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TWINLAB CORPORATION
TWIN LABORATORIES INC.
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$50,000,000
AMENDED AND RESTATED CREDIT AND GUARANTEE
AGREEMENT
November 15, 1996
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THE CHASE MANHATTAN BANK,
as Administrative Agent
and
THE BANK OF NEW YORK,
as Co-Agent
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS...................................................... 1
1.1 Defined Terms................................................. 1
1.2 Other Definitional Provisions; Financial Calculations......... 23
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS........................................................ 24
2.1 Revolving Credit Commitments.................................. 24
2.2 Procedure for Revolving Credit Borrowing...................... 24
2.3 Commitment and Other Fees..................................... 25
2.4 Termination or Reduction of Commitments....................... 25
2.5 Repayment of Revolving Credit Loans; Evidence of Debt......... 25
2.6 Swing Line Commitment......................................... 26
2.7 Repayment of Swing Line Loans; Evidence of Debt............... 27
2.8 Procedure for Borrowing Swing Line Loans...................... 28
2.9 Swing Line Loan Participations................................ 28
2.10 L/C Commitment............................................... 29
2.11 Procedure for Issuance of Letters of Credit.................. 30
2.12 Fees, Commissions and Other Charges.......................... 31
2.13 L/C Participations........................................... 31
2.14 Reimbursement Obligation of the Borrower..................... 32
2.15 Obligations Absolute......................................... 33
2.16 Letter of Credit Payments.................................... 34
2.17 Application.................................................. 34
2.18 Quarterly Reports............................................ 34
SECTION 3. GENERAL PROVISIONS APPLICABLE TO EXTENSIONS OF
CREDIT............................................................. 34
3.1 Optional and Mandatory Prepayments............................ 34
3.2 Conversion and Continuation Options........................... 36
3.3 Minimum Amounts and Maximum Number of Tranches................ 37
3.4 Interest Rates and Payment Dates.............................. 37
3.5 Computation of Interest and Fees.............................. 37
3.6 Inability to Determine Interest Rate.......................... 38
3.7 Pro Rata Treatment and Payments............................... 38
3.8 Illegality.................................................... 39
3.9 Requirements of Law........................................... 39
3.10 Taxes........................................................ 41
3.11 Indemnity.................................................... 44
3.12 Change of Lending Office; Filing of Certificates or Documents 44
3.13 Replacement Lenders.......................................... 45
SECTION 4. REPRESENTATIONS AND WARRANTIES................................... 45
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Page
4.1 Financial Condition........................................... 45
4.2 No Change..................................................... 46
4.3 Existence; Compliance with Law................................ 46
4.4 Power; Authorization; Enforceable Obligations................. 46
4.5 No Legal Bar.................................................. 47
4.6 No Material Litigation........................................ 47
4.7 No Default.................................................... 48
4.8 Ownership of Property; Liens.................................. 48
4.9 Intellectual Property......................................... 48
4.10 No Burdensome Restrictions................................... 48
4.11 Taxes........................................................ 48
4.12 Federal Regulations.......................................... 48
4.13 ERISA........................................................ 49
4.14 Investment Company Act; Other Regulations.................... 49
4.15 Subsidiaries................................................. 49
4.16 Purpose of Loans............................................. 49
4.17 Environmental Matters........................................ 50
4.18 Regulation H................................................. 51
4.19 Accuracy of Information...................................... 51
4.20 Solvency..................................................... 51
4.21 Stock Purchase Agreement..................................... 51
4.22 Security Documents........................................... 51
SECTION 5. CONDITIONS PRECEDENT............................................. 52
5.1 Conditions to Initial Extension of Credit..................... 52
5.2 Conditions to Each Extension of Credit........................ 55
SECTION 6. AFFIRMATIVE COVENANTS............................................ 56
6.1 Financial Statements.......................................... 56
6.2 Certificates; Other Information............................... 57
6.3 Payment of Obligations........................................ 58
6.4 Conduct of Business; Maintenance of Existence; Compliance
with Laws................................................. 59
6.5 Maintenance of Property; Insurance; Products Liability
Insurance................................................. 59
6.6 Inspection of Property; Books and Records; Discussions........ 59
6.7 Notices....................................................... 60
6.8 Environmental Laws............................................ 60
6.9 Maintenance of Liens of the Security Documents................ 61
6.10 Pledge of After Acquired Property; Additional Guarantors..... 61
6.11 Interest Rate Protection..................................... 62
6.12 Exchange Offer............................................... 62
6.13 Stock Purchase Agreement..................................... 62
SECTION 7. NEGATIVE COVENANTS............................................... 63
7.1 Financial Condition Covenants................................. 63
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Page
7.2 Limitation on Indebtedness.................................... 63
7.3 Limitation on Liens........................................... 66
7.4 Limitation on Guarantee Obligations........................... 67
7.5 Limitation on Fundamental Changes............................. 68
7.6 Limitation on Sale of Assets.................................. 68
7.7 Limitation on Restricted Payments............................. 69
7.8 Limitation on Capital Expenditures............................ 70
7.9 Limitation on Investments, Loans and Advances................. 70
7.10 Limitation on Optional Payments and Modifications of
Debt Instruments and other Obligations.................... 71
7.11 Limitation on Transactions with Affiliates................... 72
7.12 Limitation on Changes in Fiscal Year......................... 72
7.13 Limitation on Lines of Business.............................. 72
SECTION 8. NEGATIVE COVENANTS OF HOLDINGS................................... 73
8.1 Limitation on Holdings' Activities............................ 73
8.2 Restricted Payments........................................... 74
8.3 Net Proceeds.................................................. 74
8.4 Dividends..................................................... 74
SECTION 9. GUARANTEE........................................................ 74
9.1 Guarantee..................................................... 74
9.2 No Subrogation, Contribution, Reimbursement or Indemnity...... 75
9.3 Amendments, etc. with respect to the Obligations;
Waiver of Rights.......................................... 75
9.4 Guarantee Absolute and Unconditional.......................... 76
9.5 Reinstatement................................................. 77
9.6 Payments...................................................... 77
SECTION 10. EVENTS OF DEFAULT............................................... 77
SECTION 11. THE ADMINISTRATIVE AGENT........................................ 80
11.1 Appointment.................................................. 80
11.2 Delegation of Duties......................................... 81
11.3 Exculpatory Provisions....................................... 81
11.4 Reliance by Administrative Agent............................. 81
11.5 Notice of Default............................................ 82
11.6 Non-Reliance on Administrative Agent and Other Lenders....... 82
11.7 Indemnification.............................................. 82
11.8 Administrative Agent in Its Individual Capacity.............. 83
11.9 Successor Administrative Agent............................... 83
11.10 Issuing Bank; Swing Line Lender............................. 83
SECTION 12. MISCELLANEOUS................................................... 84
12.1 Amendments and Waivers....................................... 84
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12.2 Notices...................................................... 85
12.3 No Waiver; Cumulative Remedies............................... 86
12.4 Survival of Representations and Warranties................... 86
12.5 Payment of Expenses and Taxes................................ 86
12.6 Successors and Assigns; Participations and Assignments....... 87
12.7 Adjustments; Set-off......................................... 89
12.8 Counterparts................................................. 90
12.9 Severability................................................. 90
12.10 Integration................................................. 90
12.11 GOVERNING LAW............................................... 90
12.12 Submission To Jurisdiction; Waivers......................... 91
12.13 Acknowledgements............................................ 91
12.14 WAIVERS OF JURY TRIAL....................................... 92
12.15 Confidentiality............................................. 92
12.16 Collateral Release.......................................... 92
12.17 Amendment of Certain Cross References....................... 93
12.18 IPO Termination............................................. 93
ANNEXES:
Annex A Pricing Grid
SCHEDULES:
1.1 Commitments
4.1 Financial Condition
4.2 Dividends
4.3 Existence; Compliance with Law
4.4 Consents
4.6 Litigation
4.9 Intellectual Property
4.10 Burdensome Restrictions
4.11 Taxes
4.13 ERISA Reportable Events and Accumulated Funding Deficiencies
4.17 Environmental Matters
4.21 Exceptions to Stock Purchase Agreement Representations and Warranties
7.2(j) Indebtedness Outstanding on the Closing Date
7.3(e) Easements, Licenses, Etc.
7.3(g) Existing Liens
7.4(a) Guarantee Obligations
7.9(e) Securities Held by Borrower or any Subsidiary
7.11(viii) Affiliate Transactions
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EXHIBITS:
A Form of Borrower Mortgage Amendment
B Form of Acknowledgement and Consent
C Form of Swing Line Loan Participation Certificate
D Form of Revolving Credit Note
E Form of Swing Line Note
F Form of Closing Certificate
G Form of Assignment and Acceptance
H Form of Opinion of Kramer, Levin, Naftalis & ▇▇▇▇▇▇▇
I Form of Opinion of Utah Counsel
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AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT, dated as of November
15, 1996, among TWINLAB CORPORATION, a Delaware corporation formerly known as
TLG Laboratories Holding Corp. ("Holdings"), TWIN LABORATORIES INC., a Utah
corporation (the "Borrower"), the several banks and other financial institutions
from time to time parties to this Agreement (collectively, the "Lenders";
individually, a "Lender"), THE BANK OF NEW YORK, a New York banking corporation,
as co-agent for the Lenders (the "Co-Agent"), and THE CHASE MANHATTAN BANK, a
New York banking corporation, as administrative agent (the "Administrative
Agent") for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, pursuant to a series of substantially concurrent transactions (the
"Recapitalization") the following shall occur: (i) Holdings will consummate an
initial public offering of not more than 35% (prior to exercise of the
underwriters' over-allotment option) of its common stock (the "IPO"), (ii) all
of Holdings' outstanding PIK Preferred (as defined below) will be redeemed in
full, on the terms and subject to the conditions set forth herein, (iii) the
Term Loans (the "Term Loans") and all accrued and unpaid interest, fees and
breakage costs under the Existing Credit Agreement (as defined below) will be
repaid in full and (iv) the Revolving Credit Commitments will be increased to
$50 million;
WHEREAS, the proceeds of the Loans will be used to provide a portion of the
funds required to consummate the Recapitalization and to provide for the working
capital requirements of the Borrower and its Subsidiaries after the
Recapitalization and for general corporate purposes; and
WHEREAS, the parties hereto hereby agree that on the Closing Date (as
defined below) the Existing Credit Agreement (as defined below) shall be amended
and restated to read in its entirety as follows:
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean the rate of interest per annum publicly announced from
time to time by Chase as its prime rate in effect at its principal office in New
York City (the Prime Rate not
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being intended to be the lowest rate of interest charged by Chase in connection
with extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board of
Governors through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on such day (or,
if such day shall not be a Business Day, on the next preceding Business Day) by
the Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; "C/D Assessment Rate"
shall mean, for any day, the annual assessment rate in effect on such day which
is payable by a member of the Bank Insurance Fund maintained by the FDIC
classified as well-capitalized and within supervisory subgroup "B" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. ss. 327.3(4) (or any successor provision) to the FDIC for the FDIC's
insuring time deposits at offices of such institution in the United States; "C/D
Reserve Percentage" shall mean, for any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors, for determining the maximum reserve requirement for a Depositary
Institution (as defined in Regulation D of the Board of Governors) in respect of
new non-personal time deposits in Dollars having a maturity of 30 days or more;
and "Federal Funds Effective Rate" shall mean, for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it. Any
change in the ABR due to a change in the Prime Rate, the Three-Month Secondary
CD Rate, the C/D Assessment Rate, the C/D Reserve Percentage or the Federal
Funds Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Three-Month Secondary CD
Rate, the C/D Assessment Rate, the C/D Reserve Percentage or the Federal Funds
Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based upon
the ABR.
"Acquisition Documents": collectively, the Stock Purchase Agreement and any
other documents effectuating the Transactions.
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"Adjustment Date": the Business Day of the receipt by the Administrative
Agent of both (i) the financial statements required to be delivered pursuant to
subsection 6.1(a) or 6.1(b), as the case may be, for the most recently completed
fiscal period and (ii) the certificate required to be delivered pursuant to
subsection 6.2(b) with respect to such fiscal period.
"Administrative Agent": Chase, together with its affiliates and successors,
as the administrative agent for the Lenders under this Agreement and the other
Loan Documents, and any successor thereto pursuant to subsection 11.9.
"Affiliate": as to any Person, any other Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, "control" of
a Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"After-Acquired Mortgage Property": any parcel (or adjoining parcels) of
real property (including any leaseholds) acquired by any Loan Party after the
Closing Date.
"Aggregate Revolving Credit Outstandings": as to any Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding, plus (b) such Lender's
Revolving Credit Commitment Percentage of all Swing Line Loans made by the Swing
Line Lender then outstanding, plus (c) such Lender's Revolving Credit Commitment
Percentage of the L/C Obligations then outstanding.
"Agreement": this Amended and Restated Credit and Guarantee Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Margin": As to any Loans, 0.0% if such Loans are ABR Loans and
1.25% if such Loans are Eurodollar Loans, provided that, from and after December
31, 1996, the Applicable Margin will be adjusted, on each Adjustment Date, as to
all Loans then outstanding or made thereafter prior to the next Adjustment Date
based upon the Consolidated Interest Coverage Ratio and the ratio of
Consolidated Total Debt at the last day of the 12-month period ended on the date
of the financial statements relating to such Adjustment Date to Consolidated
EBITDA for such period as determined from such financial statements, to the
Applicable Margin set forth on Annex A hereto opposite the level for which the
Consolidated Interest Coverage Ratio as so determined satisfies the criteria on
Annex A under the heading "Consolidated Interest Coverage Ratio" and for which
the ratio of Consolidated Total Debt to Consolidated EBITDA as so determined
satisfies the corresponding criteria set forth under the heading "Ratio of
Consolidated Total Debt to Consolidated EBITDA" and provided, further, that (a)
in the event that the financial statements required to be delivered pursuant to
subsection 6.1(a) or 6.1(b), as applicable, and the related certificate required
pursuant to subsection 6.2(b), are not delivered when due, then if such
financial statements are not delivered prior to the date upon which the
resultant
4
Default shall become an Event of Default, then, effective upon such Default
becoming an Event of Default, during the period from the date upon which such
financial statements were required to be delivered until the Business Day upon
which they actually are delivered, the Applicable Margin shall be 0.75%, if such
Loans are ABR Loans, and 2.00%, if such Loans are Eurodollar Loans, and (b) if
on any Adjustment Date, the Consolidated Interest Coverage Ratio and the ratio
of Consolidated Total Debt to Consolidated EBITDA as so determined would result
in different Applicable Margins, the higher Applicable Margin shall govern.
"Application": an application, in such form as the Issuing Bank may specify
from time to time, requesting the Issuing Bank to open a Letter of Credit.
"ARP": Advanced Research Press, Inc., a New York corporation and a wholly
owned Subsidiary of the Borrower.
"ARP Spinoff": any distribution to the shareholders of Holdings of the
capital stock of Holdings' indirect wholly-owned Subsidiary ARP.
"Asset Sale": as to any Person, any sale or other disposition (including
any Sale/Leaseback Transaction and any mortgage or lease (as lessor) of real
property other than any mortgage or lease made by such Person in order to
finance the acquisition or construction of additional real property or
improvements thereon) subsequent to the Closing Date of any property of such
Person (including the issuance or sale of the Capital Stock of any Subsidiary).
"Assignee": as defined in subsection 12.6(c).
"Available Excess Equity Proceeds": at any time, the excess of (a) 100% of
any Net Proceeds of Equity Offerings received on or after the Closing Date over
(b) (without duplication) the sum of (i) the aggregate amounts expended (on or
after the Closing Date) pursuant to subsections 7.2(b)(iv)(y), 7.7(d),
7.9(d)(iv)(y), 7.9(g)(ii), 7.9(j)(ii) and 7.10(a)(i) and clause (vi) of the
definition of "Capital Expenditures" and (ii) the Net Proceeds of the IPO
expended to redeem, repurchase, defease or prepay or retire the PIK Preferred
and to repay the Term Loans.
"Available Revolving Credit Commitment": as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's Revolving
Credit Commitment at such time over (b) such Lender's Aggregate Revolving Credit
Outstandings at such time; collectively, as to all the Lenders, the "Available
Revolving Credit Commitments".
"Benefitted Lender": as defined in subsection 12.7(a).
"Board of Governors": the Board of Governors of the Federal Reserve System
and any Governmental Authority which succeeds to the powers and functions
thereof.
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"Borrower": as defined in the Preamble to this Agreement.
"Borrower Mortgage": each Mortgage executed and delivered by the Borrower,
substantially in the form of Exhibit A to the Existing Credit Agreement or in
such other form as the Administrative Agent shall reasonably require, with
respect to (i) the Mortgaged Property and (ii) each parcel of After-Acquired
Mortgage Property for which a mortgage is granted to the Administrative Agent,
for the benefit of the Lenders, pursuant to subsection 7.10, in each case as the
same may be amended, supplemented or otherwise modified from time to time.
"Borrower Security Documents": collectively, the Borrower Mortgages and the
Guarantee and Collateral Agreement.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 or 2.8 as a date on which the Borrower requests the Lenders to
make Loans hereunder.
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.
"Capital Expenditures": as to any Person for any period, the aggregate
amount incurred by such Person and its Subsidiaries for the rental, lease,
purchase (including by way of the acquisition of securities of a Person),
construction or use of any property during such period, the value or cost of
which, in accordance with GAAP, would appear on such Person's consolidated
balance sheet in the category of property, plant or equipment at the end of such
period, excluding (i) any such expenditure made to restore, replace or rebuild
property to the condition of such property immediately prior to any damage,
loss, destruction or condemnation of such property, to the extent such
expenditure is made with insurance proceeds or condemnation awards relating to
any such damage, loss, destruction or condemnation, (ii) any such expenditure to
the extent financed with or constituting Indebtedness permitted hereunder, (iii)
any such expenditure made to acquire assets purchased with the Net Proceeds of
Asset Sales permitted to be so expended, (iv) Permitted Acquisitions, (v) any
such expenditure to acquire capital assets which are Designated Sale/Leaseback
Financing Properties and (vi) any expenditures not in excess of the Available
Excess Equity Proceeds at the time of such expenditure.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities issued or directly and fully guaranteed
or insured by the United States Government, or any agency or instrumentality
thereof, having maturities of not more than one year from the date of
acquisition; (b) marketable general obligations issued by any state of the
United States of America or
6
any political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof and, at
the time of acquisition thereof, having a credit rating of "A" or better from
either Standard & Poor's or ▇▇▇▇▇'▇ Investors Service, Inc.; (c) certificates of
deposit, time deposits, eurodollar time deposits, overnight bank deposits or
bankers' acceptances having maturities of not more than one year from the date
of acquisition thereof of any Lender, or of any domestic commercial bank the
long-term debt of which is rated at the time of acquisition thereof at least A
or the equivalent thereof by Standard & Poor's or A or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., and having capital and surplus in excess of
$500,000,000; (d) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (a), (b) and (c)
entered into with any bank meeting the qualifications specified in clause (c)
above; (e) commercial paper rated at the time of acquisition thereof at least
A-2 or the equivalent thereof by Standard & Poor's or P-2 or the equivalent
thereof by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and in either case maturing within 270
days after the date of acquisition thereof; (f) interests in any investment
company which invests solely in instruments of the type specified in clauses (a)
through (e) above; and (g) other investment instruments approved in writing by
the Required Lenders and offered by any Lender or by any financial institution
which has a combined capital and surplus of not less than $500,000,000.
"Certificate of Available Excess Equity Proceeds": a certificate to be
delivered by the Borrower pursuant to subsections 6.1(a) and (b) in form and
substance satisfactory to the Administrative Agent setting forth (i) the amount
of Available Excess Equity Proceeds as of the last day of the fiscal period to
which such certificate relates and (ii) the calculations reasonably required to
determine such amount, certified by a Responsible Officer of the Borrower as
being stated fairly in all material respects.
"Change of Control": (a) any Person (other than GEI, the Investors or the
Continuing Stockholders), whether singly or in concert with one or more other
such Persons, shall, directly or indirectly, beneficially own a greater
percentage, on a fully diluted basis, of the outstanding Capital Stock (having
ordinary power in the election of directors of Holdings) of Holdings than the
percentage of such outstanding Capital Stock beneficially owned by GEI, the
Investors and the Continuing Stockholders in the aggregate, (b) the Board of
Directors of the Borrower shall not consist of a majority of Continuing
Directors, (c) Holdings shall not directly own, beneficially and of record, 100%
of the issued and outstanding Capital Stock of the Borrower, free and clear of
all Liens other than the Lien of the Security Documents or (d) a "Change of
Control" (as defined in the Senior Subordinated Note Indenture) shall occur. For
the purposes of this definition, GEI and Investors shall include Affiliates
thereof.
"Chase": The Chase Manhattan Bank, a New York banking corporation and its
successors.
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"Closing Date": the first date on which the conditions precedent set forth
in subsections 5.1 and 5.2 shall be satisfied or waived.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": all assets of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Commercial Letter of Credit": as defined in subsection 2.10(b)(i)(2).
"Commitment": with respect to any Lender, the collective reference to such
Lender's Revolving Credit Commitment; collectively, as to all the Lenders, the
"Commitments".
"Commitment Percentage": as to any Lender at any time, the percentage which
(i) the sum of (a) such Lender's then Available Revolving Credit Commitment plus
(b) such Lender's Loans (other than Swing Line Loans) then outstanding plus (c)
the product of such Lender's Revolving Credit Commitment Percentage times the
sum of (I) the Swing Line Loans then outstanding and (II) the L/C Obligations
then outstanding then constitutes of (ii) the sum of (x) the aggregate Available
Revolving Credit Commitments of the Lenders plus (y) the aggregate principal
amount of Loans of all the Lenders then outstanding plus (z) the aggregate L/C
Obligations of all the Lenders then outstanding.
"Commonly Controlled Entity": an entity, whether or not incorporated, which
is under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group which includes the Borrower and which is treated as
a single employer under Section 414(b) or (c) of the Code or, solely for
purposes of determining liability under Section 412 of the Code, which is
treated as a single employer under Section 414 (b), (c), (m) or (o) of the Code.
"Companies": the Borrower, Old Twin, Alvita Products, Inc., Twinlab Export
Corp., Twinlab Specialty Corporation, B. Bros Realty Corporation and ARP,
collectively.
"Companies EBITDA": for any period, prior to the Original Closing Date, for
the Companies, the combined net income for such period, plus to the extent
deducted in determining such combined net income, (i) interest expense, (ii)
depreciation, (iii) depletion, (iv) amortization (including amortization of debt
discount and deferred financing costs), (v) all Federal, state, local and
foreign income and corporate withholding taxes, (vi) all other non-cash expenses
or non-cash losses, (vii) any extraordinary and unusual losses and (viii)
transaction fees and expenses associated with the Transactions and, minus, to
the extent added in determining such net income, (i) any non-cash income or
non-cash gains and (ii) any extraordinary and unusual gains, all as determined,
to the extent applicable, on a combined basis in accordance with GAAP. (For the
purposes of this definition, (i) "interest expense" shall mean, for
8
any period, the net interest expense of the combined Companies for such period
as determined in accordance with GAAP and (ii) "net income" shall mean, for any
period, the net income of the combined Companies for such period as determined
in accordance with GAAP.)
"Consolidated Cash Interest Expense": for any period, Consolidated Interest
Expense paid in cash during such period.
"Consolidated EBITDA": for any period, the Consolidated Net Income for such
period, plus, to the extent deducted in determining such Consolidated Net
Income, (i) Consolidated Interest Expense, (ii) depreciation, (iii) depletion,
(iv) amortization (including amortization of debt discount and deferred
financing costs), (v) all Federal, state, local and foreign income and corporate
withholding taxes, (vi) all other non-cash expenses or non-cash losses, (vii)
any extraordinary and unusual losses, (viii) transaction fees and expenses
associated with the Transactions, (ix) fees and expenses associated with any
acquisition or financing whether or not consummated and (x) amortization or
write-off of the consideration for the non-compete agreements entered into in
connection with the Transactions and, minus, to the extent added in determining
such Consolidated Net Income, (i) any non-cash income or non-cash gains and (ii)
any extraordinary and unusual gains, all as determined, to the extent
applicable, on a consolidated basis in accordance with GAAP. Notwithstanding the
foregoing, (i) Consolidated EBITDA for the fiscal quarters ended December 31,
1995 and March 31, 1996 shall be $10,400,000 and $10,600,000, respectively, and
(ii) for the period from April 1, 1996 to the Original Closing Date,
Consolidated EBITDA shall be the Companies EBITDA for such period.
"Consolidated Interest Coverage Ratio": for any period of four consecutive
fiscal quarters ending during any Test Period, the ratio of (a) Consolidated
EBITDA for such period to (b) Consolidated Cash Interest Expense for such
period.
"Consolidated Interest Expense": for any period, the net interest expense
of the Borrower and its Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income": for any period, the net income of the Borrower
and its Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Total Debt": at any date of determination, all Indebtedness
of the Borrower and its Subsidiaries at such date of determination that would be
included in the liabilities on a consolidated balance sheet of the Borrower and
its Subsidiaries as at such date, prepared in accordance with GAAP.
"Continuing Directors": the directors of Holdings on the Closing Date and
each other director, if such other director's nomination for election to the
Board of Directors of Holdings is recommended by a majority of the then
Continuing Directors.
9
"Continuing Stockholders": as defined in the Stock Purchase Agreement.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any material agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CSI": Chase Securities Inc., a Delaware corporation.
"Currency Rate Protection Agreements": as to any Person, all foreign
exchange contracts, currency swap agreements or other similar agreements or
arrangements entered into in the ordinary course of business by such Person
designed to protect such Person against fluctuations in currency values.
"Default": any of the events specified in Section 10, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Designated Sale/Leaseback Financing Property": any acquisition by the
Borrower and its Subsidiaries of capital assets, as to which the Borrower shall
notify the Administrative Agent by the last Business Day of the fiscal year in
which such capital asset is acquired that it intends to sell and leaseback or
otherwise finance, in a transaction permitted hereunder, such capital asset
within a twelve-month period from acquisition, provided the aggregate amount of
assets so designated at any time may not exceed $3,000,000. If such sale and
leaseback or other financing shall not have occurred within twelve months of the
acquisition, such acquisition shall be deemed to constitute a Capital
Expenditure at the expiration of such twelve month period.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under the
laws of the United States of America or any political subdivision thereof.
"Dollars" and "$": lawful currency of the United States of America.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority having the force of law or
other Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning the protection of the
environment or the protection of human health as it relates to the protection of
the environment, as now or at any time hereafter in effect.
"Environmental Permits": all permits, licenses, registrations,
notifications, exemptions, and other authorizations required by or from any
Governmental Authority under Environmental Laws.
10
"Equity Interest": Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).
"Equity Offering": any offering of Capital Stock or private placement of
Capital Stock of Holdings excluding any post-closing payment received by
Holdings pursuant to the terms of the Stock Purchase Agreement.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements prescribed
for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate at
which Chase is offered Dollar deposits at or about 10:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being conducted
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its Eurodollar
Loan to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to which is based
upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/16th of
1%):
Eurodollar Base Rate
---------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 10, provided
that all requirements for the giving of notice, the lapse of time, or both, and
any other conditions, have been satisfied.
"Existing Credit Agreement": the Credit and Guarantee Agreement dated as of
May 7, 1996 among Holdings, the Borrower, the Administrative Agent, The Bank of
11
New York as documentation agent and the several banks and other financial
institutions from time to time parties thereto, which Existing Credit Agreement
is amended and restated pursuant to the terms of this Agreement.
"Extension of Credit": with respect to any Lender, (a) the making of a Loan
by such Lender and (b) the issuance of a Letter of Credit; with respect to all
the Lenders, the "Extensions of Credit".
"FDIC": the Federal Deposit Insurance Corporation and any Governmental
Authority which succeeds to the powers and functions thereof.
"Federal Funds Effective Rate": as defined in the definition of ABR.
"Final Offering Memorandum": the Offering Memorandum dated May 1, 1996,
with respect to the issuance of the Senior Subordinated Notes, a copy of which
has been furnished to each Lender.
"Financing Lease": any lease of property, real or personal, the obligations
of the lessee in respect of which are required in accordance with GAAP to be
capitalized on a balance sheet of the lessee.
"Financing Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any Financing Lease; the amount of
such obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
"Foreign Subsidiary": any Subsidiary of the Borrower organized under the
laws of any jurisdiction outside the United States of America.
"Funded Indebtedness": all Indebtedness of the Borrower under this
Agreement and the Senior Subordinated Note Indenture.
"GAAP": generally accepted accounting principles in the United States of
America in effect from time to time (subject to subsection 1.2(e)).
"GEI": Green Equity Investors II, L.P.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Grantor": as defined in the Preamble to the Guarantee and Collateral
Agreement.
"Green": ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Partners, L.P., a Delaware limited partnership
and an affiliate of GEI.
12
"Guarantee": the guarantee contained in Section 9 or in the Guarantee and
Collateral Agreement; collectively, the "Guarantees".
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement dated as of May 7, 1996 executed and delivered by Holdings, the
Borrower and each Subsidiary (other than a Foreign Subsidiary) in favor of the
Administrative Agent, for the benefit of the Lenders, substantially in the form
of Exhibit B to the Existing Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "Guaranteeing Person"), any
obligation of (a) the Guaranteeing Person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the Guaranteeing Person has issued a reimbursement, counter indemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, lease, dividend or other obligation (the "Primary Obligations") of
any other third Person (the "Primary Obligor") in any manner, whether directly
or indirectly, including, without limitation, any obligation of the Guaranteeing
Person, whether or not contingent, (i) to purchase any such Primary Obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such Primary
Obligation or (2) to maintain working capital or equity capital of the Primary
Obligor or otherwise to maintain the net worth or solvency of the Primary
Obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such Primary Obligation of the ability of
the Primary Obligor to make payment of such Primary Obligation or (iv) otherwise
to assure or hold harmless the owner of any such Primary Obligation against loss
in respect thereof; provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business or normal and customary indemnification pursuant to
the Transactions, or any transaction heretofore or hereafter entered into by the
Companies, the Borrower, or any of the Borrower's Subsidiaries in the ordinary
course of business permitted hereunder, or in connection with any purchase or
sale of assets permitted hereunder. The amount of any Guarantee Obligation of
any Guaranteeing Person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the Primary Obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for which
such Guaranteeing Person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such Primary Obligation and the
maximum amount for which such Guaranteeing Person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such Guaranteeing Person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Guarantors": Holdings and each Subsidiary (other than Foreign
Subsidiaries) of the Borrower.
13
"Hazardous Materials": any petroleum (including crude oil or any fraction
thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde
insulation, asbestos and asbestos-containing materials, pollutants,
contaminants, and all other materials and substances including but not limited
to radioactive materials regulated pursuant to any Environmental Laws or the
handling or disposal of which could result in liability under any Environmental
Law.
"Holdings": as defined in the Preamble to this Agreement.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business payable in accordance with customary practices
and not more than 90 days past due, unless being contested in good faith by
appropriate proceedings, and compensation, pension obligations and other
obligations arising from employee benefits and employee arrangements), (b) any
other indebtedness of such Person which is evidenced by a note, bond (other than
those of the type referred to in subsection 8.3(d)), debenture or similar
instrument, (c) all Financing Lease Obligations of such Person, (d) all
obligations of such Person under Rate Protection Agreements, (e) all obligations
of such Person in respect of letters of credit (whether or not drawn),
acceptances and similar obligations issued or created for the account of such
Person, and (f) all indebtedness of others of the types described in (a) through
(e) above secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof
(the amount of such indebtedness with respect to such Person being deemed to be
the lesser of the fair market value of such property or the amount of
indebtedness of others so secured).
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to ABR Loans, the last day of each April,
July, October and January, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest Period and (c) as
to any Eurodollar Loan having an Interest Period longer than three months, each
day which is three months, or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Borrower in
its notice of borrowing or notice of conversion, as the case may be, given
with respect thereto; and
14
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three Business
Days prior to the last day of the then current Interest Period with respect
thereto;
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day;
(2) no Interest Period that would otherwise extend beyond the
Termination Date shall be selected by the Borrower;
(3) 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
(4) the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period for
such Eurodollar Loan.
"Interest Rate Protection Agreements": as to any Person, all interest rate
swaps, caps or collar agreements or similar arrangements entered into by such
Person providing for protection against fluctuations in interest rates or the
exchange of nominal interest obligations, either generally or under specific
contingencies.
"Investment": as defined in subsection 7.9.
"Investor Common": the common stock of Holdings acquired by GEI and the
Investors on the Original Closing Date.
"Investors": holders, other than GEI and the Continuing Stockholders, of
the Investor Common and the PIK Preferred.
"IPO": as defined in the recitals hereto.
"Issuing Bank": Chase or any of its Affiliates, in its capacity as issuer
of any Letter of Credit.
"L/C Commitment": $15,000,000.
15
"L/C Fee Payment Date": the last day of each April, July, October and
January and the Termination Date.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not been reimbursed.
"L/C Participants": collectively, all the Lenders other than the Issuing
Bank.
"Lenders": as defined in the Preamble to this Agreement.
"Letters of Credit": collectively, Commercial Letters of Credit and Standby
Letters of Credit.
"Lien": any mortgage, pledge, hypothecation, assignment for security,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing).
"Loan": any Revolving Credit Loan or Swing Line Loan.
"Loan Documents": this Agreement, any Notes, the Guarantees, the
Applications, and the Security Documents.
"Loan Participants": as defined in subsection 12.6(b).
"Loan Parties": the Borrower, Holdings, ARP and each other Subsidiary of
the Borrower which is a party to a Loan Document.
"Management Services Agreement": the Management Services Agreement, dated
as of the Original Closing Date, between the Borrower and Green.
"Material Adverse Effect": a material adverse effect on (a) the business,
operations, property, assets, prospects, or condition (financial or otherwise)
of Holdings and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or any of
the material rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder.
"Merger Agreement": the Merger Agreement, dated as of the Original Closing
Date, among the Companies (other than ARP).
"Mortgaged Property": the real property owned by the Loan Parties located
in Utah.
16
"Mortgages": collectively, the Borrower Mortgage and the Subsidiary
Mortgage.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Proceeds": with respect to any Person, (a) with respect to any Asset
Sale by such Person, the cash proceeds (including any cash payments received by
way of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise, but only as and
when received) of such Asset Sale net of (i) attorneys' fees, accountants' fees,
investment banking fees, survey costs, title insurance premiums, and related
search and recording charges, transfer taxes, deed or mortgage recording taxes,
required debt payments (other than pursuant hereto), other customary expenses,
amounts required to be applied to the repayment of Indebtedness secured by a
Lien expressly permitted hereunder on any asset which is the subject of such
Asset Sale (other than any Lien in favor of the Administrative Agent for the
benefit of the Lenders) and brokerage, consultant and other customary fees
actually incurred in connection therewith, (ii) taxes paid or payable as a
result thereof, (iii) all amounts deemed appropriate by the Borrower to be
provided as a reserve in accordance with GAAP against any liabilities associated
with the assets that are the subject of such Asset Sale, provided that, if the
amounts held in reserve are reversed, at such time such reserve amounts shall be
deemed to constitute Net Proceeds after deducting any additional taxes required
to be paid in connection therewith, and (iv) the portion of any cash payments
attributable to Persons holding a minority interest in any Subsidiary, the
assets of which are the subject of such Asset Sale; and (b) with respect to any
issuance of equity securities or the incurrence of any Indebtedness by such
Person subsequent to the Closing Date, the cash proceeds received from such
issuance or incurrence net of investment banking fees, legal fees, accountants
fees, underwriting discounts and commissions and other customary fees and
expenses, taxes and other reasonable costs and expenses actually incurred in
connection therewith.
"New Lending Office": as defined in subsection 3.10(c).
"Non-Excluded Taxes": as defined in subsection 3.10(a).
"Notes": collectively, the Swing Line Note and Revolving Credit Notes, if
any.
"NYUCC": the Uniform Commercial Code as from time to time in effect in the
State of New York.
"Obligations": the unpaid principal of and interest on the Loans and all
other obligations and liabilities of the Borrower to the Administrative Agent
and the Lenders (including, without limitation, interest accruing at the then
applicable rate provided in this Agreement after the maturity of the Loans and
interest accruing at the then applicable rate provided in this Agreement after
the filing of any petition in
17
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, the other Loan Documents, any Rate Protection Agreement entered into
by the Borrower with any Lender or any Affiliate of any Lender, any cash
management services agreement entered into by the Borrower with any Lender or
any Affiliate of any Lender or any other document made, delivered or given in
connection herewith or therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be paid by
the Borrower pursuant to the terms of this Agreement, any other Loan Document or
any such Rate Protection Agreement or cash management services agreement entered
into by the Borrower with any Lender or any Affiliate of any Lender).
"Obsolete Property": any property of the Borrower or any of its
Subsidiaries which is obsolete, outdated or worn out or the useful life of which
has ended, in each case in the good faith determination of the Borrower.
"Old Twin": Twin Laboratories Inc., a New York corporation.
"Original Closing Date": May 7, 1996.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA and any Governmental Authority which succeeds to
the powers and functions thereof.
"Permitted Acquisition": any acquisition of all or substantially all the
assets of, or at least 80% of the shares or other Equity Interests in, a Person
or division or line of business of a Person or other significant assets of a
Person if immediately after giving effect thereto: (a) no Default or Event of
Default shall have occurred and be continuing or would result therefrom, (b) all
transactions related thereto shall be consummated in all material respects in
accordance with applicable laws, (c) all actions required to be taken, if any,
with respect to any acquired or newly formed Subsidiary under subsection 6.10
shall have been taken and (d)(i) the Borrower shall be in compliance, on a pro
forma basis after giving effect to such acquisition or formation, with the
covenants contained in subsection 7.1 recomputed as at the last day of the most
recently ended fiscal quarter of the Borrower as if such acquisition had
occurred on the first day of each relevant period for testing such compliance,
and the Borrower shall have delivered to the Administrative Agent, with a copy
for each of the Lenders, a certificate (and the pro forma assumptions relating
thereto) of a Responsible Officer to such effect, together with all relevant
financial information for such Subsidiary or assets (to the extent reasonably
available), and (ii) after giving effect to such transaction, any acquired or
newly formed Subsidiary shall not be liable
18
for any Indebtedness (except for Guarantee Obligations permitted pursuant to
subsection 7.4 and Indebtedness permitted by subsection 7.2(g)).
"Permitted Acquisition Amount": $35,000,000.
"Permitted Liens": as defined in subsection 7.3.
"Person": an individual, partnership, corporation, business trust, joint
stock company, limited liability company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"PIK Preferred": all of the outstanding pay-in-kind preferred stock of
Holdings which consists of an issue of senior preferred stock and an issue of
junior preferred stock.
"Plan": at a particular time, any employee benefit plan which is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prepayment Account": as defined in subsection 3.1(c).
"Primary Obligations": as defined in the definition of "Guarantee
Obligation" contained in this subsection 1.1.
"Proceeds": as defined in the NYUCC.
"Properties": as defined in subsection 4.17.
"Public Equity Offering": any public offering of Capital Stock of Holdings.
"Rate Protection Agreements": collectively, any Currency Rate Protection
Agreements and Interest Rate Protection Agreements.
"Recapitalization": as defined in the recitals hereto.
"Refinancing Indebtedness": as defined in subsection 7.2(o).
"Refunded Swing Line Loans": as defined in subsection 2.8(b).
"Register": as defined in subsection 12.6(d).
"Registration Rights Agreement": as defined in the Senior Subordinated Note
Indenture.
19
"Regulation D": Regulation D of the Board of Governors as in effect from
time to time.
"Regulation G": Regulation G of the Board of Governors as in effect from
time to time.
"Regulation H": Regulation H of the Board of Governors as in effect from
time to time.
"Regulation U": Regulation U of the Board of Governors as in effect from
time to time.
"Regulation X": Regulation X of the Board of Governors as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to reimburse the
Issuing Bank pursuant to subsection 2.14(a) for amounts drawn under Letters of
Credit.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Replacement Asset": any property acquired by the Borrower or any of its
Subsidiaries subsequent to the Closing Date which replaces Obsolete Property or
assets that were disposed of in accordance with subsection 7.6.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss. 2615.
"Repurchase Payments": the prepayment, redemption, defeasance or repurchase
of the Senior Subordinated Notes through either the use of Loan proceeds,
available cash of the Borrower or Available Excess Equity Proceeds.
"Required Lenders": at any time, Lenders the Commitment Percentages of
which aggregate more than 50%.
"Requirement of Law": as to any Person, (i) the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and (ii) any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject; provided however, that for purposes of Section
4, Requirement of Law shall mean only clause (ii) of this definition.
20
"Responsible Officer": as to any Person, the chief executive officer and
the president of such Person or, with respect to financial matters, the chief
financial officer of such Person or, in either case, such other executive
officers as may be designated from time to time by such Person in writing to the
Administrative Agent.
"Restricted Payments": as defined in subsection 7.7.
"Revolving Credit Commitment": with respect to any Lender, its obligation
to make Revolving Credit Loans and/or issue or participate in Letters of Credit
issued on behalf of the Borrower and/or participate in Swing Line Loans made to
the Borrower in an amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1 under the heading "Revolving Credit Commitment",
as such amount may be reduced from time to time pursuant to this Agreement or as
such amount may be adjusted from time to time pursuant to subsection 12.6;
collectively, as to all such Lenders, the "Revolving Credit Commitments".
"Revolving Credit Commitment Percentage": as to any Lender at any time, the
percentage which (i) the sum of (a) such Lender's then unused Revolving Credit
Commitment plus (b) such Lender's Revolving Credit Loans then outstanding plus
(c) the product of the percentage of the Revolving Credit Commitments of all the
Lenders then constituted by such Lender's Revolving Credit Commitment times the
sum of (I) the Swing Line Loans then outstanding and (II) the L/C Obligations
then outstanding then constitutes of (ii) the sum of (w) the aggregate
outstanding then unused Revolving Credit Commitments of all the Lenders plus (x)
the aggregate principal amount of Revolving Credit Loans of all the Lenders then
outstanding plus (y) the aggregate L/C Obligations then outstanding plus (z) the
Swing Line Loans then outstanding.
"Revolving Credit Commitment Period": the period from and including the
Closing Date to but not including the Termination Date or such earlier date on
which the Revolving Credit Commitments shall terminate as provided herein.
"Revolving Credit Fee Percentage": as defined in subsection 2.12(b).
"Revolving Credit Loans": as defined in subsection 2.1(a).
"Revolving Credit Note": as defined in subsection 2.5(e).
"Sale/Leaseback Transaction": any arrangement with any Person providing for
the leasing by the Borrower or any Subsidiary of real or personal property which
has been or is to be sold or transferred by the Borrower or such Subsidiary to
such Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of the
Borrower or such Subsidiary.
21
"SEC": the Securities and Exchange Commission or any Governmental Authority
which succeeds to the powers and functions thereof.
"Securities Act": the Securities Act of 1933, as amended.
"Security Documents": collectively, the Guarantee and Collateral Agreement,
the Mortgages, and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any Person to
secure the Obligations or to secure any guarantee of any such Obligations and,
including, without limitation, any such document delivered pursuant to
subsection 6.10.
"Sellers": the "Stockholder Indemnitors" as defined in the Stock Purchase
Agreement.
"Senior Subordinated Note Indenture": the Indenture, dated as of May 7,
1996, between the Borrower and Fleet National Bank, as trustee, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with subsection 7.10 or any indenture or other agreement pursuant to which any
Refinancing Indebtedness used to refinance the Senior Subordinated Notes is
issued, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with subsection 7.10.
"Senior Subordinated Notes": the Borrower's $100,000,000 of 10 1/4% Senior
Subordinated Notes due 2006, issued under the Senior Subordinated Note Indenture
or any Refinancing Indebtedness issued to refinance the Senior Subordinated
Notes.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any date
of determination, (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount that will be
required to pay all "liabilities of such Person, contingent or otherwise", as of
such date (as such quoted terms are determined in accordance with applicable
Federal and state laws governing determinations of the insolvency of debtors) as
such debts become absolute and matured, (b) such Person will not have, as of
such date, an unreasonably small amount of capital with which to conduct its
business, and (c) such Person will be able to pay its debts as they mature,
taking into account the timing of and amounts of cash to be received by such
Person and the timing of and amounts of cash to be payable on or in respect of
indebtedness of such Person; in each case after giving effect to (A) as of the
Closing Date the making of the Extensions of Credit to be made on the Closing
Date and the application of the proceeds of such Extensions of Credit and (B) on
any date after the Closing Date, the making of any Extension of Credit to be
made on such date and the application of the proceeds of such Extension of
Credit. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated,
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fixed, contingent, matured, unmatured, disputed, undisputed, legal equitable,
secured or unsecured.
"Standby Letter of Credit": as defined in subsection 2.10(b)(i)(1).
"Stock Purchase Agreement": the Stock Purchase and Sale Agreement dated as
of March 5, 1996 (as amended, supplemented or otherwise modified from time to
time in accordance with the terms therein) among the Stockholders (as defined
therein), Holdings, the Borrower and GEI.
"Subsidiary": as to any Person, a corporation, partnership or other entity
of which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Subsidiary Mortgage": each Mortgage to be executed and delivered by a
Subsidiary, substantially in the form of Exhibit A to the Existing Credit
Agreement, with such changes as the Administrative Agent shall deem necessary or
desirable in order (i) to provide that such Subsidiary is the Mortgagor, (ii) to
comply with and/or provide for specific laws of the jurisdictions in which the
property to be encumbered is located, and (iii) to assure that the
Administrative Agent, for the benefit of the Lenders, has a perfected Lien on
the property to be encumbered thereby securing such Subsidiary's Obligations (as
such term is defined in the Guarantee and Collateral Agreement), or in such
other form as the Administrative Agent shall reasonably require, with respect to
each parcel of After-Acquired Mortgage Property for which a mortgage is granted
to the Administrative Agent pursuant to subsection 6.10, in each case as the
same may be amended, supplemented or otherwise modified from time to time.
"Swing Line Commitment": the obligation of the Swing Line Lender to make
Swing Line Loans pursuant to subsection 2.6 in an aggregate amount at any one
time outstanding not to exceed $5,000,000.
"Swing Line Lender": as defined in subsection 2.6.
"Swing Line Loan Participation Certificate": a certificate substantially in
the form of Exhibit C.
"Swing Line Loans": as defined in subsection 2.6.
"Swing Line Note": as defined in subsection 2.7(e).
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"Swing Line Participation Amount": as defined in subsection 2.9(b).
"Termination Date": May 7, 2002.
"Term Loan": as defined in the recitals hereto; collectively, the "Term
Loans".
"Test Period": with respect to subsection 7.1(a), as set forth therein.
"Tranche": collectively, Eurodollar Loans the then current Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether or not such Loans shall originally have been made on the same
day); Tranches may be identified as "Eurodollar Tranches".
"Transactions": the transactions relating to the Stock Purchase Agreement
whereby the Borrower became a wholly-owned subsidiary of Holdings.
"Transferee": as defined in subsection 12.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be amended from time to time.
1.2 Other Definitional Provisions; Financial Calculations. (a) Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto.
(b) As used herein and in any Notes, and any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Borrower and
its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(e) Notwithstanding anything to the contrary herein, for purposes of making
all calculations in connection with the covenants contained in Section 7, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP consistently
applied as in effect on the date of this Agreement. In the
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event of any material difference at any time between GAAP in effect on the date
of this Agreement and GAAP from time to time in effect, the certificate of a
Responsible Officer required pursuant to subsection 6.2(b)(ii) shall include a
reconciliation of the calculations required thereby with the financial
statements being delivered with such certificate.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and conditions
hereof, each Lender severally agrees to make revolving credit loans ("Revolving
Credit Loans") to the Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Credit Commitment Percentage of (i)
the then outstanding Swing Line Loans and (ii) the then outstanding L/C
Obligations, does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period, the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with subsections
2.2 and 3.2, provided that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Termination Date.
2.2 Procedure for Revolving Credit Borrowing. The Borrower may borrow under
the Revolving Credit Commitments during the Revolving Credit Commitment Period
on any Business Day, provided that the Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 12:00 Noon, New York City time, (a) three Business Days prior to
the requested Borrowing Date, if all or any part of the requested Revolving
Credit Loans are to be initially Eurodollar Loans, or (b) one Business Day prior
to the requested Borrowing Date, otherwise), specifying (i) the amount to be
borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is to
be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the lengths of the initial Interest
Periods therefor. Revolving Credit Loans made on the Closing Date shall
initially be ABR Loans. Each borrowing under the Revolving Credit Commitments
shall be in an amount equal to (x) in the case of ABR Loans, $500,000 or a whole
multiple of $100,000 in excess thereof (or, if the then Available Revolving
Credit Commitments are less than $500,000, such lesser amount) and (y) in the
case of Eurodollar Loans, $1,000,000 or a whole multiple of $500,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Lender thereof. Each Lender will make the
amount of its pro rata share of each borrowing available to the Administrative
Agent for the account of the Borrower at the office of the Administrative Agent
specified in subsection 12.2 prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
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Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower designated in
its borrowing notice prior to 1:00 P.M., New York City time, on such Borrowing
Date with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent.
2.3 Commitment and Other Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including the Closing Date to the Termination Date, computed at
the rate shown on the Pricing Grid set forth on Annex A hereto, on the average
daily amount of the Available Revolving Credit Commitment of such Lender during
the period for which payment is made, payable quarterly in arrears on the last
day of each April, July, October and January and on the Termination Date or such
earlier date as the Revolving Credit Commitments shall terminate as provided
herein, commencing on the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to Chase the amounts and fees set forth in
the Fee Letter dated as of July 31, 1996 among Chase, CSI and the Borrower in
the amounts and on the dates set forth therein.
2.4 Termination or Reduction of Commitments. The Borrower shall have the
right, upon not less than one Business Day's prior notice to the Administrative
Agent (who shall notify the Lenders), to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments, provided that no such termination or reduction shall be permitted
if, after giving effect thereto and to any prepayments of the Revolving Credit
Loans made on the effective date thereof, the aggregate principal amount of the
Revolving Credit Loans then outstanding, when added to the then outstanding L/C
Obligations and Swing Line Loans, would exceed the Revolving Credit Commitments
then in effect. Any such reduction shall be in an amount equal to $500,000 or a
whole multiple of $100,000 in excess thereof and shall reduce permanently the
Revolving Credit Commitments then in effect.
2.5 Repayment of Revolving Credit Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Credit
Loan of such Lender on the Termination Date (or such earlier date on which the
Revolving Credit Loans become due and payable pursuant to Section 10). The
Borrower hereby further agrees to pay to the Administrative Agent for the
account of each Lender interest on the unpaid principal amount of the Revolving
Credit Loans from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in subsection
3.4.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Revolving Credit Loan of such Lender from time to time,
including the amounts of
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principal and interest payable and paid to such Lender from time to time under
this Agreement.
(c) The Administrative Agent shall record in the Register, with separate
subaccount for each Lender, (i) the amount and Borrowing Date of each Revolving
Credit Loan made hereunder, the Type thereof and each Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.
(d) The entries made in the Register pursuant to subsection 2.5(c) shall,
to the extent permitted by applicable law, and absent manifest error, be prima
facie evidence of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of any Lender to maintain
any account pursuant to subsection 2.5(b) or the Administrative Agent to make
recordings in the Register pursuant to subsection 2.5(c), or any error therein,
shall not in any manner affect the obligation of the Borrower to repay (with
applicable interest) the Revolving Credit Loans made to such Borrower by such
Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative Agent
by a Lender, which request is communicated to the Borrower, the Borrower will
execute and deliver to such Lender a promissory note of the Borrower dated the
Closing Date evidencing the Revolving Credit Loans of such Lender, substantially
in the form of Exhibit D with appropriate insertions as to date and principal
amount (a "Revolving Credit Note"). Each Lender is hereby authorized to record
the date, Type and amount of each Revolving Credit Loan made by such Lender, the
date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of Eurodollar Loans, the length of each Interest Period
and Eurodollar Rate with respect thereto, on the schedule (or any continuation
of the schedule) annexed to and constituting a part of its Revolving Credit
Note, and any such recordation shall, to the extent permitted by applicable law,
and absent manifest error, constitute prima facie evidence of the accuracy of
the information so recorded, provided that the failure to make any such
recordation (or any error therein) shall not affect the obligation of the
Borrower to repay (with applicable interest) the Revolving Credit Loans made to
the Borrower in accordance with the terms of this Agreement.
2.6 Swing Line Commitment. Subject to the terms and conditions hereof,
Chase (in such capacity, the "Swing Line Lender") agrees to make a portion of
the Revolving Credit Commitments available to the Borrower during the Revolving
Credit Commitment Period by making swing line loans ("Swing Line Loans") to the
Borrower in an aggregate principal amount not to exceed at any one time
outstanding the Swing Line Commitment then in effect, notwithstanding that the
Swing Line Loans outstanding at any time plus the Swing Line Lender's
outstanding Revolving Loans at that time may exceed the Swing Line Lender's
Revolving Credit Commitment at such time; provided that the Borrower shall not
request, and the Swing Line Lender shall not make, any Swing Line Loan if, after
giving effect to the making of such Swing Line Loan, the Aggregate Revolving
Credit Outstandings of all the
27
Lenders would exceed the Revolving Credit Commitments at such time. During the
Revolving Credit Commitment Period, the Borrower may use the Swing Line
Commitment by borrowing, repaying and reborrowing Swing Line Loans all in
accordance with the terms and conditions hereof. Swing Line Loans may be ABR
Loans only.
2.7 Repayment of Swing Line Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the Swing Line Lender the then unpaid principal amount of the Swing
Line Loans on the Termination Date (or such earlier date on which the Swing Line
Loans become due and payable pursuant to Section 10). The Borrower hereby
further agrees to pay to the Administrative Agent for the account of the Swing
Line Lender interest on the unpaid principal amount of the Swing Line Loans from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in subsection 3.4.
(b) The Swing Line Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to the
Swing Line Lender resulting from the Swing Line Loans made by the Swing Line
Lender from time to time, including the amounts of principal and interest
payable and paid to the Swing Line Lender from time to time under this
Agreement.
(c) The Administrative Agent shall record in the Register (i) the amount
and Borrowing Date of each Swing Line Loan made hereunder, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to the Swing Line Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder in respect of Swing Line Loans.
(d) The entries made in the Register pursuant to subsection 2.7(c) shall,
to the extent permitted by applicable law, and absent manifest error, be prima
facie evidence of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of the Swing Line Lender
to maintain any account pursuant to subsection 2.7(b) or the Administrative
Agent to make recordings in the Register pursuant to subsection 2.7(c), or any
error therein, shall not in any manner affect the obligation of the Borrower to
repay (with applicable interest) the Swing Line Loans made to the Borrower by
the Swing Line Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative Agent
by the Swing Line Lender, which request is communicated to the Borrower, the
Borrower will execute and deliver to the Swing Line Lender a promissory note of
the Borrower, dated the Closing Date, evidencing the Swing Line Loans of the
Swing Line Lender, substantially in the form of Exhibit E with appropriate
insertions as to date and principal amount (a "Swing Line Note"). The Swing Line
Lender is hereby authorized to record the date and amount of each Swing Line
Loan made by the Swing Line Lender and the date and amount of each payment or
prepayment of principal thereof on the schedule annexed to and constituting a
part of the Swing Line Note, and any such recordation shall, to the extent
permitted by applicable law, and absent manifest error, constitute prima facie
evidence of the accuracy of the
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information so recorded, provided that the failure to make any such recordation
(or any error therein) shall not affect the obligation of the Borrower to repay
(with applicable interest) the Swing Line Loans made to the Borrower by the
Swing Line Lender in accordance with the terms of this Agreement.
2.8 Procedure for Borrowing Swing Line Loans. (a) Whenever the Borrower
desires that the Swing Line Lender make Swing Line Loans under subsection 2.6,
it shall give the Swing Line Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swing Line
Lender not later than 11:00 A.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Credit Commitment
Period). Each borrowing under the Swing Line Commitment shall be in a minimum
amount of $100,000 or a whole multiple of $50,000 in excess thereof. Not later
than 2:00 P.M., New York City time, on the Borrowing Date specified in a notice
in respect of Swing Line Loans, the Swing Line Lender shall make available to
the Administrative Agent for the account of the Borrower at the office of the
Administrative Agent specified in subsection 12.2 an amount in immediately
available funds equal to the amount of the Swing Line Loan to be made by the
Swing Line Lender. The Administrative Agent shall make the proceeds of such
Swing Line Loan available to the Borrower not later than 2:00 P.M., New York
City time, on such Borrowing Date by crediting the account of the Borrower,
designated in its borrowing notice, with such proceeds in immediately available
funds.
(b) The Swing Line Lender, at any time in its sole and absolute discretion
may, on behalf of the Borrower (which hereby irrevocably directs the Swing Line
Lender to act on its behalf) request each Lender including the Swing Line
Lender, to make a Revolving Credit Loan in an amount equal to such Lender's
Revolving Credit Commitment Percentage of the amount of the Swing Line Loans
outstanding on the date such notice is given (the "Refunded Swing Line Loans").
Unless any of the events described in Section 10(f) with respect to the Borrower
shall have occurred (in which event the procedures of subsection 2.9(b) shall
apply) each Lender shall make the proceeds of its Revolving Credit Loan
available to the Administrative Agent for the account of the Swing Line Lender
at the office of the Administrative Agent specified in subsection 12.2 prior to
11:00 A.M., New York City time, in funds immediately available on the Business
Day next succeeding the date such notice is given. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the Refunded Swing
Line Loans. Effective on the day such Revolving Credit Loans are made, the
portion of the Swing Line Loans so paid shall no longer be outstanding as Swing
Line Loans, shall no longer be due under the Swing Line Note and shall be due
under the respective Revolving Credit Loans made by the Lenders in accordance
with their respective Revolving Credit Commitment Percentages.
2.9 Swing Line Loan Participations. (a) Notwithstanding anything herein to
the contrary, the Swing Line Lender shall not be obligated to make any Swing
Line Loans if a Default under Section 10(a) or an Event of Default shall have
occurred and be continuing. The Swing Line Lender shall notify the Borrower of
such election not to make any Swing Line Loans unless the Event of Default is of
the type specified in Section 10(f) with respect to the Borrower.
29
(b) If prior to the repayment of any Swing Line Loan or the making of
Revolving Credit Loans pursuant to subsection 2.8(b), one of the events
described in Section 10(f) with respect to the Borrower shall have occurred,
each Lender shall on the date such Revolving Credit Loan was to have been made
pursuant to the notice in subsection 2.8(a) purchase an undivided participating
interest in the Refunded Swing Line Loans in an amount equal to such Lender's
Revolving Credit Commitment Percentage of the aggregate principal amount of
Swing Line Loans then outstanding (the "Swing Line Participation Amount"). On
the date of such purchase, each Lender shall transfer to the Swing Line Lender,
in immediately available funds, such Lender's Swing Line Participation Amount
and upon receipt thereof the Swing Line Lender shall deliver to such Lender a
Swing Line Loan Participation Certificate dated the date of the Swing Line
Lender's receipt of such funds and in an amount equal to such Lender's Swing
Line Participation Amount.
(c) Whenever, at any time after the Swing Line Lender has received from any
Lender such Lender's Swing Line Participation Amount, the Swing Line Lender
receives any payment on account of the Swing Line Loans, the Swing Line Lender
will distribute to such Lender its pro rata share of such payment (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded);
provided, however, that in the event that such payment received by the Swing
Line Lender is required to be returned, such Lender will return to the Swing
Line Lender any portion thereof previously distributed to it by the Swing Line
Lender.
(d) Each Lender's obligation to purchase participating interests pursuant
to subsection 2.9(b) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender or the
Borrower may have against the Swing Line Lender, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by any of the Loan Parties or any other Lender; or (v)
any other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing, provided that, no Lender will be obligated to purchase a
participating interest in any Swing Line Loan made during the continuance of an
Event of Default if and only if, (x) subsequent to the occurrence of such Event
of Default such Lender has notified the Administrative Agent that it will not
purchase participations in Swing Line Loans made during the continuance of such
Event of Default and (y) such Swing Line Loan was made after receipt by the
Administrative Agent of such notice while such Event of Default was continuing.
2.10 L/C Commitment. (a) Subject to the terms and conditions hereof, the
Issuing Bank, in reliance on the agreements of the other Lenders set forth in
subsection 2.13(a), agrees to issue Letters of Credit for the account of the
Borrower on any Business Day during the Revolving Credit Commitment Period in
such form as may be approved from time to time by the Issuing Bank; provided
that the Issuing Bank shall have no obligation to, and shall not, issue any
Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the Available Revolving
Credit Commitments would be less than zero.
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(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (1) a standby letter
of credit issued to support obligations of the Borrower, contingent or
otherwise, in connection with the working capital or business needs of the
Borrower in the ordinary course of business permitted hereunder (a "Standby
Letter of Credit") or (2) a commercial letter of credit issued in respect
of the purchase of goods or services by the Borrower and its Subsidiaries
in the ordinary course of business (a "Commercial Letter of Credit");
(ii) expire no later than the earlier of (A) five Business Days prior
to the Termination Date and (B) one year after the date of issuance
thereof, provided that, subject to clause (A) above, any such Letter of
Credit may, at the request of the Borrower as set forth in the applicable
Application or prior to expiration thereof, be automatically renewed on
each anniversary of the issuance thereof for an additional period of one
year or less unless the Issuing Bank shall have given prior written notice
to the Borrower and the beneficiary of such Letter of Credit (as specified
therein) that such Letter of Credit will not be renewed;
(iii) have a face amount equal to at least $100,000; and
(iv) if it is outstanding on the Termination Date, be cash
collateralized.
(c) Each Letter of Credit shall be subject to the Uniform Customs and, to
the extent not inconsistent therewith, the laws of the State of New York.
(d) The Issuing Bank shall not at any time be obligated to issue any Letter
of Credit hereunder if such issuance would conflict with, or cause the Issuing
Bank or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
2.11 Procedure for Issuance of Letters of Credit. The Borrower may from
time to time request that the Issuing Bank issue a Letter of Credit by
delivering to the Issuing Bank at its address for notices specified herein an
Application therefor, completed to the reasonable satisfaction of the Issuing
Bank, and such other certificates, documents and other papers and information as
the Issuing Bank may reasonably request. The Issuing Bank shall notify the
Lenders promptly of the receipt of any request pursuant to the immediately
preceding sentence. Upon receipt of any Application, the Issuing Bank will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Bank be required to issue any Letter
of Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Bank and
the Borrower. The Issuing Bank shall furnish a copy of such Letter of Credit to
the Administrative Agent and the Borrower promptly following the issuance
thereof.
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2.12 Fees, Commissions and Other Charges. (a) The Borrower shall pay to the
Administrative Agent, for the account of the Issuing Bank, a fronting fee with
respect to each Letter of Credit, computed for the period from the date of
issuance of such Letter of Credit or the immediately preceding L/C Fee Payment
Date, as the case may be, to the next L/C Fee Payment Date to occur thereafter
at a rate per annum equal to 1/5 of 1%, calculated on the basis of a 360-day
year for actual days elapsed, of the average daily amount available to be drawn
under such Letter of Credit during the period for which such fee is calculated.
Such fronting fee shall be payable in arrears on each L/C Fee Payment Date to
occur after the issuance of such Letter of Credit and on the Termination Date
and shall be nonrefundable.
(b) The Borrower shall pay to the Administrative Agent, for the account of
the L/C Participants and the Issuing Bank, a letter of credit commission with
respect to each Letter of Credit, computed for the period from the date of
issuance of such Letter of Credit or the immediately preceding L/C Fee Payment
Date, as the case may be, to the next L/C Fee Payment Date to occur thereafter
at a rate per annum equal to the Applicable Margin for Revolving Credit Loans
that are Eurodollar Loans in effect from time to time (the "Revolving Credit Fee
Percentage"), calculated on the basis of a 360-day year for actual days elapsed,
of the average daily amount available to be drawn under such Letter of Credit
during the period for which such fee is calculated, to be shared ratably among
the L/C Participants and the Issuing Bank in accordance with their respective
Revolving Credit Commitment Percentages. Such commissions shall be payable in
arrears on each L/C Fee Payment Date to occur after the issuance of such Letter
of Credit and on its termination and shall be nonrefundable.
(c) In addition to the foregoing fees and commissions, the Borrower shall
pay or reimburse the Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
(d) The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Issuing Bank and the L/C Participants all fees and commissions
received by the Administrative Agent for their respective accounts pursuant to
this subsection.
2.13 L/C Participations. (a) The Issuing Bank irrevocably agrees to grant
and hereby grants to each L/C Participant, and, in order to induce the Issuing
Bank to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Bank, on the terms and conditions hereinafter stated, for such L/C Participant's
own account and risk an undivided interest equal to such L/C Participant's
Revolving Credit Commitment Percentage in the Issuing Bank's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Bank thereunder, provided that, no Lender will be obligated
to purchase a participating interest in any Letter of Credit made during the
continuance of an Event of Default if and only if, (x) subsequent to the
occurrence of such Event of Default such Lender has notified the Administrative
Agent that it will not purchase participations in any Letter of Credit made
during the continuance of such Event of Default and (y) such Letter of Credit
was made after receipt by the Administrative Agent of such Notice while such
Event of Default was continuing, except for, any automatic renewals of
outstanding
32
Letters of Credit. Each L/C Participant unconditionally and irrevocably agrees
with the Issuing Bank that, if a draft is paid under any Letter of Credit for
which the Issuing Bank is not reimbursed in full by the Borrower in accordance
with the terms of this Agreement, including by a Revolving Credit Loan by such
Lender under subsection 2.14(c), such L/C Participant shall pay to the Issuing
Bank upon demand at the Issuing Bank's address for notices specified herein an
amount equal to such L/C Participant's Revolving Credit Commitment Percentage of
the amount of such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the Issuing
Bank pursuant to subsection 2.13(a) in respect of any unreimbursed portion of
any payment made by the Issuing Bank under any Letter of Credit is paid to the
Issuing Bank within three Business Days after the date such payment is due, such
L/C Participant shall pay to the Issuing Bank on demand an amount equal to the
product of (i) such amount, times (ii) the daily average Federal Funds Effective
Rate, during the period from and including the date such payment is required to
the date on which such payment is immediately available to the Issuing Bank,
times (iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to subsection 2.13(a) is not
in fact made available to the Issuing Bank by such L/C Participant within three
Business Days after the date such payment is due, the Issuing Bank shall be
entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to ABR Loans hereunder. A certificate of the Issuing Bank submitted to any L/C
Participant with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has made payment under any
Letter of Credit and has received from any L/C Participant its pro rata share of
such payment in accordance with subsection 2.13(a), the Issuing Bank receives
any payment related to such Letter of Credit (whether directly from the Borrower
or otherwise, including proceeds of collateral applied thereto by the Issuing
Bank), or any payment of interest on account thereof, the Issuing Bank will
distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing Bank
shall be required to be returned by the Issuing Bank, such L/C Participant shall
return to the Issuing Bank the portion thereof previously distributed by the
Issuing Bank to it.
2.14 Reimbursement Obligation of the Borrower. (a) The Borrower agrees to
reimburse the Issuing Bank on each date on which the Issuing Bank notifies the
Borrower of the date and amount of a draft presented under any Letter of Credit
and paid by the Issuing Bank for the amount of (i) such draft so paid and (ii)
any taxes, fees, charges or other costs or expenses incurred by the Issuing Bank
in connection with such payment. Each such payment shall be made to the Issuing
Bank at its address for notices specified herein in lawful money of the United
States of America and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining unpaid by
the Borrower under this subsection 2.14 from the date the draft presented under
the affected
33
Letter of Credit is paid until payment in full, at the rate which would be
payable on any outstanding Revolving Credit Loans that are ABR Loans which were
then overdue.
(c) Each drawing under any Letter of Credit shall constitute a request by
the Borrower to the Administrative Agent for a borrowing pursuant to subsection
2.2 of ABR Loans in the amount of such drawing (but without any requirement for
compliance with the prior notice or minimum borrowing amount provisions of
subsection 2.2 or the conditions set forth in subsection 5.2). The Borrowing
Date with respect to such borrowing shall be the date of such drawing and each
Lender shall make its Revolving Credit Commitment Percentage of such borrowing
available to the Administrative Agent on such date to be used to repay the
Reimbursement Obligation created by such drawing. The application of such Loans
shall satisfy the Borrower's obligations under subsection 2.14(a) in the amount
thereof.
(d) On the Termination Date, any outstanding Letters of Credit shall be
cash collateralized in amounts satisfactory to the Issuing Bank.
2.15 Obligations Absolute. (a) The Borrower's obligations under this
Section 2 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank, any Lender or any
beneficiary of a Letter of Credit (other than the defense of payment to the
Issuing Bank or a defense based on the gross negligence or willful misconduct of
the Issuing Bank).
(b) The Borrower also agrees with the Issuing Bank and the Lenders that,
subject to subsection 2.15(d), neither the Issuing Bank nor any Lender shall be
responsible for, and the Borrower's Reimbursement Obligations under subsection
2.14(a) shall not be affected by, among other things, (i) the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or (ii) any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
(iii) any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee.
(c) The Issuing Bank and the Lenders shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except in the case of the Issuing Bank for errors, omissions, interruptions or
delays caused by the Issuing Bank's gross negligence or willful misconduct.
(d) The Borrower agrees that any action taken or omitted by the Issuing
Bank under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs, and
to the extent not inconsistent therewith, the Uniform Commercial Code of the
State of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Bank or any Lender to the Borrower.
34
2.16 Letter of Credit Payments. If any draft shall be presented for payment
under any Letter of Credit, the Issuing Bank shall, within a reasonable time
after its receipt thereof, examine all documents purporting to represent a
demand for payment under such Letter of Credit to ascertain that the same appear
on their face to be in conformity with the terms and conditions of such Letter
of Credit. The Issuing Bank shall also promptly notify the Borrower of the date
and amount thereof. The responsibility of the Issuing Bank to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
2.17 Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 2, the provisions of this Section 2 shall apply.
2.18 Quarterly Reports. The Issuing Bank shall furnish to each Lender a
quarterly report with respect to Letters of Credit issued or outstanding during
such quarter and any drawings thereunder.
SECTION 3. GENERAL PROVISIONS APPLICABLE TO EXTENSIONS OF CREDIT
3.1 Optional and Mandatory Prepayments. (a) The Borrower may at any time
and from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice to the Administrative Agent prior to 11:00
A.M., New York City time, one Business Day (or, in the case of Swing Line Loans,
by irrevocable notice to the Administrative Agent by 11:00 A.M., New York City
time, on the same Business Day) in the case of ABR Loans, and three Business
Days' irrevocable notice to the Administrative Agent in the case of the
Eurodollar Loans, prior to such prepayment, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Administrative Agent shall notify each
affected Lender thereof on the date of receipt of such notice. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with any amounts payable pursuant to
subsection 3.11. Partial prepayments and accompanying reductions in the
Revolving Credit Commitments (except (x) in the case of Swing Line Loans which
shall be in accordance with subsection 2.7 and (y) in the case of Revolving
Credit Loans under subsection 2.14(c)) shall be in an aggregate principal amount
of at least $500,000.
(b) Unless the Required Lenders otherwise agree, the Revolving Credit
Commitments shall be permanently reduced with (i) 100% of the Net Proceeds of
any Equity Offering by Holdings or any incurrence of Indebtedness by any Loan
Party on or after the Closing Date (other than any Indebtedness permitted
pursuant to subsection 7.2), provided however that, in the case of a Public
Equity Offering by Holdings, the Net Proceeds may be used at the discretion of
Holdings and the Borrower, including without limitation to (u) redeem,
repurchase, defease or prepay or retire the PIK Preferred or other preferred
stock of
35
Holdings or the Senior Subordinated Notes or to permanently reduce the Revolving
Credit Commitments, (v) make investments in foreign subsidiaries as permitted by
subsection 7.9(d), (w) pay dividends as permitted by subsection 7.7(d), (x) make
Permitted Acquisitions as permitted by subsection 7.9(g), (y) make other
Investments as permitted by subsection 7.9(j)(ii) and (z) make capital
expenditures to the extent excluded from the definition of Capital Expenditures
by clause (vi) thereof; provided that Net Proceeds of any Equity Offering shall
not be required to be applied to permanently reduce Revolving Credit Commitments
pursuant to this subsection until such time as the aggregate amount of such Net
Proceeds not yet applied exceeds $250,000 and (ii) 50% of the Net Proceeds of
any Asset Sale by the Borrower or any of its Subsidiaries pursuant to
subsections 7.6(a) (except to the extent that the assets disposed of in such
Asset Sale are replaced with Replacement Assets within 360 days following the
date of such Asset Sale) and 7.6(b), in each case, to the extent that such Net
Proceeds realized from any such Asset Sale (or series of related Asset Sales) in
any fiscal year are greater than $1,000,000; provided Net Proceeds of any Asset
Sale shall not be required to be applied to permanently reduce Revolving Credit
Commitments pursuant to this subsection until such time as the aggregate amount
of such Net Proceeds above $1,000,000 not yet applied exceeds $250,000. Each
such reduction shall be made on or before the date which is ten Business Days
after the date any Loan Party receives such Net Proceeds.
(c) If, after giving effect to any permanent reduction in the Revolving
Credit Commitments pursuant to subsection 2.4 or 3.1(b), the aggregate principal
amount of the Revolving Credit Loans then outstanding, when added to the then
outstanding L/C Obligations and Swing Line Loans, would exceed the Revolving
Credit Commitments as so reduced, then the Revolving Credit Loans and Swing Line
Loans shall be prepaid and the Letters of Credit shall be cash collateralized or
replaced to the extent of such excess. Amounts to be applied pursuant to this
subsection 3.1(c) to the prepayment of Revolving Credit Loans and/or Swing Line
Loans shall be applied, as applicable, first to reduce outstanding Revolving
Credit Loans and/or Swing Line Loans which are ABR Loans. Any amounts remaining
after each such application shall, at the option of the Borrower, be applied to
prepay Revolving Credit Loans which are Eurodollar Loans immediately and/or
shall be deposited in the Prepayment Account (as defined below). The
Administrative Agent shall apply any cash deposited in the Prepayment Account
allocable to Revolving Credit Loans to prepay Revolving Credit Loans which are
Eurodollar Loans, in each case on the last day of the respective Interest
Periods therefor (or, at the direction of the Borrower, on any earlier date)
until all outstanding Revolving Credit Loans which are Eurodollar Loans have
been prepaid or until all cash on deposit in the Prepayment Account (including,
without limitation, interest earned thereon) with respect to such Loans has been
exhausted. For purposes of this Agreement, the term "Prepayment Account" shall
mean an account established by the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control, including the
right of withdrawal for application in accordance with this subsection 3.1(c).
The Administrative Agent will, at the request of the Borrower, invest amounts on
deposit in the Prepayment Account in Cash Equivalents that mature prior to the
last day of the applicable Interest Periods of the Eurodollar Loans to be
prepaid, provided that (i) the Administrative Agent shall not be required to
make any investment that, in its sole judgment, would require or cause the
Administrative Agent to be in, or would result in any, violation of any
36
Requirement of Law and (ii) the Administrative Agent shall have no obligation to
invest amounts on deposit in the Prepayment Account if a Default or Event of
Default shall have occurred and be continuing. The Borrower shall indemnify the
Administrative Agent for any losses relating to the investments so that the
amount available to prepay Eurodollar Loans on the last day of the applicable
Interest Periods therefor is not less than the amount that would have been
available had no investments been made. Other than any interest earned on such
investments, the Prepayment Account shall not bear interest. Interest or
profits, if any, on such investments shall be deposited and reinvested and
disbursed as described above. If the maturity of the Loans has been accelerated
pursuant to Section 10, the Administrative Agent shall first apply all amounts
on deposit in the Prepayment Account to prepay any outstanding Revolving Credit
Loans and/or Swing Line Loans and, second, to cash collateralize any outstanding
Letters of Credit. Until funds in the Prepayment Account are applied to the
prepayment of any Loans, such Loans shall continue to be outstanding and
interest shall continue to accrue thereon. The Borrower hereby grants to the
Administrative Agent, for its benefit and the benefit of the Lenders, a security
interest in the Prepayment Account to secure the Obligations.
3.2 Conversion and Continuation Options. (a) The Borrower may elect from
time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Day's prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto (or on any other
day if on the date of such conversion the Borrower pays to the Administrative
Agent for the account of the applicable Lenders accrued interest on such
Eurodollar Loans to the date of such conversion together with all amounts
payable under subsection 3.11). The Borrower may elect from time to time to
convert ABR Loans to Eurodollar Loans by giving the Administrative Agent at
least three Business Days' prior irrevocable notice of such election. Any such
notice of conversion to Eurodollar Loans shall specify the length of the initial
Interest Period or Interest Periods therefor. Upon receipt of any such notice
the Administrative Agent shall promptly notify each affected Lender thereof. All
or any part of outstanding Eurodollar Loans and ABR Loans may be converted as
provided herein, provided that (i) no Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined that such a
conversion is not appropriate and (ii) no Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the Termination Date
(in the case of conversions of Revolving Credit Loans).
(b) Any Eurodollar Loans may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in subsection 1.1, of the length of the
next Interest Period to be applicable to such Loans, provided that no Eurodollar
Loan may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined that such a continuation is not appropriate or (ii) after the date
that is one month prior to the Termination Date (in the case of continuations of
Revolving Credit Loans) and provided, further, that if the Borrower shall fail
to give such notice or if such
37
continuation is not permitted such Loans shall be automatically converted to ABR
Loans on the last day of such then expiring Interest Period.
3.3 Minimum Amounts and Maximum Number of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or
a whole multiple of $500,000 in excess thereof. In no event shall there be more
than five Eurodollar Tranches outstanding at any time.
3.4 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR
plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan, (ii) any
interest payable thereon or (iii) any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise, but taking into account any applicable grace period
under Section 10(a)), such overdue amount shall bear interest at a rate per
annum which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of overdue interest, commitment fees or
other amounts due and payable hereunder, the rate described in subsection 3.4(b)
plus 2%, in each case from the date of such non-payment until such amount is
paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date and
the Termination Date, provided that interest accruing pursuant to subsection
3.4(c) shall be payable from time to time on demand.
3.5 Computation of Interest and Fees. (a) Commitment fees and interest
shall be calculated on the basis of a 360-day year for the actual days elapsed,
except that whenever interest is calculated on the basis of the Prime Rate,
interest shall be calculated on the basis of a 365- (or 366-, as the case may
be) day year for the actual days elapsed. The Administrative Agent shall as soon
as practicable notify the Borrower and the affected Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirement shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall, as soon as practicable,
notify the Borrower and the affected Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the
38
request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Administrative Agent in determining any interest rate
pursuant to subsection 3.4(a).
3.6 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the affected Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be converted to or continued as ABR Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the last day of such Interest Period, to
ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert ABR Loans to Eurodollar Loans.
3.7 Pro Rata Treatment and Payments. (a) All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 12:00 Noon, New York City time, on the
due date thereof to the Administrative Agent, for the account of the Lenders at
the Administrative Agent's office specified in subsection 12.2, in Dollars and
in immediately available funds. Payments received by the Administrative Agent
after such time shall be deemed to have been received on the next Business Day.
The Administrative Agent shall distribute such payments to the Lenders entitled
to receive the same promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day (and, with respect to payments of principal, interest
shall be payable thereon at the then applicable rate during such extension)
unless the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day. If, and to the extent that, on any Business Day the
Administrative Agent receives any payment hereunder or under
39
the other Loan Documents (including any such payment representing a realization
upon the Collateral), and such payment is not sufficient to pay in full all
principal, interest and fees then due and payable hereunder, the Administrative
Agent shall apply such payment ratably to all such amounts then due and payable.
(b) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its portion of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this subsection shall be conclusive in the absence of
manifest error. If such Lender's portion of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to the Loan
resulting from such borrowing hereunder, on demand, from the Borrower, without
prejudice to any right or claim the Borrower may have against such Lender.
(c) Each borrowing by the Borrower of Revolving Credit Loans shall be made
ratably from Lenders, in accordance with their Revolving Credit Commitment
Percentages. Any reduction of the Revolving Credit Commitments shall be made
ratably among the Lenders, in accordance with their respective Revolving Credit
Commitment Percentages.
3.8 Illegality. Notwithstanding any other provision herein, if the adoption
of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, then such Lender shall give
notice of such illegality to the Administrative Agent and the Borrower. Upon
such adoption or change, (a) the commitment of such Lender hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans to
Eurodollar Loans shall forthwith be suspended until such time as it shall no
longer be unlawful for such Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. Any Lender giving notice
pursuant to the first sentence of this subsection shall notify the
Administrative Agent and the Borrower at such time as the circumstances giving
rise to the initial notice shall cease to exist.
3.9 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any
40
central bank or other Governmental Authority, in each case made subsequent to
the date hereof or, in the case of a Transferee, to the same extent as that of
the transferor prior to the transfer or subsequent to the date of transfer:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes,
changes in the rate of tax on the overall net income of such Lender and
taxes imposed as a result of any future, present or former connection
between such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof
or therein (other than any such connection arising solely from such Lender
having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note));
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall, within 20 Business Days
after receipt by the Borrower of such Lender's written demand (with a copy to
the Administrative Agent), pay such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduced amount
receivable. If any Lender has demanded compensation under this subsection 3.9(a)
with respect to any Eurodollar Loan, the Borrower shall have the option to
convert immediately such Eurodollar Loan into an ABR Loan until the
circumstances giving rise to such demand for compensation no longer apply;
provided, that (i) no such conversion shall affect the Borrower's obligation to
pay compensation as provided herein which is due with respect to the period
prior to such conversion and (ii) on the date of such conversion the Borrower
shall pay to the Administrative Agent for the benefit of the relevant Lender
accrued interest on such Eurodollar Loan to the date of conversion.
(b) If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority, in each case made
subsequent to the date hereof, shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder or under, or in respect of, any Letter of Credit to a
41
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
material to such Lender, or such corporation, then from time to time, within 10
Business Days after receipt by the Borrower of such Lender's written demand
therefor (with a copy to the Administrative Agent), the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such corporation for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts pursuant
to subsection 3.9(a) or (b), it shall promptly give written notice to the
Borrower (with a copy to the Administrative Agent) specifying in reasonable
detail the event by reason of which it has become so entitled and the method of
calculating the amounts to which it claims to be entitled. A certificate as to
any additional amounts payable pursuant to this subsection submitted by such
Lender to the Borrower (with a copy to the Administrative Agent) shall be
conclusive in the absence of manifest error. The Borrower shall not be obligated
to compensate any Lender pursuant to this subsection 3.9 for amounts accruing
prior to the date which is 90 days before such Lender notifies the Borrower of
such event. The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.10 Taxes. (a) All payments made by the Borrower under this Agreement and
any Notes shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes, franchise taxes and capital taxes imposed
on the Administrative Agent or any Lender (or Transferee) as a result of any
future, present or former connection between the Administrative Agent or such
Lender (or Transferee) and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Administrative
Agent or such Lender (or Transferee) having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any Note
or any other Loan Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Administrative Agent or
any Lender (or Transferee) hereunder or under any Note, the amounts so payable
to the Administrative Agent or such Lender (or Transferee) shall be increased
("increased amounts") by the amounts necessary so that after making all required
deductions and withholdings (including, without limitation, the payment of all
Non-Excluded Taxes) the Administrative Agent or such Lender (or Transferee)
receives the amounts equal to the interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement. Whenever
any Non-Excluded Taxes are payable by the Borrower, the Borrower shall promptly
send to the Administrative Agent for its own account or for the account of such
Lender (or Transferee), as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof or other
evidence of remittance of Non-Excluded Taxes reasonably acceptable to the
Administrative Agent. If the Borrower fails to pay any Non-Excluded Taxes when
due to the appropriate taxing authority
42
or fails to remit to the Administrative Agent the required receipts or other
reasonably acceptable evidence, the Borrower shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest or penalties that may
become payable by the Administrative Agent or any Lender as a result of any such
failure. The Borrower will indemnify each Lender (or Transferee) and the
Administrative Agent for the amount of Non-Excluded Taxes paid by such Lender
(or Transferee) or the Administrative Agent, as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. The agreements in this subsection 3.10 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) Each Lender (and each Transferee) that is not incorporated or organized
under the laws of the United States of America or a state thereof shall:
(i) in the case of a Lender or a Transferee that is a "bank" under
Section 881(c)(3)(A) of the Code:
(A) on or before the date it becomes a party to this Agreement
(or, in the case of a Loan Participant, on or before the date such
Loan Participant becomes a Loan Participant hereunder) and on or
before the date, if any, such Lender (or Transferee) changes its
applicable lending office by designating a different lending office (a
"New Lending Office"), deliver to the Borrower and the Administrative
Agent (y) two properly completed and duly executed copies of United
States Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, and (z) an Internal Revenue
Service Form W-8 or W-9, or successor applicable form, as the case may
be;
(B) deliver to the Borrower and the Administrative Agent two
further properly completed and duly executed copies of any such form
or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of
any event requiring a change in the most recent form previously
delivered by it to the Borrower or upon the request of the Borrower or
the Administrative Agent; and
(C) obtain such extensions of time for filing and completing such
forms or certifications as may reasonably be requested by the
Borrower;
(ii) in the case of a Lender or a Transferee that is not a "bank"
under Section 881(c)(3)(A) of the Code:
(A) on or before the date it becomes a party to this Agreement
(or, in the case of a Loan Participant, on or the date such Loan
Participant becomes a Loan Participant hereunder) deliver to the
Borrower and the Administrative Agent (I) a statement under penalties
of perjury that such Lender (w) is not a "bank" under Section
881(c)(3)(A) of the Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated
as a bank for purposes of any tax, securities law or other filing or
submission
43
made to any Governmental Authority, any application made to a rating
agency or qualification for any exemption from tax, securities law or
other legal requirements, (x) is not a 10-percent shareholder within
the meaning of Section 881(c)(3)(B) of the Code, (y) is not a
controlled foreign corporation receiving interest from a related
person within the meaning of Section 881(c)(3)(C) of the Code and (z)
is not a "conduit entity" within the meaning of U.S. Treasury
Regulations Section 1.881-3 and (II) a properly completed and duly
executed Internal Revenue Service Form W-8 or applicable successor
form;
(B) deliver to the Borrower and the Administrative Agent two
further properly completed and duly executed copies of said Form W-8,
or any successor applicable form on or before the date that any such
Form W-8 expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form previously delivered
by it to the Borrower or upon the request of the Borrower; and
(C) obtain such extensions of time for filing and completing such
forms or certifications as may be reasonably requested by the Borrower
or the Administrative Agent;
unless in any such case any change in law or regulation has occurred subsequent
to the date such Lender (or Transferee) became a party to this Agreement (or in
the case of a Loan Participant, the date such Loan Participant became a Loan
Participant hereunder) which renders all such forms inapplicable or which would
prevent such Lender from properly completing and executing any such form with
respect to it and such Lender so advises the Borrower and the Administrative
Agent in writing no later than 15 calendar days before any payment hereunder or
under any Note is due. Each such Lender (and each such Transferee) shall certify
(i) in the case of a Form 1001 or 4224, that it is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes and (ii) in the case of a Form W-8 or W-9 delivered
pursuant to subsection 3.10(b)(i), that it is entitled to an exemption from
United States backup withholding tax.
(c) The Borrower shall not be required to indemnify any Lender (or
Transferee), or to pay any increased amounts to any Lender (or Transferee) in
respect of any Non-Excluded Tax, pursuant to this subsection 3.10 to the extent
that (i) any obligation to withhold or deduct amounts with respect to tax
existed on the date such Lender (or Transferee) became a party to this Agreement
(or, in the case of a Transferee that is a Loan Participant, on the date such
Loan Participant became a Loan Participant hereunder) or, with respect to
payments to a New Lending Office, the date such Lender (or Transferee)
designated such New Lending Office with respect to a Loan; provided, however,
that this clause (i) shall not apply to any Transferee or New Lending Office
that becomes a Transferee or New Lending Office as a result of an assignment,
participation, transfer or designation made at the written request of the
Borrower, or (ii) any Lender (or Transferee) fails to comply in full with the
provisions of subsection 3.10(b) hereof.
44
(d) If a Lender (or Transferee) or the Administrative Agent shall become
aware that it is entitled to claim a refund from a Governmental Authority in
respect of Non-Excluded Taxes as to which it has been indemnified by the
Borrower, or with respect to which the Borrower has paid increased amounts,
pursuant to this subsection 3.10, it shall promptly notify the Borrower of the
availability of such refund claim and shall make the appropriate claim to such
Governmental Authority for such refund. If a Lender (or Transferee) or the
Administrative Agent receives a refund (including pursuant to a claim for refund
made pursuant to the preceding sentence) in respect of any Non-Excluded Tax as
to which it has been indemnified by the Borrower, or with respect to which the
Borrower has paid increased amounts, pursuant to this subsection 3.10, it shall
within 30 days from the date of such receipt pay over such refund to the
Borrower, net of all out-of-pocket third-party expenses of such Lender (or
Transferee) or the Administrative Agent.
3.11 Indemnity. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a direct consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans or converting any Eurodollar Loans to ABR Loans
on a day which is not the last day of an Interest Period with respect thereto.
Such indemnification may include an amount equal to the excess, if any, of (i)
the amount of interest which would have accrued on the amount so prepaid or
converted, or not so borrowed, converted or continued, for the period from the
date of such prepayment or conversion or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding the Applicable Margin) over (ii) the
amount of interest (as reasonably determined by such Lender) which would have
accrued to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
3.12 Change of Lending Office; Filing of Certificates or Documents. Each
Lender agrees that if it makes any demand for payment, or becomes entitled to
any increased amounts, under subsection 3.9 or 3.10 or if any adoption or change
of the type described in subsection 3.8 shall occur with respect to it, it will
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not be disadvantageous
to it, as determined in its sole discretion) to designate a different lending
office or file any certificate or document reasonably requested in writing by
the Borrower if such action would reduce or obviate the need for the Borrower to
make payments under subsection 3.9 or 3.10 or would eliminate or reduce the
effect of any adoption or change described in subsection 3.8.
45
3.13 Replacement Lenders. In the event that (a) the Borrower becomes
obligated to pay additional amounts or increased amounts to, or receives notice
from, any Lender pursuant to subsection 3.8, 3.9 or 3.10 and such Lender has not
theretofore removed or cured the conditions which result in the obligation to
pay such additional amounts or increased amounts, or (b) any Lender has
defaulted in its obligation to make Loans hereunder, then the Borrower may, on
ten Business Days' prior written notice to the Administrative Agent and such
Lender, cause such Lender to (and such Lender shall) assign pursuant to
subsection 12.6(c) all of its rights and obligations under this Agreement to
another bank or financial institution which is willing to become a Lender and is
acceptable (which acceptance shall not be unreasonably withheld) to the
Administrative Agent, for a purchase price equal to the outstanding principal
amount of the Loans payable to such Lender plus any accrued but unpaid interest
on such Loans, any accrued but unpaid commitment fees in respect of such
Lender's Commitment and any other amounts payable to such Lender under this
Agreement (including, without limitation, amounts payable under subsections 3.9,
3.10 and 3.11).
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, Holdings and the Borrower hereby represent and warrant to the
Administrative Agent and each Lender that:
4.1 Financial Condition. (a) Except as set forth on Schedule 4.1, the
combined audited balance sheet of the Companies as at December 31, 1995 and the
related consolidated statements of income and cash flows for the fiscal year
ended on such date, audited by Deloitte & Touche LLP, a copy of which has
heretofore been furnished to each Lender, present fairly in accordance with GAAP
the combined financial condition of the Companies as at such date, and the
combined results of their operations and their combined cash flows for the
fiscal year then ended. Except as set forth on Schedule 4.1, all such financial
statements have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such accountants and as
disclosed therein). None of the Companies had at the date of the balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any material interest rate or foreign
currency swap or exchange transaction, which is not reflected in the foregoing
statements or in the notes thereto or expressly permitted to be incurred
hereunder.
(b) Except as set forth on Schedule 4.1, the unaudited combined balance
sheet of the Companies, as at September 30, 1996 and the related consolidated
statement of income, certified by a Responsible Officer of the Borrower, a copy
of which has heretofore been furnished to each Lender, presents fairly in
accordance with GAAP the combined financial condition of the Companies as at
such date and the combined results of their operations for the fiscal quarter
then ended. Except as set forth on Schedule 4.1, such balance sheet, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP (except as approved by such Responsible Officer and disclosed therein).
None of the
46
Companies or ARP had at the date of such balance sheet, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency exchange transaction, which is not reflected
in such balance sheet or in the notes thereto or in the Prospectus (as defined
in subsection 4.19).
(c) The unaudited consolidated pro forma balance sheet of the Borrower and
its consolidated Subsidiaries, as of September 30, 1996, certified by a
Responsible Officer of the Borrower (the "Pro Forma Balance Sheet"), copies of
which have been furnished to each Lender, is the unaudited balance sheet of the
Borrower and its consolidated Subsidiaries, adjusted to give effect (as if such
events had occurred on such date) to (i) the incurrence of the Loans and the
issuance of the Letters of Credit to be incurred or issued, as the case may be,
on the Closing Date and (ii) the Recapitalization, and the payment of all
amounts the Borrower and its consolidated Subsidiaries expect to pay in
connection with the Recapitalization. The Pro Forma Balance Sheet, together with
the notes thereto, were prepared based on good faith assumptions in accordance
with GAAP and are based on the best information available to the Borrower, as of
the date of delivery thereof, and reflect on a pro forma basis the financial
position of the Borrower and its consolidated Subsidiaries, as of September 30,
1996, as adjusted, as described above, assuming that the events specified in the
preceding sentence had actually occurred as of September 30, 1996.
4.2 No Change. (a) Since December 31, 1995, except as set forth in Schedule
4.6, there has been no development, event or circumstance which has had or could
reasonably be expected to have a Material Adverse Effect, and (b) during the
period from December 31, 1995, to and including the date of this Agreement,
except in connection with the Transactions or the Recapitalization, or as
otherwise set forth in Schedule 4.2, no dividends or other distributions have
been declared, paid or made upon the Capital Stock of Holdings or any of the
Companies or any of their consolidated Subsidiaries nor has any of the Capital
Stock of Holdings or any of the Companies or any of their consolidated
Subsidiaries been redeemed, retired, purchased or otherwise acquired for value
by any of the Companies or any of their Subsidiaries.
4.3 Existence; Compliance with Law. Except as set forth in Schedule 4.3
each Loan Party (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the power and
authority to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified or licensed to do business as a foreign entity and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except where
the failure to be so qualified and/or in good standing, in the aggregate could
not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4 Power; Authorization; Enforceable Obligations. Each Loan Party has the
power and authority, and the legal right, to make, deliver and perform the Loan
Documents to
47
which it is a party and, in the case of the Borrower, to borrow and obtain the
Extensions of Credit hereunder. Each Loan Party has taken all necessary action
to authorize the Extensions of Credit on the terms and conditions of this
Agreement and any Notes and to authorize the execution, delivery and performance
by it of the Loan Documents to which it is a party. No consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required to be obtained or made by any Loan
Party in connection with the Recapitalization, the Extensions of Credit
hereunder, the execution, delivery or performance by each applicable Loan Party
or the validity or enforceability with respect to or against any Loan Party of
the Loan Documents to which it is a party or with the continuing operations of
the Borrower and its Subsidiaries other than (i) consents, authorizations and
filings in connection with the Recapitalization (x) which are required to be
obtained or made and are in full force and effect (each of which are listed on
Schedule 4.4) or (y) which are not required to be obtained or made prior to
consummation of the Recapitalization and are listed on Schedule 4.4 or (z)
which, if not obtained or made, could not reasonably be expected to have a
Material Adverse Effect, (ii) the filing of Uniform Commercial Code financing
statements and filings with the United States Patent and Trademark Office and
the United States Copyright Office to perfect the security interests of the
Administrative Agent, for the benefit of the Lenders, in the Collateral that can
be perfected by such filings, (iii) recordation of the Mortgages and (iv)
consents, authorizations and filings in connection with enforcement of the Loan
Documents. This Agreement has been, and each other Loan Document will be, duly
executed and delivered on behalf of each Loan Party that is a party hereto or
thereto. This Agreement constitutes, and each other Loan Document when executed
and delivered will constitute, a legal, valid and binding obligation of each
Loan Party that is a party hereto or thereto enforceable against such Loan Party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents, the Extensions of Credit hereunder and the use of the proceeds
thereof by each applicable Loan Party will not violate any Requirement of Law or
Contractual Obligation of any Loan Party which could reasonably be expected to
have a Material Adverse Effect and will not result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation other
than as contemplated in or permitted by the Loan Documents.
4.6 No Material Litigation. Except as set forth in Schedule 4.6, no
litigation, investigation (of which the Borrower or Holdings has been made
aware) or proceeding of or before any arbitrator or Governmental Authority is
pending or, to the knowledge of the Borrower or Holdings, threatened by or
against any Loan Party or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby or (b) which has a reasonable likelihood of an
adverse determination, and if adversely determined, could reasonably be expected
to have a Material Adverse Effect.
48
4.7 No Default. No Loan Party is in default under or with respect to any of
its Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
4.8 Ownership of Property; Liens. To the best of each Loan Party's
knowledge, after giving effect to the Recapitalization, each Loan Party has or
will have good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property except for such matters as do not
materially adversely affect the use of such property in the conduct of the
business as currently conducted, and own, or hold a valid leasehold interest in,
all its other material property, and none of such property is subject to any
Lien except as permitted by subsection 7.3.
4.9 Intellectual Property. Schedule 4.9 sets forth as of the Closing Date,
a true and complete list of all material trademarks (registered or
unregistered), trade names, service marks and copyrights and applications
therefor owned, used or filed by or licensed to the Borrower and its
Subsidiaries in the United States (after giving effect to the Recapitalization)
and, with respect to registered trademarks (if any), contains a list of all
registration and application numbers. Except as disclosed on Schedule 4.9, the
Borrower or a Subsidiary (after giving effect to the Recapitalization) owns or
has the right to use, without payment to any other party, the trademarks
(registered or unregistered), trade names, service marks, copyrights and
applications therefor referred to in such Schedule. Except as set forth on
Schedule 4.9, to the best knowledge of the Borrower, no claims are pending by
any Person with respect to the ownership, validity, enforceability or the
Borrower's or any Subsidiary's use of any such trademarks (registered or
unregistered), trade names, service marks, copyrights, or applications therefor
or challenging or questioning the validity or effectiveness of any of the
foregoing, in the United States.
4.10 No Burdensome Restrictions. Except as set forth on Schedule 4.10 or as
disclosed in the Prospectus, no Requirement of Law or Contractual Obligation
applicable to any Loan Party could reasonably be expected to have a Material
Adverse Effect.
4.11 Taxes. Except as set forth in Schedule 4.11 Holdings and the Borrower
and its Subsidiaries have filed or caused to be filed all tax returns which, to
the knowledge of Holdings or the Borrower and its Subsidiaries, are required to
be filed and have paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property in respect of such
periods and all other material taxes imposed on it or any of its property by any
Governmental Authority (other than any taxes the amount or validity of which are
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
applicable Loan Party and other than any taxes which in the aggregate would not
have a Material Adverse Effect), in respect of such periods.
4.12 Federal Regulations. No Letter of Credit and no part of the proceeds
of any Loans will be used for "buying" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation G or
Regulation U as now and from time to time hereafter in effect. If requested by
any Lender or the Administrative Agent, the
49
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form G-1 or FR
Form U-1 referred to in Regulation G or Regulation U, as the case may be.
4.13 ERISA. Except as set forth in Schedule 4.13, neither a Reportable
Event nor an "accumulated funding deficiency" (within the meaning of Section 412
of the Code or Section 302 of ERISA) has occurred during the five-year period
prior to the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied in all material respects with
the applicable provisions of ERISA and the Code, except where, in connection
with any such event or noncompliance, the liability which would be likely to
result could not be reasonably expected to have a Material Adverse Effect. No
termination of a Single Employer Plan has occurred except where, in connection
with any such termination, the liability which would be likely to result could
not be reasonably expected to have a Material Adverse Effect, and no Lien which
remains unsatisfied in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount in excess of $1,000,000. Neither the Borrower
nor any Commonly Controlled Entity has had a complete or partial withdrawal from
any Multiemployer Plan; neither the Borrower nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made; and no such Multiemployer Plan is in
Reorganization or Insolvent, except where, in any such case, the liability which
would be likely to result could not be reasonably expected to have a Material
Adverse Effect.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not subject to regulation under any Federal or State
statute or regulation (other than Regulation X) which limits its ability to
incur Indebtedness as contemplated herein.
4.15 Subsidiaries. As of the Closing Date and after giving effect to the
Recapitalization, Holdings has no direct Subsidiaries other than the Borrower,
and the Borrower has no Subsidiaries other than ARP.
4.16 Purpose of Loans. The proceeds of the Revolving Credit Loans and/or
Swing Line Loans shall be used to provide for the working capital requirements
of the Borrower and its Subsidiaries on or after the Closing Date and for
general corporate purposes, which include: (i) up to $35,000,000 for Permitted
Acquisitions in the aggregate subject to reduction as provided below; (ii) up to
$20,000,000 ("Recapitalization Loans") to enable the Borrower on the Closing
Date to repay outstanding Term Loans under the Existing Credit Agreement if the
net proceeds of the IPO and available cash of the Borrower are insufficient for
such purpose; (iii) amounts used to make Repurchase Payments and (iv) the
payment of a
50
tax adjustment relating to the Stock Purchase Agreement. The availability for
Permitted Acquisitions will be reduced by the amount of outstanding
Recapitalization Loans and any Repurchase Payments that are Loans (assuming that
Recapitalization Loans and Loans used to make Repurchase Payments are the last
Loans repaid). The proceeds of the Letters of Credit shall be used to provide
for the working capital requirements of the Borrower and its Subsidiaries and
for any general corporate purpose.
4.17 Environmental Matters. Except as set forth in Schedule 4.17 and except
to the extent that the inaccuracy of any of the following (or the circumstances
giving rise to such inaccuracy), individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain any
Hazardous Materials in amounts or concentrations which (i) constitute a
violation of, or (ii) could give rise to any liability under, any
Environmental Law or could interfere with the continued operation of the
Properties or could reasonably be expected to impair the fair saleable
value thereof.
(b) The Borrower and its Subsidiaries and the Properties are in
compliance with, and to the knowledge of the Borrower and its Subsidiaries
have in the last three years been in compliance with, all applicable
Environmental Laws and applicable Environmental Permits, and the Borrower
and its Subsidiaries reasonably believe that they will be able to comply
with all applicable Environmental Laws in the future and renew or obtain
all Environmental Permits necessary for their operations in the future.
(c) Neither the Borrower nor any of its Subsidiaries has received any
written notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Companies,
nor to the knowledge of the Borrower or any of its Subsidiaries is such
notice being threatened.
(d) Hazardous Materials have not been transported, disposed of,
emitted, discharged, or otherwise released or threatened to be released,
nor has their disposal been arranged for, (i) by the Borrower or any of its
Subsidiaries in violation of, or (ii) in a manner or to a location which
could reasonably be expected to give rise to liability under, any
applicable Environmental Law; nor have any Hazardous Materials been
generated, treated, stored, emitted, discharged or otherwise released or
threatened to be released or disposed of at, on or under any of the
Properties in violation of, or in a manner that could reasonably be
expected to give rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened under any Environmental Law to which the Borrower or any
Subsidiary is or to the knowledge of the Borrower or any of its
Subsidiaries will be named as a party, nor are there any
51
consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
the Borrower or any of its Subsidiaries, or the Properties or the
Companies.
4.18 Regulation H. To the extent available, the Borrower has obtained for
all Mortgaged Properties which are located in a "flood hazard area", as
designated in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency, flood insurance in such total amount as the Administrative
Agent has from time to time reasonably required.
4.19 Accuracy of Information. The factual statements and information
contained in the Prospectus dated as of November 15, 1996 (the "Prospectus"),
when taken as a whole, were, as of the date of such Prospectus or the dates
otherwise specified therein or written supplements thereto, accurate in all
material respects and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading, provided that (a) the statements therein describing documents and
agreements are summary only and as such are qualified in their entirety by
reference to such documents and agreements, (b) to the extent any such
information therein was based upon or constitutes a forecast or projection or
pro forma financial information, Holdings and the Borrower represent only that
such forecasts or projections or pro forma financial information were based upon
good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made and (c) as to the information which is specified
as having been supplied by third parties, Holdings and the Borrower represent
only that they are not aware of any material misstatement or omission therein.
4.20 Solvency. As of the Closing Date, after giving effect to the
Transactions and the Recapitalization, the initial Extensions of Credit
hereunder and the other transactions contemplated to occur on the Closing Date
each Loan Party is Solvent.
4.21 Stock Purchase Agreement. The Administrative Agent has received a
complete copy of each of the Stock Purchase Agreement (including all exhibits,
schedules and disclosure letters referred to therein or delivered pursuant
thereto) and all amendments and waivers relating thereto and other side letters
or agreements affecting the terms thereof. As of the Closing Date, none of such
documents and agreements has been amended or supplemented, nor have any of the
provisions thereof been waived, in any material respect, except pursuant to a
written agreement or instrument which has heretofore been delivered to the
Administrative Agent. As of the Original Closing Date, to the knowledge of
Holdings and the Borrower, the representations and warranties contained in the
Stock Purchase Agreement were true and correct in all material respects on the
Original Closing Date as if made on and as of the Original Closing Date (except
as contemplated by the Stock Purchase Agreement or the other Acquisition
Documents or as set forth on Schedule 4.21).
4.22 Security Documents. (a) Except to the extent that Collateral has been
released (and not re-pledged) as provided in subsection 12.16, the Guarantee and
Collateral Agreement is effective to create in favor of the Administrative
Agent, for the ratable benefit
52
of the Lenders, a legal, valid and enforceable security interest in all the
Collateral described therein and Proceeds thereof and, upon completion of the
filings and other actions specified on Schedule 3 to the Guarantee and
Collateral Agreement, the Guarantee and Collateral Agreement shall constitute
fully perfected, first priority Liens on, and security interests in, all right,
title and interest of Holdings, the Borrower and its Subsidiaries in the
Collateral described therein and in Proceeds thereof superior in right to any
other Person other than Permitted Liens.
(b) Except to the extent that real property subject to a Mortgage has been
released (and not re-pledged) as provided in subsection 12.16, the Mortgages on
the Mortgaged Property are each effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable Lien on the properties described therein and proceeds thereof,
subject to obtaining necessary consents (which consents shall be obtained on or
prior to the Closing Date) and when the Mortgages are filed they shall
constitute a fully perfected, first priority Lien on, and security interest in,
all right, title and interest of the Loan Parties in the properties described
therein and the proceeds thereof, superior in right to any other Person other
than Permitted Liens.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The effectiveness of the
amendment and restatement of the Existing Credit Agreement and the agreement of
each Lender to make the initial Extension of Credit requested to be made by it
is subject to the satisfaction, immediately prior to or concurrently with the
making of such Extension of Credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of
Holdings and the Borrower with a counterpart for each Lender, (ii) for the
account of each Lender which requests a Revolving Credit Note on the
Closing Date, a Revolving Credit Note conforming to the requirements hereof
and executed by a duly authorized officer of the Borrower, and (iii) if
requested by the Swing Line Lender on the Closing Date, for the account of
the Swing Line Lender, a Swing Line Note conforming to the requirements
hereof and executed by a duly authorized officer of the Borrower;
(b) (i) The IPO shall have been consummated and (ii) as of the Closing
Date, the Administrative Agent shall have received evidence reasonably
satisfactory to it that Holdings shall have received at least $90,000,000
in gross cash proceeds from the issuance of its common stock in the IPO.
After giving effect to the Recapitalization, Holdings and its Subsidiaries
shall have outstanding no Indebtedness or preferred stock other than (A)
under this Agreement, (B) pursuant to the Senior Subordinated Notes, (C) as
permitted under subsection 7.2 or (E) as otherwise consented to by the
Lenders;
(c) Closing Certificate. The Administrative Agent shall have received,
with a copy for each Lender, a certificate of the Borrower, dated the
Closing Date,
53
substantially in the form of Exhibit F, with appropriate insertions and
attachments, reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of the Borrower;
(d) Corporate Proceedings of the Borrower. The Administrative Agent
shall have received, with a copy for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of the Borrower authorizing
(i) the execution, delivery and performance of this Agreement and the other
Loan Documents to which it is a party and (ii) the Extensions of Credit
contemplated hereunder certified by the Secretary or an Assistant Secretary
of the Borrower as of the Closing Date, which certificate shall be in form
and substance reasonably satisfactory to the Administrative Agent and shall
state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded and are in full force and effect;
(e) Borrower Incumbency Certificate. The Administrative Agent shall
have received, with a copy for each Lender, a certificate of the Borrower,
dated the Closing Date, as to the incumbency and signature of the officers
of the Borrower executing any Loan Document reasonably satisfactory in form
and substance to the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of the
Borrower;
(f) Corporate Proceedings of Holdings. The Administrative Agent shall
have received, with a copy for each Lender, a copy of the resolutions, in
form and substance reasonably satisfactory to the Administrative Agent, of
the Board of Directors of Holdings authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which
Holdings is a party and copies of the constituent documents of Holdings, in
each case certified by the Secretary or an Assistant Secretary of Holdings
as of the Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state that
the resolutions thereby certified have not been amended, modified, revoked
or rescinded and are in full force and effect;
(g) Holdings Incumbency Certificate. The Administrative Agent shall
have received, with a copy for each Lender, a certificate of Holdings,
dated the Closing Date, as to the incumbency and signature of the officers
of Holdings executing any Loan Document reasonably satisfactory in form and
substance to the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of Holdings;
(h) Consents, Licenses and Approvals. The Administrative Agent shall
have received, with a copy for each Lender, a certificate of a Responsible
Officer of the Borrower (i) attaching copies of all consents and
authorizations of and filings with any Governmental Authority or any other
Person that are required to be obtained or made by any Loan Party in
connection with the Recapitalization, the Extensions of Credit
54
hereunder, the execution, delivery or performance by each applicable Loan
Party or the validity or enforceability with respect to or against any Loan
Party of the Loan Documents to which it is a party or with the continuing
operations of the Borrower and its Subsidiaries (other than those set forth
in clauses (i)(y), (i)(z), (ii), (iii) or (iv) of subsection 4.4) as are
reasonably requested by the Administrative Agent, and (ii) stating that
such consents, authorizations and filings are in full force and effect and
that all applicable waiting periods under any Requirement of Law shall have
expired without any action being taken or threatened by any competent
Governmental Authority which would restrain, prevent or otherwise impose
material adverse conditions on the Recapitalization or the financing
thereof, and each such consent, authorization and filing shall be in form
and substance reasonably satisfactory to the Administrative Agent;
(i) Fees. The Administrative Agent shall have received the fees to be
received on the Closing Date referred to in the Fee Letter dated as of July
31, 1996, from Chase and CSI to the Borrower;
(j) Aggregate Expenses. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in
connection with the Recapitalization and the financing thereof shall be in
an amount customary for transactions of this type;
(k) Legal Opinions. The Administrative Agent shall have received, with
a counterpart for each Lender, the following executed legal opinions dated
the Closing Date and addressed to the Administrative Agent and each Lender:
(i) the executed legal opinion of Kramer, Levin, Naftalis &
▇▇▇▇▇▇▇, special counsel to the Loan Parties, in form and substance
satisfactory to the Administrative Agent and in substantially the form
of Exhibit H;
(ii) the executed legal opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Utah
local counsel to the Loan Parties, in form and substance satisfactory
to the Administrative Agent and in substantially the form of Exhibit
I;
(iii) executed legal opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP in form and substance reasonably satisfactory to the
Administrative Agent;
(l) Financial Statements. The Administrative Agent shall have received,
with a copy for each Lender, (i) the audited combined financial statements of
each of the Companies for the three most recent fiscal years ended prior to the
Closing Date and (ii) the unaudited interim combined and consolidating financial
statements of each of the Companies for each quarterly period ended subsequent
to the date of the latest financial statements delivered pursuant to clause (i)
of this paragraph as to which such financial statements are available;
55
(m) Pro Forma Balance Sheet. The Administrative Agent shall have received,
with a copy for each Lender, a pro forma consolidated balance sheet as at
September 30, 1996 of the Borrower at the Closing Date, satisfactory to it,
after giving effect to the consummation on the Closing Date of the
Recapitalization and the financings contemplated thereby;
(n) Utah Amendment. The Administrative Agent shall have received, with a
copy for each Lender, (i) an amended Borrower Mortgage and (ii) a title
endorsement, each in form and substance reasonably satisfactory to it on or
before the Closing Date;
(o) Acknowledgment and Consent to the Guarantee and Collateral Agreement.
The Administrative Agent shall have received, with a copy for each Lender, an
Acknowledgment and Consent to the Guarantee and Collateral Agreement,
substantially in the form of Exhibit B executed by each Loan Party, attached
hereto; and
(p) Repayment of Existing Credit Agreement. The Borrower shall have repaid
in full any outstanding Term Loans and any accrued and unpaid interest, fees or
breakage costs relating thereto under the Existing Credit Agreement.
5.2 Conditions to Each Extension of Credit. The agreement of each Lender to
make any Extension of Credit requested to be made by it on any date (including,
without limitation, its initial Extension of Credit), and the agreement of the
Issuing Bank to issue any Letter of Credit for which an Application is
presented, is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Borrower and the other Loan Parties in or pursuant to the
Loan Documents shall be true and correct in all material respects on and as of
such date (and, in the case of the representations and warranties made on the
Closing Date, after giving effect to the Recapitalization) as if made on and as
of such date, except to the extent such representations and warranties expressly
relate to an earlier date in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date;
(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the Extension of Credit
requested to be made on such date;
(c) Borrowing Requests and Applications. The Administrative Agent shall
have received a request or Application for such Loan or Letter of Credit if and
as required by subsection 2.2, 2.8, 2.11 or 2.14, as applicable; and
(d) Acquisition Conditions. The obligation of the Lenders to make any Loan
to be used to make a Permitted Acquisition shall be conditioned upon the
following:
56
(i) the Borrower's pro forma compliance with the financial covenants
set forth in subsection 7.1 after giving effect to such Permitted
Acquisition;
(ii) subject to subsection 12.16, the grant or pledge to the
Administrative Agent for the ratable benefit of the Lenders of a first
priority Lien subject to Permitted Liens on the property, stock or other
assets being acquired, as requested by the Administrative Agent, as
collateral security pursuant to documentation reasonably satisfactory in
form and substance to the Administrative Agent;
(iii) the receipt by the Administrative Agent, with a counterpart for
each Lender, of such legal opinions, officers' certificates and other
documents as reasonably requested by the Administrative Agent with respect
to the relevant Permitted Acquisition to be financed in whole or in part
with the proceeds of such Loan; and
(iv) the Permitted Acquisition to be funded, in whole or in part, with
the proceeds of such Loan shall only be of a business which is reasonably
related to those businesses in which the Borrower and its Subsidiaries are
engaged on the date of this Agreement or extensions thereof, including,
without limitation, any business involving the manufacturing or marketing
of products sold in health food stores or stores that sell similar
products.
Each borrowing by and Letter of Credit issued on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date thereof that the conditions contained in clauses (a) and (b) and, if
applicable, (d)(i) and (d)(iv) of this subsection have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date and so
long as the Commitments remain in effect or any amount is owing to any Lender or
the Administrative Agent hereunder or under any other Loan Document or any
Letter of Credit remains outstanding, it shall and (except in the case of
delivery of financial information, reports and notices and subsections 6.1 and
6.2 which shall be performed by the Borrower) shall cause each of its
Subsidiaries to, unless the Required Lenders shall otherwise consent in writing:
6.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, (i) a copy of the audited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
year and the related audited consolidated statements of income and retained
earnings and of cash flows for
57
such year, setting forth in each case, except in the first year after the
Original Closing Date, in comparative form the figures as of the end of and for
the previous year, reported on without a "going concern" or like qualification
or exception, or a qualification arising out of the scope of the audit, by
Deloitte & Touche LLP or other independent certified public accountants of
nationally recognized standing, (ii) a copy of the consolidating balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such year and
the related consolidating statements of income and retained earnings and of cash
flows for such year, setting forth in each case, except in the first year after
the Closing Date in comparative form the figures as of the end of and for the
previous year and (iii) a Certificate of Available Excess Equity Proceeds;
(b) as soon as available, but in any event not later than 45 days after the
end of each of the first three quarterly periods of each fiscal year of the
Borrower, (i) the unaudited consolidated and consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated and consolidating statements of income and
retained earnings and of cash flows of the Borrower and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case, except for the first year after the
Original Closing Date, in comparative form the figures as of the end of and for
the corresponding period in the previous year, certified by a Responsible
Officer of the Borrower as being fairly stated in all material respects (subject
to normal year-end audit adjustments) and (ii) a Certificate of Available Excess
Equity Proceeds; and
(c) as soon as available, but in any event not later than 30 days after the
end of each month (other than September, December, March and June) of each
fiscal year of the Borrower, the unaudited consolidated and consolidating
statement of income (through the "Earnings Before Tax" line) of the Borrower and
its consolidated Subsidiaries for such month and the portion of the fiscal year
through the end of such month, setting forth in each case, except for the first
year after the Original Closing Date, in comparative form the figures as of the
end of and for the corresponding period in the previous year, certified by a
Responsible Officer of the Borrower as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail, in accordance with GAAP
(subject to the addition, in the case of clauses (b) and (c) of this subsection,
of year end notes) applied consistently throughout the periods reflected therein
and with prior periods (except as approved by such accountants or Responsible
Officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred to
in subsection 6.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor
58
no knowledge was obtained of any Default or Event of Default having occurred as
of the end of the fiscal year covered by such financial statements, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in subsections 6.1(a) and (b), a certificate of a Responsible Officer of the
Borrower (i) stating that, to the best of such Responsible Officer's knowledge,
the Borrower during such period has observed or performed in all material
respects all of its covenants and other agreements, and satisfied every
condition in all material respects, contained in this Agreement and the other
Loan Documents to be observed, performed or satisfied by it during such period,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) setting forth
in reasonable detail the calculations required to determine compliance with
subsections 7.1 and 7.8;
(c) not later than sixty days after the end of each fiscal year of the
Borrower, commencing with the fiscal year ending in December 1996, a copy of the
board-approved projections by the Borrower of the operating budget and cash flow
budget of the Borrower and its Subsidiaries for the succeeding fiscal year, such
projections to be accompanied by a certificate of a Responsible Officer of the
Borrower to the effect that such projections have been prepared using
assumptions believed in good faith by management of the Borrower to be
reasonable at the time made and that such Responsible Officer has no reason to
believe that such projections are incorrect or misleading in any material
respect;
(d) within five Business Days after the same are sent, copies of all
financial statements and reports which Holdings or the Borrower sends to the
holders of the Senior Subordinated Notes or to the holders of any securities of
the Loan Parties registered with the SEC, and within five Business Days after
the same are filed, copies of all financial statements and reports which
Holdings or the Borrower may make to, or file with, the SEC or any successor or
analogous federal Governmental Authority;
(e) promptly upon receipt thereof, copies of all reports submitted to the
Borrower by independent certified public accountants in connection with each
annual, interim or special audit of the books of the Borrower or any of its
Subsidiaries made by such accountants, including, without limitation, any
management letter commenting on the Borrower's internal controls submitted by
such accountants to management in connection with their annual audit; and
(f) promptly, such additional financial and other information within the
possession of the Borrower or any of its Subsidiaries as any Lender may from
time to time reasonably request through the Administrative Agent.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature including taxes, except as contemplated
by this Agreement or where the
59
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or any of its
Subsidiaries or the failure to pay the same could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, as the case may be.
6.4 Conduct of Business; Maintenance of Existence; Compliance with Laws.
Continue to engage in business of the same general type as now conducted by the
Borrower and its Subsidiaries and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable, in any material
respect in the normal conduct of its business except as otherwise permitted
pursuant to subsection 7.5; comply in all material respects with all Contractual
Obligations and Requirements of Law (excluding, for purposes of this subsection
6.4, Requirements of Law and Contractual Obligations specifically addressed
elsewhere in this Section 6) except where (a) any such Contractual Obligation is
being contested in good faith, a bona fide dispute exists with respect to any
such Contractual Obligation or failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect and (b) the
failure to comply with any such Requirement of Law could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance; Products Liability Insurance. (i)
Keep all property material to the conduct of its business (including, without
limitation, the Mortgaged Property) in good working order and condition (normal
wear and tear excepted); maintain insurance with financially sound and reputable
insurance companies with an A.M. Best rating of A- or better (or, to the extent
consistent with prudent business practice, a program of self-insurance) on such
of its property and in at least such amounts and against at least such risks as
are usually insured against in the same general area by companies engaged in the
same or a similar business (including, without limitation, the insurance
required pursuant to the Security Documents); (ii) maintain sufficient products
liability insurance, in amounts according with standard industry practice, to
cover the various products produced, marketed and/or sold by the Borrower or any
of its Subsidiaries and (iii) furnish to the Administrative Agent, upon written
request, full information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions. Keep proper
financial records in conformity with GAAP and, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect, all
Requirements of Law; and permit (a) representatives of the Administrative Agent
or any Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time during normal
business hours, upon reasonable notice, and as often as may reasonably be
desired, and (b) upon reasonable notice during normal business hours,
representatives of the Administrative Agent or any Lender to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants (subject
to reasonable requirements of confidentiality, including without limitation,
requirements imposed by law or contract).
60
6.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default by the Borrower or any of its
Subsidiaries under any Contractual Obligation of the Borrower or any of its
Subsidiaries of which any Loan Party has knowledge or notice or (ii)
litigation, investigation or proceeding which may exist at any time between
the Borrower or any of its Subsidiaries and any Governmental Authority of
which any Loan Party has knowledge or notice, which in either case, if not
cured or resolved or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any pending or threatened claim, litigation or proceeding
affecting the Borrower or any of its Subsidiaries, of which any Loan Party
has knowledge or notice, in which the amount involved is not covered by
insurance or in which injunctive or similar relief is sought and which, in
either case, if adversely determined, could reasonably be expected to have
a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan, in each of cases (i) and (ii),
where such event could reasonably be expected to have a Material Adverse
Effect; and
(e) any other development or event of which any Loan Party has
knowledge or notice which could reasonably be expected to have a Material
Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and use reasonable efforts to
ensure compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and use reasonable
efforts to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all Environmental Permits required by applicable Environmental
Laws, except where the failure to so comply or obtain such permits could not
reasonably be expected to have a Material Adverse Effect.
61
(b) Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions required by any Governmental
Authority under Environmental Laws and promptly comply with all lawful orders
and directives of all Governmental Authorities regarding Environmental Laws,
except to the extent that the failure to do any of the foregoing could not
reasonably be expected to have a Material Adverse Effect.
6.9 Maintenance of Liens of the Security Documents. Unless the conditions
to release of Collateral in subsection 12.16(a) are satisfied, promptly, upon
the reasonable request of the Administrative Agent, at the Borrower's expense,
execute, acknowledge and deliver, or cause the execution, acknowledgement and
delivery of, and thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any document or
instrument supplemental to or confirmatory of the Security Documents or
otherwise reasonably deemed by the Administrative Agent necessary or desirable
for the continued validity, perfection and priority of the Liens on the
Collateral covered thereby. The foregoing notwithstanding, no Mortgage on real
property at any time owned by the Borrower or any Subsidiary of the Borrower in
New York State shall be executed in favor of the Administrative Agent if the
conditions set forth in subsection 12.16(b) do not occur.
6.10 Pledge of After Acquired Property; Additional Guarantors. (a) Unless
the conditions to release of Collateral in subsection 12.16(a) are satisfied, if
at any time following the Closing Date the Borrower or any of its Subsidiaries
(other than a Foreign Subsidiary) shall acquire property of any nature
whatsoever having a value in excess of $250,000 which is intended by the terms
of the applicable Security Document to be, but is not, subject to the Liens
created by the Security Documents, the Borrower shall, or shall cause the
relevant Subsidiaries to, as soon as possible and in no event later than 30 days
after the relevant acquisition date and, to the extent permitted by applicable
law, except in the case of (i) property subject to a permitted Financing Lease
or (ii) purchase money Indebtedness, grant to the Administrative Agent for the
ratable benefit of the Lenders a first priority Lien subject to Permitted Liens
on such property as collateral security for the Obligations pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent. The Borrower, at its own expense, shall execute,
acknowledge and deliver, or cause the execution, acknowledgement and delivery
of, and thereafter register, file or record in an appropriate governmental
office, any document or instrument (including legal opinions, title insurance,
consents and corporate documents) and take all such actions reasonably deemed by
the Administrative Agent to be necessary or desirable to ensure the creation,
priority and perfection of such Lien. The foregoing notwithstanding, no Mortgage
on real property at any time owned by the Borrower or any Subsidiary of the
Borrower in New York State shall be executed in favor of the Administrative
Agent if the conditions set forth in subsection 12.16(b) do not occur.
(b) (i) The Borrower shall cause each new Subsidiary (other than a Foreign
Subsidiary) of the Borrower created or acquired after the date hereof, promptly
upon such creation or acquisition, to execute an instrument in form and
substance reasonably satisfactory to the Administrative Agent (it being
acknowledged and agreed that an instrument in the form attached to the Guarantee
and Collateral Agreement as Exhibit A thereto shall satisfy this
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requirement) pursuant to which such new Subsidiary shall become a party to the
Guarantee and Collateral Agreement as a grantor (unless the conditions in
subsection 12.16(a) are satisfied) and a guarantor thereunder, and (ii) unless
the conditions to release of Collateral in subsection 12.16(a) are satisfied,
the Borrower shall, or shall cause the Subsidiary of the Borrower (other than a
Foreign Subsidiary) which holds the Capital Stock of such new Subsidiary to,
execute and deliver an instrument in form and substance reasonably satisfactory
to the Administrative Agent (it being acknowledged and agreed that an instrument
in the form attached to the Guarantee and Collateral Agreement as Exhibit B
thereto shall satisfy this requirement) providing for the pledge of 100% of the
issued and outstanding Capital Stock of each new Subsidiary (including a Foreign
Subsidiary) of the Borrower created or acquired after the date hereof and owned
by the Borrower or one of its Subsidiaries (provided, that in no event shall
Capital Stock representing more than 65% of the voting power of the Capital
Stock of any such new Subsidiary which is a Foreign Subsidiary be so pledged) to
the Administrative Agent for the benefit of the Lenders, and the Borrower shall
deliver to the Administrative Agent the stock certificates evidencing such
Capital Stock together with undated stock powers for each such certificate, duly
executed in blank. The foregoing notwithstanding, no Mortgage on real property
at any time owned by the Borrower or any Subsidiary of the Borrower in New York
State shall be executed in favor of the Administrative Agent if the conditions
set forth in subsection 12.16(b) do not occur.
6.11 Interest Rate Protection. Within 90 days following the Original
Closing Date, enter into Interest Rate Protection Agreements in form and
substance reasonably satisfactory to the Administrative Agent which, considered
together with the terms of the Borrower's outstanding Funded Indebtedness
bearing a fixed rate of interest, provide to the Borrower fixed interest rates
with respect to not less than one-half of the aggregate outstanding principal
amount of the Borrower's outstanding Funded Indebtedness as of the Original
Closing Date (as the same may be reduced from time to time pursuant to regularly
scheduled amortization payments) for a period of at least three years after the
Original Closing Date, and the Borrower agrees and confirms that the Guarantee
and Collateral Agreement grants to the Administrative Agent, for the benefit of
the Lenders, a first priority (subject to any Liens permitted pursuant to
subsection 7.3) perfected security interest in its rights under any such
Interest Rate Protection Agreements. The Borrower covenants and agrees that it
will not (and it will not permit its Subsidiaries to) enter into Rate Protection
Agreements for the purpose of (i) reducing the amount of Indebtedness bearing a
fixed rate of interest or swapped or capped into a fixed rate of interest as
required by this subsection 6.11 or (ii) speculating on interest rates or
currency movements. It is understood and agreed that the foregoing prohibition
is not intended to restrict the use of Rate Protection Agreements in the
ordinary course of business to match assets and liabilities of the Borrower and
its Subsidiaries.
6.12 Exchange Offer. Comply with the provisions of the Registration Rights
Agreement (as defined in the Final Offering Memorandum).
6.13 Stock Purchase Agreement. Not amend, modify or otherwise change the
Stock Purchase Agreement in any way materially adverse to the Loan Parties or
the Lenders without the express written approval of the Administrative Agent and
the Required Lenders.
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SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date and so
long as the Commitments remain in effect or any amount is owing to any Lender or
the Administrative Agent hereunder or under any other Loan Document or any
Letter of Credit remains outstanding, the Borrower shall not, nor (except with
respect to subsection 7.1) shall the Borrower permit any of its Subsidiaries to,
directly or indirectly, unless the Required Lenders shall otherwise agree in
writing:
7.1 Financial Condition Covenants.
(a) Leverage Ratio. Permit the ratio of (i) Consolidated Total Debt at the
last day of any fiscal quarter ending during any "Test Period" set forth below
to (ii) Consolidated EBITDA for the period of four consecutive fiscal quarters
ending on such date to be greater than the amount set forth opposite such period
below:
Test Period Ending Leverage Ratio
------------------ --------------
12/31/96 4.25 to 1.00
12/31/97 4.00 to 1.00
12/31/98 3.75 to 1.00
12/31/99 3.40 to 1.00
12/31/00 3.20 to 1.00
12/31/01 and thereafter 3.00 to 1.00
(b) Interest Coverage Ratio. Permit for any period of four consecutive
fiscal quarters ending on the last day of any fiscal year the ratio of (i)
Consolidated EBITDA for such period to (ii) Consolidated Cash Interest Expense
for such period to be less than the amount set forth opposite such period below:
Test Period Ending Interest Coverage Ratio
------------------ -----------------------
12/31/96 1.75 to 1.00
12/31/97 2.20 to 1.00
12/31/98 2.60 to 1.00
12/31/99 2.90 to 1.00
12/31/00 3.00 to 1.00
12/31/01 and thereafter 3.00 to 1.00
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness or issue or sell any preferred stock, except (without
duplication):
(a) Indebtedness in respect of the Loans, any Notes, the Guarantees, the
Letters of Credit and the other obligations of the Loan Parties under this
Agreement and the other Loan Documents;
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(b) Indebtedness of (i) the Borrower to any Subsidiary, (ii) of any
Domestic Subsidiary to the Borrower or any other Subsidiary, (iii) any Foreign
Subsidiary to any other Foreign Subsidiary or (iv) any Foreign Subsidiary to the
Borrower or any Domestic Subsidiary in an amount for this clause (iv) together
with any Investments pursuant to subsection 7.9(d)(iv) (other than loans to such
Foreign Subsidiary) not to exceed at any one time outstanding (x) $2,000,000
plus (y) at the time advanced any Available Excess Equity Proceeds in an
aggregate amount not to exceed $10,000,000;
(c) Indebtedness in respect of Sale/Leaseback Transactions in an aggregate
principal amount incurred subsequent to the Closing Date, not to exceed
$5,000,000 at any time outstanding;
(d) Indebtedness of the Borrower in an aggregate principal amount not
exceeding $100,000,000 (except as provided in subsection 7.2(o)) in respect of
the Senior Subordinated Notes;
(e) Indebtedness not exceeding $5,000,000 pursuant to this clause (e) in
aggregate principal amount at any one time outstanding, provided that such
Indebtedness is not secured by a Lien on any assets of the Loan Parties;
(f) Indebtedness consisting of Guarantee Obligations expressly permitted
pursuant to subsection 7.4;
(g) (i) Indebtedness of the Subsidiaries, not to exceed $1,000,000 in the
aggregate, which represents the assumption of Indebtedness by a Subsidiary in
connection with the merger of such Subsidiary with or into the acquired Person
or the purchase of all or substantially all the assets of such acquired Person
or (ii) Indebtedness of a Subsidiary acquired after the date hereof or of a
Person merged with or into the Borrower or a Subsidiary after the date hereof,
which Indebtedness exists at the time of such acquisition or merger, and is not
created in contemplation of such event, in each case pursuant to a transaction
permitted under subsection 7.9(g); provided that the principal amount of such
Indebtedness is not increased, the maturity of such Indebtedness is not
shortened, and no Guarantee Obligations of such Indebtedness are incurred in
connection therewith and such Indebtedness is not secured by any Lien on
property other than that which secured it before such event;
(h) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business, provided that such Indebtedness is extinguished within five
Business Days of notice to the Borrower of its incurrence;
(i) Indebtedness in respect of Rate Protection Agreements permitted under
subsection 6.11;
(j) Indebtedness outstanding on the Closing Date and listed on Schedule
7.2(j);
65
(k) Financing Lease Obligations and Indebtedness for the deferred purchase
price of newly acquired property or to finance equipment (pursuant to purchase
money mortgages or otherwise) used in the ordinary course of business (provided
such financing is entered into within one year of the acquisition of such
property) in an amount not exceeding an aggregate principal amount of $2,000,000
per annum, provided however, that for any fiscal year, such amount may be
increased by carrying over to such fiscal year any permitted amounts not spent
in the preceding fiscal year;
(l) so long as no Default or Event of Default is continuing at the time
thereof, or would occur as a result thereof, the incurrence of Indebtedness
(including without limitation Indebtedness in respect of Sale/Leaseback
Transactions or Financing Lease Obligations) in an aggregate principal amount
not to exceed $10,000,000 at any time outstanding to finance (or to reimburse
the Borrower or its Subsidiaries for amounts expended to finance), on terms
reasonably satisfactory to the Required Lenders, the expansion or relocation of
their manufacturing, warehouse or office facilities provided that, at the time
of incurrence of such Indebtedness, the Borrower shall have provided projections
to the Lenders showing that after giving effect thereto it will be in compliance
with all covenants set forth in subsection 8.1 on a pro forma basis for each
future year during the remaining term of this Agreement;
(m) indorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business;
(n) Indebtedness in respect of trade letters of credit (or reimbursement
obligations arising therefrom) secured by Liens permitted by subsection 7.3(k)
in an aggregate principal amount not to exceed $2,500,000 at any one time
outstanding;
(o) Indebtedness (the "Refinancing Indebtedness") renewing, extending the
maturity of, or refunding or refinancing, in whole or in part, any of the
Indebtedness pursuant to clauses (d) and (l) of this subsection or of any
Refinancing Indebtedness, provided that, (1) the material terms (including,
without limitation, principal amount (subject to clause (2) below), interest
rate, events of default, weighted average life to maturity, payment terms,
covenants, collateral, if any, and subordination terms, if any) of any such
Refinancing Debt, and of any agreement entered into and of any instrument issued
in connection therewith, are no less favorable to the Borrower and its
Subsidiaries and the Lenders in any material respect than the terms governing
the Indebtedness so renewed, extended, refunded or refinanced and are not
inconsistent with the terms of the Loan Documents and are permitted thereunder,
(2) the principal amount of the Indebtedness to be renewed, extended, refunded
or refinanced may be increased above the principal amount thereof outstanding
immediately prior to such renewal, extension, refunding or refinancing, in an
amount up to $3,000,000 pursuant to this clause (o) in the aggregate (for all
such Indebtedness) from and after the Closing Date for purposes of paying
prepayment premiums and penalties, consent payments and fees and similar
expenses in respect of the refinancing of such Indebtedness, (3) the direct and
contingent obligors therefor shall not be changed, as a result of or in
connection with such extension, refunding or refinancing, and (4) in the
66
case of any renewal, extension, refunding or refinancing of any of the Senior
Subordinated Notes or Indebtedness incurred pursuant to subsection 7.2(l), the
covenants, events of default, subordination terms (if any) and other provisions
thereof, and all agreements and instruments executed in connection with such
renewal, extension, refunding or refinancing, shall be in form and substance
reasonably satisfactory to the Administrative Agent; and
(p) unsecured Indebtedness owing to a seller in an amount not to exceed
$5,000,000, at any one time outstanding, incurred to finance a Permitted
Acquisition.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for the following:
(a) Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;
(b) statutory landlords' liens and carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business for sums which are not overdue for a period of more than 90 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) all easements, zoning restrictions, flowage rights, rights-of-way,
covenants, conditions, restrictions, reservations, licenses, agreements and
other similar matters, including the unrecorded easements and similar agreements
set forth in Schedule 7.3(e), which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from the use of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or such Subsidiary;
(f) (A) Liens securing Indebtedness permitted by subsections 7.2(c), (k)
and (l) incurred to finance (or reimburse the Borrower or its Subsidiaries for
amounts expended to finance) the acquisition, construction or improvement of
fixed or capital assets, or (B) Liens existing on any such fixed capital asset
at the time of such acquisition, provided that (i) in the case of clause (A),
such Liens shall be created
67
within 360 days after the acquisition, construction or improvement of such fixed
or capital assets, (ii) such Liens do not at any time encumber any property
other than the property acquired, constructed or improved with the proceeds of
such Indebtedness, (iii) the amount of Indebtedness secured thereby shall not
subsequently be increased and (iv) the principal amount of Indebtedness secured
by any such Lien shall at no time exceed 100% of the original purchase price of
such asset or the amount expended to construct or improve such asset, as the
case may be.
(g) Liens in existence on the date hereof listed on Schedule 7.3(g),
provided that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby shall not
subsequently be increased;
(h) all building codes and zoning ordinances and other laws, ordinances,
regulations, rules, orders or determinations of any Federal, state, county,
municipal or other governmental authority now or hereafter enacted;
(i) Liens created pursuant to the Security Documents;
(j) judgment Liens created by or resulting from any litigation or legal
proceeding if released, stayed or bonded (or the judgment which it secures
discharged) within 60 days of the date of creation thereof;
(k) Liens arising in connection with trade letters of credit (other than
Commercial Letters of Credit) issued to secure the purchase of inventory in the
ordinary course of business of the Borrower and its Subsidiaries permitted under
subsection 7.2(n); provided that such Liens shall cover only the documents in
respect of which such letters of credit were issued, the goods covered thereby
and the insurance proceeds of such goods;
(l) Liens on property of a Person existing at the time such Person is
merged into or consolidated with the Borrower or becomes a Subsidiary of the
Borrower or any Subsidiary of the Borrower in accordance with subsection 7.9(g);
provided that such Liens were not created in contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with or acquired by the Borrower or such Subsidiary;
and
(m) the replacement, extension or renewal of any Lien permitted by clauses
(f), (g), (j), and (l) above upon or in the same property theretofore subject
thereto as security for the same Indebtedness or any renewal, extension,
refunding or refinancing thereof permitted hereunder.
7.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to
exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and listed on
Schedule 7.4(a);
68
(b) the Guarantees and Letters of Credit; and
(c) guarantees by the Borrower of obligations of any Subsidiary, or by any
Subsidiary of the obligations of any other Subsidiary or the Borrower, to the
extent such guaranteed obligations are otherwise permitted under this Agreement.
7.5 Limitation on Fundamental Changes. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any one or more wholly-owned
Subsidiaries of the Borrower (provided that the wholly-owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation);
(b) any wholly-owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any other wholly-owned Subsidiary of the
Borrower;
(c) pursuant to any sale of assets expressly permitted by subsection
7.6; and
(d) pursuant to any Permitted Acquisition in which the surviving
entity is the Borrower or (after giving effect to the acquisition) any of
its Subsidiaries.
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary's Capital Stock to any Person other than the Borrower or any
Subsidiary, except (without duplication):
(a) the conveyance, sale, lease, assignment, transfer or other
disposition of Obsolete Property or surplus property for fair value in the
ordinary course of business;
(b) Asset Sales (other than as otherwise permitted by this subsection
7.6), provided that the Net Proceeds of any such Asset Sale are applied to
the extent required by subsection 3.1(b)(ii) and shall not exceed
$10,000,000 in the aggregate;
(c) any Asset Sale pursuant to any Sale/Leaseback Transaction,
provided that the provisions of subsection 7.2(c) or (l), as the case may
be, are not violated;
(d) the sale of inventory in the ordinary course of business;
69
(e) the sale or discount for fair value without recourse of accounts
receivable arising in the ordinary course of business in connection with
the compromise or collection thereof;
(f) as permitted by subsection 7.5(b);
(g) the license of intellectual property in the ordinary course of
business; and
(h) leases or subleases not materially interfering with the ordinary
course of conduct of the business of the Borrower and its Subsidiaries;
(i) the sale or liquidation of Cash Equivalents in the ordinary course
of business;
(j) the transfer of properties in tax free exchanges pursuant to
Section 1031 of the Code for properties for use consistent with the ongoing
trade or business of the Borrower and its Subsidiaries, for equivalent fair
market value (after giving effect to the payment or receipt of any cash in
connection with any such exchange);
(k) distribution of inventory, in amounts not to exceed $750,000 per
year, to third parties for charitable purposes; and
(l) any ARP Spinoff.
7.7 Limitation on Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary
(such declarations, payments, setting apart, purchases, redemptions,
defeasances, retirements, acquisitions and distributions being herein called
"Restricted Payments"), except that (without duplication),
(a) the Borrower may pay cash dividends to Holdings to pay any taxes
required to be paid by Holdings in the ordinary course of business provided
that, in each case, any such taxes are paid no later than fifteen Business Days
after the date on which the relevant dividend is made;
(b) the Borrower may pay cash dividends to Holdings to the extent necessary
to enable Holdings to pay fees, expenses and other obligations incurred or
required in connection with the Transactions, the Recapitalization and in
connection with the other matters permitted in subsection 8.1, provided that
Holdings shall pay each obligation in respect of which such dividend is made no
later than fifteen Business Days after the date on which the relevant dividend
is made, provided further that the Borrower may
70
not pay dividends under this clause (b) subsequent to the Closing Date to be
applied to the repurchase, redemption, or other acquisition of Capital Stock of
Holdings owned by GEI, any Investor, or any Continuing Stockholder (as defined
in the Stock Purchase Agreement) or their Affiliates and the aggregate amount
applied for the repurchase, redemption or other acquisition of Capital Stock
from other Persons may not exceed $500,000 per annum, provided however, that (i)
for any fiscal year, such amount may be increased by carrying over to such
fiscal year any permitted amounts not spent in the preceding fiscal years and
(ii) if the Borrower receives through Holdings proceeds from the sale of equity
securities purchased by any employee, officer or director, such proceeds shall
increase the $500,000 amount in the year of receipt.
(c) the Borrower may pay cash dividends to Holdings in an amount not to
exceed $400,000 in the aggregate in any fiscal year to the extent necessary to
enable Holdings to pay reasonable and necessary operating expenses and other
general corporate expenses (including reasonable attorneys and other
professional fees);
(d) the Borrower may pay cash dividends to Holdings out of Available Excess
Equity Proceeds to the extent received by the Borrower and to the extent that
Holdings is permitted to use such proceeds to repurchase, redeem or retire
preferred stock pursuant to subsection 3.1(b); provided that Holdings shall so
use such proceeds within 60 days after the date the relevant dividend is made;
and
(e) the Borrower may pay dividends contemplated by subsection 7.6(l).
7.8 Limitation on Capital Expenditures. Make or commit to make Capital
Expenditures in excess of $6,000,000 per annum for the Borrower and its
Subsidiaries during any fiscal year of the Borrower; provided, that (i) Capital
Expenditures not in excess of $2,000,000 permitted to be made during any fiscal
year (and not carried over from a prior fiscal year) and not made during such
fiscal year may be carried over and expended during the next succeeding fiscal
year, (ii) Capital Expenditures made during any fiscal year shall be first
deemed made in respect of amounts carried over from the prior fiscal year and
then deemed made in respects of amounts permitted for such fiscal year and (iii)
the Borrower and its Subsidiaries may make, or commit to make, additional
Capital Expenditures in the amount of up to $12,500,000 in the aggregate, to be
used to finance the expansion or relocation of their manufacturing, warehouse or
office facilities.
7.9 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of, or any assets constituting a business
unit of, or make any other investment in, any Person (an "Investment"), except
(without duplication):
(a) extensions of trade credit and endorsements of negotiable
instruments and other negotiable documents in the ordinary course of
business;
(b) Investments in Cash Equivalents;
71
(c) loans and advances to employees and directors of Holdings, the
Borrower or any of its Subsidiaries for travel, entertainment and
relocation expenses in the ordinary course of business in an aggregate
amount for Holdings, the Borrower and its Subsidiaries not to exceed
$500,000 at any time outstanding;
(d) Investments by (i) the Borrower in its Domestic Subsidiaries, (ii)
any Domestic Subsidiaries in the Borrower or in any other Domestic
Subsidiary, (iii) any Foreign Subsidiary in any other Foreign Subsidiary or
(iv) the Borrower or any of its Domestic Subsidiaries in Foreign
Subsidiaries in an amount for this clause (iv) not to exceed at any one
time outstanding (x) $2,000,000 plus (y) at the time made any Available
Excess Equity Proceeds in an aggregate amount not to exceed $10,000,000;
(e) securities and other Investments held by the Borrower or any of
its Subsidiaries prior to the Closing Date and listed on Schedule 7.9(e);
(f) advances by the Borrower to Holdings, in lieu of the payment of
cash dividends, to enable Holdings to make the payments contemplated by
subsection 7.7, provided that, if such advances are made with respect to
the payments contemplated by subsection 7.7(a) or 7.7(b), such advances are
used to make such payments within fifteen Business Days after such advances
are made;
(g) Permitted Acquisitions in an aggregate amount not to exceed (i)
the Permitted Acquisition Amount plus (ii) at the time made, any Available
Excess Equity Proceeds plus (iii) any consideration paid in equity
securities of Holdings;
(h) repurchases of Senior Subordinated Notes to the extent permitted
under subsection 7.10;
(i) Rate Protection Agreements; and
(j) other Investments not to exceed $1,000,000 plus (i) any returns of
or on such Investments and (ii) any Available Excess Equity Proceeds.
7.10 Limitation on Optional Payments and Modifications of Debt Instruments
and other Obligations. (a) Make any optional payment or prepayment on or
redemption, defeasance or purchase of any Senior Subordinated Notes except (i)
in accordance with the provisions of subsection 3.1(b)(i)(u), (ii) with the
proceeds of Indebtedness permitted under subsections 7.2(e) (in connection with
the incurrence of Refinancing Indebtedness under subsection 7.2(o)) and 7.2(o)
and (iii) as long as no Default or Event of Default has occurred and is
continuing, in an aggregate cash amount not to exceed $15,000,000 unless the
ratio of Consolidated Total Debt to Consolidated EBITDA (calculated on the terms
set forth in subsection 7.1(a)) for the most recent completed four fiscal
quarters prior to any such optional payment, prepayment, redemption, defeasance
or purchase is less than or equal to 2.0 to 1.0 and then in an aggregate cash
amount not to exceed $30,000,000, (b) amend, modify or change, or consent or
agree to any amendment, modification or change to any of the terms of the Senior
Subordinated Note Indenture (other than any such amendment, modification or
72
change which (i) would extend the maturity or reduce the amount of any payment
of principal thereof or would reduce the rate or extend the date for payment of
interest thereon or (ii) does not in any way adversely affect the interests of
the Administrative Agent or the Lenders hereunder, thereunder or under the other
Loan Documents or (iii) is of a technical or clarifying nature), (c) designate
any Indebtedness having a principal amount in excess of $20,000,000 as "Senior
Debt" under and as defined in the Senior Subordinated Note Indenture without the
consent of the Administrative Agent, or (d) amend, modify or change, or consent
or agree to any amendment, modification or change to the articles of
incorporation (or such similar charter documents) of the Borrower or any
Subsidiary in any material respect.
7.11 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, provided, that the
foregoing restriction shall not prohibit (i) payment of reasonable fees,
expenses and other benefits to directors of Holdings, the Borrower and its
Subsidiaries not in excess of $250,000 per fiscal year, (ii) consummation of the
Transactions contemplated by the Acquisition Documents or the Recapitalization,
(iii) any payment or other transaction pursuant to any tax sharing agreement,
(iv) payments permitted under subsection 7.7 or Investments permitted by
subsection 7.9, (v) the Indebtedness permitted pursuant to subsection 7.2(b),
(vi) any employment or consulting agreement or arrangement entered into by the
Borrower or any of its Subsidiaries pursuant to the Transactions contemplated
herein or in the ordinary course of business, (vii) transactions between the
Borrower and any Subsidiary and between Subsidiaries, (viii) the transactions
contemplated by the agreements listed on Schedule 7.11(viii), (ix)
indemnification payments to officers and directors of Holdings, the Borrower or
its Subsidiaries, (x) payments to Green for management, financial advisory and
investment banking services pursuant to the Management Services Agreement and
(xi) transactions with any Person on an arms length basis if such Person is an
Affiliate solely by reason of being controlled by Green or its Affiliates.
7.12 Limitation on Changes in Fiscal Year. Permit the fiscal year of the
Borrower to end on a day other than December 31.
7.13 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses which are
reasonably related to those businesses in which the Companies are engaged on the
date of this Agreement or extensions thereof, including, without limitation, any
business involving the manufacturing or marketing of products sold in health
food stores or stores that sell similar products.
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SECTION 8. NEGATIVE COVENANTS OF HOLDINGS
Holdings agrees that, from and after the Closing Date and so long as the
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document or any Letter of
Credit remains outstanding, Holdings shall not, unless the Required Lenders
shall otherwise agree in writing:
8.1 Limitation on Holdings' Activities. Incur any Indebtedness or create
any Guarantee Obligations, or make any investments, loans or advances to any
Person, or purchase any material assets, or conduct, transact or otherwise
engage, or commit to transact, conduct or otherwise engage, in any business or
operations other than (i) transactions contemplated in connection with the
consummation of the Transactions or the Recapitalization, (ii) the ownership of
the Capital Stock of the Borrower, and the exercise of rights and performance of
obligations in connection therewith, (iii) the entry into, and exercise of
rights and performance of obligations in respect of, (A) this Agreement and the
Guarantee and Collateral Agreement and the Senior Subordinated Note Indenture
(including Notes exchanged thereunder), (B) contracts and agreements with or for
the benefit of officers, directors, employees and consultants of Holdings or any
Subsidiary thereof relating to their employment or directorships or consultancy,
(C) insurance policies and related contracts and agreements, and (D) equity
subscription agreements, registration rights agreements, warrant agreements and
voting and other stockholder agreements, engagement letters, underwriting
agreements, stock option plans and agreements and other agreements (including,
without limitation, acquisition agreements) in respect of its equity securities
or any offering, issuance or sale thereof, including, without limitation,
listing agreements with securities exchanges and acquisition agreements pursuant
to which equity securities of Holdings will be issued and (E) the PIK Preferred
or other preferred stock of Holdings (including, without limitation, the
repurchase, redemption or retirement thereof to the extent permitted hereunder),
(iv) the offering, issuance and sale of its equity securities (including,
without limitation, in connection with an acquisition) to the extent such
offering, issuance or sale does not constitute a Default or Event of Default
under Section 10(k), (v) the filing of registration statements, and compliance
with applicable reporting and other obligations, under and in compliance with
its Federal, state or other securities laws or applicable securities exchange
requirements, (vi) the performance of obligations under and in compliance with
its certificate of incorporation and by-laws, or any applicable law, ordinance,
regulation, rule, order, judgment, decree or permit, including, without
limitation, as a result of or in connection with the activities of its
Subsidiaries, (vii) the performance of contractual obligations in existence on
the date hereof or otherwise permitted hereunder, including, without limitation,
the Management Services Agreement, (viii) the incurrence and payment of its
business expenses and any taxes for which it may be liable, (ix) the incurrence
and exercise of rights and performance of obligations in respect of any
Refinancing Indebtedness pursuant to subsection 7.2(o), (x) the incurrence and
exercise of rights and performance of obligations in respect of Indebtedness
permitted by subsection 7.9(f) or (xi) other activities reasonably incidental or
related to the foregoing.
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8.2 Restricted Payments. Use any amount received by it pursuant to
subsection 7.7 or 7.9(f) from the Borrower or any of its Subsidiaries for any
purpose other than as set forth in such subsections.
8.3 Net Proceeds. Fail to contribute the Net Proceeds of any Equity
Offering on or after the Closing Date to the Borrower within two Business Days
after Holdings receives such Net Proceeds, except that Holdings may retain such
Net Proceeds to repurchase, redeem or retire PIK Preferred or other preferred
stock in connection with the Recapitalization or as contemplated or otherwise
permitted by subsection 3.1(b).
8.4 Dividends. Except as contemplated by subsection 3.1(b), 7.7 or 7.9(f)
or in connection with the Recapitalization, declare or pay any dividend (other
than dividends payable solely in Capital Stock of Holdings) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for the purchase, redemption, defeasance, retirement or other acquisition of
Capital Stock of Holdings, or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Holdings or any of its Subsidiaries.
SECTION 9. GUARANTEE
9.1 Guarantee. (a) To induce the Administrative Agent and the Lenders to
execute and deliver this Agreement and to make the Extensions of Credit provided
for herein to the Borrower, Holdings hereby absolutely, unconditionally and
irrevocably guarantees to the Administrative Agent, the Documentation Agent and
the Lenders and their respective successors, permitted transferees and permitted
assigns, the prompt and complete payment and performance by the Borrower when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations. Holdings further agrees to pay any and all reasonable expenses
(limited in the case of counsel to all reasonable fees and disbursements of one
counsel) which may be paid or incurred by the Administrative Agent or any Lender
in enforcing, or obtaining advice of one counsel in respect of, any rights with
respect to, or collecting, any or all of the Obligations and/or enforcing any
rights with respect to, or collecting against, Holdings under this Section 9.
Subject to subsection 9.5, this Guarantee shall remain in full force and effect
until the Obligations are indefeasibly paid in full, no Letter of Credit remains
outstanding and the Commitments are terminated, notwithstanding that from time
to time prior thereto the Borrower may be free from any Obligations.
(b) No payment or payments made by the Borrower or any other Person or
received or collected by the Administrative Agent or any Lender from the
Borrower or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of Holdings under this Section 9 which
shall, notwithstanding any such payment or payments (other than payments made by
Holdings in respect of the Obligations or payments received or collected from
Holdings in respect of the Obligations), remain in full force and effect until,
subject to subsection 9.5, the Obligations are indefeasibly paid in full, no
Letter of Credit remains
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outstanding and the Commitments are terminated. Holdings agrees that whenever,
at any time, or from time to time, it shall make any payment to the
Administrative Agent or any Lender on account of its liability under this
Section 9, it will notify the Administrative Agent and such Lender in writing
that such payment is made under this Section 9 for such purpose.
9.2 No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Section 9, Holdings shall not
be entitled to be subrogated to any of the rights of the Administrative Agent or
any Lender against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative Agent or any
Lender for the payment of the Obligations, nor shall Holdings seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by Holdings hereunder, until all
amounts owing to the Administrative Agent and the Lenders by the Borrower on
account of the Obligations are paid in full, the Commitments are terminated and
no Letter of Credit remains outstanding. If any amount shall be paid to Holdings
on account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, the Commitments shall not have been terminated
or a Letter of Credit remains outstanding, such amount shall be held by Holdings
in trust for the Administrative Agent and the Lenders, segregated from other
funds of Holdings, and shall, forthwith upon receipt by Holdings, be turned over
to the Administrative Agent in the exact form received by Holdings (duly
indorsed by Holdings to the Administrative Agent, if required), to be applied
against the Obligations, whether matured or unmatured, in such order as the
Administrative Agent may determine. The provisions of this paragraph shall
survive the termination of the guarantee contained in this Section 9 and the
payment in full of the Obligations, the termination of the Commitments and the
cancellation, revocation or termination of all outstanding Letters of Credit.
9.3 Amendments, etc. with respect to the Obligations; Waiver of Rights.
Holdings shall remain obligated hereunder notwithstanding that, without any
reservation of rights against Holdings, and without notice to or further assent
by Holdings, any demand for payment of any of the Obligations made by the
Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender, and any of the Obligations continued, and the Obligations, or
the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and this Agreement, the other Loan Documents, any Interest
Rate Protection Agreement entered into by the Borrower with any Lender or any
Affiliate of any Lender and any other documents executed and delivered in
connection herewith or therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders, as the case may be) or such Lender or Affiliate may deem advisable from
time to time, and any collateral security, guarantee or right of offset at any
time held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender or its Affiliates shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as
security for the Obligations or for the guarantee contained in this Section 9 or
any property subject thereto. When making any demand hereunder against
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Holdings, the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on the Borrower or any other guarantor, and
any failure by the Administrative Agent or any Lender to make any such demand or
to collect any payments from the Borrower or any such other guarantor or any
release of the Borrower or such other guarantor shall not relieve Holdings of
its obligations or liabilities under this Section 9, and shall not impair or
affect the rights and remedies, express or implied, or as a matter of law, of
the Administrative Agent or any Lender against Holdings. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.
9.4 Guarantee Absolute and Unconditional. Holdings waives, to the fullest
extent permitted by applicable law, any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon the guarantee contained
in this Section 9 or acceptance of the guarantee contained in this Section 9;
the Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 9; and all dealings
between the Borrower or Holdings, on the one hand, and the Administrative Agent
and the Lenders, on the other, shall likewise be conclusively presumed to have
been had or consummated in reliance upon the guarantee contained in this Section
9. Holdings waives, to the fullest extent permitted by applicable law,
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or Holdings with respect to the Obligations.
This Guarantee shall be construed as a continuing, absolute, irrevocable and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of this Agreement, any Note, any other Loan
Document or any Interest Rate Protection Agreement entered into by the Borrower
with any Lender or any Affiliate of any Lender, any of the Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower, Holdings or any other Person against the Administrative Agent or
any Lender or (c) any other circumstance whatsoever (with or without notice to
or knowledge of the Borrower or Holdings) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of Holdings under the guarantee contained in this Section 9, in
bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against Holdings, the Administrative Agent and any Lender may, but
shall be under no obligation to, pursue such rights and remedies as it may have
against the Borrower or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower or any such
other Person or of any such collateral security, guarantee or right of offset,
shall not relieve Holdings of any liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Lender against Holdings. For
the purposes hereof, "demand" shall include the commencement and continuance of
any legal proceedings. The guarantee contained in this
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Section 9 shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon Holdings and its successors, and shall
inure to the benefit of the Administrative Agent and the Lenders, and their
respective successors, permitted transferees and permitted assigns, until,
subject to subsection 9.5, all the Obligations and the obligations of Holdings
under this Guarantee shall have been indefeasibly satisfied by payment in full,
no Letter of Credit remains outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of this Agreement the
Borrower may be free from any Obligations.
9.5 Reinstatement. The guarantee contained in this Section 9 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any other Person or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any other Person or any substantial part of its property, or
otherwise, all as though such payments had not been made.
9.6 Payments. Holdings hereby agrees that the Obligations will be paid to
the Administrative Agent without set-off or counterclaim in Dollars at the
office of the Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan, or any
other amount payable hereunder, within five Business Days after any such
interest or other amount becomes due in accordance with the terms thereof
or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or
any such other Loan Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made or furnished; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 7 or
Section 8, or subsection 5.5 or 5.9 of the Guarantee and Collateral
Agreement; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan
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Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days; or
(e) The Borrower or any other Loan Party shall (i) default in any
payment of principal of or interest of any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or such Guarantee Obligation to become payable;
provided, however, that no Default or Event of Default shall exist under
this paragraph unless the aggregate amount of Indebtedness and/or Guarantee
Obligations in respect of which any default or other event or condition
referred to in this paragraph shall have occurred shall be equal to at
least $2,000,000; or
(f) (i) The Borrower or any other Loan Party shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any other Loan Party shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any other Loan Party any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be entered any order for the
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of the assets of the Borrower
or any other Loan Party which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Borrower or any other Loan Party shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
the Borrower or any other Loan Party shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any
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"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in
favor of the PBGC or a Plan shall arise on the assets of the Borrower or
any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed (or a
trustee shall be appointed) to administer, or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan, or (vi) any other
similar event or condition shall occur or exist with respect to a Plan that
could result in a liability (other than in the ordinary course), and in
each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably
be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the Borrower
or any of its Subsidiaries involving individually a liability of $1,500,000
(not paid or fully covered by insurance or with respect to which coverage
has been denied by the insurers or not covered by the indemnity of the
Sellers under the Stock Purchase Agreement) or in the aggregate a liability
of $3,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60 days
from the entry thereof; or
(i) (i) Except as provided in subsection 12.16, any of the Security
Documents shall cease, for any reason, to be in full force and effect, or
the Borrower or any other Loan Party which is a party to any of the
Security Documents shall so assert in writing or (ii) any Lien created by
any of the Security Documents shall, by reason of any breach by any Loan
Party thereto of any of its covenants or other obligations contained in
such Security Documents, cease to be enforceable and of the same effect and
priority, purported to be created thereby; or
(j) Any Guarantee shall cease, for any reason other than release by the
Lenders, to be in full force and effect or any Guarantor shall so assert;
or
(k) A Change of Control shall occur; or
(l) The subordination provisions contained in Article XII (or in the
case of any Senior Subordinated Note Indenture relating to Refinancing
Indebtedness, the corresponding article) of the Senior Subordinated Note
Indenture shall cease to be enforceable in accordance with their terms;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii) or (iii) of paragraph (f) of this Section with respect to
the Borrower, automatically the Commitments (including the Swing Line
Commitment) shall immediately terminate and the
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Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments (including the Swing Line Commitment) to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) owing under this
Agreement to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Bank and the L/C Participants and the other Lenders, a security interest
in such cash collateral to secure all obligations of the Borrower under this
Agreement and the other Loan Documents. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other Obligations. After all such Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations shall
have been satisfied and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower. The Borrower shall execute and deliver to the Administrative Agent,
for the account of the Issuing Bank and the L/C Participants, such further
documents and instruments as the Administrative Agent may request to evidence
the creation and perfection of the security interest in such cash collateral
account.
SECTION 11. THE ADMINISTRATIVE AGENT
11.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents, and each Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
81
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
11.2 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
11.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
11.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders or all Lenders, as
the case may be, as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders or all Lenders, as the case
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may be, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and all future holders of the Loans.
11.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender or the
Borrower or Holdings referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders or all Lenders, as the case may be;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
11.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Administrative
Agent hereafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans and
issue or participate in Letters of Credit hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder or furnished
to the Administrative Agent for the account of or with a copy or counterpart for
any of the Lenders, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought (or, if
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indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with their Commitment Percentages immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. The agreements in this subsection shall
survive the payment of the Loans and all other amounts payable hereunder.
11.8 Administrative Agent in Its Individual Capacity. Chase and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though Chase were not the Administrative
Agent hereunder and under the other Loan Documents. With respect to the Loans
made by it and with respect to any Letter of Credit issued or participated in by
it, Chase shall have the same rights and powers under this Agreement and the
other Loan Documents as any Lender and may exercise the same as though it were
not the Administrative Agent, and the terms "Lender" and "Lenders" shall include
Chase in its individual capacity.
11.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall be subject to the approval of the Borrower if no Default or Event of
Default shall have occurred and be continuing (which approval shall not be
unreasonably withheld), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 11 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
11.10 Issuing Bank; Swing Line Lender. The provisions of this Section 11
(other than subsection 11.9) shall apply to the Issuing Bank and the Swing Line
Lender mutatis mutandis to the same extent as such provisions apply to the
Administrative Agent.
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SECTION 12. MISCELLANEOUS
12.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
and each other Loan Party which is a party to the relevant Loan Documents
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder, (b) release collateral (except that no
consent of any Lender or the Required Lenders is required to permit the release
of a Lien or Guarantee in connection with any Asset Sale permitted under Section
7 of this Agreement or any other transaction permitted under such Section) or
(c) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) reduce the amount or
extend the scheduled date of maturity of any Loan made by any Lender or of any
installment thereof, or any Reimbursement Obligation, or reduce the stated rate
of any interest thereon or reduce the fee payable hereunder to any Lender or
extend the scheduled date of any payment thereof or increase the aggregate
amount or extend the expiration date of any Lender's Commitments, in each case
without the written consent of each Lender directly affected thereby, (ii)
amend, modify or waive any provision of this subsection or reduce the percentage
specified in the definition of Required Lenders or consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents or release all or substantially all of
the Collateral or release any Guarantee (other than as provided above), in each
case without the written consent of all the Lenders, (iii) amend, modify or
waive any provision of subsections 2.10 through 2.18 without the written consent
of the Issuing Bank, (iv) amend, modify or waive any provision of subsections
2.6 through 2.9 without the written consent of the Swing Line Lender, or (v)
amend, modify or waive any provision of Section 11 without the written consent
of the then Administrative Agent and Issuing Bank. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Lenders
and shall be binding upon the Borrower, the Lenders, the Administrative Agent
and all future holders of the Loans. In the case of any waiver, the Borrower,
the Lenders and the Administrative Agent shall be restored to their former
positions and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon. Notwithstanding
anything to the contrary in this subsection 12.1, no consent of any Lender or of
the Required Lenders shall be required to permit the release of a Lien in
connection with any Asset Sale or other transaction permitted by Section 7 of
this Agreement; the Administrative Agent shall execute such release and
termination as may be required by this Agreement.
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12.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by facsimile
transmission followed by hand-delivery) and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered, or three
days after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, addressed as follows in the case of the Borrower
and the Administrative Agent by messenger or by mail, and as set forth on its
signature page hereto in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto:
Holdings: Twinlab Corporation
c/o Twin Laboratories Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Borrower: Twin Laboratories Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Partners
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Kramer, Levin, Naftalis & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative The Chase Manhattan Bank
Agent: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: Chase Agent Bank Services
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.4, 2.8, 2.11, 3.1, 3.2 or 3.7 shall
not be effective until received.
12.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
12.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Extensions of
Credit hereunder.
12.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the syndication of the Loans and the
Commitments under, and the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, (b) to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents prepared in
connection herewith or therewith, including, without limitation, the fees and
disbursements of one counsel to the Lenders and the Administrative Agent, (c) to
pay, and indemnify and hold harmless each Lender and the Administrative Agent
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise, mortgage
recording and other similar taxes, if any, which are payable or determined to be
payable in connection with the execution and delivery of, or administration of
any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and (d) to
pay, and indemnify and hold harmless each Lender and the Administrative Agent
from and against, any and all other liabilities (excluding income taxes),
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents, the Stock Purchase Agreement, the
Transactions, the Recapitalization or the use of the proceeds of the Extensions
of Credit in connection with the Transactions or the Recapitalization, and any
such other documents, including, without limitation, any of the foregoing
relating to the violation of, noncompliance with or liability under any
Environmental Law applicable to the operations of the Borrower, any of its
Subsidiaries or any of the Properties (all the foregoing in this clause (d),
collectively, the
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"indemnified liabilities"), provided, that the Borrower shall have no obligation
hereunder to the Administrative Agent or any Lender with respect to indemnified
liabilities arising from (i) the gross negligence or willful misconduct of the
Administrative Agent or any such Lender or (ii) legal proceedings commenced
against the Administrative Agent or any such Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such. The agreements in this
subsection shall survive repayment of the Loans and all other amounts payable
hereunder.
12.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower,
Holdings, the Lenders, the Administrative Agent and their respective successors
and assigns, except that neither the Borrower nor Holdings may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender and any assignment or transfer by any Lender of
its rights or obligations under this Agreement or any Loan Document must be made
in compliance with this subsection 12.6 (and any purported assignment in
violation of this subsection shall be null and void).
(b) Any Lender may, in the ordinary course of its lending or investment
business and in accordance with applicable law, at any time sell to one or more
financial institutions or other entities ("Loan Participants") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a Loan
Participant, (i) such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible for the performance thereof, (iii) such Lender shall remain
the holder of any such Loan or other interest for all purposes under this
Agreement and the other Loan Documents, (iv) the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and the other
Loan Documents, and (v) no Loan Participant under any participation shall have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except
with respect to the matters described in clauses (i) and (ii) of the proviso to
the second sentence of subsection 12.1. The Borrower agrees that, while an Event
of Default shall have occurred and be continuing if amounts outstanding under
this Agreement are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each Loan
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of set off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in subsection 12.7(a) as fully as if it were a
Lender hereunder. The Borrower also agrees that each Loan Participant shall be
entitled to the benefits of subsections 3.9, 3.10 and 3.11 with respect to its
participation in the Commitments and the Extensions of Credit outstanding from
time to time as if it were a Lender; provided that, in the case of subsection
3.10 such Loan Participant shall have complied with the requirements of said
subsection and provided, further, that no Loan Participant shall be
88
entitled to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in connection with the
same event or circumstance in respect of the amount of the participation
transferred by such transferor Lender to such Loan Participant had no such
transfer occurred.
(c) Any Lender may, in the ordinary course of its lending or investment
business and in accordance with applicable law, at any time and from time to
time assign, with the consent of the Borrower (so long as no Default or Event of
Default shall have occurred and be continuing) and the Administrative Agent in
the case of an assignment other than to another Lender or an affiliate thereof
(which in each case shall not be unreasonably withheld), to any other Lender or
any affiliate thereof or to an additional bank or financial institution (an
"Assignee") all or any part of its rights and obligations under this Agreement
and the other Loan Documents in an amount at least equal to $5,000,000 divided
by $50,000,000 and multiplied by the aggregate Commitments at the time of
assignment pursuant to an Assignment and Acceptance, substantially in the form
of Exhibit G, executed by such Assignee, such assigning Lender (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof, by the
Borrower (so long as no Default or Event of Default shall have occurred and be
continuing) and the Administrative Agent (which consent shall not unreasonably
be withheld)) and delivered to the Administrative Agent for its acceptance and
recording in the Register, provided that, (i) in the case of any such assignment
to an Assignee that is an affiliate of the assigning Lender, the consent of the
Borrower shall only be required if, at the time of such assignment, such
Assignee would be entitled to require the Borrower to pay, or the Borrower would
be required to pay, greater amounts under subsection 3.9 or 3.10 than if no such
assignment had occurred and (ii) in the case of any such assignment to an
additional bank or financial institution, if such assignment is of less than all
of the rights and obligations of the assigning Lender, the sum of the aggregate
principal amount of the Loans, the aggregate amount of the L/C Obligations and
the aggregate amount of the unused Commitments (A) being assigned to such
additional bank or financial institution and (B) remaining with the assigning
Lender are not, in each case, less than $5,000,000 (or such lesser amount as may
be agreed to by the Borrower and the Administrative Agent) divided by
$50,000,000 and multiplied by the aggregate Commitments at the time of
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning Lender
shall cease to be a party hereto except as to subsections 3.9, 3.10 and 9.5).
Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
subsection, the consent of the Borrower shall not be required, and, unless
requested by the Assignee and/or the assigning Lender, new Notes shall not be
required to be executed and delivered by the Borrower, for any assignment which
occurs when any of the events described in Section 10(f) shall have occurred and
be continuing.
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(d) The Administrative Agent, on behalf of the Borrower, shall maintain at
the address of the Administrative Agent referred to in subsection 12.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as the owner of a Loan
or other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding any notice to the
contrary. Any assignment of any Loan or other obligation hereunder (whether or
not evidenced by a Note) shall be effective only upon appropriate entries with
respect thereto being made in the Register. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Administrative
Agent) together with, except in the case of an assignment pursuant to subsection
3.13, payment to the Administrative Agent of a registration and processing fee
of $3,500, the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Loan Participant
or Assignee (each, a "Transferee") and any prospective Transferee, subject to
the provisions of subsection 12.15, any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge that
the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law, provided that no such assignment, whether to
a Federal Reserve Bank or other entity, shall release a Lender from any of its
obligations hereunder or substitute any such Federal Reserve Bank or other
entity for such Lender as a party hereto or permit an absolute assignment to
occur other than in accordance with such provisions of this subsection.
12.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 10(f), or otherwise
except as to subsections 3.13 and 12.6), in a greater
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proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender's Loans or the Reimbursement Obligations
owing to it, or interest thereon, such Benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each such
other Lender's Loan or the Reimbursement Obligations owing to it, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
12.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
12.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without, to the extent
permitted by law, invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not, to the extent
permitted by law, invalidate or render unenforceable such provision in any other
jurisdiction.
12.10 Integration. This Agreement and the other Loan Documents represent
the entire agreement of the Borrower, the Administrative Agent and the Lenders
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof or thereof not
expressly set forth or referred to herein or in the other Loan Documents.
12.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
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12.12 Submission To Jurisdiction; Waivers. Each of the Borrower and
Holdings hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower or Holdings at its address set forth in subsection 12.2 or at such
other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential
damages.
12.13 Acknowledgements. Each of the Borrower and Holdings hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower or Holdings arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower and Holdings, on the other hand, in connection herewith or
therewith is solely that of creditor and debtor; and
92
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower, Holdings and the Lenders.
12.14 WAIVERS OF JURY TRIAL. THE BORROWER, HOLDINGS, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
12.15 Confidentiality. Each of the Administrative Agent and each Lender
agrees to keep confidential all non-public information provided to it by or on
behalf of the Borrower, Holdings, or any Subsidiary that is designated by the
Borrower, Holdings or any Subsidiary as confidential; provided that nothing
herein shall prevent the Administrative Agent or any Lender from disclosing any
such information (a) to the Administrative Agent or any other Lender, (b) to any
Transferee or prospective Transferee which agrees to comply with the provisions
of this subsection 12.15, (c) to the employees, directors, agents, attorneys,
accountants and other professional advisors of such Lender for purposes related
to the transactions contemplated by the Loan Documents, (d) upon the request or
demand of any Governmental Authority having jurisdiction over the Administrative
Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to applicable
law or regulation, (f) which has been publicly disclosed other than in breach of
this subsection 12.15, or (g) in connection with the exercise of any remedy
hereunder or under any other Loan Document.
12.16 Collateral Release. (a) The obligations arising under the Guarantee
and Collateral Agreement shall be unconditional and binding on each of Holdings
and the Borrower pursuant to the terms therein; provided that if either (i) on
the last day of any period of four fiscal quarters the ratio of Consolidated
Total Debt to consolidated EBITDA (as calculated according to the provisions of
subsection 7.1(a)) is less than 1.5 to 1.0 or (ii) ratings of BBB- and Baa3 or
above are attained by the Borrower or Holdings from Standard & Poor's Ratings
Group and ▇▇▇▇▇'▇ Investors Services, respectively, the Collateral pledged (but
not the Guarantee contained) in such Guarantee and Collateral Agreement shall be
released; and provided further that if such performance criteria at any time
thereafter is not maintained, such Collateral shall again be pledged in favor of
the Administrative Agent, for the ratable benefit of the Lenders, pursuant to
the Guarantee and Collateral Agreement.
(b) On the Closing Date, the Administrative Agent shall release the
Mortgage on the real property owned by the Borrower in New York State that was
granted pursuant to the Existing Credit Agreement. After the Closing Date, if at
any time the average outstanding Extensions of Credit are in excess of
$30,000,000 for more than 30 days or an Event of Default has occurred and is
continuing, upon the request of the Administrative Agent (and provided the
conditions to release of Collateral in subsection 12.16(a) have not been
satisfied), the Borrower and each Subsidiary shall execute a Mortgage or
Mortgages in favor of the Administrative Agent, for the ratable benefit of the
Lenders, on its real property located
93
in New York State upon such terms and conditions as the Administrative Agent
shall reasonably request.
12.17 Amendment of Certain Cross References. Cross references in any of the
Loan Documents to "Sections" and/or "subsections" and/or "Exhibits" and/or
"Schedules" in the Existing Credit Agreement shall be deemed to be cross
references to the corresponding "Sections" and/or "subsections" and/or
"Exhibits" and/or "Schedules" in this Agreement.
12.18 IPO Termination. This amendment and restatement of the Existing
Credit Agreement (as evidenced by this Agreement) shall only become effective on
the consummation of the IPO. In the event that the IPO fails to be consummated
on or before November 30, 1996, the Commitments hereunder shall automatically
terminate and this amendment and restatement of the Existing Credit Agreement
shall be null and void.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
TWINLAB CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
TWIN LABORATORIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
THE CHASE MANHATTAN BANK as
Administrative Agent, Issuing Bank, Swing Line
Lender and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇
Title: Vice President
Commitment Amount: $8,000,000.00
THE BANK OF NEW YORK, as Co-Agent and
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
THE BANK OF NEW YORK
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Amount: $6,000,000.00
THE FIRST NATIONAL BANK OF BOSTON, as
a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
Address for Notices:
THE FIRST NATIONAL BANK OF BOSTON
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Amount: $4,500,000.00
DRESDNER BANK A.G. NEW YORK BRANCH
AND GRAND CAYMAN BRANCH, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: V.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VP
Address for Notices:
DRESDNER BANK A.G.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Amount: $6,000,000.00
FIRST BANK NATIONAL ASSOCIATION, as a
Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Commercial banking Officer
Address for Notices:
FIRST BANK NATIONAL ASSOCIATION
First Bank Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Amount: $6,000,000.00
EUROPEAN AMERICAN BANK, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address for Notices:
EUROPEAN AMERICAN BANK
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Amount: $4,500,000.00
GIROCREDIT BANK AKTIENGESELLSCHAFT
DER SPARKASSEN, GRAND CAYMAN
ISLAND BRANCH, as a Lender
By: ▇. ▇▇▇▇▇
--------------------------
Name:
Title:
Address for Notices:
GIROCREDIT BANK
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Amount: $4,500,000.00
THE NIPPON CREDIT BANK, LTD., as a
Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Manager
Address for Notices:
THE NIPPON CREDIT BANK, LTD.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Amount: $6,000,000.00
ZIONS FIRST NATIONAL BANK, as a Lender
By: /s/ P. ▇▇▇▇ ▇▇▇▇▇
--------------------------
Name: P. ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Address for Notices:
ZIONS FIRST NATIONAL BANK
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: P. ▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Amount: $4,500,000.00
ANNEX A TO
AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT
---------------------------------------------------
PRICING GRID
Applicable Margin Applicable
Ratio of Consolidated Total Debt to for Eurodollar Margin for Commitment
Consolidated Interest Coverage Ratio Consolidated EBITDA Loans ABR Loans Fee Rate
------------------------------------ ----------------------------------- ----- ---------- ---------
Less than 2.00 to 1.00 or Greater than 4.00 to 1.00 2.00% .75% .375%
Greater than or equal to 2.00 to 1.00 and Less than or equal to 4.00 to 1.00 1.75% .50% .375%
Greater than or equal to 2.50 to 1.00 and Less than or equal to 3.50 to 1.00 1.50% .25% .375%
Greater than or equal to 3.00 to 1.00 and Less than or equal to 3.00 to 1.00 1.25% .0% .375%
Greater than or equal to 3.50 to 1.00 and Less than or equal to 2.50 to 1.00 1.00% .0% .300%
Greater than or equal to 4.00 to 1.00 and Less than or equal to 2.00 to 1.00 .75 % .0% .250%