of
its Subsidiaries, and any assets related thereto including all collateral
securing such accounts receivable, all contracts and all Contingent Obligations
or other obligations in respect of such accounts receivable, proceeds of such
accounts receivable and other assets which are customarily transferred or in
respect of which security interests are customarily granted in connection with
asset securitization transactions involving accounts receivable.
"RCRA" means the Resource Conservation and Recovery Act and any state
equivalents, as any of the same may be amended from time to time, and any
successors thereto.
"RECEIVABLES SUBSIDIARY" means a Subsidiary of Company which engages
in no activities other than in connection with the financing of accounts
receivable and which is designated by the Board of Directors of Company (as
provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness
or any other obligations (contingent or otherwise) of which (i) is guaranteed by
Company or any Subsidiary of Company (excluding guarantees of obligations (other
than the principal of, and interest on, Indebtedness) pursuant to
representations, warranties, covenants and indemnities entered into in the
ordinary course of business in connection with a Qualified Receivables
Transaction), (ii) is recourse to or obligates Company or any Subsidiary of
Company in any way other than pursuant to customary representations, warranties,
covenants and indemnities entered into in connection with a Qualified
Receivables Transaction or (iii) subjects any property or asset of Company or
any Subsidiary of Company (other than accounts receivable and related assets as
provided in the definition of "Qualified Receivables Transaction"), directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified
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Receivables Transaction, (b) with which neither Company nor any Subsidiary of
Company has any material contract, agreement, arrangement or understanding other
than on terms no less favorable to Company or such Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of Company,
other than fees payable in the ordinary course of business in connection with
servicing accounts receivable and (c) with which neither Company nor any
Subsidiary of Company has any obligation to maintain or preserve such
Subsidiary's financial condition or cause such Subsidiary to achieve certain
levels of operating results. Any such designation by the Board of Directors of
Company will be evidenced to the Administrative Agent by filing with the
Administrative Agent a certified copy of the resolution of the Board of
Directors of Company giving effect to such designation and an officer's
certificate certifying that such designation complied with the foregoing
conditions.
"REGISTER" has the meaning assigned to that term in Section 2.6.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED AGREEMENTS" means, collectively, the Stock Purchase Agreement,
the Stockholders Agreement, the Certificates of Merger, the Management
Agreement, the Senior Subordinated Note Documents, the Tender Offer Documents,
the Credit Agreement, and all documents relating to any of the foregoing.
"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 ASSETS" has the meaning assigned to that term in the
Senior Subordinated Note Indenture.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the sum of the aggregate Term Loan Exposure of all Lenders.
"RESPONSIBLE OFFICER" means, as to any Person, any of the chairman of
the board, the president, the chief executive officer, the chief financial
officer, any senior or executive vice president, the general counsel, the
treasurer or assistant treasurer, secretary or assistant secretary, the
principal financial officer or principal accounting officer, of such Person.
"RESTRICTED JUNIOR PAYMENT" has the meaning assigned to that term in
Section 6.5.
"REVOLVING LOAN" has the meaning assigned to that term in the Credit
Agreement.
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"SEC" means Securities and Exchange Commission.
"SECURITIES" means, with respect to any Person, any stock, shares,
partnership or other similar 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 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 of such Person.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SELLERS" means collectively, ▇▇▇▇▇▇▇ Holdings, LLC, a Delaware limited
liability company, Fenway, the Management Investors and the ESOP.
"SENIOR DEBT" means (a) all Indebtedness of the Credit Parties
outstanding under the Credit Agreement (and the other Credit Documents (as
defined therein)) and this Agreement and all Hedge Agreements with respect
thereto; (b) any other Indebtedness of the Credit Parties that is not
subordinated in right of payment to the Obligations hereunder (including any
guarantee related thereto); and (c) all obligations with respect to the items
listed in the preceding clauses (a) and (b) (including any interest accruing
after the commencement by or against any Credit Party of any proceedings under
the Bankruptcy Code, whether or not such interest is an allowed claim under
applicable law).
"SENIOR LEVERAGE RATIO" means the ratio, as of any date of
determination, of (i) Consolidated Total Debt which constitutes Senior Debt of
Company and its Subsidiaries on a consolidated basis as of such date minus, Cash
and Cash Equivalents of Company and its Subsidiaries as of such date not in
excess of $30,000,000 to (ii) Consolidated Adjusted EBITDA for the most recent
four-Fiscal Quarter period ended on or prior to such date.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means the Senior Subordinated Note
Indenture, the Senior Subordinated Notes and each other document executed in
connection with the Senior Subordinated Notes, as each such document may be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under Section 6.11.
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture dated December
19, 2003 pursuant to which the Senior Subordinated Notes are issued, as such
indenture may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under Section 6.11 or
replaced pursuant to a refinancing permitted under Section 6.1.
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"SENIOR SUBORDINATED NOTES" means the Senior Subordinated Notes of
Company in the aggregate principal amount not to exceed $200,000,000 and issued
pursuant to the Senior Subordinated Note Indenture, with such changes thereto
when executed as are permitted under Section 6.11, which principal amount may
be increased by amounts permitted to be incurred pursuant to Section 6.1, and as
such notes may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under Section 6.11 or
refinanced to the extent permitted under Section 6.1.
"▇▇▇▇▇▇▇" has the meaning assigned to that term in the recitals hereto.
"▇▇▇▇▇▇▇ HOLDCO" means ▇▇▇▇▇▇▇ Holdings, Inc., a Delaware corporation.
"SOLVENCY CERTIFICATE" means a certificate in the form of Exhibit F.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of such
Person is (1) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (2) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person 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; 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.
"SPONSOR "means ▇▇▇▇▇▇ ▇. ▇▇▇ Partners, L.P. and its Affiliates.
"STOCK PURCHASE AGREEMENT" means that certain Stock Purchase Agreement
dated as of November 17, 2003, by and among ▇▇▇▇▇▇▇ Holdings, Inc., THL Bedding
Company, and the Sellers.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of Company under
the Senior Subordinated Note Documents; and (ii) any other Permitted
Subordinated Indebtedness and, in each case, any Permitted Refinancing
Indebtedness with respect thereto.
"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
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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.
"SUBSIDIARY GUARANTOR" means any Domestic Subsidiary of Company that is
a party hereto as of the Closing Date or pursuant to the Assumption Agreement
and is not identified as a Non-Guarantor Subsidiary on Schedule 4.1 or becomes a
party to the Guaranty at any time after the Closing Date pursuant to Section
5.9.
"TAX" means any present or future tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature and whatever called, by a governmental
authority, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided, "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's 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, on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise, including, franchise taxes
or taxes substantially similar to franchise taxes) of that Person (and/or, in
the case of a Lender, its lending office).
"TENDER OFFER" means the offer by Company to purchase at least 50% of
the outstanding Existing Notes pursuant to the Tender Offer Documents.
"TENDER OFFER DOCUMENTS" means the Offer to Purchase and Consent
Solicitation Statement and the Consent of Company dated November 18, 2003.
"TERM LOAN" means a Term Loan made by a Lender to Company pursuant to
Section 2.1.
"TERM LOAN AMOUNT" means the amount of the Term Loan to be lent by a
Lender to Company. The Term Loan Amount of each Lender is initially as set forth
opposite the name of that Lender in Schedule 1.1(b) annexed hereto, and may be
adjusted or reduced pursuant to the terms and conditions hereof. As of the
Closing Date, the aggregate amount of the Term Loan Amounts shall be
$140,000,000.
"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 Amount.
"TERM LOAN NOTE" means a promissory note substantially in the form of
Exhibit B, as it may be amended, restated, supplemented or otherwise modified
from time to time.
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"TERMINATION DATE" means the date upon which all non-contingent
Obligations which are accrued have been paid in full in Cash or satisfied.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Company on or before the Closing Date in connection with the transactions
contemplated by the Credit Documents and the Related Agreements.
"TRUSTEE" means State Street Bank & Trust Company as trustee of the
ESOP.
"TYPE" means a Base Rate Loan or a Eurodollar Rate Loan.
"UBSS" has the meaning assigned to that term in the preamble hereto.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UNFUNDED BENEFIT LIABILITIES" has the meaning assigned to that term in
Section 4.19.
"US LENDER" has the meaning assigned to that term in Section 2.20(d).
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 Administrative Agent
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); provided, that all calculations in connection with financial
definitions shall utilize accounting principles and policies in conformity with
those used to prepare the Historical Financial Statements; provided, further, if
Company notifies the Administrative Agent that Company wishes to amend any
covenant in Section 6 or any related definition to eliminate the effect of any
change in GAAP occurring after the date of this Agreement on the operation of
such covenant (or if Administrative Agent notifies Company that the Requisite
Lenders wish to amend Section 6 or any related definition for such purpose),
then (i) Company and Administrative Agent shall negotiate in good faith to agree
upon an appropriate amendment to such covenant and (ii) Company's compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective until such
covenant is amended in a manner satisfactory to Company and Requisite Lenders.
With respect to the fourth Fiscal Quarter of 2003, and notwithstanding the
actual accounting periods for which any financial statements were prepared for
the fourth Fiscal Quarter of 2003, such fourth Fiscal Quarter shall be treated
as one accounting period and all financial definitions shall be calculated with
all applicable financial statements prepared for such fourth Fiscal Quarter,
taken as a whole.
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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, Exhibit or
Schedule shall be to a Section, an Exhibit and a Schedule, respectively, 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.
Furthermore, when the performance of any covenant, duty or other non-monetary
obligation is stated to be required on a day which is not a Business Day, the
date of such performance shall extend to the immediately succeeding Business
Day. Except as otherwise set forth in this Agreement, 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 commitment fees hereunder, as the case may be.
SECTION 2. TERM LOANS
2.1 TERM LOANS. Subject to the terms and conditions hereof, each
Lender severally agrees to lend to Company, on December 19, 2003, a Term Loan in
an amount equal to such Lender's Term Loan Amount to be used for the purposes
identified in Section 2.5. Any amount borrowed under this Section 2.1, and
subsequently repaid or prepaid, may not be reborrowed.
2.2 [RESERVED].
2.3 [RESERVED].
2.4 PRO RATA SHARES. All Term Loans made hereunder shall be made
by Lenders simultaneously and proportionately to their respective applicable 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 Term
Loan requested hereunder nor shall the Term Loan Amount 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 Term Loan requested hereunder. Unless
Administrative Agent shall have been notified by any Lender prior to the Closing
Date that such Lender does not intend to make available to Administrative Agent
the amount of such Lender's Term Loan on the Closing Date, Administrative Agent
may assume that such Lender has made such amount available to Administrative
Agent on the Closing Date and Administrative Agent may, in its sole discretion,
but shall not be obligated to, make available to Company a corresponding amount
on the Closing 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
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thereon, for each day from the Closing 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 (3) Business Days and thereafter
at the Base 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 the Closing Date until the date such amount is paid to
Administrative Agent, at the rate payable hereunder for Base Rate Loans. Nothing
in this Section 2.4 shall be deemed to relieve any Lender from its obligation to
fulfill its commitments to make Term Loans hereunder or to prejudice any rights
that Company may have against any Lender as a result of any default by such
Lender hereunder.
2.5 USE OF PROCEEDS. The proceeds of the Term Loans shall be
applied by Company to fund a portion of the Acquisition Financing Requirements.
No portion of the proceeds of any Term Loans shall be used in any manner that
causes or might cause such Term Loans 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.
2.6 TERM LOAN NOTES; REGISTER; LENDERS' BOOKS AND RECORDS. 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 thereafter, Company shall execute and deliver to such Lender
(and/or, if applicable and if so specified in such notice, to any Person who is
a permitted 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 Term Loan Note to evidence such Lender's
Term Loan. Administrative Agent shall maintain, at its address referred to in
Section 10.1, a register for the recordation of the names and addresses of
Lenders and the Term Loans of each Lender (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 Term Loans of each Lender and each prepayment in
respect of the principal amount of the Term Loans (and related interest payments
with respect to the Term Loans), and any such recordation shall be conclusive
and binding on Company and each Lender, absent demonstrable error; provided,
failure to make any such recordation, or any error in such recordation, shall
not affect Company's Obligations in respect of any Term Loan. Company hereby
designates the Administrative Agent to serve as Company's agent solely for
purposes of maintaining the Register as provided in this Section 2.6, and
Company hereby agrees that, to the extent the Administrative Agent serves in
such capacity, the Administrative Agent and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all purposes. Each Lender
shall record on its internal records, including its Term Loan Notes, the amount
of the Term Loans made by it and each repayment and prepayment and interest
payment in respect thereof. Any such recordation shall be conclusive and binding
on Company, absent demonstrable error;
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provided, failure to make any such recordation, or any error in such
recordation, shall not affect Company's Obligations in respect of any applicable
Term 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. 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 Term Loans listed therein for all purposes hereof.
2.7 INTEREST PAYMENTS. (a) Except as otherwise set forth herein,
each Term Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at the sum
of (x) the applicable interest rate for the Type of Term Loan plus (y) 2.75% per
annum with respect to Term Loans which are Base Rate Loans or 3.75% per annum
with respect to Term Loans which are Eurodollar Rate Loans. The Type of any Term
Loan, and the Interest Period with respect to any Eurodollar Rate Loan, shall be
selected by Company and notified to Administrative Agent and Lenders pursuant to
the Closing Date Certificate or the Conversion/Continuation Notice, as the case
may be. If on any day a Term Loan is outstanding with respect to which 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 Term Loan shall be a Base Rate Loan. Notwithstanding
anything contained herein to the contrary, in connection with Eurodollar Rate
Loans (i) there shall be no more than 16 Interest Periods outstanding at any
time; and (ii) in the event Company fails to specify an Interest Period for any
Eurodollar Rate Loan in the applicable Conversion/Continuation Notice, Company
shall be deemed to have selected an Interest 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 demonstrable error, be final, conclusive and binding upon all
parties) the interest rate that shall apply to the Eurodollar Rate Loans for
which an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Company and each Lender.
(b) Interest payable hereunder shall be computed (i) in the case
of Base Rate Loans, on the basis of a 365/6-day year, as the case may be, and
(ii) in the case of Eurodollar Rate 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 Term Loan, the date of the making of such
Term Loan or the first day of an Interest Period applicable to such Term Loan
or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Term Loan or the expiration date of an Interest Period applicable to such Term
Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate
Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded.
(c) Except as otherwise set forth herein, interest on each Term
Loan shall be payable in arrears on and to (i) each Interest Payment Date
applicable to that Term Loan;
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(ii) any prepayment of that Term Loan, to the extent accrued on the amount being
prepaid; and (iii) on the Maturity Date.
2.8 CONVERSION; CONTINUATION. Company shall have the option (a) to
convert at any time all or any part of any Term Loans from one Type of Term Loan
to another Type of Term Loan, provided, that partial conversions of Base Rate
Loans shall be in the aggregate principal amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount and the aggregate principal
amount of the resulting Eurodollar Rate Loans outstanding in respect of any one
(1) Interest Period shall be at least $2,000,000 and integral multiples of
$1,000,000 in excess of that amount; or (b) upon the expiration of any Interest
Period applicable to a Eurodollar Rate Loan, to continue all or any portion of
such Term Loan as a Eurodollar Rate Loan; provided, (1) a Eurodollar Rate Loan
may only be converted into a Base Rate Loan on the expiration date of an
Interest Period applicable thereto and (2) the aggregate principal amount of the
resulting Eurodollar Rate Loans outstanding in respect of any one Interest
Period shall be at least $2,000,000 and integral multiples of $1,000,000 in
excess of that amount. Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
(1) Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three (3) Business Days in advance
of the proposed conversion/continuation date (in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein,
a Conversion/Continuation Notice for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) 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. After the
occurrence of and during the continuation of an Event of Default, unless the
Requisite Lenders otherwise consent, (i) Company may not elect to have a Term
Loan be maintained as, or converted to, a Eurodollar Rate Loan after the
expiration of any Interest Period then in effect for that Term Loan; and (ii)
any Conversion/Continuation Notice given by Company with respect to a requested
borrowing or conversion/continuation that has not yet occurred shall be deemed
to be rescinded by Company.
2.9 POST-MATURITY INTEREST. Any principal payments on the Term
Loans not paid when due and, to the extent permitted by applicable law, any
interest payments on the Tern Loans or any fees or other amounts owed hereunder
not paid when due, in each case whether at the Maturity Date, by notice of
prepayment, by acceleration or otherwise, 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 which is 2% per
annum in excess of the interest rate otherwise payable hereunder with respect to
the applicable Term 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 Base Rate Loans); provided, in the case of Eurodollar Rate Loans,
upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the
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interest rate otherwise payable hereunder for Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this Section 2.9
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.
2.10 FEES. Company agrees to pay to the Agents such other fees in
the amounts and at the times separately agreed upon between Company and the
Agents.
2.11 REPAYMENT OF TERM LOANS. Company shall repay to the
Administrative Agent on the Maturity Date for the ratable account of the Lenders
the aggregate principal amount of all Term Loans outstanding on such date.
2.12 VOLUNTARY PREPAYMENTS. Company may, upon not less than one (1)
Business Day's prior written or telephonic notice, in the case of Base Rate
Loans, and three (3) Business Days' prior written or telephonic notice, in the
case of Eurodollar Rate Loans, in each case given to Administrative Agent by
12:00 noon (New York City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by telefacsimile
or telephone to each Lender), at any time and from time to time prepay any Term
Loans on any Business Day in whole or in part in an aggregate minimum amount of
$500,000 and integral multiples of $100,000 in excess of that amount; provided,
however, that a Eurodollar Rate Loan may only be prepaid on the expiration of
the Interest Period applicable thereto unless Company pays Lenders any amount
required pursuant to Section 2.18(c) on the date of such prepayment. To the
extent Company makes a voluntary prepayment of any Term Loans within three (3)
years after the Closing Date, such prepayment shall be made with a premium such
that the aggregate amount of such voluntary prepayment shall be in an amount
equal to (1) 103% of the principal amount prepaid if such voluntary prepayment
is made within one (1) year after the Closing Date, (2) 102% of the principal
amount prepaid if such voluntary prepayment is made within two (2) years after
the Closing Date, and (3) 101% of the principal amount prepaid if such voluntary
prepayment is made within three (3) years after the Closing Date. The prepayment
of any Term Loans after the third anniversary of the Closing Date pursuant to
this Section 2.12 shall be made without premium or penalty. Notice of prepayment
having been given as aforesaid, the principal amount of the Term Loans specified
in such notice shall become due and payable on the prepayment date specified
therein; provided that Company may rescind or postpone any such notice of
prepayment if such prepayment would have resulted from a refinancing of all of
the Term Loans and such refinancing shall not be consummated or otherwise shall
be delayed.
2.13 MANDATORY PREPAYMENTS Within ten (10) Business Days after the
occurrence of a Change of Control, Company shall prepay any and all outstanding
Term Loans with a premium such that the aggregate amount of such prepayment
shall be in an amount equal to 101% of the unpaid principal amount of the Term
Loans.
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(b) If Holdings or any of its Subsidiaries conducts an Asset Sale
which, after giving effect to Section 6.8 hereof, gives rise to any Excess
Proceeds, Company shall give written notice to the Administrative Agent thereof
on or prior to the date on which Company shall be required to prepay an
aggregate principal amount of Term Loans in an amount equal to such Excess
Proceeds as indicated in Section 6.8 within two (2) Business Days of the date
Company is required to make such prepayment; provided, that to the extent
Company makes such a mandatory prepayment of any Term Loans within three (3)
years after the Closing Date, such prepayment shall be made with a premium such
that the aggregate amount of such mandatory prepayment shall be in an amount
equal to (1) 103% of the principal amount prepaid if such mandatory prepayment
is made within one (1) year after the Closing Date, (2) 102% of the principal
amount prepaid if such mandatory prepayment is made within two (2) years after
the Closing Date, and (3) 101% of the principal amount prepaid if such mandatory
prepayment is made within three (3) years after the Closing Date. The prepayment
of any Term Loans pursuant to this Section 2.13(b) after the third anniversary
of the Closing Date shall be made without premium or penalty.
2.14 [RESERVED]
2.15 GUARANTY PAYMENTS. All payments received by Administrative
Agent under the Guaranty shall be applied promptly from time to time by
Administrative Agent in the following order of priority: first, to the payment
of the costs and expenses of any collection or other realization under the
Guaranty, including reasonable compensation to Administrative Agent and its
agents and counsel, and all expenses, liabilities and advances made or incurred
by Administrative Agent in connection therewith, all in accordance with the
terms of the Guaranty and this Agreement; second, to the extent of any excess
such payments, to the payment of all other Obligations for the ratable benefit
of the holders thereof; and third,to the extent of any excess such payments, to
the payment to the applicable Guarantor or to whosoever may be lawfully entitled
to receive the same or as a court of competent jurisdiction may direct.
2.16 GENERAL PROVISIONS REGARDING PAYMENTS. All payments by Company
of principal, interest, fees and other Obligations shall be made in Dollars in
same day funds, without defense, set-off or counterclaim, free of any
restriction or condition, and delivered to Administrative Agent not later than
12:00 noon (New York City time) on the date due at the Funding and Payment
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. All payments in respect of the principal amount of
any Term Loan 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 Term Loan on a date when interest is due and payable with
respect to such Term Loan) shall be applied to the payment of interest before
application to principal. Administrative Agent shall promptly distribute to each
Lender, at its primary address set forth on its signature page hereto or at such
other address as such Lender may request, its applicable Pro Rata Share of all
payments and prepayments of principal and interest due hereunder, together with
all other amounts due thereto,
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including, without limitation, all fees payable thereto, received by
Administrative Agent. Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its applicable Pro Rata Share
of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
2.17 RATABLE SHARING. Lenders hereby agree among themselves that if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Term Loans made and applied in accordance with the terms hereof),
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, 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 (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) 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
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 directly by Company.
2.18 MAKING OR MAINTAINING EURODOLLAR RATE LOANS. (a) In the event
that Administrative Agent shall have reasonably determined (which determination
shall be final and conclusive and binding upon all parties hereto), on any
Interest Rate Determination Date with respect to any Eurodollar Rate 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
Term Loans on the basis provided for in the definition of Adjusted Eurodollar
Rate, Administrative Agent shall on such date give notice (by telefacsimile or
by telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Term Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist,
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which notice shall be given as soon as reasonably practicable and (ii) any
Conversion/Continuation Notice given by Company with respect to the Term Loans
in respect of which such determination was made shall be deemed to be rescinded
by Company without the necessity of paying any amount under Section 2.18(c).
(b) In the event that on any date any Lender shall have reasonably
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 maintaining or continuation of its Eurodollar
Rate 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, or would
cause such Lender material hardship, as a result of contingencies occurring
after the Closing Date 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 convert Term Loans to Eurodollar Rate 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
Eurodollar Rate Loan then being requested by Company pursuant to a
Conversion/Continuation Notice, the Affected Lender shall convert such Term Loan
to a Base Rate Loan, (3) the Affected Lender's obligation to maintain its
outstanding Eurodollar Rate Loans (the "AFFECTED TERM LOANS") shall be
terminated at the earlier to occur of the expiration of the Interest Period then
in effect with respect to the Affected Term Loans or when required by law, and
(4) the Affected Term Loans shall automatically convert into Base 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 Eurodollar
Rate Loan then being requested by Company pursuant to a Conversion/Continuation
Notice, Company shall have the option, subject to the provisions of Section
2.18(c), to rescind such 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 Term Loans as, or to convert Term Loans to, Eurodollar Rate Loans in
accordance with the terms hereof.
(c) 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
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lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and
any loss, expense or liability sustained by such Lender in connection with the
liquidation or re-employment of such funds but excluding (a) any loss solely
attributable to the failure to receive the applicable margin on a Eurodollar
Rate Loan for any period after (y) the date specified for such Eurodollar Rate
Loan in the case of clause (i) below and (z) the date such Eurodollar Rate
Loans are prepaid or converted in the case of clause (ii) below) which
such Lender may sustain: (i) if for any reason (other than a default by such
Lender) a borrowing of any Eurodollar Rate Loan does not occur on the Closing
Date or a conversion to or continuation of any Eurodollar Rate 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 Eurodollar Rate Loans
occurs on a date prior to the last day of an Interest Period applicable to that
Term Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not
made on any date specified in a notice of prepayment given by Company and (b)
any loss, expense or liability with respect to Taxes (and any liabilities
relating thereto), the indemnity for which shall be governed solely and
exclusively by Section 2.20.
(d) Any Lender may make, carry or transfer Eurodollar Rate Loans
at, to, or for the account of any of its branch offices or the office of an
Affiliate of such Lender. In addition, in the case o f each Lender that makes,
carries or transfers any Eurodollar Rate Loan at, to, or for the account of an
office of an Affiliate of such Lender pursuant to this Section 2.18(d), such
Lender: (i) shall keep a register, meeting the requirements of Temporary
Treasury Regulation Section 5f.103-l(c), relating to each such Affiliate of such
Lender, specifying such Affiliate's entitlement to payments of principal and
interest with respect to such Term Loan, and (ii) shall collect, prior to the
time such Affiliate receives payments, from each such Lender the appropriate
forms, certificates and statements described in Section 2.20 (and updated as
required by Section 2.20) as if such Affiliate were a Lender under Section 2.20.
(e) Calculation of all amounts payable to a Lender under this
Section 2.18 and under Section 2.19 shall be made as though such Lender had
actually funded each of its relevant Eurodollar Rate Loans through the purchase
of a Eurodollar deposit bearing interest at the rate obtained pursuant to clause
(i) of the definition of Adjusted Eurodollar Rate in an amount equal to the
amount of such Eurodollar Rate Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of such Lender to a domestic office of such Lender in
the United States of America; provided, each Lender may fund each of its
Eurodollar Rate 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.
2.19 INCREASED COSTS; CAPITAL ADEQUACY. Subject to the provisions
of Section 2.20 (which shall be controlling with respect to the Tax matters), in
the event that any Lender shall reasonably determine (which determination shall,
absent demonstrable error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or
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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 Closing Date, or compliance by such Lender with any
guideline, request or directive issued or made after the Closing Date by
any central bank or other governmental or quasi-governmental authority (whether
or not having the force of law): (a) imposes, modifies or holds applicable any
reserve (including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, 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 (including letters of
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
Eurodollar Rate Loans that are reflected in the definition of Adjusted
Eurodollar Rate); or (b) 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 Term Loans hereunder or to reduce any amount received or
receivable by such Lender (or its applicable lending office) with respect
thereto; 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 reasonable 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, which statement
shall be conclusive and binding upon all parties hereto absent demonstrable
error.
2.20 TAXES; WITHHOLDING, ETC. (a) All sums payable by any Credit
Party hereunder and 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 or any Agent), 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) 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 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
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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 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 reasonably 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 or any Agent under clause
(iii) above with respect to any deductions or withholding applicable as of the
Closing Date (in the case of each Lender and each Agent listed on the signature
pages hereof) or the effective date of the Assignment Agreement pursuant to
which such Lender became a Lender or the date on which a successor Lender
becomes a Lender, or the date a successor Agent becomes an Agent (in the case of
each other Lender or Agent) in respect of payments to such Lender or such Agent.
(c) Each Lender and each Agent 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 and each Agent 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 or on or prior to the date a
successor Lender becomes a Lender or on or prior to the date a successor Agent
becomes an Agent (in the case of each other Lender and each Agent): (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 Non-U.S. Lender,
and such other documentation required under the Internal Revenue Code to
establish that such Non-U.S. Lender is not subject to deduction or withholding
of United States federal income tax with respect to any payments to such
Non-U.S. Lender of principal, interest, fees or other amounts payable under any
of the Credit Documents, or (ii) if such Non-U.S. 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-8BEN (or any successor form), properly
completed and duly executed by such Non-U.S. Lender, and such other
documentation required under the Internal Revenue Code to establish that such
Non-US. Lender is not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Non-U.S. Lender of
interest payable under any of the Credit Documents. Each Non-U.S. Lender
required to deliver any forms, certificates or other
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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 Non-U.S. Lender of such forms, certificates or other
evidence to 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-8BEN (or successor forms or certificates as shall be adopted from
time to time by the relevant United States taxing authority), as the case may
be, properly completed and duly executed by such Non-U.S. Lender, and such other
documentation required under the Internal Revenue Code to confirm or establish
that such Non-U.S. Lender is not subject to deduction or withholding of United
States federal income tax with respect to payments to such Non-U.S. Lender under
the Credit Documents, (i) on or before the date that any such previously
provided forms, certificates or evidence expires or becomes inaccurate, (ii)
whenever a lapse in time or change in circumstances renders such previously
provided forms, certificates or other evidence obsolete or inaccurate and (iii)
from time to time thereafter if reasonably requested by Company or
Administrative Agent, or to notify Administrative Agent and Company of its
inability to deliver any such forms, certificates or other evidence. Company and
each other Credit Party shall not be required to pay any additional amount to
any Non-US Lender under Section 2.20(b)(iii) if such Non-U.S. Lender shall have
(x) failed to deliver the forms, certificates or other evidence referred to in
this Section 2.20(c), or (y) notified Administrative Agent and Company of its
inability to deliver any such forms, certificates or other evidence, as the case
may be; provided, if such Non-U.S. 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 or the date of succession pursuant to which it
became a Lender or an Agent, as applicable, nothing in this last sentence of
Section 2.20(c) shall relieve Company and each other Credit Party of its
obligation to pay any additional amounts pursuant to this Section 2.20 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 Non-U.S. Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Non-U.S. Lender is not subject
to withholding as described herein.
(d) Each Lender and each Agent that is not a Non-US Lender (a "US
LENDER") shall deliver to Administrative Agent and Company two original copies
of Internal Revenue Service Form W-9 properly completed and duly executed by
such US Lender on or prior to the Closing Date (or on or prior to the date it
becomes a party to this Agreement), certifying that such US Lender is entitled
to an exemption from United States backup withholding tax, or any successor
form. Each US Lender required to deliver any forms, certificates or other
evidence with respect to United States backup withholding tax matters pursuant
to this Section 2.20(d) hereby agrees, from time to time after the initial
delivery by such US Lender of such forms, certificates or other evidence, that
such US Lender shall promptly deliver to Administrative Agent for transmission
to Company two new original copies of Internal Revenue Service Form W-9,
properly completed and duly executed by such US Lender, together with any other
certificate or
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statement of exemption required in order to confirm or establish that such US
Lender is exempt from United States backup withholding tax with respect to
payments to such US Lender under any of the Credit Documents (i) on or before
the date that any such previously provided forms, certificates or other evidence
expires or becomes obsolete, (ii) whenever a lapse in time or change in
circumstances render such previously provided forms, certificates or other
evidence obsolete or inaccurate, and (iii) from time to time thereafter if
reasonably requested by Company or Administrative Agent, or shall notify
Administrative Agent and Company of its inability to deliver any such forms,
certificates or other evidence. Company and each other Credit Party shall not be
required to pay any additional amount to any US Lender under Section
2.20(b)(iii) to the extent deduction or withholding is a result of such US
Lender's failure to provide an Internal Revenue Service Form W-9 establishing
that such US Lender is exempt from United States backup withholding tax;
provided, if such US Lender shall have satisfied the requirements of this
Section 2.20(d) on the Closing Date or on the date of the Assignment Agreement
or on the date of the succession pursuant to which it became a Lender or an
Agent, as applicable, nothing in this last sentence of Section 2.20(d) shall
relieve Company and each other Credit Party of its obligation to pay any
additional amounts otherwise payable 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 US Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such US Lender is not subject to United States backup
withholding tax as described herein. If such US Lender fails to deliver such
forms, then Company may withhold from any payment to such US Lender an amount
equal to the applicable backup withholding tax imposed by the Internal Revenue
Code.
(e) If any Lender or any Agent determines that it has received a
refund in respect of any Taxes as to which additional amounts have been paid to
it by Company pursuant to Section 2.2O(b)(iii), it shall promptly remit such
refund (including any interest included in such refund) to Company, net of all
out-of-pocket expenses of such Lender or such Agent, as the case may be;
provided however, that Company, upon request of such Lender or such Agent, as
the case may be, agrees to promptly return such refund to such party in the
event such party is required to repay such refund to the relevant taxing
authority. Such Lender or such Agent, as the case may be, shall, at Company's
request, provide Company with a copy of any notice of assessment or other
evidence of the requirement to repay such refund received from the relevant
taxing authority (provided that such Lender or such Agent, as the case may be,
may delete any information therein that such Lender or such Agent, as the case
may be, deems confidential).
2.21 CAPITAL ADEQUACY ADJUSTMENT. If any Lender 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
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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 Term Loans or
other obligations hereunder with respect to the Term Loans 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), then from time to time, within
five (5) 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 of the calculation of
such additional a mounts, which statement shall be conclusive and binding upon
all parties hereto absent demonstrable error.
2.22 OBLIGATION TO MITIGATE. Each Lender agrees that, as promptly
as practicable after the officer of such Lender responsible for administering
its Term Loans 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 2.19, 2.20 or 2.21,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts (i) to make, fund or maintain its Term Loans, including any Affected
Term Loans, through another office of such Lender, or (ii) 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 2.19, 2.20 or 2.21 would be materially
reduced and if, as determined by such Lender in its sole discretion, the making,
funding or maintaining of such Term Loans through such other office or in
accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Term Loans or the interests of such Lender;
provided, such Lender will not be obligated to utilize such other office
pursuant to this Section 2.22 unless Company agrees to pay all incremental
expenses incurred by such Lender as a result of utilizing such other office as
described in clause (i) above. A certificate as to the amount of any such
expenses payable by Company pursuant to this Section 2.22 (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
demonstrable error. With respect to any Lender's claim for compensation under
Sections 2.19, 2.20 or 2.21, Company shall not be required to compensate such
Lender for any amount incurred more than ninety (90) days prior to the date that
such Lender becomes aware of the event that gives rise to such claim.
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2.23 [RESERVED]
2.24 REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein
to the contrary notwithstanding, in the event that: (a) 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 2.19, Section 2.20 or Section 2.21, 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 such Lender shall fail to withdraw
such notice within five (5) Business Days after Company's request for such
withdrawal; or (b) 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) or Section 10.5(c), 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 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: (i) prepay on the date of such termination any outstanding Term Loans made
by such Terminated Lender, together with accrued and unpaid interest thereon and
any other amounts payable to such Terminated Lender hereunder pursuant to
Section 2.18(c), 2.19, 2.20 or 2.21 or otherwise; or (ii) elect to cause such
Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to
assign its outstanding Term Loans in full to one or more Eligible Assignees
(each a "REPLACEMENT LENDER") in accordance with the provisions of Section 10.6
(and no processing or recordation fee shall be payable under Section 10.6);
provided, (1) on the date of such assignment, Company shall pay any amounts
payable to such Terminated Lender pursuant to Section 2.18(c), 2.19, 2.20 or
2.21 or otherwise as if it were a prepayment and (2) in the event such
Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall
consent, at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender; provided, the Lender that acts as
the Administrative Agent may not be replaced hereunder except in accordance with
the terms of Section 9.7(a). Upon the prepayment of all amounts owing to any
Terminated Lender 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 obligations of Lenders to make any Term
Loans to be made on the Closing Date are 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, executed and delivered by each
applicable Credit Party, for each Lender and its counsel.
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(b) ORGANIZATIONAL DOCUMENTS, ETC. Administrative Agent shall have
received a copy of each of the following documents, originally executed (where
applicable) and delivered by each Credit Party, as applicable: (i) certified
copies of the Certificate or Articles of Incorporation (or equivalent charter
document) of such Person, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation or formation, as
applicable and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each such jurisdiction, each
dated the Closing Date or a recent date prior thereto; (ii) copies of the Bylaws
(or equivalent operative agreement) of such Person, certified as of the Closing
Date by such Person's corporate secretary or an assistant secretary; (iii)
resolutions of the Board of Directors (or similar governing body) of such Person
approving and authorizing the execution, delivery and performance of the Credit
Documents to which it is a party, certified as of the Closing Date by the
corporate secretary or an assistant secretary of such Person as being in full
force and effect without modification or amendment; and (iv) signature and
incumbency certificates of the officers of such Person executing the Credit
Documents to which it is a party, dated the Closing Date.
(c) GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Each Credit Party
shall have obtained all material Governmental Authorizations and all material
consents of other Persons, in each case that are necessary in connection with
the transactions contemplated by the Credit Documents and each of the foregoing
shall be in full force and effect. 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.
(d) OPINIONS OF COUNSEL TO CREDIT PARTIES. Lenders shall have
received executed copies of the favorable written opinion of Weil, Gotshal &
▇▇▇▇▇▇ LLP, in the form of Exhibit D-l and as to such other matters as Agents
may reasonably request, and otherwise in form and substance reasonably
satisfactory to Agents and Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, dated as of
the Closing Date.
(e) OPINIONS OF AGENT'S COUNSEL. Lenders shall have received
executed copies of one or more favorable written opinions of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Agents, dated as of the Closing Date,
in the form of Exhibit D- 2 and otherwise in form and substance reasonably
satisfactory to Agents.
(f) [RESERVED].
(g) EXISTING INDEBTEDNESS, RELATED LIENS AND LETTERS OF CREDIT.
(i) On the Closing Date, Company and its Subsidiaries shall have (w) repaid (or
satisfied and discharged as described in clause (ii) below) in full all
Indebtedness of Holdings and its Subsidiaries other than the Indebtedness set
forth on Schedule 6.1 annexed hereto or otherwise permitted pursuant to Section
6.1, (x) terminated any commitments to lend or make other extensions of credit
thereunder, (y) delivered to Administrative Agent all
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documents or instruments necessary to release all Liens securing such repaid
Indebtedness or other obligations of Holdings and its Subsidiaries thereunder
and (Z) made arrangements reasonably satisfactory to Administrative Agent to
support obligations of Holdings and its Subsidiaries with respect to any letters
of credit outstanding under such repaid Indebtedness and described on Schedule
6.1.
(ii) On or before the Closing Date, (w) all conditions to
payment with respect to 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 waived with
the consent of the Agents; (x) no less than 50% of outstanding Existing
Notes shall have been retired or shall have been tendered for
retirement pursuant to the terms of the Tender Offer Documents; (y)
each holder of the Existing Notes who has tendered shall also have
delivered the consent necessary to amend those covenants set forth in
Section 4 of the Existing Indenture (as more fully described in the
Tender Offer Documents) and such amendments shall have become
effective; and (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.
(h) CORPORATE STRUCTURE, ETC. Set forth on Schedule 4.1 is the
corporate organizational structure of Holdings and its Subsidiaries, after
giving effect to the Acquisition and the Mergers.
(i) ISSUANCE OF SENIOR SUBORDINATED NOTES. On or before the
Closing Date:
(i) Company shall have received the gross proceeds from
the issuance of the Senior Subordinated Notes in an aggregate amount in
cash of not less than $200,000,000;
(ii) Company shall have delivered to Administrative Agent
complete, correct and conformed copies of the Senior Subordinated Note
Documents which shall include terms reasonable and customary for loans
and securities of such type, as mutually agreed upon between Sponsor
and the Agents; and
(iii) The proceeds of Senior Subordinated Notes have been
irrevocably committed, simultaneously with the application of the
proceeds of the Term Loans to be made on the Closing Date, to the
payment of a portion of the Acquisition Financing Requirements.
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(j) CREDIT AGREEMENT. On or before the Closing Date:
(i) Company shall have received the gross proceeds from
the issuance of the Tranche B Term Loans and Revolving Loans that are
made on the Closing Date pursuant to the Credit Agreement;
(ii) Company shall have delivered to Administrative Agent
complete, correct and conformed copies of the Credit Agreement which
shall include terms reasonable and customary for loans of such type, as
mutually agreed upon between Sponsor and the Agents; and
(iii) The proceeds of Tranche B Term Loans and Revolving
Loans that are made on the Closing Date under the Credit Agreement have
been irrevocably committed, simultaneously with the application of the
proceeds of the Term Loans, to the payment of a portion of the
Acquisition Financing Requirements.
(k) EQUITY FINANCING. On or before the Closing Date, the proceeds
of the Equity Financing have been irrevocably committed, simultaneously with the
application of the proceeds of the Term Loans, to the payment of a portion of
the Acquisition Financing Requirements.
(l) RELATED AGREEMENTS. Agents shall each have received a fully
executed or conformed copy of the Stock Purchase Agreement and the Management
Agreement, and the Stock Purchase Agreement and the Management Agreement shall
be in full force and effect and no provision thereof shall have been modified or
waived in any respect reasonably determined by Agents to be material, in each
case without the consent of two of the three Agents.
(m) CONSUMMATION OF ACQUISITION. With respect to the consummation
of the Acquisition, concurrently with the Term Loans made hereunder, (i) all
conditions to the Acquisition set forth in Sections 5_ and 6 of the Stock
Purchase Agreement and related documents shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the consent of
Agents and (ii) the Acquisition shall have become effective in accordance with
the terms of the Stock Purchase Agreement and related documents;
(n) CONSUMMATION OF MERGERS. The Agents shall have received
evidence reasonably satisfactory to the Agents that, immediately following the
consummation of the Acquisition, all conditions to the Mergers shall have been
satisfied or the fulfillment of any such conditions shall have been waived with
the consent of the Agents such that immediately following the consummation of
the Acquisition, the Mergers shall become effective.
(o) SOLVENCY ASSURANCES. On the Closing Date, Agents and Lenders
shall have received a Solvency Certificate dated the Closing Date, demonstrating
that, after
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giving effect to the consummation of the Acquisition, the related financings and
the other transactions contemplated by the Credit Documents and the Related
Agreements, each Credit Party will be Solvent.
(p) TRANSACTION COSTS. On or prior to the Closing Date, Company
shall have delivered to the Agents Company's reasonable best estimate of the
Transactions Costs (other than fees and expenses payable to any Agent).
(q) CLOSING DATE CERTIFICATE. Holdings and Company shall have
delivered to Administrative Agent a Closing Date Certificate.
(r) NO LITIGATION. 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, to the knowledge of Company, singly or in the
aggregate, materially impairs the Acquisition, the financing thereof or any of
the other transactions contemplated by the Credit Documents or the Related
Agreements, or that could reasonably be expected to have a Material Adverse
Effect.
Each Agent and Lender, by delivering its signature page to this Agreement, to
the extent applicable, and funding its Term Loan Amount on the Closing Date,
shall be deemed to have acknowledged receipt of, and consented to and approved
(as long as substantially in the form delivered to such Agent or Lender, as
applicable, including any changed pages thereto delivered to such Agent or
Lenders, as applicable), each Credit Document and each other document required
to be approved by Requisite Lenders or Lenders, as applicable.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
Term Loans to be made thereby, Company represents and warrants to each Lender
(after giving effect to the consummation of the Acquisition and the Mergers) as
follows:
4.1 ORGANIZATION AND POWERS. Each Credit Party is a corporation,
limited liability company or limited partnership, as applicable, duly organized
or formed, as applicable, validly existing and, to the extent such concept
applies, in good standing under the laws of its jurisdiction of incorporation or
formation, as applicable. Each Credit Party has all requisite corporate or other
organizational power and 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.
4.2 QUALIFICATION AND GOOD STANDING. Each Credit Party 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, except in jurisdictions where
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the failure to be so qualified or in good standing has not had and could not be
reasonably be expected to have a Material Adverse Effect.
4.3 SUBSIDIARIES. As of the Closing Date, all of the Subsidiaries
of Holdings are identified in Schedule 4.1. As of the Closing Date, the issued
and outstanding capital stock of each of the Subsidiaries of Holdings identified
in Schedule 4.1 is duly authorized, validly issued, fully paid and nonassessable
and none of such capital stock constitutes Margin Stock. Each of the
Subsidiaries of Holdings is a corporation, limited liability company or limited
partnership, as applicable, duly organized or formed, as applicable, validly
existing, to the extent such concept applies, and in good standing under the
laws of its respective jurisdiction of incorporation or formation, as
applicable, has all requisite corporate power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted, and 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 failure to be so
qualified or in good standing or a lack of such corporate power and authority
has not had and could not be reasonably expected to have a Material Adverse
Effect. As of the Closing Date, Schedule 4.1 correctly sets forth the ownership
interest of Holdings and each of its Subsidiaries in each of the Subsidiaries of
Holdings identified therein.
4.4 AUTHORIZATION OF BORROWING; NO CONFLICT. The execution,
delivery and performance of the Credit Documents have been duly authorized by
all necessary corporate, limited liability company or limited partnership, as
applicable, action on the part of each Credit Party that is a party thereto. 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, the Certificate or Articles of Incorporation or Bylaws (or
equivalent constituent 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, except to the extent such violation could
not be reasonably be expected to have a Material Adverse Effect, (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, unless, solely with respect to the consummation of the Acquisition
and the Mergers, such conflict, breach or default 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
collateral documents entered into with respect to the Credit Agreement and
Credit Facilities), or (d) require any approval of stockholders 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 except for
any such consents or approvals the failure of which to obtain would not
reasonably be expected to have a Material Adverse Effect.
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4.5 GOVERNMENTAL CONSENTS. 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 require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body except for (a) such as have been obtained and are in full
force and effect and (b) any such consents or approvals the failure of which to
obtain would not reasonably be expected to have a Material Adverse Effect.
4.6 BINDING OBLIGATION. Each of the Credit Documents 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 VALID ISSUANCE OF THE SENIOR SUBORDINATED NOTES. Company has
the corporate power and authority to issue the Senior Subordinated Notes. The
Senior Subordinated Notes, when issued and paid for, will be the legally valid
and binding obligations of Company, enforceable against Company in accordance
with their 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. The
subordination provisions of the Senior Subordinated Note Documents will be
enforceable against the holders of the Senior Subordinated Notes. The Senior
Subordinated Notes, when issued and sold, will either (a) have been registered
or qualified under applicable federal and state securities laws or (b) be exempt
therefrom.
4.8 FINANCIAL CONDITION. Company has heretofore delivered to
Lenders the Historical Financial Statements all of which were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position, on a consolidated basis, of the entities 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 financial statements, except for the absence of notes
thereto.
4.9 No MATERIAL ADVERSE CHANGE. Since December 31, 2002, 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 LITIGATION; ADVERSE FACTS. 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
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in default with respect to any final judgments, writs, injunctions, decrees,
rules or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
4.11 PAYMENT OF TAXES. Except in accordance with Section 5.3, all
Federal and material state and other tax returns and reports of Holdings and its
Subsidiaries required to be filed by any of them have been timely filed, and all
Federal and material state and other 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 except those (a) which are not overdue by more than thirty (30)
days or (b) which are being contested by Holdings or such Subsidiary in good
faith and by appropriate proceedings or (c) with respect to which the failure to
make such filings or payment could not reasonably be expected to have a Material
Adverse Effect.
4.12 TITLE TO PROPERTIES; REAL PROPERTY. Company and its
Subsidiaries have, subject to Permitted Liens, (a) good, sufficient and legal
title to (in the case of fee interests in real property); (b) valid leasehold
interests in (in the case of leasehold interests in real or owned personal
property); and (c) good title to (in the case of all other personal property),
all of their respective properties and assets except for defects in title that
do not materially interfere with its ability to conduct its business or to
utilize such assets for their intended purposes or where failure to have such
title in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
4.13 [RESERVED].
4.14 ENVIRONMENTAL. 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 (a) any Environmental Law, (b) any Environmental Claim, or
(c) 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 Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C.Section 9604) or any comparable state law which could
reasonably be expected to have a Material Adverse Effect. There are and, to
Company's 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
Company's knowledge, any predecessor of Holdings or any of its Subsidiaries has
treated, stored or disposed of any hazardous waste at any Facility, and none of
Holdings' or any of its Subsidiaries' operations involves the treatment, storage
or disposal of hazardous waste that, in each case, would require a
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permit under RCRA. 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. Notwithstanding anything in this Section 4.14 to the contrary,
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 that, with the giving of notice or the
lapse of time or both, would constitute such a default, except, in either case,
where the consequences, direct or indirect, of such default or defaults, if any,
could not be reasonably be expected to have a Material Adverse Effect.
4.16 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.
4.17 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 Term 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 that
violates, or is inconsistent with, the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
4.18 EMPLOYEE MATTERS. There is 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.
4.19 EMPLOYEE BENEFIT PLANS. Company, each of its Subsidiaries and
each of their respective ERISA Affiliates are in compliance with all applicable
provisions and requirements of ERISA and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have
performed in all material respects all their obligations under each Employee
Benefit Plan, except for such noncompliance which, individually or in the
aggregate, could not reasonably be 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 is so qualified or will be qualified by admission of
such Plan for an IRS determination in a timely fashion, if not already
submitted, and the timely making of such amendments as may be required as a
condition for issuance of a favorable determination. No ERISA Event has occurred
or as of the Closing Date is reasonable expected to occur where such Event
individually or in the
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aggregate would have a Material Adverse Effect. As of the most recent valuation
date for any Pension Plan, any amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA "UNFUNDED BENEFIT LIABILITIES"),
individually or in the aggregate for all Pension Plans (except for purposes of
such computation any Pension Plans with respect to which assets exceed benefit
liabilities), could not reasonably be expected to have a Material Adverse
Effect. Neither Company, its Subsidiaries nor their respective ERISA Affiliates
has completely or partially withdrawn from any Multiemployer Plan, or incurred
termination liability to the PBGC or withdrawal liability to any Multiemployer
Plan. As of the most recent valuation date for each Multiemployer Plan for which
the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Pian (within the meaning of Section 4203 of ERISA),
when aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, could not reasonably be expected to have a Material Adverse Effect.
4.20 [RESERVED].
4.21 SOLVENCY. Each Credit Party is Solvent.
4.22 CERTAIN RELATED AGREEMENTS. Holdings and Company have
delivered to the Administrative Agent complete and correct copies of the Stock
Purchase Agreement and the Management Agreement and, in each case, of all
exhibits and schedules thereto as of the Closing Date.
4.23 [RESERVED].
4.24 DISCLOSURE. No written information, reports, financial
statements, certificates or exhibits (other than any Projections) furnished to
Lenders by or on behalf of Company or any of its Subsidiaries for use in
connection with the transactions contemplated hereby, when taken as a whole,
contained any untrue statement of a material fact or omitted to state a material
fact (known to Company, in the case of any document not furnished by it)
necessary in order to make the statements contained herein or therein not
materially misleading in light of the circumstances in which the same were made.
Any projections and pro forma financial information (collectively, the
"PROJECTIONS") contained in such, materials are based upon good faith estimates
and assumptions believed by Company 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 to Company (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.
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4.25 INTELLECTUAL PROPERTY. Each of the Credit Parties owns or has
the valid right to use all Intellectual Property free and clear of any and all
Liens other than Permitted Liens. All registrations therefor are in full force
and effect and are valid and enforceable, except as could not be expected to
have a Material Adverse Effect. To each Credit Party's knowledge, the conduct of
the business of each Credit Party as currently conducted, including, but not
limited to, all products, processes, or services, made, offered or sold by each
such Credit Party, does not infringe upon, violate, misappropriate or dilute any
intellectual property of any third party which infringement is likely to have a
Material Adverse Effect. To the Credit Parties' knowledge, no third party is
infringing upon the Intellectual Property in any manner which could reasonably
be expected to have a Material Adverse Effect. There is no pending, or to each
Credit Party's knowledge, threatened claim or litigation contesting any
Credit Party's right to own or use any Intellectual Property or the validity
or enforceability thereof which could reasonably be expected to have a Material
Adverse Effect.
SECTION 5. AFFIRMATIVE COVENANTS
Until the Termination Date has occurred, each of Holdings and Company
shall, and shall (except in the case of the covenants set forth in Section 5.1)
cause each Subsidiary to:
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS. Company will deliver
to Administrative Agent for further distribution (and which Administrative Agent
shall promptly distribute) to each Lender, in form and detail reasonably
satisfactory to Administrative Agent:
(a) as soon as available and in any event within twenty-five (25)
days after the end of each of the first two (2) months of each Fiscal Quarter
ending after the Closing Date (such reports, the "MONTHLY REPORTS"), (i) 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 (ii) for any
Monthly Reports delivered after the first anniversary of the Closing Date, for
the period from the beginning of the then current Fiscal Year to the end of such
month, setting forth beginning with the monthly financial statements for fiscal
year 2005, in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year, all in reasonable detail,
together with a CFO Certification and an MD&A with respect to each of the
foregoing; provided, that if the Credit Agreement Termination Date has occurred
or Company is not otherwise required to deliver such Monthly Reports under the
Credit Agreement, then Company shall not be required to deliver any Monthly
Reports pursuant to this Section 5.1(a);
(b) as soon as available and in any event within forty-five (45)
days after the end of the first three (3) Fiscal Quarters of each Fiscal Year,
the consolidated balance sheet of Company and its Subsidiaries as at the end of
such Fiscal Quarter and the related consolidated statements of income,
stockholders' equity and cash flows of Company and
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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 (i) a quarterly accounts receivable exposure report for such Fiscal Quarter
in the form prepared by management of Company in the ordinary course of business
and (ii) a CFO Certification and an MD&A with respect thereto;
(c) as soon as available and in any event within ninety (90) days
after the end of each Fiscal Year, (i) the consolidated balance sheet of Company
and its Subsidiaries as at the end of such Fiscal Year and the related
consolidated 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 CFO
Certification and an MD&A with respect thereto; and (ii) in the case of such
consolidated financial statements, a report thereon of PricewaterhouseCoopers
LLP or other independent certified public accountants of recognized national
standing selected by Company and in form and substance reasonably satisfactory
to Administrative Agent;
(d) [RESERVED].
(e) (i) if, as a result of any change in accounting principles and
policies from those used in the preparation of the Historical Financial
Statements, the consolidated financial statements of Company and its
Subsidiaries delivered pursuant to Section 5.1 (a), 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 statements
of reconciliation for all such prior financial statements in form and substance
satisfactory to Administrative Agent; and (ii) promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all final
management letters submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of the
financial statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(f) [RESERVED].
(g) 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 public security holders in such capacity
or by any Subsidiary of Company to its security holders other than Company or
another Subsidiary of Company, and (ii) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Company or any of its Subsidiaries with
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any securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority;
(h) promptly upon any Responsible Officer 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;
(i) promptly upon any Responsible Officer obtaining knowledge of
(i) the institution of, or any written 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) is
reasonably likely to give rise to 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;
(j) (i) promptly but in any event within twenty (20) days after
Company, any of its Subsidiaries or any of its ERISA Affiliates knows, or has
reason to know, that (1) any ERISA Event with respect to an Employee Benefit
Plan has occurred or will occur, or (2) Company, any of its Subsidiaries or any
of their respective ERISA Affiliates has applied for a waiver of the minimum
funding standard under Section 412 of the Code or Section 3 02 of ERISA, or
( 3) the aggregate present value of the Unfunded Benefit Liabilities
under all Pension Plans has in any year increased by to an amount in excess of
$1,000,000, or (4) any ERISA Event occurs with respect to a Multiemployer Plan
which presents a material risk of a partial or complete withdrawal (as described
in Section 4203 or 4205 of ERISA) by Company, any of its Subsidiaries or any of
their respective ERISA Affiliates from a Multiemployer Plan and such withdrawal
is reasonably expected to trigger withdrawal liability payments in any year in
excess of $5,000,000, or (5) Company, any of its Subsidiaries or any of
their respective ERISA Affiliates is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan, or (6)
the potential withdrawal liability (as determined in accordance with Title IV of
ERISA) of Company, any of its Subsidiaries and their respective ERISA Affiliates
with respect to all Multiemployer Plans has in any year increased to an amount
in excess of $5,000,000, or (7) there is an action brought against Company, any
of its Subsidiaries or any of their respective ERISA Affiliates under Section
502 of ERISA with respect to its failure to comply with Section 515 of ERISA, a
certificate of the president or chief financial officer of Company setting forth
the details of each of the events described in clauses (1) through (7) above as
applicable and the
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action which Company, any of its Subsidiaries or their respective ERISA
Affiliates proposes to take with respect thereto, together with a copy of any
notice or filing from the PBGC or which may be required by the PBGC or other
agency of the United States government with respect to each of the events
described in clauses (1) through (7) above, as applicable;
(ii) As soon as possible and in any event within ten (10)
Business Days after the receipt by the Company (or to the knowledge of
the Company, after receipt by any of its Subsidiaries or any of their
respective ERISA Affiliates) of a demand letter from the PBGC notifying
the Company, its Subsidiaries or their respective ERISA Affiliates of
its decision finding liability, a copy of such letter, together with a
certificate of the president or chief financial officer of the Company
setting forth the action which the Company, its Subsidiaries or their
respective ERISA Affiliates proposes to take with respect thereto;
(k) as soon as practicable and in any event no later than sixty
(60) days after the beginning of each Fiscal Year, a consolidated plan and
financial forecast for such Fiscal Year (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 such Fiscal Year,
together with 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 each Fiscal Year, together with
an explanation of the assumptions on which such forecasts are based, and (iii)
such other information and projections as any Lender may reasonably request;
(l) with reasonable promptness, copies of any material amendment,
restatement, supplement or other modification to or waiver of the Stock Purchase
Agreement and the Management Agreement entered into after the Closing Date; and
(m) with reasonable promptness, such other information and data
with respect to Company or any of its Subsidiaries as from time to time may be
reasonably requested by any Lender (through the Administrative Agent).
5.2 LEGAL EXISTENCE, ETC. Except as permitted under Section 6.7
and Section 6.8, each Credit Party will, and will cause each of its Subsidiaries
to, at all times preserve and keep in full force and effect its legal existence
and all rights and franchises material to its business; provided, that Company
and is Subsidiaries may consummate the Acquisition and the Mergers; provided,
further, neither any Credit Party nor any of its Subsidiaries shall be required
to preserve any such right or franchise if the preservation thereof is no longer
desirable in the conduct of the business of such Credit Party or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to such Credit Party, such Subsidiary or Lenders.
5.3 PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will
cause each of its Subsidiaries to, pay all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income,
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businesses or franchises before any penalty 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 charge or claim need be paid
(a) unless the failure to pay the same could reasonably be expected to have a
Material Adverse Effect or (b) if it is being contested in good faith by
appropriate proceedings so long as such reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall have been made
therefor. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated, combined or unitary income tax
return with any Person (other than Parent, Holdings or any of Company's
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 and casualty and
condemnation excepted, all material properties used or useful in the business of
Company and its Subsidiaries and from time to time during its useful life will
make or cause to be made all appropriate maintenance payments, repairs, renewals
and replacements thereof in accordance with prudent industry practice.
5.5 INSURANCE. Each Credit Party will and will cause its
Subsidiaries to maintain or cause to be maintained, with financially sound and
reputable insurers (including one or more Captive Insurance Subsidiaries),
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiary Guarantors as
may customarily be carried or maintained under similar circumstances by Persons
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 Persons similarly situated
in the industry.
5.6 INSPECTION RIGHTS; LENDER MEETING. 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 Company or of any of its Subsidiaries, to inspect, copy and take
copies of 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 (subject to reasonable requirements of
confidentiality) (provided, 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, that excluding any such visits and inspections during the
occurrence and continuation of an Event of Default, the Lenders shall not
exercise such rights more often than two (2) times during any calendar year
absent the existence of an Event of Default and only one (1) such time shall be
at Company's expense absent the existence of an Event of Default. Company will,
upon the request of Agents or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year or, during the
continuance of any Default or Event of Default, as reasonably requested by the
Agents or
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the Requisite Lenders, 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.
5.7 COMPLIANCE WITH LAWS, ETC. Each Credit Party will comply, and
shall cause each of its Subsidiaries and, within its control, shall use its
commercially reasonable efforts to cause 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
cause, individually or in the aggregate, a Material Adverse Effect.
5.8 ENVIRONMENTAL MATTERS. 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 which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect or with respect to any Environmental Claims which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect; (ii) promptly upon the occurrence thereof, written
notice describing in reasonable detail (1) any Release required to be reported
to any federal, state or local governmental or regulatory agency under any
applicable Environmental Laws which could reasonably be expected to have a
Material Adverse Effect, (2) any remedial action taken by Company or any other
Person in response to (x) 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
(y) 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 is reasonably likely 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
of a material nature 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 to any
federal, state or local governmental or regulatory agency which could reasonably
be expected to have a Material Adverse Effect, and (3) any request 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 could reasonably be
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 (x) expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that
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could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (y) affect the ability of Company or any of its
Subsidiaries 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 material
additional obligations or requirements under any Environmental Laws that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; 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 5.8.
5.9 SUBSIDIARIES. In the event that any Domestic Subsidiary which
was a Non-Guarantor Subsidiary ceases to be a Non-Guarantor Subsidiary or any
Person becomes a Subsidiary of Company after the Closing Date, Company will
promptly notify Administrative Agent thereof and cause such Subsidiary to
execute and deliver to Administrative Agent a Counterpart Agreement. With
respect to each such Subsidiary, Company shall send to Administrative Agent
written notice setting forth with respect to such Person (a) the date on which
such Person became a Subsidiary of Company, and (b) all of the data required to
be set forth in Schedule 4.1 with respect to all Subsidiaries of Company.
Notwithstanding the foregoing, Company shall not be required to deliver a
Counterpart Agreement or any of the other documents described in this Section
with respect to (w) any Domestic Subsidiary which is not a Material Subsidiary,
(x) any Captive Insurance Subsidiary, (y) the Co-Op Subsidiary or (z) any
Foreign Subsidiary; provided, however, that notwithstanding the foregoing at no
time shall (i) the aggregate amount of consolidated revenues of the
Non-Guarantor Subsidiaries (other than the Persons referred to in clauses (x)
through (z) above) for the most recent Fiscal Quarter account for more than 5%
of the consolidated revenues of Company and its Subsidiaries for such Fiscal
Quarter or (ii) the aggregate amount of consolidated assets owned by the
Non-Guarantor Subsidiaries (other than the Persons referred to in clauses (x)
through (z) above) at the end of the most recent Fiscal Quarter account for more
than 5% of the consolidated assets of Company and its Subsidiaries at the end of
such Fiscal Quarter, and if either such case shall occur, Company shall
immediately come into compliance with this Section 5.9 by notifying
Administrative Agent of the identity of a sufficient number of Non-Guarantor
Subsidiaries who are Domestic Subsidiaries (who shall cease to be Non-Guarantor
Subsidiaries) and causing such Domestic Subsidiaries to execute and deliver to
Administrative Agent a Counterpart Agreement.
5.10 EXECUTION OF CREDIT DOCUMENTS. Immediately following the
consummation of the Acquisition and the Mergers, ▇▇▇▇▇▇▇ will execute this
Agreement and the other Credit Documents and will assume all of the obligations
of THL Bedding Company thereunder pursuant to the Assumption Agreement.
5.11 DESIGNATED SENIOR DEBT. Upon the Credit Agreement Termination
Date, the designation of the Obligations as "Designated Senior Debt" (or any
comparable term)
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under and as defined in, the Senior Subordinated Note Indenture or any other
applicable documentation governing Subordinated Indebtedness shall immediately
become effective.
SECTION 6. NEGATIVE COVENANTS
Until the Termination Date has occurred, Holdings and Company shall
not, nor shall they permit any of their Subsidiaries to (other than in Sections
6.1, 6.3, 6.5 and 6.8 where Company shall not, nor shall it permit any of its
Subsidiaries to), directly or indirectly:
6.1 INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK AND PREFERRED
STOCK. Create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to (collectively,
"INCUR"), or permit to be incurred, any Indebtedness and Company will not issue
any Disqualified Stock and will not permit any of its Subsidiaries to issue any
shares of preferred stock, except:
(a) Company and its Subsidiaries may incur Senior Debt if the
Senior Leverage Ratio for the Company's most recently ended four (4) full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Senior Debt is incurred would have
been less than 4.75 to 1.00 on a pro forma basis after giving effect to such
Indebtedness and the application of the proceeds thereof;
(b) Company and its Subsidiaries may incur Permitted Subordinated
Indebtedness or issue Disqualified Stock and any Subsidiary Guarantor may issue
preferred stock, if the Fixed Charge Coverage Ratio for Company's most recently
ended four full fiscal quarters for which internal consolidated financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
would have been at least 2.00:1.00, determined on a pro forma basis after giving
effect to such Indebtedness or the preferred stock or Disqualified Stock and the
application of the proceeds thereof; and
(c) Holdings, Company and its Subsidiaries may incur Permitted
Debt.
For purposes of determining compliance with this Section 6.1,
in the event that any proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt, or is entitled to be incurred pursuant to
clause (a) or (b) of this Section 6.1, Company will be permitted to classify
such item of Indebtedness on the date of its incurrence, and from time to time
may reclassify, in any manner that complies with this Section 6.1 at such time.
Indebtedness under the Credit Agreement and Senior Subordinated Notes on the
Closing Date shall be deemed to have been incurred on the Closing Date in
reliance on the definition of Permitted Debt.
The accrual of interest, the accretion or amortization of
original issue discount, the payment of interest and dividends on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment or accrual of dividends on
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Disqualified Stock or preferred stock in the form of additional shares of the
same class of Disqualified Stock or preferred stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock or preferred
stock for purposes of this Section 6.1.
6.2 LIENS. Create, incur, assume or permit to exist any Lien on or
with respect to any property or asset of any kind, whether now owned or
hereafter acquired, or file or authorize the filing of, any financing statement
under the UCC of any State or under any similar recording or notice statute,
except:
(a) Permitted Encumbrances;
(b) Liens described in Schedule 6.2 annexed hereto and
modifications, replacements, renewals or extensions thereof; provided, that (i)
the Lien does not extend to any additional property other than (A)
after-acquired property that is affixed to or incorporated in the property
covered by such Lien or financed by Indebtedness permitted under Section 6.1 and
(B) the proceeds and products thereof and (ii) the modification, replacement,
renewal or extension of the obligations secured or benefited by such Liens is
permitted by Section 6.1;
(c) purchase money Liens (including mortgages, conditional sales,
Capital Leases and any other title retention or deferred purchase devices) in
real or tangible personal property of Company or any of its Subsidiaries
existing or created at the time of acquisition thereof or, in the case of
tangible and personal property, within sixty (60) days thereafter, or in the
case of real property, within one hundred twenty (120) days thereafter and the
modification, refinancing, refunding, renewal or extension of any such Liens;
provided, that the Indebtedness secured by or benefited by such Lien is
permitted by Section 6.1 hereof;
(d) Liens granted pursuant to any collateral documents entered
into with respect to the Credit Agreement and Credit Facilities;
(e) Liens on property of any of Company's Foreign Subsidiaries
created solely for the purpose of securing Indebtedness of any Foreign
Subsidiary permitted by Section 6.1;
(f) Liens on property of Company or any of its Subsidiaries
created solely for the purpose of securing Indebtedness permitted by clause
(i)(i) or (ii) of the definition of Permitted Debt and the proviso to such
clauses (so long as such Lien was not incurred in anticipation of the related
acquisition); provided that no such Lien incurred in connection with such
Indebtedness shall extend to or cover other property of Company or such
Subsidiary other than the respective property so acquired and the proceeds and
the products thereof;
(g) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of commercial letters of credit;
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(h) Liens (i) on cash advances in favor of the seller of any
property to be acquired in an Investment permitted by Section 6.3 to be applied
against the purchase price thereof and (ii) consisting of a definitive agreement
to dispose of property in an Asset Sale permitted under Section 6.7 or 6.8;
(i) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
Company and its Subsidiaries in the ordinary course of business and permitted
hereby;
(j) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 6.3;
(k) Liens in connection with workmen's compensation obligations
and general liability exposure of Company and its Subsidiaries; and
(1) Liens on assets of Company and its Subsidiaries not otherwise
permitted under this Section 6.2, securing Indebtedness or other obligations in
an aggregate principal amount at any time outstanding not in excess of
$40,000,000.
Notwithstanding the foregoing, no Credit Party shall create or assume any Lien
securing Indebtedness upon any of its properties or assets, whether now owned or
hereafter acquired, other than Liens excepted by the first sentence of this
Section 6.2, unless it shall make or cause to be made effective provision
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 Section 6.2
shall not be construed as a consent by Requisite Lenders to the creation or
assumption of any such Lien not permitted by the provisions of this Section 6.2.
Except with respect to (a) this Agreement, (b) the Credit Agreement, (c)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to an Asset Sale, (d) the
agreements entered into with Net Jet Sales, Inc. for the purchase of fractional
interests in a corporate jet by Company, (e) customary restrictions contained in
leases, subleases, licenses and sublicenses permitted hereunder and (f)
documents evidencing any Indebtedness permitted by Section 6.1, 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 to secure the Obligations.
6.3 INVESTMENTS. Make or own any Investment in any Person,
including any Joint Venture, except:
(a) Investments by (i) Holdings or any of its Subsidiaries in any
Credit Party (but, in the case of Investments by a Credit Party in Holdings only
to the extent set forth in clause (e) of the definition of Permitted Debt),
including any new Subsidiary which becomes a Credit Party pursuant to Section
5.9, (ii) by any Subsidiary of Holdings which is not a Credit Party (1) in any
other Subsidiary of Holdings that is also not a Credit Party and (2) in any
Subsidiary of Holdings that is a Credit Party, and (iii) Holdings and the
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other Credit Parties in any Subsidiary of Holdings that is not a Credit Party in
an aggregate amount pursuant to this clause (iii) not to exceed $30,000,000 at
any one time outstanding (net of any dividends or distributions, or prepayments
or payments of interest by such Subsidiaries);
(b) Investments existing on the Closing Date and set forth on
Schedule 6.3 and any modification, replacement, renewal or extension thereof;
provided that the amount of the original Investment is not increased except by
the terms of such Investment or as otherwise permitted by this Section 6.3;
(c) Company and its Subsidiaries may make and own Investments in
Cash Equivalents;
(d) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted hereunder;
(e) Holdings and its Subsidiaries may acquire the Securities of
any Person or a line of business or division of, or all or substantially all of
the business, property or assets of any Person the Cash consideration for which
constitutes $100,000,000 in the aggregate from the Closing Date to the date of
determination; provided that (i) Company shall give Administrative Agent at
least five (5) days' notice of the proposed transaction, (ii) Company and its
Subsidiaries shall have beneficial ownership of all of the Securities of the
Person acquired and shall comply with the provisions of Section 5.9, and (iii)
both before and after giving effect to the consummation of such acquisition, no
Default or Event of Default shall exist;
(f) Holdings and its Subsidiaries may make loans and advances to
directors, officers and employees of Parent and its Subsidiaries in an aggregate
amount not to exceed $5,000,000 outstanding at any time;
(g) Company and its Subsidiaries may make and own Investments
consisting of notes and other non-Cash consideration received in connection with
any Asset Sale permitted by Section 6.7;
(h) Company and its Subsidiaries may make and own Investments
received in connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other disputes
with, suppliers and customers arising in the ordinary course of business and
upon the foreclosure with respect to any secured Investment or other transfer of
title with respect to a secured Investment;
(i) Company and its Subsidiaries may make and own Investments in
Subsidiaries created and operated as a captive insurance company (the "CAPTIVE
INSURANCE SUBSIDIARY") in an aggregate amount not to exceed $10,000,000 (net of
any dividends or distributions, or prepayments or payments of interest by the
Captive Insurance Subsidiary to Company or any of its Subsidiary Guarantors);
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(j) Investments constituting Indebtedness permitted to be incurred
under Sections 6.1, 6.2, 6.5 and 6.7;
(k) Investments in Hedge Agreements permitted hereunder;
(l) the Acquisition and the Mergers;
(m) Investments in the ordinary course of business consisting of
(i) endorsements for collection or deposit and (ii) customary trade arrangements
with customers;
(n) loans and advances to Holdings (and by Holdings to Parent) in
lieu of, and not in excess of the amount of (after giving effect to any other
loans, advances, or Restricted Junior Payments in respect thereof) Restricted
Junior Payments to the extent permitted to be made to Holdings (and by Holdings
to Parent) in accordance with Section 6,5;
(o) Holdings may repurchase (i) Holdings' Securities to the extent
permitted by Section 6.5 and (ii) the Existing Notes;
(p) Investments in Co-Op Subsidiary in an amount not to exceed
$30,000,000 in the aggregate from the Closing Date to the date of determination;
and
(q) Holdings and its Subsidiaries may make and own other
Investments not otherwise permitted under this Section 6.3 in an aggregate
principal at any time outstanding not exceeding $150,000,000 from the Closing
Date to the date of determination.
In addition to the Investments permitted pursuant to this Section 6.3, Holdings
and its Subsidiaries may make additional Investments (which shall not be counted
in the limitations set forth above) as follows: Investments consisting of (i)
the reinvestment of the proceeds of issuances of Securities by Holdings not
required to prepay the loans under the Credit Agreement (other than Permitted
Cure Securities (as defined in the Credit Agreement) or used to make Restricted
Junior Payments, (ii) the Consolidated Excess Cash Flow (as defined in the
Credit Agreement) that is not required to prepay the loans under the Credit
Agreement and (iii) the proceeds received by Holdings in connection with any
Permitted Holdings Indebtedness incurred by Holdings less any proceeds of such
Indebtedness that are applied to make Restricted Junior Payments; provided that,
if such Investment is consummated by Holdings, Holdings shall, immediately
following the closing thereof, cause the assets or Securities acquired to be
contributed to Company or its Subsidiaries or the merger of Company or its
Subsidiaries with the Person formed to consummate or acquire such Investment
(other than any promissory note of Parent received by Holdings in connection
with loans and advances by Holdings to Parent in lieu of, and not in excess of,
the amount of (after giving effect to any other loans, advances or Restricted
Junior Payments in respect thereof) Restricted Junior Payments to the extent
permitted to be made by Holdings pursuant to Section 6.5).
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6.4 [RESERVED].
6.5 RESTRICTED JUNIOR PAYMENTS.
(a) declare or pay any dividend on, or make any other payment or
distribution on account of, Company's or any of its Subsidiaries' equity
Securities (including any payment in connection with any merger or consolidation
involving Company or any of its Subsidiaries) or to the direct or indirect
holders of Company's or any of its Subsidiaries' equity Securities in their
capacity as such (in each case, other than dividends or distributions payable
(i) in equity Securities (other than Disqualified Stock) of Company or (ii) to
Company or a Subsidiary of Company);
(b) purchase, redeem or otherwise acquire or retire for value
(including in connection with any merger or consolidation involving Company) any
equity Security of Company, Holdings or Parent held by Persons other than
Company or a Subsidiary of Company;
(c) make any principal payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness of
Holdings, any Permitted Subordinated Indebtedness or the Senior Subordinated
Notes, except a payment of principal at the stated maturity thereof or in
connection with Permitted Refinancing Indebtedness otherwise permitted hereunder
(all such payments and other actions set forth in these clauses (a) through (c)
being collectively referred to as "RESTRICTED JUNIOR PAYMENTS"),
unless, at the time of and after giving effect to such Restricted Junior
Payment:
(A) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Junior Payment;
(B) Company would, at the time of such Restricted Junior
Payment and after giving pro forma effect thereto as if such Restricted Junior
Payment had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness under
each of clauses (a) and (b) of Section 6.1; and
(C) such Restricted Junior Payment, together with the
aggregate amount of all other Restricted Junior Payments made by Company and its
Subsidiaries after the Closing Date (excluding Restricted Junior Payments
permitted by clauses (ii), (iii), (iv), (vi), (vii), (ix), (x) and (xi) of the
next succeeding paragraph), is less than the sum, without duplication, of:
(1) 50% of the Consolidated Net Income of Company for the
period (taken as one accounting period) from the beginning of the first
Fiscal Quarter commencing after the Closing Date to the end of
Company's most recently ended Fiscal Quarter for which internal
consolidated financial statements of Company are
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available at the time of such Restricted Junior Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus
(2) 100% of the aggregate Net Cash Proceeds received by
Company subsequent to the Closing Date (X) as a contribution to its
common equity Securities or from the issue or sale of equity Securities
of Company (other than Excluded Contributions or Disqualified Stock) or
(Y) as a result of the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt Securities of
Company or any Subsidiary of Company that have been converted into or
exchanged for either (aa) such equity Securities (other than equity
Securities (or Disqualified Stock or debt Securities) sold to a
Subsidiary of Company) or (bb) securities of Holdings, except any Net
Cash Proceeds that have been utilized for any other purpose under this
Section 6.5 (other than pursuant to (xiii) below), plus
(3) an amount equal to the net reduction in Investments
made by Company and its Subsidiaries subsequent to the Closing Date
resulting from payments of interest on Indebtedness, dividends,
repayments of loans or advances or other transfers of assets, in each
case to Company or any such Subsidiary from any such Investment, or
from the Net Proceeds or Net Cash Proceeds, as the case may be, from
the sale of any such Investment, or from a redesignation of a Non-
Guarantor Subsidiary to a Subsidiary Guarantor, but only if and to the
extent such amounts are not included in the calculation of Consolidated
Net Income and not to exceed in the case of any Investment the amount
of the Investment previously made by Company or any Subsidiary in such
Person or Non-Subsidiary Guarantor; provided that any amounts in excess
of the amount of the Investment previously made may be added to the
amounts otherwise available under this clause (3) to make Investments
pursuant to this clause (3), plus
(4) 100% of the fair market value, as determined in good
faith by the Board of Directors of Company, such determination to be
conclusive and evidenced by an officer's certificate delivered to the
Administrative Agent, of any Permitted Acquisition of another Person
engaged in a business permitted pursuant to Section 6.12 (including
equity Securities of a Permitted Acquisition of another Person engaged
in a business permitted pursuant to Section 6.12 that is or becomes a
Guarantor) received by Company or a Subsidiary of Company as
consideration for the issuance by Company subsequent to the Closing
Date of equity Securities (other than Disqualified Stock) of Company or
as a contribution to the common equity capital of Company.
The preceding provisions will not prohibit:
(i) the payment of any dividend or other distribution
within sixty (60) days after the date of declaration thereof, if at the
date of declaration the
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dividend payment or other distribution would have complied with the
provisions of this Agreement;
(ii) the making of any Restricted Junior Payment with the
Net Cash Proceeds of a substantially concurrent sale (other than to a
Subsidiary of Company) of equity Securities of Company (other than
Disqualified Stock) or contribution to the common equity capital of
Company to the extent not previously utilized for any other purpose
under this Section 6.5;
(iii) the redemption, repurchase, retirement, defeasance or
other acquisition of Subordinated Indebtedness of Company or any
Subsidiary of Company, in exchange for, or with the net cash proceeds
from a substantially concurrent issuance or sale of, Permitted
Refinancing Indebtedness;
(iv) the payment of any dividend by a Subsidiary of
Company to the holders of its equity Securities on a pro rata basis;
(v) so long as no Default has occurred and is continuing
or would be caused thereby, the payment of dividends, other
distributions or amounts to Holdings in amounts equal to the amounts
expended by Holdings or Parent to purchase, repurchase, retire or
otherwise acquire for value equity Securities of Holdings or Parent
owned by employees, former employees, directors, former directors,
consultants or former consultants of Parent, Holdings, Company or any
of its Subsidiaries (or permitted transferees, assigns, estates or
heirs of such employees, former employees, directors, former directors,
consultants or former consultants); provided, however, that the
aggregate amount paid, loaned or advanced to such parent pursuant to
this clause (v) will not, in the aggregate, exceed $3,000,000 per
Fiscal Year; provided that Company may carry over and make in
subsequent Fiscal Years, in addition to the amounts permitted for such
calendar year, the amount of such purchases, redemptions or other
acquisitions or retirements for value permitted to have been made but
not made in any preceding calendar year up to a maximum of $12,000,000
in any Fiscal Year; and provided, further that such amount in any
Fiscal Year may be increased by an amount not to exceed (y) the Net
Cash Proceeds from the sale of equity Securities (other than
Disqualified Stock) of Company (or of Holdings or Parent to the extent
such Net Cash Proceeds are contributed to the common equity of Company)
to employees, officers, directors or consultants of Company and its
Subsidiaries that occurs after the Closing Date (to the extent the Net
Cash Proceeds from the sale of such equity Securities have not
otherwise been applied to the payment of Restricted Junior Payments
pursuant to clause (ii) above or previously applied to the payment of
Restricted Junior Payments pursuant to this clause (v)), plus (z) the
cash proceeds of key-man life insurance policies received by Company
and its Subsidiaries after the Closing Date, less any amounts
previously applied to the payment of Restricted Junior Payments
pursuant to this clause (v); provided, further that cancellation of
Indebtedness owing to Company from employees, officers, directors and
consultants of Company or any of its Subsidiaries in connection
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with a repurchase of equity Securities of Company from such Persons
will not be deemed to constitute a Restricted Junior Payment for
purposes of this Section 6.5 or any other provisions of this Agreement;
provided, further that the Net Cash Proceeds from such sales of equity
Securities described in clause (y) of this clause (v) shall be excluded
from clause (C)(2) of the preceding paragraph to the extent such
proceeds have been or are applied to the payment of Restricted Junior
Payments pursuant to this clause (v);
(vi) the payment of any dividends or distributions or the
making of any loans or other advances by Company or any Subsidiary of
Company to Holdings or Parent to permit Holdings or Parent to (A) pay
franchise taxes and other fees and expenses required to maintain its
existence and (B) to provide for all other operating costs of Holdings
or Parent to the extent attributable to the ownership or operation of
Company and its Subsidiaries, including in respect of director fees and
expenses, administrative, legal and accounting services provided by
third parties and other costs and expenses including all costs and
expenses with respect to filings with the SEC, of up to an aggregate
amount under this clause (B) of $2,000,000 per Fiscal Year, plus any
indemnification claims made by directors or officers of Holdings or
Parent attributable to the ownership or operation of Company and its
Subsidiaries;
(vii) the payment of Permitted Tax Distributions;
(viii) the repurchase of equity Securities deemed to occur
upon exercise of stock options, warrants or other convertible
securities to the extent the shares of such equity Securities represent
a portion of the exercise price of such options, warrants or
convertible securities;
(ix) so long as no Default has occurred and is continuing
or would be caused thereby, the declaration and payment of dividends or
distributions to holders of any class or series of Disqualified Stock
of Company or preferred stock of its Subsidiaries issued after the
Closing Date pursuant to Section 6.1;
(x) any payments made, or the performance of any of the
transactions contemplated, in connection with the Acquisition, the
Acquisition Financing Requirements, and the consummation of the
transactions contemplated by Related Agreements;
(xi) any redemption, repurchase, retirement, defeasance or
other acquisition for value of Disqualified Stock of Company or a
Subsidiary of Company made by exchange for, or out of the Net Cash
Proceeds of the substantially concurrent sale of, Disqualified Stock of
Company or such Subsidiary, as the case may be; provided that any such
new Disqualified Stock is issued by the issuer of the Disqualified
Stock being redeemed, repurchased, retired, defeased or otherwise
acquired for value and that such new Disqualified Stock is issued
pursuant to Section 6.1;
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(xii) so long as no Default has occurred and is continuing
or would be caused thereby, the payment of dividends on Company's
equity Securities (or dividends, distributions or advances to Holdings
or Parent to allow Holdings or Parent to pay dividends on its common
equity Securities), following the first public offering of Company's
equity Securities (or of Holdings' or Parent's equity Securities, as
the case may be) after the Closing Date, of, whichever is earlier, (i)
in the case of the first public offering of Company's equity
Securities, up to 6% per annum of the Net Cash Proceeds received by
Company in such public offering or (ii) in the case of the first public
offering of Holdings' or Parent's equity Securities, up to 6% per annum
of the amount contributed directly or indirectly by Holdings (other
than Excluded Contributions) to Company from the Net Cash Proceeds
received by Holdings or Parent in such public offering;
(xiii) Restricted Junior Payments in respect of the Existing
Notes not tendered in connection with the Tender Offer;
(xiv) dividends or distributions paid in an amount equal to
any reduction in taxes actually realized by Company and its
Subsidiaries in the form of cash refunds or from deductions when
applied to offset income or gain as a direct result of (i) the costs,
including the costs of any premium paid or interest expense, incurred
in connection with repurchasing the Existing Notes pursuant to the
Tender Offer, (ii) purchase accounting adjustments made in connection
with the Acquisition, Mergers and Related Agreements, (iii)
compensation expense incurred in connection with the repurchase or
rollover of stock options or transaction bonuses, or (iv) the write off
of deferred financing charges as a result of the refinancing
contemplated by the Acquisition, Mergers and Related Agreements; and
(xv) so long as no Default has occurred and is continuing
or would be caused thereby, other Restricted Junior Payments in an
aggregate amount not to exceed $30,000,000 since the Closing Date.
The amount of all Restricted Junior Payments (other than cash) will be
the fair market value on the date of the Restricted Junior Payment of the
asset(s) or Securities proposed to be transferred or issued by Company or such
Subsidiary, as the case may be, pursuant to the Restricted Junior Payment. The
fair market value of any assets or securities that are required to be valued by
this Section 6.5 will, if the fair market value thereof exceeds $2,000,000, be
determined by the Board of Directors of Company whose resolution with respect
thereto shall be delivered to the Administrative Agent.
6.6 [RESERVED].
6.7 FUNDAMENTAL CHANGES. Except to the extent otherwise permitted
under this Agreement, alter the corporate, capital or legal structure (except in
a way that does not have a Material Adverse Effect) of Holdings, Company or any
of its Subsidiaries,
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consummate any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution) except:
(a) any Subsidiary of Company may be merged with or into Company
or any Subsidiary of Company, or be liquidated, wound up or dissolved into, 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 Subsidiary of Company; provided that, (i) in the
case of such a merger involving Company, Company shall be the continuing or
surviving Person or the surviving Person shall be a Person organized under the
laws of the United States of America and expressly assume the obligations of
Company pursuant to documents reasonably acceptable to Administrative Agent, and
(ii) when any Guarantor is merging with any other Subsidiary (A) Guarantor shall
be the surviving Person or (B) such transaction shall constitute an Investment
which Investment must otherwise be permitted under Section 6.3;
(b) any Subsidiary may merge with any other Person in order to
effect an Investment permitted under Section 6.3; provided that (i) the
surviving Person shall be a Subsidiary which, to the extent required, shall have
complied with Section 5.9 or (ii) to the extent constituting an Investment, such
Investment must otherwise be permitted under Section 6.3;
(c) any merger, consolidation, liquidation, wind-up or
dissolution, the purpose of which is to effect an Asset Sale otherwise permitted
by Section 6.8; and
(d) any Change of Control.
6.8 ASSET SALES. Consummate, or permit any of its Subsidiaries to
consummate an Asset Sale unless: (a) Company (or the Subsidiary, as the case may
be) receives consideration (including by way of relief from, or by any other
Person assuming sole responsibility for, any liabilities, contingent or
otherwise) at the time of the Asset Sale at least equal to the fair market value
of the assets or equity Securities issued or sold or otherwise disposed of; (b)
in the case of Asset Sales involving consideration in excess of $10,000,000, the
fair market value is determined by Company's Board of Directors and evidenced
by a resolution of such Board of Directors set forth in an officer's
certificate delivered to the Administrative Agent promptly after the
consummation of such Asset Sale; and (c) at least 75% of the consideration
received in the Asset Sale by Company or such Subsidiary is in the form of Cash,
Cash Equivalents, Replacement Assets or any combination thereof.
For purposes of clause (c) above, each of the following will be deemed
to be Cash:
(i) any liabilities, as shown on Company's or such
Subsidiary's most recent balance sheet, of Company or any Subsidiary
(other than liabilities that are by their terms subordinated to the
Term Loans or the Guaranty in the case of any Subsidiary Guarantor)
that are assumed by the transferee of any such assets and, in the case
of liabilities other than Non-Recourse Debt, where Company and
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all Subsidiaries are released pursuant to an agreement that releases
Company or such Subsidiary from further liability;
(ii) any Securities or other obligations received by
Company or any such Subsidiary from such transferee that are within one
hundred eighty (180) days converted by Company or such Subsidiary into
Cash (to the extent of the Cash received in that conversion); and
(iii) any Designated Noncash Consideration received by
Company or any of its Subsidiaries in the Asset Sale having an
aggregate fair market value, taken together with all other Designated
Noncash Consideration received pursuant to this clause (iii) that is at
the time outstanding, not to exceed $5,000,000 million (with the fair
market value of each item of Designated Noncash Consideration being
measured at the time received and without giving effect to subsequent
changes in value).
For purposes of paragraph (c) above, any liabilities of Company or any
Subsidiary of Company that are not assumed by the transferee of such assets in
respect of which Company and all Subsidiaries are not released from any future
liabilities in connection therewith shall not be considered consideration.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, Company (or such Subsidiary, as the case may be) may apply those Net
Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid
is revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto;
(2) to acquire all or substantially all of the assets of,
or a majority of the voting equity Securities of, another Person
engaged in a business permitted pursuant to Section 6.12;
(3) to make a capital expenditure; or
(4) to acquire non-current assets, including investments
in property, that are used or useful in a business permitted pursuant
to Section 6.12;
it being understood that Company may apply Net Proceeds received by any of its
Subsidiaries in any of the foregoing manners and any Subsidiary of Company may
apply Net Proceeds received by Company or another Subsidiary of Company in any
of the foregoing manners. Pending the final application of any Net Proceeds,
Company may temporarily reduce revolving credit Indebtedness or otherwise invest
the Net Proceeds in any manner that is not prohibited by this Agreement.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "EXCESS PROCEEDS". On the
366th day after an
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Asset Sale, if the aggregate amount of Excess Proceeds exceeds $15,000,000,
Company will prepay the Term Loans in an amount equal to such Excess Proceeds in
accordance with Section 2.13(b). The amount of Term Loans prepaid will be as
more specifically set forth in Section 2.13(b), and will be payable in cash. If
the aggregate principal amount of Term Loans exceeds the amount of Excess
Proceeds, the Term Loans shall be prepaid on a pro rata basis on the basis of
the aggregate principal amount of Term Loans. Upon completion of each such
prepayment of the Term Loans, the amount of Excess Proceeds will be reset at
zero.
6.9 [RESERVED].
6.10 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. 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 Affiliate of Company,
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 Persons who are not such
an Affiliate; provided, the foregoing restriction shall not apply, subject to
the other covenants contained hereunder, (a) to any transaction between Parent
and any of its Subsidiaries or between any of its Subsidiaries, (b) to the
payment of reasonable and customary fees paid to members of the Boards of
Directors of Parent and its Subsidiaries and reimbursement of reasonable
out-of-pocket expenses of directors, (c) to the payment of Management Fees, (d)
to the consummation of the transactions contemplated by the Related Agreements
and the payment of Transaction Costs, and (e) in respect of employment and
severance arrangements with directors, officers, employees and members of
management of Parent or any of its Subsidiaries in the ordinary course of
business, (f) transactions between Holdings and any of its Subsidiaries with
Co-Op Subsidiary or any Captive Insurance Subsidiary and (g) the transactions by
Parent and its Subsidiaries to the extent permitted under this Section 6.
6.11 AMENDMENTS OR WAIVERS OF CERTAIN DOCUMENTS
(a) AMENDMENTS OF ORGANIZATIONAL DOCUMENTS, CERTIFICATES OF
MERGER, MANAGEMENT AGREEMENT AND UNSECURED TERM LOAN AGREEMENT, (i) Amend any of
the organizational or constituent documents of any Credit Party in a manner
materially adverse to the Administrative Agent or the Lenders; (ii) amend,
modify or supplement the Certificates of Merger or waive or otherwise consent to
any change or departure from any of the terms or conditions of the Certificates
of Merger in any manner materially adverse to the Administrative Agent or the
Lenders; and (iii) amend, modify or supplement the Management Agreement or waive
or otherwise consent to any change or departure from any of the terms or
conditions of the Management Agreement, in each case, in any manner that
increases the fees or other amounts payable thereunder.
(b) AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
Amend or otherwise change the redemption, prepayment, repurchase or defeasance
provisions of any Subordinated Indebtedness, change the subordination provisions
thereof (or of any guaranty thereof), or amend or change any other term if, the
effect of such amendment or change, together with all other amendments or
changes made, taken
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as a whole, is to increase materially the obligations of the obligor thereunder
or to confer any additional rights on the holders of such Subordinated
Indebtedness (or trustee or other representative on their behalf) which would be
materially adverse to Company or Lenders (other than the execution and delivery
by Holdings and/or any of its Subsidiaries of a supplemental agreement pursuant
to which such Subsidiary becomes a guarantor thereunder, so long as such
Subsidiary is also a Guarantor hereunder).
6.12 CONDUCT OF COMPANY BUSINESS. From and after the Closing Date,
engage in any business other than the businesses engaged in by Company and its
Subsidiaries on the Closing Date and any businesses reasonably related or
ancillary thereto.
6.13 SPECIAL COVENANTS OF HOLDINGS. From and after the Closing
Date, Holdings shall:
(a) engage in no business or activities other than (i) owning 100%
of the issued and outstanding capital stock of Company, (ii) holding Cash and
Cash Equivalents, (iii) activities incidental thereto, (iv) as otherwise
required by mandatory provisions of law, (v) the consummation of the Acquisition
and transactions contemplated by the Related Agreements, (vi) entering into the
Related Agreements to which it is a party, and (vii) as otherwise specifically
permitted hereunder or permitted under the Credit Agreement; and
(b) not own or acquire any assets other than (i) 100% of the
issued and outstanding equity Securities of Company and (ii) as specifically
permitted hereunder or permitted under the Credit Agreement.
6.14 FISCAL YEAR. Change its Fiscal Year-end from the final
Saturday in the calendar year, provided, however, that Company may change its
Fiscal Year-end to December 31.
6.15 RESTRICTION ON BURDENSOME AGREEMENTS. Create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any such Subsidiary to (w) pay
dividends or make any other distributions on any of such Subsidiary's equity
Securities owned by Company or any other Subsidiary of Company, (x) repay or
prepay any Indebtedness owed by such Subsidiary to Company or any other
Subsidiary of Company, (y) make loans or advances to Company or any other
Subsidiary of Company, or (z) transfer any of its property or assets to Company
or any other Subsidiary of Company except for any agreement (A) in effect on the
Closing Date, (B) in existence at the time a Subsidiary becomes a Subsidiary of
Company so long as such agreement was not entered into solely in contemplation
of such Person becoming a Subsidiary, (C) in existence at the time any assets
were acquired by Company or any Subsidiary of Company so long as such agreement
was not entered into solely in contemplation of the acquisition of such assets,
(D) representing Indebtedness which is permitted by Section 6.1; (E) in
connection with any Asset Sale or other sale of assets
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permitted hereunder; or (F) customary restrictions contained in leases,
subleases, licenses and sublicenses permitted hereunder.
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 the due and punctual payment in full of all Obligations
of Company 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) or any other provision of the Bankruptcy Code (the "GUARANTEED
OBLIGATIONS").
7.2 LIMITATION ON AMOUNT GUARANTIED, (a) Anything contained herein
to the contrary notwithstanding, if any Fraudulent Transfer Law (as hereinafter
defined) is determined by a court of competent jurisdiction to be applicable to
the obligations of any Guarantor hereunder, such obligations of such Guarantor
hereunder shall be limited to a maximum aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any applicable provisions of comparable state law (collectively,
the "FRAUDULENT TRANSFER LAWS"), in each case after giving effect to all other
liabilities of such Guarantor, contingent or otherwise, that are relevant under
the Fraudulent Transfer Laws (specifically excluding, however, any liabilities
of such Guarantor (x) in respect of intercompany indebtedness to Company or
other affiliates of Company to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(y) under any guaranty of Subordinated Indebtedness which guaranty contains a
limitation as to maximum amount similar to that set forth in this Section
7.2(a), pursuant to which the liability of such Guarantor hereunder is included
in the liabilities taken into account in determining such maximum amount) and
after giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement (including any such
right of contribution hereunder).
(b) Guarantors under this Guaranty, together desire to allocate
among themselves, 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 any Guarantor under this Guaranty (a "FUNDING GUARANTOR")
that exceeds its Fair Share (as defined below) as of such date, that Funding
Guarantor shall be entitled to a contribution from each of the other Guarantors
in the amount of such other Guarantor's Fair Share Shortfall (as defined below)
as of such date, with the result that all such contributions will cause each
Guarantor's Aggregate Payments (as defined below) to equal its Fair Share as of
such date. "FAIR SHARE" means, with respect to a Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Guarantor to (y) the aggregate of
the Adjusted
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Maximum Amounts with respect to all Guarantors multiplied by (ii) the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Guaranty in respect of the obligations guarantied. "FAIR SHARE
SHORTFALL" means, with respect to a Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Guarantor over the Aggregate
Payments of such Guarantor. "ADJUSTED MAXIMUM AMOUNT" means, with respect to a
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Guarantor under this Guaranty determined as of such date, in
the case of any Guarantor, in accordance with Section 7.2(a); provided that,
solely for purposes of calculating the "Adjusted Maximum Amount" with respect to
any Guarantor for purposes of this Section 7.2(b), any assets or liabilities of
such 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 Guarantor. "AGGREGATE
PAYMENTS" means, with respect to a Guarantor as of any date of determination,
an amount equal to (i) the aggregate amount of all payments and distributions
made on or before such date by such Guarantor in respect of this Guaranty
(including in respect of this Section 7.2(b)) minus (ii) the aggregate amount of
all payments received on or before such date by such Guarantor from the other
Guarantors as contributions under this Section 7.2(b). 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 Guarantors of their obligations as set forth in this Section
7.2(b) shall not be construed in any way to limit the liability of any Guarantor
hereunder.
7.3 PAYMENT BY GUARANTORS. Subject to Section 7.2(a), 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 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) or any other provision of the Bankruptcy
Code), 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 the filing of a petition in bankruptcy with
respect to Company, would have accrued on such Guaranteed Obligations, whether
or not a claim is allowed against Company for such interest in the related
bankruptcy proceeding) and all other Guaranteed Obligations then owed to
Beneficiaries as aforesaid.
7.4 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that,
to the maximum extent permitted by applicable law, its obligations hereunder are
irrevocable, absolute, independent and unconditional, and constitute primary
obligations of such Guarantor and not a contract of surety, and shall not be
affected by any circumstance which constitutes a legal or equitable discharge of
a guarantor or surety other than payment in full in Cash of the Guaranteed
Obligations. In furtherance of the foregoing
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and without limiting the generality thereof, each Guarantor agrees that, to the
maximum extent permitted by applicable law,
(a) this Guaranty is a guaranty of payment when due and not of
collectibility;
(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 and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment of this
Guaranty 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 of this Guaranty 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 with this Agreement 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
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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 applicable Hedge Agreements; and
(e) this Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than
payment in full in Cash 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) of this Agreement, 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
of this Agreement or such Credit Document, such Hedge Agreement or any agreement
relating to such other guaranty or security (provided that no Credit Document to
which such Guarantor is a party may be amended without its written consent);
(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 against any Beneficiary in respect of the
Guaranteed Obligations, including failure of consideration, breach of warranty,
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.
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7.5 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Beneficiaries, to the maximum 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
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 from
any cause other than payment in full in Cash 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 gross negligence or willful
misconduct or 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 under this Agreement, 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 (other than payment in
full in Cash of the Guaranteed Obligations).
7.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Each
Guarantor hereby waives, until the Termination Date, any claim, right or remedy,
direct or indirect, that such Guarantor now has or may hereafter have against
Company or any of its assets in connection herewith 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 (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against
Company, (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
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hereafter held by any Beneficiary. In addition, until the Termination Date, 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 any such right of contribution under Section
7.2(b)). 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 the Termination Date shall not have occurred, 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 the Termination Date. 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 AND GUARANTORS. 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
or any other Guarantor. Each Guarantor has adequate means to obtain information
from Company and each other Guarantor on a continuing basis concerning the
financial condition of Company or such other Guarantor and its ability to
perform its obligations under the Credit Documents, and each Guarantor assumes
the responsibility for being and keeping informed of the
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financial condition of Company and each other Guarantor 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 or any other Guarantor now known or hereafter known by any
Beneficiary.
7.11 BANKRUPTCY, ETC. (a) The obligations of Guarantors hereunder
shall not be reduced, limited, impaired, discharged, deferred, suspended or
terminated by any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of Company or by any defense which Company 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 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 said proceeding, such interest as would have
accrued on such portion of the Guaranteed Obligations if said proceedings 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 guarantied 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
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;
provided that interest or fees on any such reinstated Guaranteed Obligations
shall not be payable for the period during which the Beneficiaries were paid
such funds until the date such funds were returned.
7.12 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in an Asset
Sale not prohibited by this Agreement or otherwise consented to by Requisite
Lenders, 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.
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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 by Company to pay (i) any installment of principal of
any Term Loan when due, whether at the Maturity Date, by acceleration, by notice
of voluntary prepayment, by mandatory prepayment or otherwise; or (ii) any
interest on any Term Loan or any fee or any other amount due hereunder within
five (5) days after the date due; or
(b) a default by Holdings, Company or any of its Subsidiaries
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by Holdings, Company or any of its Subsidiaries (or the payment of which is
guaranteed by Company or any of its Subsidiaries), whether such Indebtedness or
guarantee now exists, or is created after the Closing Date, if that default (i)
is caused by a failure to pay principal of such Indebtedness at its final stated
maturity within any applicable grace period provided in such Indebtedness (a
"PAYMENT DEFAULT"); or (ii) results in the acceleration of such Indebtedness
prior to its expressed maturity, and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any such Indebtedness
which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $20,000,000 or more;
(c) failure of Company to perform or comply with any term or
condition contained in Section 2.5, Section 5.1(h), Section 5.2 (with respect to
Holdings or the Company only) or Section 6 hereof; or
(d) any representation, warranty or certification made or deemed
made by Holdings, Company or any of its Subsidiaries in any Credit Document or
in any statement or certificate at any time given by Holdings, Company or any of
its Subsidiaries in writing pursuant hereto or thereto or in connection herewith
or therewith shall be false in any material respect on the date as of which made
or deemed made; or
(e) any Credit Party shall default in the performance of or
compliance with any term contained herein or in any of the other Credit
Documents, other than any such term referred to in any other provision of this
Section 8.1, and such default shall not have been remedied or waived within
thirty (30) days after receipt by Company of notice from Administrative Agent or
any Lender of such default; or
(f) (i) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Holdings, Company or any of its
Material Subsidiaries (or any group of Company's Subsidiaries that, taken as
a whole, would constitute a Material 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
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federal or state law; or (ii) an involuntary case shall be commenced against
Holdings, Company or any of its Material Subsidiaries (or any group of
Company's Subsidiaries that, taken as a whole, would constitute a Material
Subsidiary) 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 over Holdings, Company or any of its Material Subsidiaries (or any group
of Company's Subsidiaries that, taken as a whole, would constitute a Material
Subsidiary), 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, Company or any of its Material
Subsidiaries (or any group of Company's Subsidiaries that, taken as a whole,
would constitute a Material Subsidiary) 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, Company or
any of its Material Subsidiaries (or any group of Company's Subsidiaries that,
taken as a whole, would constitute a Material Subsidiary), and any such event
described in this clause (ii) shall continue for sixty (60) days unless
dismissed, bonded or discharged; or
(g) (i) Holdings, Company or any of its Material Subsidiaries (or
any group of Company's Subsidiaries that, taken as a whole, would constitute a
Material Subsidiary) shall have an order for relief entered with respect to it
or 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 and
such appointment continues undischarged or unstayed for sixty (60) days; or
Holdings, Company or any of its Material Subsidiaries (or any group of Company's
Subsidiaries that, taken as a whole, would constitute a Material Subsidiary)
shall make any assignment for the benefit of creditors; or (ii) Holdings,
Company or any of its Material Subsidiaries (or any group of Company's
Subsidiaries that, taken as a whole, would constitute a Material Subsidiary)
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
of Holdings, Company or any of its Material Subsidiaries (or any group of
Company's Subsidiaries that, taken as a whole, would constitute a Material
Subsidiary) (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in this Section
8.1(g); or
(h) any money judgment, writ or warrant of attachment or similar
process involving individually or in the aggregate at any time an amount in
excess of $20,000,000 (in either case not adequately covered by insurance as to
which the insurance company has not denied coverage) shall be entered or filed
against Holdings, 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
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(i) any order, judgment or decree shall be entered against
Holdings, Company or any of its Subsidiaries decreeing the dissolution or split
up of Holdings, Company or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of thirty (30) days; or
(j) (i) the Company and any of its Subsidiaries or ERISA
Affiliates are required to contribute or pay during any year an aggregate amount
to one or more Multiemployer Plans which could reasonably be expected to have a
Material Adverse Effect; (ii) there shall occur one or more ERISA Events, other
than any ERISA Events with respect of Multiemployer Plans, which individually or
in the aggregate result in liability of Company, any of its Subsidiaries or any
of their respective ERISA Affiliates which could reasonably be expected to have
a Material Adverse Effect; or (iii) there shall exist an amount of Unfunded
Benefit Liabilities individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed liabilities), which could reasonably be expected to have a
Material Adverse Effect; or
(k) at any time after the execution and delivery thereof, the
Guaranty, for any reason other than the satisfaction in full of all
non-contingent Obligations in Cash, ceases to be in full force and effect or is
declared to be null and void or any Credit Party denies 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; or
(l) the Mergers shall fail to take place by 5:00 p.m. Eastern Time
on December 22, 2003;
THEN (1) upon the occurrence of any Event of Default described in Section 8.1(f)
or 8.1(g), each of (A) the unpaid principal amount of and accrued interest on
the Term Loans, and (B) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by each
Credit Party, and (2) upon the occurrence and during the continuation of any
other Event of Default, Administrative Agent shall, upon the written request or
with the written consent of Requisite Lenders, by written notice to Company,
declare all or any portion of the amounts described in clauses (A) and (B) above
to be, and the same shall forthwith become, immediately due and payable.
8.2 CERTAIN OPTION OF LENDERS. Notwithstanding anything contained
in Section 8.1, if at any time within sixty (60) days after an acceleration of
the Term Loans pursuant to such Section, Company shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified
herein) and all Events of Default and Defaults (other than non-payment of the
principal of and accrued interest on the Term Loans, in each case which is due
and payable solely by virtue of acceleration) shall be remedied or waived
pursuant to Section 10.5, then Requisite Lenders, by written notice to Company,
may at their option rescind and annul such acceleration and its consequences;
but such action
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shall not affect any subsequent Event of Default or Default or impair any right
consequent thereon. The provisions of this Section 8.2 are intended merely to
bind Lenders to a decision which may be made at the election of Requisite
Lenders and are not intended, directly or indirectly, to benefit Company, and
such provisions shall not at any time be construed so as to grant Company the
right to require Lenders to rescind or annul any acceleration hereunder or to
preclude Administrative Agent or Lenders from exercising any of the rights or
remedies available to them under any of the Credit Documents, even if the
conditions set forth in this Section 8.2 are met.
SECTION 9. AGENTS
9.1 APPOINTMENT OF AGENTS. GSCP is hereby appointed Co-Syndication
Agent and a Joint Lead Arranger hereunder, and each Lender hereby authorizes Co-
Syndication Agent and such Joint Lead Arranger to act as its agent in accordance
with the terms hereof and the other Credit Documents. UBSS is hereby appointed a
Co-Syndication Agent and a Joint Lead Arranger hereunder and each Lender hereby
authorizes such Joint Lead Arranger to act as its agent in accordance with the
terms hereof and the other Credit Documents. DBNY is hereby appointed
Administrative Agent hereunder and under the other Credit Documents and each
Lender hereby authorizes Administrative 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 in 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, except as provided in
Sections 9.7 and 9.8. 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 Holdings, Company or any of their respective Subsidiaries,
except as provided in Section 2.6 as to Administrative Agent with respect to
maintaining the Register. Co-Syndication Agents, without consent of or notice to
any party hereto, may assign any and all of their respective rights or
obligations hereunder to any of their respective Affiliates. As of the Closing
Date, neither GSCP, in its capacity as Co-Syndication Agent and a Joint Lead
Arranger, nor UBSS as Co-Syndication Agent and a Joint Lead Arranger 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 in 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 of any of the
other Credit Documents, a fiduciary relationship in respect of any Lender; and
nothing herein or in any of the other Credit Documents, expressed or implied, is
intended to or
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shall be so construed as to impose upon any Agent any obligations in respect
hereof or of any of the other Credit Documents except as expressly set forth
herein or therein.
9.3 GENERAL IMMUNITY. (a) No Agent shall be responsible to any
Lender for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency hereof or of 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 Company 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 Term Loans or as to
the existence or possible existence of any Event of Default or Default. Anything
contained herein to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding Term
Loans.
(b) None of Agents nor any of their respective 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 with 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 under 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 AGENT 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
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participation in the Term Loans, each Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term 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 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 AND WARRANTIES.
(a) Each Lender, by delivering its signature page to this
Agreement and funding its Term Loans 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.
(b) 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 the Term Loans made 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 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 Term 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.
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 Company, 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 hereof or of 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,
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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. Administrative Agent may
resign at any time by giving 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, provided that Company shall have the right to approve any such successor
Administrative Agent unless an Event of Default then exists under Sections 8.1
(a), (f) or (g). Upon the approval by Company (if required hereunder) 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 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.
SECTION 10. MISCELLANEOUS
10.1 NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telexed or sent by telefacsimile (and
confirmed by telephone) or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of telefacsimile (and confirmed by telephone) or telex, or three (3)
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided, notices to Agents shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent
and Company.
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 Administrative Agent and the Co-Syndication
Agents in connection with the 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
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(including any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with hereunder and under
the other Credit Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements; (c) the reasonable fees,
expenses and disbursements of a single law firm acting as counsel to Agents 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 (including the reasonable fees,
expenses and disbursements) of any auditors, consultants, accountants, agents or
appraisers retained by any Agent with the prior consent of Company (not to be
unreasonably withheld); (e) all other actual and reasonable costs and expenses
incurred by Co-Syndication Agents or Administrative Agent in connection with the
syndication of the Term Loan Amounts 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 an Event of Default, all costs and expenses (including
reasonable attorneys' fees of a single counsel to Agents and Lenders) and costs
of settlement, incurred by Co-Syndication Agents, Administrative 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
Event of Default (including in connection with 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 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, Company and each Guarantor agree to defend (subject to Indemnitees'
selection of counsel, which shall be reasonably satisfactory to Company),
indemnify, pay and hold harmless Agents and Lenders, and the officers, partners,
directors, trustees, employees, agents and affiliates of any of Agents and
Lenders (each, an "INDEMNITEE"), from and against any and all Indemnified
Liabilities; provided, neither the Company nor any Guarantor shall have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities (i) to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct or bad faith of that Indemnitee or (ii) to the
extent such Indemnified Liabilities relate to Taxes (and any liabilities
relating thereto), the indemnity for which shall be governed solely and
exclusively by Section 2.20. 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, Company and the Guarantors 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) Company and each Guarantor agree that neither it nor any of
its Subsidiaries will settle, compromise or consent to the entry of any judgment
in any
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pending or threatened claim, action or proceeding in respect of which
indemnification or contribution could be sought under subsection (a) of this
section (whether or not any Indemnitee is an actual or potential party to such
claim, action or proceeding) without the prior written consent of the applicable
Indemnitees, unless such settlement, compromise or consent includes an
unconditional release of such Indemnitee from all liability arising out of such
claim, action or proceeding, which consent shall not be unreasonably withheld or
delayed.
(c) If an Indemnitee is requested or required to appear as a
witness in any action brought by or on behalf of or against Company, any
Guarantor or any Affiliate thereof in which such Indemnitee is not named as a
defendant, Company agrees to reimburse such Indemnitee for all reasonable
expenses incurred by it in connection with such Indemnitee's appearing and
preparing to appear as such a witness, including, without limitation, the
reasonable fees and disbursements of its legal counsel.
10.4 [RESERVED]
10.5 AMENDMENTS AND WAIVERS. (a) Subject to Section 10.5(b),
Section 10.5(c) and Section 10.5(d), no amendment, modification, supplement 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 Requisite Lenders.
(b) No amendment, modification, supplement or waiver of any
provision of the Credit Documents, or consent to any departure by any Credit
Party therefrom, shall extend the Maturity Date, or reduce the rate of interest
on any Term Loan (other than any waiver of any increase in the interest rate
applicable to any Term Loan pursuant to Section 2.9), or extend the time for
payment of any such interest, or reduce the principal amount of any Term Loan,
or shall amend any provision of the Credit Documents providing for pro rata
treatment of Lenders in any such case without the written consent of each Lender
with Obligations affected thereby.
(c) No amendment, modification, supplement or waiver of any
provision of the Credit Documents, or consent to any departure by any Credit
Party therefrom, shall (i) amend, modify, supplement or waive any provision of
this Section 10.5, (ii) reduce the percentage specified in the definition of
"Requisite Lenders" or the definition of "Pro Rata Share", (iii) release all or
substantially all of the Guarantors from the Guaranty or (iv) consent to the
assignment or transfer by Company of any of its rights and obligations
hereunder, in each case without the written consent of each Lender.
(d) No amendment, modification, supplement or waiver of any
provision of the Credit Documents, or consent to any departure by any Credit
Party therefrom, shall: (i) increase the Term Loan Amount of any Lender over the
amount thereof then in effect for such Lender without the consent of such Lender
(it being understood that no amendment, modification or waiver of any condition
precedent, covenant, Default or Event of Default, and no increase in the
available portion of any Term Loan Amount of any Lender or the
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rescission of any acceleration pursuant to Section 8.2, shall constitute an
increase in the Term Loan Amount of any Lender); or (ii) 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 without the consent of such Agent.
(e) 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 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.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS. (a) 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. Neither any 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.
(b) No assignment or transfer of any Term Loan shall be effective,
in each case unless and until an Assignment Agreement effecting the assignment
or transfer thereof shall have been accepted by Administrative Agent and
recorded in the Register. Prior to such recordation, all amounts owed with
respect to the applicable Term 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 Term
Loans.
(c) Each Lender shall have the right at any time to sell, assign
or transfer, in whole or in part, any Term Loan or any other Obligation: (i)
upon the giving of notice to Administrative Agent, to another Lender, or to an
Affiliate of the assigning Lender (or if such assigning Lender is a fund that
invests in commercial or bank loans, another such investment fund managed or
advised by the same investment advisor or an Affiliate thereof) or another
Lender; or (ii) unless otherwise covered by clause (i) hereof, with the consent
of Company and Administrative Agent (which consent of Company and Administrative
Agent shall not be unreasonably withheld or delayed) to any other Eligible
Assignee (treating any two or more investment funds that invest in commercial
loans and that are managed or advised by the same investment advisor or by an
Affiliate of such investment advisor as a single Eligible Assignee), in an
aggregate amount of not less than $1,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Term Loan and other Obligations of the
assigning Lender); provided, however, that upon the occurrence and during the
continuance of an Event of Default with respect to
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Sections 8.1(a), 8.1(f) and 8.1(g), the consent of Company shall not be required
under clause (ii) above.
(d) The assigning Lender and the assignee thereof shall execute
and deliver to Administrative Agent an Assignment Agreement, together with a
processing and recordation fee of $2,000 (treating any two or more investment
funds that invest in commercial loans and that are managed or advised by the
same investment advisor or by an Affiliate of such investment advisor as a
single Eligible Assignee) and such 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) and Section 2.20(d); provided,
that notwithstanding the foregoing to the contrary, no processing fee shall be
required to be paid with respect to assignments made pursuant to clause (ii) of
the definition of "Eligible Assignee". Subject to Section 10.6(b), upon its
receipt of a duly executed and completed Assignment Agreement, together with the
processing and recordation fee referred to herein and any forms, certificates or
other evidence that such assignee may be required hereunder to deliver to
Administrative Agent, Administrative Agent shall, if Administrative Agent and
Company have consented to the assignment evidenced thereby (in each case to the
extent such consent is required hereunder), (i) accept such Assignment Agreement
by executing a counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Administrative Agent to such assignment), (ii)
record the information contained therein in the Register, and (iii) give prompt
notice thereof to Company. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in this Section
10.6(d). Anything contained herein to the contrary notwithstanding, in the case
of an assignment to an Affiliate of the assigning Lender, such assignment shall
be effective between such assigning Lender and its Affiliate immediately without
compliance with the conditions for assignment under Sections 10.6(b) through
(d), but shall not be effective with respect to any Credit Party, Administrative
Agent, any other Agent or any Lender, and each Credit Party, Administrative
Agent, each other Agent, and each Lender shall be entitled to deal solely and
directly with such assigning Lender under any such assignment, in each case,
until the conditions for assignment under Sections 10.6(b) through (d) have been
complied with.
(e) Each Lender listed on the signature pages hereof hereby
represents and warrants, and each Lender executing and delivering an Assignment
Agreement shall be deemed to represent and warrant as of the effective date of
such Assignment Agreement, that (i) it is an Eligible Assignee; (ii) it has
experience and expertise in the making or purchasing of loans such as the Term
Loans; and (iii) it will make or purchase, as the case may be, its Term Loans
for its own account in the ordinary course of its business and without a view to
distribution of such Term Loans within the meaning of the Securities Act or the
Exchange Act or other federal securities laws (it being understood that, subject
to the provisions of this Section 10.6, the disposition of such Term Loans or
any interests therein shall at all times remain within its exclusive control).
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(f) Subject to the terms and conditions of this Section 10.6, as
of the effective date specified in such Assignment Agreement: (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; and (iii)
if any such assignment occurs after the issuance of the Term Loan Notes
hereunder, the assigning Lender shall, upon the effectiveness of such assignment
or as promptly thereafter as practicable, surrender its applicable Term Loan
Notes to Administrative Agent for cancellation, and thereupon new Term Loan
Notes shall be issued to the assignee and/or to the assigning Lender, with
appropriate insertions, to reflect the outstanding Term Loans of the assignee
and/or the assigning Lender.
(g) In addition to the assignments and participations permitted
under the provisions of this Section 10.6,any Lender may assign and pledge all
or any portion of its Term Loans, the other Obligations owed to such Lender, and
its Term Loan Notes to 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, and any Lender which is
an investment fund may pledge all or any portion of its Term Loan Notes or Term
Loans to its trustee in support of its obligations to such trustee (unless such
trustee is Highland Capital Management, L.P. or any of its Affiliates or
Subsidiaries) or to its indenture trustee in support of its obligations to
noteholders on whose behalf such indenture trustee is acting; provided, (i) no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any such assignment and pledge and (ii) in
no event shall such 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.
(h) Each Lender shall have the right at any time to sell one or
more participations to any Person (other than Highland Capital Management, L.P.
or any of its Affiliates or Subsidiaries) in, all or any part of its Term Loans
or any other interest herein or in any other Obligation. The holder of any
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 action directly affecting (i) the extension of
the Maturity Date or scheduled payment of interest on any Term Loan allocated to
such participation or (ii) a reduction of the principal amount of or the rate of
interest payable on any Term Loan (other than any waiver of any increase in the
interest rate applicable to any Term Loan pursuant to Section 2.9) allocated to
such participation, and all amounts payable by any Credit Party hereunder
(including amounts payable to such Lender pursuant to Section 2.18(c), Section
2.19 or Section 2.20) shall be determined as if such
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Lender had not sold such participation. Each Credit Party and each Lender hereby
acknowledge and agree that, solely for purposes of Section 2.17, (1) any
participation will give rise to a direct obligation of each Credit Party to the
Participant and (2) the participant shall be considered to be a "Lender".
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 of this Agreement and the making of any Term Loans.
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
and 10.3 and the agreements of Lenders set forth in Sections 9.3, 9.6 and 2.17
shall survive the Termination Date.
10.9 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of Administrative 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 privilege. The rights, powers and remedies given to
Beneficiaries 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. 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 PAYMENTS SET ASIDE. To the extent that any Credit Party makes
a payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), and such payment or payments or the proceeds
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, shall be revived and continued in
full force and effect as if such payment or payments had not been made; provided
that with respect to calculating interest on any Obligation that is so
reinstated, interest shall accrue from the date that such Obligation is first
reinstated and not from the previous date of payment.
10.11 SEVERABILITY. In case any provision herein or obligation
hereunder or the Term Loan Notes shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such
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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 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 (INCLUDING NEW
YORK GENERAL OBLIGATIONS LAW SECTION 5-1401).
10.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH PARTY HERETO, 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 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 PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (e) AGREES THAT 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; AND (f) AGREES THAT THE
PROVISIONS OF THIS SECTION RELATING TO JURISDICTION AND VENUE SHALL BE BINDING
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AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
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 OUT OF THIS AGREEMENT OR 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 their 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 ANY SUBSEQUENT AMENDMENTS, RESTATEMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT 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 and Agent shall hold all
non-public information obtained pursuant to the terms hereof in accordance with
such Lender's customary procedures for handling confidential information of such
nature and in accordance with prudent lending or investing practices, it being
understood and agreed by Company that in any event a Lender may make disclosures
to Affiliates of such Lender and such Lender's Affiliates' directors, officers,
employees and agents in connection with the administration of this Agreement and
the preservation, exercise or enforcement of the rights of the Agents and the
Lenders under this Agreement (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential) or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Term Loans or any participations therein or by any direct or indirect
contractual counterparties (or the professional advisors thereto) in swap
agreements (provided, any such potential assignee, transferee, participant or
swap counterparties and advisors are advised of and agree to be bound by the
provisions of this Section 10.17)or disclosures required or requested by any
governmental agency or representative thereof or by the National Association of
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Insurance commissioners or pursuant to legal process; provided, unless
specifically prohibited by applicable law or court order, each Lender shall use
reasonable efforts to notify Company of any request by any governmental agency
or representative thereof (other than any such request in connection with any
routine examination of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information;
and Provided further, in no event shall any Lender be obligated or required
to return any materials furnished by Company or any of its Subsidiaries.
Notwithstanding anything to the contrary set forth herein (or in any Credit
Document), each party (and each of their respective employees, representatives
or other agents) may disclose to any and all persons, without limitations of any
kind, the tax treatment and tax structure of the transactions contemplated by
this Agreement and the other Credit Documents and all materials of any kind
(including opinions and other tax analyses) that are provided to any such party
relating to such tax treatment and tax structure. However, any information
relating to the tax treatment or tax structure shall remain subject to the
confidentiality provisions hereof (and the foregoing sentence shall not apply)
to the extent reasonably necessary to enable the parties hereto, their
respective Affiliates, and their and their respective Affiliates' directors,
officers, employees and agents to comply with applicable securities laws. For
this purpose, "tax structure" means any facts relevant to understanding the
federal income tax treatment of the transactions contemplated by this Agreement
and the other Credit Documents but does not include information relating to the
identity of any of the parties hereto or any of their respective Affiliates.
10.18 COUNTERPARTS; EFFECTIVENESS. 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. 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.
10.19 MAXIMUM AMOUNT. It is the intention of Company and the Lenders
to conform strictly to the usury and similar laws relating to interest from time
to time in force, and all agreements between the Credit Parties and their
respective Subsidiaries and the Lenders, whether now existing or hereafter
arising and whether oral or written, are hereby expressly limited so that in no
contingency or event whatsoever, whether by acceleration of maturity hereof or
otherwise, shall the amount paid or agreed to be paid in the aggregate to the
Lenders as interest (whether or not designated as interest, and including any
amount otherwise designated but deemed to constitute interest by a court of
competent jurisdiction) hereunder or under the other Credit Documents or in any
other document evidencing or pertaining to the indebtedness evidenced hereby,
exceed the maximum amount permissible under applicable usury or such other laws
(the "MAXIMUM AMOUNT"). If under any circumstances whatsoever fulfillment of
any provision hereof, or any of the other Credit Documents, at the time
performance of such provision shall be due, shall involve exceeding the Maximum
Amount, then, ipso facto, the obligation to be fulfilled shall be reduced to the
Maximum Amount. For purposes of calculating the
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actual amount of interest paid and/or payable hereunder in respect of laws
pertaining to usury or such other laws, all sums paid or agreed to be paid
hereunder or under any other Credit Document for the use, forbearance or
detention of the indebtedness of Company evidenced hereby or by any other Credit
Document, outstanding from time to time shall, to the extent permitted by
applicable law, be amortized, pro-rated, allocated and spread from the date of
disbursement of the proceeds of the Term Loans until payment in full of all of
such indebtedness, so that the actual rate of interest on account of such
indebtedness is uniform through the term hereof. The terms and provisions of
this subsection shall control and supersede every other provision of all
agreements between Holdings, Company, or any of their respective Subsidiaries or
any endorser of the Term Loan Notes and the Lenders.
[The remainder of this page is intentionally left blank.]
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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.
THL BEDDING COMPANY,
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President, Treasurer and
Assistant Secretary
NOTICE ADDRESS:
c/▇ ▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇ Partners, LP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: 617-227- 1050
Fax: ▇▇▇-▇▇▇-▇▇▇▇
AND:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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THL-SC BEDDING COMPANY,
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President, Treasurer and
Assistant Secretary
NOTICE ADDRESS:
c/▇ ▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇ Partners, LP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
AND:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇ ▇-▇▇▇-▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
individually, as Sole Bookrunner, a Joint
Lead Arranger, a (lo-Syndication Agent
and as Lender
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------------
Authorized Signatory
NOTICE ADDRESS:
Goldman Sacbs Credit Partners L.P.
C/O Goldman, Sachs & CO.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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UBS SECURITIES LLC,
as Joint Lead Arranger And
Co-Syndication Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇ ▇. Craubett
------------------------------------
Name: ▇▇▇▇ ▇. Craubett
Title: Director
NOTICE ADDRESS:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vladimira Holeckova
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇
BRANCH,
as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
NOTICE ADDRESS:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
DEUTSCHE BANK AG,, CAYMAN ISLANDS
BRANCH,
individually AS A Lender
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
NOTICE ADDRESS:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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SCHEDULE 1.1(b)
TERM LOAN AMOUNTS, REVOLVING LOAN
COMMITMENTS AND PRO RATA SHARES
TERM LOAN COMMITMENTS
LENDER REVOLVING COMMITMENT PRO RATA SHARE
Deutsche Bank AG, New York Branch $140,000,000 100%
Total $140,000,000 100%
SCHEDULE 4.1
CORPORATE STRUCTURE
SEE ATTACHED.
Schedule 4.1 - Page 1
STRUCTURE AFTER ACQUISITION AND MERGERS
[FLOW CHART]
SUBSIDIARIES OF HOLDINGS
JURISDICTION OF AUTHORIZED OUTSTANDING SOLE
NAME ORGANIZATION OR FORMATION CAPITAL STOCK CAPITAL STOCK SHAREHOLDER OR MEMBER
---- ------------------------- ------------- ------------- ---------------------
▇▇▇▇▇▇▇ Company Delaware 3,000 shares 100 shares THL-SC Bedding Company
$0.01 par value Common Stock
Common Stock
▇▇▇▇▇▇▇ Caribbean Bedding, Inc.* Puerto Rico 10,000 shares 400 shares ▇▇▇▇▇▇▇ Company
no par value Common Stock
Common Stock
Gallery Corp. Delaware 100,000 shares 1,000 shares ▇▇▇▇▇▇▇ Company
$0.01 par value Common Stock
Common Stock
200,000 shares
$0.01 par value
Preferred Stock
SC Holdings, Inc. Delaware 100 shares 100 shares ▇▇▇▇▇▇▇ Company
$0.01 par value Common Stock
Common Stock
Sleep Country USA, Inc. Delaware 3,000 shares 3,000 shares SC Holdings, Inc.
$0.01 par value Common Stock
Common Stock
▇▇▇▇▇▇▇ I.P. Inc.* Ontario Unlimited number of shares of 2,121,100 shares ▇▇▇▇▇▇▇ Company
Common Stock Common Stock
Unlimited number of shares of
Class A Stock
Info Establishment* Liechtenstein 10,000 S. Frs. 10,000 S. Frs. ▇▇▇▇▇▇▇ Company
▇▇▇▇▇▇▇ International Holding New York 200 shares 101 shares ▇▇▇▇▇▇▇ Company
Company, Inc.* no par value Common Stock
Common Stock
[dissolution pending]
21 shares
no par value
Preferred Stock
▇▇▇▇▇▇▇ International Ltd.* Bahama Islands, B.V.I. 5,000 shares N/A ▇▇▇▇▇▇▇ Company
[dissolution pending] $1.00 par value
Common Stock
Schedule 4.1 - Page 1
JURISDICTION OF AUTHORIZED OUTSTANDING SOLE
NAME ORGANIZATION OR FORMATION CAPITAL STOCK CAPITAL STOCK SHAREHOLDER OR MEMBER
---- ------------------------- ------------- -------------- ---------------------
688363 Ontario Limited* Ontario Unlimited number of shares 10 shares ▇▇▇▇▇▇▇ Company
[dissolution pending] of Ordinary Stock Ordinary Stock
Unlimited number of shares 16,300 shares
of First Preference Stock Third Preference
Stock
Unlimited number of shares
of Second Preference Stock
Unlimited number of shares
of Third Preference Stock
The ▇▇▇▇▇▇▇ Manufacturing Co., LLC Delaware N/A N/A ▇▇▇▇▇▇▇ Company
▇▇▇▇▇▇▇ Contract Sales, LLC Delaware N/A N/A ▇▇▇▇▇▇▇ Company
World of Sleep Outlets, LLC Delaware N/A N/A ▇▇▇▇▇▇▇ Company
Dreamwell, Ltd. Nevada N/A N/A ▇▇▇▇▇▇▇ Company
▇▇▇▇▇▇▇ Capital Management, LLC Nevada N/A N/A ▇▇▇▇▇▇▇ Company
Windsor Bedding Co., LLC Delaware N/A N/A ▇▇▇▇▇▇▇ Company
* Non-Guarantor Subsidiary
Schedule 4.1 - Page 2
SCHEDULE 6.1
CERTAIN EXISTING INDEBTEDNESS
Per Schedule 1.3(e) of Stock Purchase Agreement:
City of Janesville, Wisconsin IRB $9.7M, 7%, 11/12/92; due 10/15/17 $ 9,700,000.00
Slumberland Note pay $500,000, 6%, 09/17/03; due 09/17/04 $ 500.000.00
SCUSA cap leases: $ 309,162.00
CIT software equip
Telephone system
Office furniture
Ford truck
Cambridge software
Puerto Rico cap leases: $ 44,762.39
Small truck $ 12,825.82
Auto - Chrysler $ 12,901.23
Xerox copier $19,035.34
Waycross, Georgia capital lease
City of Shawnee, Kan Construction as IRB $5.0M, floating, 12/23/96; due 12/01/16 $ 4,000,000.00
Banco Santander Construction Loan $3.2M, floating, 12/12/97; due 12/01/12 $ 2,115,587.89
Premium Financing @ 3.10% (AFCO and A1 Credit 03/04 Policy period) $ 2,827.136.03
Undrawn Letters of Credit: $ 10,443,235.00
Greenwich Insurance 96/97 Policy period $ 350,625.00
National Union Fire Ins. 01/02 Policy period $ 2,700,000.00
National Union Fire Ins. 02/03 Policy period $ 2,200,000.00
National Union Fire Ins. 03/04 Policy period $ 1,192,610.00
KC IRB - Shawnee, KS plant $ 4,000,000.00
Total $ 10,443,235.00
SCHEDULE 6.2
CERTAIN EXISTING LIENS
See Schedule 6.2 to Credit and Guaranty Agreement
SCHEDULE 6.3
EXISTING INVESTMENTS
Investments described on Schedule 4.1
Other existing investments:
Allmerica Financial Corporation 3,854 shares
Federal Department stores 2,421 shares
Existing 12.50% interest in corporate jet pursuant to agreement with NetJet
Sales, Inc.
EXHIBIT A TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
CONVERSION/CONTINUATION NOTICE
Reference is made to the Senior Unsecured Term Loan and Guaranty
Agreement, dated as of December 19, 2003 (as it may be a mended, supplemented or
otherwise modified, the "CREDIT AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
THL-SC BEDDING COMPANY ("HOLDINGS"), ▇▇▇▇▇▇▇ COMPANY (as successor to THL
Bedding Company) ("COMPANY"), certain Subsidiaries of Company, as Guarantors,
the Lenders party thereto from time to time, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
as Sole Bookrunner, Joint Lead Arranger and Co-Syndication Agent, UBS
SECURITIES, LLC, as Joint Lead Arranger and Co-Syndication Agent, and DEUTSCHE
BANK AG, NEW YORK BRANCH, as Administrative Agent.
Pursuant to Section 2.8 of the Credit Agreement, Company desires to
convert or to continue the following Loans, each such conversion and/or
continuation to be effective as of [Mmm/dd/yy]:
TERM LOANS:
$[___,___,___] Eurodollar Rate Loans to be continued with Interest
Period of ___ month(s)
$[___,___,___] Base Rate Loans to be converted to Eurodollar Rate
Loans with Interest Period of ___ month(s)
$[___,___,___] Eurodollar Rate Loans to be converted to Base Rate
Loans
Company hereby certifies that as of the date hereof, no event has
occurred and is continuing or would result from the consummation of the
conversion and/or continuation contemplated hereby that would constitute an
Event of Default or a Default.
Date: [mm/dd/yy] ▇▇▇▇▇▇▇ COMPANY
By: ___________________________
Name: _________________________
Title: ________________________
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
446409-New York Server 5A
EXHIBIT A- 1
EXHIBIT B TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
TERM LOAN NOTE
$[___,___,___]
DECEMBER 19,2003
New York, New York
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ COMPANY (as successor to THL Bedding
Company), a Delaware corporation ("COMPANY"), promises to pay [NAME OF LENDER]
("PAYEE") or its registered assigns the principal amount of [DOLLARS]
($[___,___,___]) in the installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Senior Unsecured Term Loan and Guaranty Agreement, dated as of December 19, 2003
(as it may be amended, supplemented or otherwise modified, the "CREDIT
AGREEMENT"; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among THL-SC BEDDING COMPANY
("HOLDINGS"), COMPANY, certain Subsidiaries of Company, as Guarantors, the
Lenders party thereto from time to time, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as
Sole Bookrunner, Joint Lead Arranger and Co-Syndication Agent, UBS SECURITIES,
LLC, as Joint Lead Arranger and Co-Syndication Agent, and DEUTSCHE BANK AG, NEW
YORK BRANCH, as Administrative Agent.
Company shall repay on the Maturity Date the aggregate principal amount
on this Note as set forth in Section 2.11 of the Credit Agreement.
This Note is one of the "Term Loan Notes" representing a portion of the
Term Loans in the aggregate principal amount of $140,000,000 and is issued
pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Term Loan evidenced hereby was made and is to be
repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
principal office of Administrative Agent or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement. Unless and until an Assignment Agreement effecting the
assignment or transfer of the obligations evidenced hereby shall have been
accepted by Administrative Agent and Company (to the extent required) and
recorded in the Register, Company, each Agent and Lenders shall be entitled to
deem and treat Payee as the owner and holder of this Note and the obligations
evidenced hereby. Payee hereby agrees, by its acceptance hereof, that before
disposing of this Note or any part hereof it will make a notation hereon of all
principal payments previously made hereunder and of the date to which interest
hereon has been paid; provided, the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of Company
hereunder with respect to payments of principal of or interest on this Note.
This Note is subject to mandatory prepayment and to prepayment at the
option of Company, each as provided in the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
446409-New York Server 5A
EXHIBIT B-1
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terns of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency prescribed
in the Credit Agreement.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in the Credit Agreement, incurred in the
collection and enforcement of this Note. Company and any endorsers of this Note
hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
notice of every kind and the right to plead any statute of limitations as a
defense to any demand hereunder, in each case to the full extent permitted by
law.
[The remainder of this page is intentionally left blank.]
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT B-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
▇▇▇▇▇▇▇ COMPANY
By: ___________________________
Name: _________________________
Title: ________________________
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
446409-New York Server 5A
EXHIBIT B-3
EXHIBIT C-1 TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
OPINION OF WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
SEE ATTACHED
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
446409-New York Server 5A
EXHIBIT C- 1-1
WEIL,GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ . ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ DALLAS
(▇▇▇) ▇▇▇-▇▇▇▇ HOUSTON
FAX:(▇▇▇) ▇▇▇-▇▇▇▇ MENLO PARK
(SILICON VALLEY)
MIAMI
WASHINGTON. D.C
BRUSSELS
BUDAPEST
LONDON
PRAGUE
WARSAW
WRITER'S DIRECT LINE December 19, 2003
Deutsche Bank AG, New York Branch,
as administrative agent
for the Lenders, and the Lenders and
the Agents referred to below
Ladies and Gentlemen:
We have acted as special counsel to THL Bedding Company, a Delaware
corporation (the "Borrower"), THL-SC Bedding Company, a Delaware corporation '
("Holdings"), and each of the entities listed on Schedule 1 hereto (together
with the Borrower and Holdings, the "Credit Parties") in connection with the
preparation, execution and delivery of, and the consummation of the transactions
contemplated, by the Senior Unsecured Term Loan and Guaranty Agreement dated as
of the date hereof (the "Credit Agreement"), by and among the Borrower, Holdings
and certain other entities party thereto, as guarantors, the financial
institutions listed on the signature pages thereto (the "Lenders"), ▇▇▇▇▇▇▇
Sachs Credit Partners L.P., as sole bookrunner, joint lead arranger and as
co-syndication agent, UBS Securities LLC ,as joint lead arranger and co-
syndication agent, Deutsche Bank AG, New York Branch, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent"), and the other
Agents named therein. Capitalized terms defined in the Credit Agreement and used
(but not otherwise defined) herein are used herein as so defined. This opinion
is delivered pursuant to Section 3.1(d) of the Credit Agreement.
In so acting, we have examined originals or copies (certified or
otherwise identified to our satisfaction and, unless otherwise noted, each dated
as of the date hereof) of (a)(i) the Credit Agreement, (ii) the Notes and (iii)
the Assumption Agreement (the items listed in (a)(i) through (a)(iii) are,
collectively, the "Credit Documents") and (b) such corporate and limited
liability company records, agreements, documents and other instruments, and such
certificates or comparable documents of public officials and of officers and
representatives of the Credit Parties, and have made such inquiries of such
officers and representatives, as we have deemed relevant and necessary as a
basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us
WEIL,GOTSHAL& ▇▇▇▇▇▇ LLP
December 19, 2003
Page 2
as originals, the conformity to original documents of all documents submitted to
us as certified, conformed or photostatic copies and the authenticity of the
originals of such latter documents. As to all questions of fact material to
these opinions that have not been independently established, we have relied upon
certificates or comparable documents of officers and representatives of the
Credit Parties and upon the representations and warranties of the Credit Parties
contained in the Credit Documents. We have also assumed (i) the valid existence
and good standing of Dreamwell, Ltd. ("Dreamwell") and ▇▇▇▇▇▇▇ Capital
Management, LLC (together with Dreamwell, the "Nevada Credit Parties") under the
laws of the State of Nevada, (ii) that each of the Nevada Credit Parties has the
requisite corporate or limited liability company, as the case may be, power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, (iii) that each of the Nevada Credit Parties has the
requisite corporate or limited liability company, as the case may be, power and
authority to execute and deliver the Credit Documents to which it is a party and
(iv) the due authorization, execution and delivery by each of the Nevada Credit
Parties of the Credit Documents to which it is a party. As used herein, "to our
knowledge" and "of which we are aware" mean the conscious awareness of facts or
other information by any lawyer in our firm actively involved in the
transactions contemplated by the Credit Agreement.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. Each Credit Party (other than the Nevada Credit Parties)
(collectively, the "Delaware Credit Parties") is a corporation or a limited
liability company, as the case may be, validly existing and in good standing
under the laws of the State of Delaware. Each of the Delaware Credit Parties has
all requisite corporate or limited liability company, as the case may be, power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted.
2. Each of the Delaware Credit Parties has all requisite
corporate or limited liability company, as the case may be, power and authority
to execute and deliver the Credit Documents to which it is a party and to
perform its obligations thereunder. The execution, delivery and performance by
the Delaware Credit Parties of the Credit Documents to which each is a party
have been duly authorized by all necessary corporate or limited liability
company, as the case may be, action on the part of the Delaware Credit Parties.
The Credit Documents to which each Delaware Credit Party is a party have been
duly and validly executed and delivered by such Delaware Credit Party. Assuming
the due authorization, execution and delivery thereof by the parties thereto,
other than the Delaware Credit Parties, each Credit Document to which the Credit
Parties are a party constitutes the legal, valid and binding obligation of such
Credit Party party thereto, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to
WEIL,GOTSHAL & ▇▇▇▇▇▇ LLP
December 19,2003
Page 3
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except that (A) rights to indemnification
and contribution thereunder may be limited by federal or state securities laws
or public policy relating thereto and (B) certain remedial provisions of the
Credit Documents are or may be unenforceable in whole or in part under the laws
of the State of New York, but the inclusion of such provisions does not affect
the validity of such Credit Documents, and the Credit Documents contain adequate
provisions for the practical realization of the rights and benefits afforded
thereby.
3. The execution and delivery by each Delaware Credit Party of
the Credit Documents to which it is a party and the performance by such Delaware
Credit Party of its obligations thereunder will not conflict with, constitute a
default under or violate (i) any of the terms, conditions or provisions of the
Certificate of Incorporation or Certificate of Formation, as the case may be, or
by-laws or operating agreement, as the case may be, of any Delaware Credit
Party, (ii) any of the terms, conditions or provisions of any document,
agreement or other instrument set forth on Schedule 2 hereto to which any
Delaware Credit Party is a party or by which it is bound, (iii) any New York, '
Delaware corporate or limited liability company or federal law or regulation
(other than federal and state securities or blue sky laws, as to which we
express no opinion in this paragraph), or (iv) any judgment, writ, injunction,
decree, order or ruling of any court or governmental authority binding on the
Delaware Credit Parties of which we are aware.
4. No consent, approval, waiver, license or authorization or
other action by or filing with any New York, Delaware corporate or limited
liability company or federal governmental authority is required in connection
with the execution and delivery by each Credit Party of the Credit Documents to
which it is a party, the consummation by such Credit Party of the transactions
contemplated thereby or the performance by each Credit Party of its obligations
thereunder, except for (i) consents or filings which have already been made or
obtained, (ii) those which the failure to make or obtain would not reasonably be
expected to have a Material Adverse Effect and (iii) federal and state
securities or blue sky laws, in each case, as to which we express no opinion in
this paragraph.
5. To our knowledge, there is no litigation, proceeding or
governmental investigation pending or overtly threatened against the Credit
Parties that relates to any of the transactions contemplated by the Credit
Documents.
6. None of the Credit Parties is an "investment company" within
the meaning of the Investment Company Act of 1940, as amended. None of the
Credit Parties is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", within the meaning of, or is
otherwise subject to regulation under, the Public Utility Holding Company Act of
1935, as amended.
WEIL,GOTSHAL & ▇▇▇▇▇▇ LLP
December 19,2003
Page 4
7. The making of the extensions of credit under the Credit
Agreement and the application of the proceeds thereof as provided in the Credit
Agreement does not violate Regulations T, U or X of the Board of Governors of
the Federal Reserve System.
The opinions expressed herein are limited to the laws of the State of
New York, the corporate and limited liability company laws of the State of
Delaware and the federal laws of the United States, and we express no opinion as
to the effect on the matters covered by this letter of the laws of any other
jurisdiction.
The opinions expressed herein are rendered solely for your benefit and
the benefit of your successors and permitted assigns in connection with the
transactions described herein. Those opinions may not be used or relied upon by
any other person, nor may this letter or any copies hereof be furnished to a
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without our prior written consent, other than to bank regulatory
authorities or successors and permitted assigns of any Lender.
Very truly yours,
[ILLEGIBLE]
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
Schedule 1
Entity Jurisdiction of Organization
------ ----------------------------
1. ▇▇▇▇▇▇▇ Company Delaware
2. ▇▇▇▇▇▇▇ Holdings, Inc. Delaware
3. The Simmons Delaware
Manufacturing Co., LLC
4. Gallery Corp. Delaware
5. World of Sleep Outlets, Delaware
LLC
6. Simmons Contract Sales, Delaware
LLC
7. Windsor Bedding Co., LLC Delaware
8. SC Holdings, Inc. Delaware
9. Sleep Country USA, Inc. Delaware
10 Dreamwell, Ltd. Nevada
11. Simmons Capital Nevada
Management, LLC
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
Schedule 2
1. Credit and Guaranty Agreement, dated as of December 19, 2003, among
THL, THL-SC, the guarantors named therein and the financial
institutions party thereto, and all agreements constituting exhibits to
or required to be executed pursuant thereto.
2. Indenture, dated as of December 19, 2003 (the "Indenture"), between
Borrower and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
trustee (the "Trustee"), and the other guarantors named therein.
3. Indenture between ▇▇▇▇▇▇▇ Company (the "Company") and SunTrust Bank,
Atlanta, as Trustee, dated as of March 16, 1999.
4. Employment Agreement among THL Bedding Holding Company, the Company and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, dated as of December 19, 2003.
5. Employment Agreement among THL Bedding Holding Company, the Company and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, dated as of December 19, 2003.
6. Employment Agreement among THL Bedding Holding Company, the Company and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, dated as of December 19, 2003.
7. Employment Agreement among THL Bedding Holding Company, the Company and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, dated as of December 19, 2003.
8. Labor Agreement between the Company and The United Steel Workers of
America, A.F.L., C.I.O., C.L.C., on behalf of its members in Local No.
173, in the Shawnee, Kansas plant of the Company excluding executives,
sales employees, office workers, supervisors, foremen, time keepers,
mechanics or machinists for the period from April 23, 1999 to April
22, 2002.
9. Labor Agreement between the Company and The United Steel Workers, Local
No. 425 for all employees at the Jacksonville, Florida plant of the
Company excluding executives, sales employees, office workers,
supervisors, inspectors, departmental coordinators or persons in any
way identified with management for the period from October 16,2001 to
October 15, 2004.
10. Labor Agreement between the Company and The United Steel Workers, Local
No. 422 for all production and maintenance employees at the Dallas,
Texas plant of the Company excluding supervisors, foremen, factory
clerks, office employees, time keepers, watchmen or persons in any way
identified with management for the period from October 16, 2001 to
October 15, 2004.
11. Labor Agreement between the Company and The United Steel Workers, Local
No. 2401 for all production at the Atlanta, Georgia plant of the
Company excluding office workers, supervisors, foremen, inspectors,
watchmen, plant guards, departmental coordinators, carload checkers or
persons in any way
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
identified with management for the period from October 16, 2001 to
October 15, 2005.
12. Labor Agreement between the Company and The United Steel Workers, Local
No. 515U for all employees at the Los Angeles, California plant of the
Company excluding executives, sales employees, office workers, and
supervisors for the period from October 16, 2001 to October 15, 2005
(2001 10-K).
13. Labor Agreement between the Company and The United Steel Workers, Local
No. 420 for employees at the Piscataway, New Jersey plant of the
Company excluding watchmen, office janitors, maintenance department
employees, truck drivers, tool makers, machinists, supervisors,
porters, matrons, main office, clerical, and maintenance helpers for
the period of October 16, 2001 to October 15, 2005.
14. Labor Agreement between the Company and The United Steel Workers, Local
No. 424 for all production employees at the Columbus, Ohio plant of the
Company excluding executives, sales employees, office workers,
timekeepers, watchmen, office janitors, maintenance department
employees, truck drivers, foremen, supervisors, private chauffeurs,
main office, clerical, and engine room and power plant employees for
the period from October 16, 2001 to October 15, 2004.
15. Loan Agreement, dated as of November 1, 1982, between the City of
Janesville, Wisconsin and the Company, as successor by merger to
▇▇▇▇▇▇▇ Manufacturing Company, Inc., relating to $9,700,000 City of
Janesville, Wisconsin industrial Development Revenue Bond, Series A.
16. Loan Agreement between the City of Shawnee and the Company relating to
the Indenture of Trust between City of Shawnee, Kansas and State Street
Bank and Trust Company of Missouri, N.A., as Trustee, dated December 1,
1996 relating to $5,000,000 Private Activity Revenue Bonds, Series
1996.
EXHIBIT D TO
SENIOR UNSECURED TERM LOAN AND
GUARANTY AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT(1)
This Assignment and Assumption Agreement (this "ASSIGNMENT"),is dated
as of the Effective Date set forth below and is entered into by and between
[the] [each] Assignor identified in item [1] [item 3] below ([the] [each an]
"ASSIGNOR")and [the] [each] Assignee identified in [item 2] [item 3] below
([the] [each an] "ASSIGNEE"). [It is understood and agreed that the rights and
obligations of such Assignee [Assignor] hereunder are several and not joint.]
Capitalized terms used herein but not defined herein shall have the meanings
given to them in the Credit Agreement identified below (as amended, supplemented
or otherwise modified from time to time, the "CREDIT AGREEMENT"), receipt of a
copy of which is hereby acknowledged by [the] [each] Assignee. The Standard
Terms and Conditions set forth in Annex 1 hereto (the "STANDARD TERMS AND
CONDITIONS") are hereby agreed to and incorporated herein by reference and made
a part of this Assignment as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to [the] [each] Assignee, and [the] [each] Assignee hereby irrevocably
purchases and assumes from [the] [each such] Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Administrative Agent as contemplated
below, the interest in and to all of the Assignor's rights and obligations
under the Credit Agreement and any other documents or instruments delivered
pursuant thereto that represents the amount and percentage interest identified
below of all of the Assignor's outstanding rights and obligations under the
respective facilities identified below (the "ASSIGNED INTEREST"). [Each] [Such]
sale and assignment is without recourse to [the] [each such] Assignor and,
except as expressly provided in this Assignment, without representation or
warranty by [the] [each such] Assignor.
1. Assignor: _________________
2. Assignee: _________________(2)
[2][3]. Credit Agreement: $140,000,000 Senior Unsecured Term Loan and
Guaranty Agreement, dated as of December 19, 2003,
by and among THL-SC BEDDING COMPANY, ▇▇▇▇▇▇▇
COMPANY (as successor to THL Bedding Company,
"COMPANY"), certain Subsidiaries of Company, as
Guarantors, the Lenders party thereto from time to
time, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as Sole
Bookrunner, Joint Lead Arranger and Co-Syndication
Agent, UBS SECURITIES, LLC, as Joint Lead Arranger
and Co-Syndication Agent, and DEUTSCHE BANK AG, NEW
YORK BRANCH, as Administrative Agent.
-------------------
1 This Assignment and Assumption Agreement should be used by for an
assignment to or from a single Assignee or to or from funds managed by the
same or related investment managers.
2 Item 1 and Item 2 should be filled in as appropriate. In the case of an
assignment to or from funds managed by the same or related investment
managers, the Assignees or Assignors should be listed in bracketed item 3
as applicable.
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT D-1
[3. Assigned Interest:(3)
Facility Aggregate Amount of Loans for all Percentage Assigned of
Assignee assigned Lenders Amount of Loans Assigned Loans(4)
-------- -------- ------- ------------------------ --------
[Name of Assignee] _______ _______ _______%
[Name of Assignee] _______ _______ _______%]
[4. Assigned Interest:(5)
Percentage Assigned of
Facility assigned Aggregate Amount of Loans for all Lenders Amount of Loans Assigned Loans(6)
----------------- ----------------------------------------- ------------------------ --------
Tranche B Term Loans $___________ $________ %________
[insert additional rows as applicable]
Effective Date_______,___,200_
ASSIGNOR INFORMATION
Payment Instructions:
_____________________
_____________________
_____________________
_____________________
Reference:
Notice Instructions:
_____________________
_____________________
_____________________
Reference:
-----------------
3 Insert this chart if this Form of Assignment and Assumption Agreement is
being used for assignment to or from funds managed by the same or related
investment managers.
4 Set forth, to at least 9 decimals, as a percentage of the Loans of all
Lenders thereunder.
5 Insert this chart if this Form of Assignment and Assumption Agreement is
being used by a Lender for an assignment to a single Assignee.
6 Set forth, to at least 9 decimals, as a percentage of the Loans of all
Lenders thereunder.
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TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT D-2
ASSIGNEE INFORMATION
Payment Instructions: _____________________
_____________________
_____________________
_____________________
Reference:
Notice Instructions:
_____________________
_____________________
_____________________
Reference:
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
446409-New York Server 5A
EXHIBIT D-3
The terms set forth in this Assignment are hereby agreed to:
ASSIGNOR ASSIGNEE
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE](7)
By:_________________________ By:____________________________________
Name: Name:
Title: Title:
[Consented to:](8)
▇▇▇▇▇▇▇ COMPANY
By:________________________
Name:
Title:
[Consented to and](9) Accepted:
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Administrative Agent
By:________________________
Name:
Title:
--------------------
7 Add additional signature blocks, as needed, if this Assignment and
Assumption Agreement is being used by funds managed by the same or related
investment managers.
8 Consent of Company is not required upon the occurrence and during the
continuance of an Event of Default with respect to Sections 8.1(a), 8.1(f)
and 8.1(g) of the Credit Agreement.
9 Consent of Administrative Agent and Company is not required for assignments
to another Lender or to an Affiliate of the assigning Lender (or if such
assigning Lender is a fund that invests in commercial or bank loans,
another such investment fund managed or advised by the same investment
advisor or an Affiliate thereof) or another Lender.
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TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT ▇-▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT
1. Representations and Warranties.
1.1 Assignor. [Each] [The] Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties
or representations made in or in connection with any Credit
Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other Credit Document or any other
instrument or document delivered pursuant thereto, other than
this Assignment, or any collateral thereunder, (iii) the
financial condition of Holdings or any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any
Credit Document or (iv) the performance or observance by
Holdings or any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Credit
Documents.
1.2 Assignee. [Each] [The] Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and
to consummate the transactions contemplated hereby and to
become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit
Agreement, (iii) from and after the Effective Date, it shall
be bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interest, shall have the obligations of
a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.1 thereof, as
applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and to purchase the
Assigned Interest on the basis of which it has made such
analysis and decision and (v) attached to this Assignment is
any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed
by [the] [each such] Assignee; and (b) agrees that (i) it
will, independently and without reliance on the Administrative
Agent, [the] [each such] Assignor or any other Lender, and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Documents, (ii) appoints and authorizes each of the
Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers
under the Credit Agreement and the other Credit Documents as
are delegated to or otherwise conferred upon the
Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (iii) it will
perform in accordance with their terms all of the obligations
which by the terms of the Credit Documents are required to be
performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative Agent
shall make all payment in respect to the Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the] [each
such] Assignor for amounts which have accrued to but excluding the
Effective Date and to [the] [each] Assignee for amounts which have
accrued from and after the Effective Date.
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EXHIBIT D-5
3. General Provisions. This Assignment shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and
assigns. This Assignment may be executed in any number of counterparts,
which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Assignment by telecopy shall be
effective as delivery of a manually executed counterpart of the
Assignment. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS).
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TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT D-6
EXHIBIT E TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
CERTIFICATE RE NON-BANK STATUS
Reference is made to the Senior Unsecured Term Loan and Guaranty
Agreement, dated as of December 19, 2003 (as it may be amended, supplemented or
otherwise modified, the "CREDIT AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
THL-SC BEDDING COMPANY, ▇▇▇▇▇▇▇ COMPANY (as successor to THL Bedding Company)
("COMPANY"), certain Subsidiaries of Company, as Guarantors, the Lenders party
thereto from time to time, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as Sole
Bookrunner, Joint Lead Arranger and Co-Syndication Agent, UBS SECURITIES, LLC,
as Joint Lead Arranger and Co-Syndication Agent, and DEUTSCHE BANK AG, NEW YORK
BRANCH, as Administrative Agent. Pursuant to Section 2.20(c) of the Credit
Agreement, the undersigned hereby certifies that it is not a "bank" or other
Person described in Section 881(c)(3) of the Internal Revenue Code of 1986, as
amended.
[NAME OF LENDER]
By:____________________________________
Name:
Title:
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT E-1
EXHIBIT F TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
SOLVENCY CERTIFICATE
See Exhibit G attached to the Credit and Guaranty Agreement
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TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT F-1
EXHIBIT G TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
CLOSING DATE CERTIFICATE
See Exhibit H attached to the Credit and Guaranty Agreement
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TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT G-1
EXHIBIT H TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
COUNTERPART AGREEMENT
This COUNTERPART AGREEMENT, dated [MM/DD/YY] (this "COUNTERPART
AGREEMENT") is delivered pursuant to that certain Senior Unsecured Term Loan and
Guaranty Agreement, dated as of December 19, 2003 (as it may be amended,
supplemented or otherwise modified, the "CREDIT AGREEMENT"; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among THL-SC BEDDING COMPANY, ▇▇▇▇▇▇▇ COMPANY ( as successor to THL
Bedding Company) ("COMPANY"), certain Subsidiaries of Company, as Guarantors,
the Lenders party thereto from time to time, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
as Sole Bookrunner, Joint Lead Arranger and Co-Syndication Agent, UBS
SECURITIES, LLC, as Joint Lead Arranger and Co-Syndication Agent, and DEUTSCHE
BANK AG, NEW YORK BRANCH, as Administrative Agent.
SECTION 1. Pursuant to Section 5.9 of the Credit Agreement, the
undersigned Subsidiary of Company hereby:
(a) agrees that this Counterpart Agreement may be
attached to the Credit Agreement and that by the execution and delivery
hereof, the undersigned becomes a Guarantor under the Credit Agreement
and agrees to be bound by all of the terms thereof;
(b) represents and warrants that each of the
representations and warranties set forth in the Credit Agreement and
each other Credit Document and applicable to the undersigned is true
and correct in all material respects both before and after giving
effect to this Counterpart Agreement, except to the extent that any
such representation and warranty relates solely to any earlier date, in
which case such representation and warranty is true and correct in all
material respects as of such earlier date;
(c) certifies that no event has occurred or is continuing
as of the date hereof, or will result from the transactions
contemplated hereby on the date hereof, that would constitute an Event
of Default or a Default; and
(d) agrees to irrevocably and unconditionally guaranty
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
Section362(a) of the Bankruptcy Code and in accordance with Section 7
of the Credit Agreement.
SECTION 2. The undersigned agrees from time to time, upon request of
Administrative Agent, to take such additional actions and to execute and deliver
such additional documents and instruments as Administrative Agent may request to
effect the transactions contemplated by, and to carry out the intent of, this
Counterpart Agreement. Neither this Counterpart Agreement nor any term hereof
may be changed, waived, discharged or terminated, except by an instrument in
writing signed by the party (including, if applicable, any party required to
evidence its consent to or acceptance of this Counterpart Agreement) against
whom enforcement of such change, waiver, discharge or termination is sought. Any
notice or other communication herein required or permitted to be given shall be
given in pursuant to Section 10.1 of the Credit Agreement, and all for purposes
thereof, the notice address of the undersigned shall be the address as set forth
on the signature page hereof. In case any provision in or obligation under this
Counterpart Agreement 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.
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EXHIBIT H-1
THIS COUNTERPART AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
[The remainder of this page is intentionally left blank.]
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TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT H-2
IN WITNESS WHEREOF, the undersigned has caused this Counterpart
Agreement to be duly executed and delivered by its duly authorized officer as of
the date above first written.
[NAME OF SUBSIDIARY]
By:____________________________________
Name:
Title:
Address for Notices:
_____________________
_____________________
_____________________
Attention:
Telecopier
with a copy to:
_____________________
_____________________
_____________________
Attention:
Telecopier
ACKNOWLEDGED AND ACCEPTED,
as of the date above first written:
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Administrative Agent
By: _______________________
Name:
Title:
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT H-3
EXHIBIT I TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
CERTAIN ADJUSTMENTS TO EBITDA
FOUR-FISCAL QUARTER PERIOD ENDING: CONSOLIDATED ADJUSTED EBITDA:
March 31, 2003 $29,066,000
June 30, 2003 $30,212,000
September 30,2003 $37,117,000
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EXHIBIT I-1
EXHIBIT J TO
SENIOR UNSECURED TERM LOAN
AND GUARANTY AGREEMENT
SEE EXHIBIT N TO CREDIT AGREEMENT
EXHIBITS TO SENIOR UNSECURED
TERM LOAN AND GUARANTY AGREEMENT EXECUTION
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EXHIBIT J-1