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EXHIBIT 4.01
CONFORMED COPY
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CSK AUTO, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 30, 1999
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$396,160,000
Credit Facility
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THE CHASE MANHATTAN BANK,
as Administrative Agent,
and
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Documentation Agent,
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CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................2
1.1 Defined Terms.......................................2
1.2 Other Definitional Provisions......................23
SECTION 2. TERM LOANS..................................23
2.1 Term Loans.........................................23
2.2 Repayment of Term Loans............................23
2.3 Use of Proceeds....................................24
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS .................................24
3.1 Revolving Credit Commitments.......................24
3.2 Commitment Fee.....................................24
3.3 Proceeds of Revolving Credit Loans.................25
3.4 Swing Line Commitment..............................25
3.5 Issuance of Letters of Credit......................26
3.6 Participating Interests............................27
3.7 Procedure for Opening Letters of Credit............27
3.8 Payments in Respect of Letters of Credit...........27
3.9 Letter of Credit Fees..............................28
3.10 Letter of Credit Reserves.........................29
3.11 Further Assurances................................30
3.12 Obligations Absolute..............................30
3.13 Assignments.......................................30
3.14 Participations....................................31
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS......31
4.1 Procedure for Borrowing............................31
4.2 Conversion and Continuation Options................32
4.3 Changes of Commitment Amounts......................32
4.4 Optional and Mandatory Prepayments; Repayments
of Term Loans .....................................33
4.5 Interest Rates and Payment Dates...................36
4.6 Computation of Interest and Fees...................37
4.7 Certain Fees.......................................37
4.8 Inability to Determine Interest Rate...............38
4.9 Pro Rata Treatment and Payments....................38
4.10 Illegality........................................41
4.11 Requirements of Law...............................41
4.12 Indemnity.........................................44
4.13 Repayment of Loans; Evidence of Debt..............44
4.14 Replacement of Lenders............................45
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SECTION 5. REPRESENTATIONS AND WARRANTIES..............46
5.1 Financial Condition................................46
5.2 No Change..........................................47
5.3 Corporate Existence; Compliance with Law...........47
5.4 Corporate Power; Authorization.....................48
5.5 Enforceable Obligations............................48
5.6 No Legal Bar.......................................49
5.7 No Material Litigation.............................49
5.8 Investment Company Act.............................49
5.9 Federal Regulation.................................49
5.10 No Default........................................49
5.11 Taxes.............................................50
5.12 Subsidiaries......................................50
5.13 Ownership of Property; Liens......................50
5.14 ERISA.............................................50
5.15 Collateral Documents..............................51
5.16 Copyrights, Permits, Trademarks and Licenses......52
5.17 Environmental Matters.............................52
5.18 Accuracy and Completeness of Information..........53
5.19 Year 2000 Matters.................................53
SECTION 6. CONDITIONS PRECEDENT........................54
6.1 Conditions to Initial Loans and Letters of Credit..54
6.2 Conditions to All Loans and Letters of Credit......57
SECTION 7. AFFIRMATIVE COVENANTS.......................57
7.1 Financial Statements...............................58
7.2 Certificates; Other Information....................58
7.3 Payment of Obligations.............................60
7.4 Conduct of Business and Maintenance of Existence...60
7.5 Maintenance of Property; Insurance.................60
7.6 Inspection of Property; Books and Records;
Discussions .......................................61
7.7 Notices............................................61
7.8 Environmental Laws.................................62
7.9 Receipt of Stock Certificates and Supplements
to Subsidiary Guarantee and Subsidiary Security
Agreement .........................................62
SECTION 8. NEGATIVE COVENANTS..........................63
8.1 Indebtedness.......................................63
8.2 Limitation on Liens................................64
8.3 Limitation on Contingent Obligations...............66
8.4 Prohibition of Fundamental Changes.................67
8.5 Prohibition on Sale of Assets......................67
8.6 Limitation on Investments, Loans and Advances......68
8.7 Capital Expenditures...............................70
8.8 Consolidated EBITDA................................70
8.9 Debt to EBITDA.....................................71
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8.10 Interest Coverage.................................71
8.11 Limitation on Dividends...........................71
8.12 Transactions with Affiliates......................72
8.13 Prepayments and Amendments of Permanent
Subordinated Debt. ...............................73
8.14 Limitation on Changes in Fiscal Year..............73
8.15 Limitation on Lines of Business...................73
8.16 Limitation on Interest Rate Agreements............73
SECTION 9. EVENTS OF DEFAULT...........................74
SECTION 10. THE ADMINISTRATIVE AGENT; THE ISSUING
LENDER ....................................77
10.1 Appointment.......................................77
10.2 Delegation of Duties..............................77
10.3 Exculpatory Provisions............................77
10.4 Reliance by Administrative Agent..................78
10.5 Notice of Default.................................78
10.6 Non-Reliance on Administrative Agent and
Other Lenders ....................................78
10.7 Indemnification...................................79
10.8 The Administrative Agent in its Individual
Capacity .........................................79
10.9 Successor Agent...................................80
10.10 Issuing Lender as Issuer of Letters of Credit....80
SECTION 11. MISCELLANEOUS..............................80
11.1 Amendments and Waivers............................80
11.2 Notices...........................................82
11.3 No Waiver; Cumulative Remedies....................83
11.4 Survival of Representations and Warranties........83
11.5 Payment of Expenses and Taxes.....................83
11.6 Successors and Assigns; Participations and
Assignments ......................................84
11.7 Adjustments; Set-off..............................88
11.8 Counterparts......................................89
11.9 Governing Law; No Third Party Rights..............89
11.10 Submission to Jurisdiction; Waivers..............89
11.11 Releases.........................................90
11.12 Interest.........................................90
11.13 Special Indemnification..........................90
11.14 Permitted Payments and Transactions..............91
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ANNEX A Pricing Grid
SCHEDULES
Schedule I List of Addresses for Notices; Lending Offices; Commitment
Amounts
Schedule 3.5(c) Letters of Credit
Schedule 5.12 Subsidiaries
Schedule 5.13 Fee and Leased Properties
Schedule 5.15(b) UCC Filing Offices
Schedule 5.16 Trademarks and Copyrights
Schedule 8.1(a) Indebtedness to
Remain Outstanding
Schedule 8.2 Existing Liens
Schedule 8.3(d) Existing Contingent Obligations
EXHIBITS
EXHIBIT A Form of Revolving Credit Note
EXHIBIT B Form of Tranche B Note
EXHIBIT B-1 Form of Tranche B-1 Note
EXHIBIT C Form of Swing Line Note
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E-1 Company Security Agreement
EXHIBIT E-2 Subsidiary Security Agreement
EXHIBIT F-1 Holdings Guarantee
EXHIBIT F-2 Subsidiary Guarantee
EXHIBIT G-1 Holdings Pledge Agreement
EXHIBIT G-2 Company Pledge Agreement
EXHIBIT H Form of L/C Participation Certificate
EXHIBIT I Form of Swing Line Loan Participation Certificate
EXHIBIT J-1 Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
EXHIBIT J-2 Form of Opinion of ▇▇▇▇▇ ▇▇▇▇ LLP
EXHIBIT K Form of Subsection 4.11(d)(2) Certificate
EXHIBIT L-1 Form of Company Closing Certificate
EXHIBIT L-2 Form of Holdings Closing Certificate
EXHIBIT L-3 Form of Subsidiary Closing Certificate
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June
30, 1999, among CSK AUTO, INC., an Arizona corporation (the "Company"), the
several lenders from time to time parties hereto (the "Lenders"), THE CHASE
MANHATTAN BANK, a New York banking corporation, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), and ▇▇▇▇▇▇ COMMERCIAL
PAPER INC., a Delaware corporation, as documentation agent for the Lenders (in
such capacity, the "Documentation Agent").
W I T N E S S E T H:
WHEREAS, the Company, the several lenders from time to time
parties thereto, the Administrative Agent and the Documentation Agent entered
into a credit agreement, dated as of October 30, 1996 (as amended, supplemented
or otherwise modified, the "1996 Credit Agreement");
WHEREAS, the Company entered into an amended and restated
credit agreement, dated as of December 8, 1997, with the several lenders from
time to time parties thereto, the Administrative Agent and the Documentation
Agent (as amended, supplemented or otherwise modified to date, the "Existing
Credit Agreement") to refinance the loans under the 1996 Credit Agreement (the
"Refinancing") and to acquire (the "Trak West Acquisition") all of the issued
and outstanding capital stock of TRK Socal, Inc., a Delaware corporation
("Socal"), to which certain assets of Trak Auto Corporation, Trak Corporation
d/b/a Trak Auto Corporation I and Super Trak Corporation (collectively, "Trak
West") were assigned or transferred on or prior to the 1997 Closing Date (as
hereinafter defined) pursuant to the Asset Purchase Agreement between the
Company and Trak West dated October 6, 1997 (the Trak West Acquisition together
with the Refinancing and the other transactions contemplated hereby,
collectively the "1997 Transaction");
WHEREAS, the Company intends to acquire (the "Big Wheel
Acquisition") certain assets of APSCO Products Company d/b/a Big Wheel/Rossi, a
Minnesota corporation ("Big Wheel"), for a purchase price in cash of
approximately $60,000,000 and the repayment of existing debt of Big Wheel in an
aggregate amount of approximately $5,000,000 pursuant to the Asset Purchase
Agreement between the Company and Big Wheel, dated as of May 17, 1999 (as
amended, supplemented or otherwise modified, the "Asset Purchase Agreement");
WHEREAS, the Company also intends to make a prepayment
(without reducing the Revolving Credit Commitments) of the outstanding Revolving
Credit Loans in an approximate amount of $60,000,000 (the "Prepayment");
WHEREAS, the parties hereto have agreed to amend and restate
the Existing Credit Agreement (the "Amendment", together with the Prepayment,
the Big Wheel Acquisition and other transactions contemplated hereby and
thereby, collectively, the "Transaction") as provided in this Agreement; and
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, and for other valuable consideration, the receipt
and sufficiency of which are
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hereby acknowledged, the parties hereto agree that on the Closing Date (as
defined below) the Existing Credit Agreement shall be amended and restated in
its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
defined in the caption hereto shall have the meanings set forth therein, and the
following terms have the following meanings:
"Adjustment Date": as defined in the Pricing Grid.
"Affiliate": of any Person (a) any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with such Person, (b) any
Person who is a director or officer (i) of such Person, (ii) of any
Subsidiary of such Person or (iii) of any Person described in clause
(a) above or (c) in the case of a trust, its protectors or trustees,
any Person who is or has been a beneficiary thereof, or any Person who
is or has been able to appoint a beneficiary thereof. For purposes of
this definition, control of a Person shall mean the power, direct or
indirect (i) to vote 25% or more of the securities having ordinary
voting power for the election of directors of such Person, whether by
ownership of securities, contract, proxy or otherwise, or (ii) to
direct or cause the direction of the management and policies of such
Person, whether by ownership of securities, contract, proxy or
otherwise.
"Agreement": this Second Amended and Restated Credit
Agreement, as amended, supplemented or modified from time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum publicly announced from time
to time by the Administrative Agent as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by the Administrative Agent 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 of the Federal Reserve System (together with any successor,
the "Board") through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate
shall not be so reported on such day or such next preceding Business
Day, the average of the secondary market
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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; 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 Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate, respectively.
"Alternate Base Rate Lending Office": as to each Lender, the
office of such Lender located within the United States which shall be
making or maintaining Alternate Base Rate Loans.
"Alternate Base Rate Loans": Loans at such time as they are
made and/or being maintained at a rate of interest based upon the
Alternate Base Rate.
"Amendment": as defined in the recitals hereto.
"Applicable Margin": from the Closing Date until (and
excluding) the Delivery Date, the Applicable Margins for the Term Loans
and Revolving Credit Loans (including the Swing Line Loans) shall be
adjusted based upon the Company's Leverage Ratio as set forth in the
Pricing Grid, which Leverage Ratio shall be determined from the
Company's financial statements for the latest quarterly period
delivered to the Administrative Agent and the Lenders, provided, that
from the Closing Date until (and excluding) the Delivery Date, the
Applicable Margins shall in no event be less than the following: (a)
0.75% for Revolving Credit Loans (including Swing Line Loans) which are
Alternate Base Rate Loans and 1.75% for Revolving Credit Loans which
are Eurodollar Loans; and (b) 1.00% for Term Loans which are Alternate
Base Rate Loans and 2.00% for Term Loans which are Eurodollar Loans. On
the Delivery Date and on each Adjustment Date thereafter, the
Applicable Margins for the Revolving Credit Loans (including the Swing
Line Loans) and the Term Loans shall be adjusted based upon the
Company's Leverage Ratio as set forth in the Pricing Grid, provided,
that at no time shall the Applicable Margins for the Tranche B-1 Term
Loans (x) which are Alternate Base Rate Loans be less than 1.00% and
(y) which are Eurodollar Loans be less than 2.00%.
"Asset Purchase Agreement": as defined in the recitals hereto.
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"Asset Sale": any sale, sale-leaseback, or other disposition
by the Company or any Subsidiary thereof of any of its property or
assets, including the stock of any Subsidiary of the Company that is
restricted by subsection 8.5 hereof, other than sales and dispositions
permitted by subsections 8.5(a), (b), (c), (e), (f) and (g).
"Assignee": as defined in subsection 11.6(c).
"Assignment and Acceptance": an assignment and acceptance
substantially in the form of Exhibit D.
"Available Revolving Credit Commitment": as to any Lender, at
a particular time, an amount equal to (a) the amount of such Lender's
Revolving Credit Commitment at such time, less (b) the sum of (i) the
aggregate unpaid principal amount at such time of all Revolving Credit
Loans made by such Lender pursuant to subsection 3.1, (ii) such
Lender's Revolving Credit Commitment Percentage of the aggregate unpaid
principal amount at such time of all Swing Line Loans, provided that
for purposes of calculating the Revolving Credit Commitments pursuant
to subsection 3.2 the amount referred to in this clause (ii) shall be
zero, (iii) such Lender's L/C Participating Interest in the aggregate
amount available to be drawn at such time under all outstanding Letters
of Credit issued by the Issuing Lender and (iv) such Lender's Revolving
Credit Commitment Percentage of the aggregate outstanding amount of L/C
Obligations; collectively, as to all the Lenders, the "Available
Revolving Credit Commitments".
"Base Amount": as defined in subsection 8.7(d).
"benefitted Lender": as defined in subsection 11.7.
"Big Wheel": as defined in the recitals hereto.
"Big Wheel Acquisition": as defined in the recitals hereto.
"Board": as defined in the definition of "Alternate Base
Rate".
"Borrowing Date": any Business Day specified in a notice
pursuant to (a) subsection 3.4 or 4.1 as a date on which the Company
requests the Swing Line Lender or the Lenders to make Loans hereunder
or (b) subsection 3.5 as a date on which the Company requests the
Issuing Lender to issue a Letter of Credit 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": for any period, all amounts which
would, in accordance with GAAP, be set forth as capital expenditures
(exclusive of any amount attributable to capitalized interest) on the
consolidated statement of cash flows or other similar statement of the
Company and its Subsidiaries for such period and shall in any event
include
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expenditures to acquire all or a portion of the Capital Stock or assets
of any Person (exclusive of expenditures for the acquisition of cash)
but shall exclude any expenditures made with the proceeds of
condemnation or eminent domain proceedings affecting real property or
with insurance proceeds; provided that any Capital Expenditures
financed with the proceeds of any Indebtedness permitted hereunder
(other than Indebtedness incurred hereunder) shall be deemed to be a
Capital Expenditure only in the period in which, and by the amount
which, any principal of such Indebtedness is repaid.
"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.
"Carmel Trust": the Carmel Trust, a trust governed by the laws
of Canada.
"Cash Equivalents": (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof having maturities of not more than
six months from the date of acquisition, (b) certificates of deposit
and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any
Lender or with any domestic commercial bank having capital and surplus
in excess of $300,000,000, (c) repurchase obligations with a term of
not more than seven days for underlying securities of the types
described in clauses (a) and (b) entered into with any financial
institution meeting the qualifications specified in clause (b) above,
and (d) commercial paper issued by any Lender or the parent corporation
of any Lender, and commercial paper rated A-1 or the equivalent thereof
by Standard & Poor's Ratings Group or P-1 or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc. and in each case maturing within six
months after the date of acquisition.
"C/D Assessment Rate": for any day the net annual assessment
rate (rounded upwards, if necessary, to the next 1/100 of 1%)
determined by the Administrative Agent to be payable on such day to the
Federal Deposit Insurance Corporation or any successor ("FDIC") for
FDIC's insuring time deposits made in Dollars at offices of the
Administrative Agent in the United States.
"C/D Reserve Percentage": for any day as applied to any Base
CD Rate, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board for determining maximum reserve
requirement for a Depositary Institution (as defined in Regulation D of
the Board) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Change in Law": with respect to any Lender, the adoption of
any law, rule, regulation, policy, guideline or directive (whether or
not having the force of law) or any
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change therein or in the interpretation or application thereof by any
Governmental Authority having jurisdiction over such Lender, in each
case after the Closing Date.
"Change of Control": shall be considered to have occurred if
(a)(1) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended),
whether acting singly or in concert with one or more "person" or
"group", other than the Initial Shareholders or any Person acting in
the capacity of an underwriter, shall, directly or indirectly, have
acquired, or acquire the power to vote or direct the voting of, 30% or
more on a fully diluted basis, of the outstanding Capital Stock of
Holdings or (2) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the board
of directors of Holdings together with any new members of such board of
directors whose elections by such board of directors or whose
nomination for election by the stockholders of Holdings was approved by
a vote of a majority of the members of such board of directors then
still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously so
approved shall cease for any reason to constitute a majority of the
directors of Holdings then in office, or (b) Holdings shall cease to
own and control directly, of record and beneficially, 100% of each
class of outstanding Capital Stock of the Company, free and clear of
all Liens, other than Liens in favor of the Administrative Agent and
the Lenders pursuant to the Credit Documents.
"Chase": The Chase Manhattan Bank, a New York banking
corporation, and its successors.
"Class": (a) as to any Loan, its designation as a Tranche B
Term Loan, Tranche B-1 Term Loan or Revolving Credit Loan and (b) as to
any Commitment, its designation as a Tranche B Term Loan Commitment,
Tranche B-1 Term Loan Commitment or Revolving Credit Commitment.
"Closing Date": the date (which shall be on or prior to July
30, 1999) on which the Lenders make their initial Loans.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Credit Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commercial L/C": a commercial documentary Letter of Credit
under which the Issuing Lender agrees to make payments in Dollars for
the account of the Company, on behalf of the Company or a Subsidiary
thereof, in respect of obligations of the Company or such Subsidiary in
connection with the purchase of goods or services in the ordinary
course of business.
"Commitment": as to any Lender at any time, such Lender's
Swing Line Commitment, Tranche B Term Loan Commitment, Tranche B-1 Term
Loan Commitment
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and Revolving Credit Commitment; collectively, as to all the Lenders,
the "Commitments".
"Commitment Fee Rate": as specified on the Pricing Grid.
"Commitment Percentage": as to any Lender at any time, its
Tranche B Term Loan Commitment Percentage, Tranche B-1 Term Loan
Commitment Percentage or Revolving Credit Commitment Percentage, as the
context may require.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 414(b) or (c) of the Code.
"Company": CSK Auto, Inc., an Arizona corporation.
"Company Pledge Agreement": the Company Pledge Agreement,
dated as of June 22, 1999 made by the Company in favor of the
Administrative Agent for the ratable benefit of the Lenders, a copy of
which is attached hereto as Exhibit G-2, as the same may be amended,
modified or supplemented from time to time.
"Company Security Agreement": the Company Security Agreement,
dated as of October 30, 1996, made by the Company in favor of the
Administrative Agent for the ratable benefit of the Lenders, a copy of
which is attached hereto as Exhibit E-1, as the same may be amended,
modified or supplemented from time to time.
"Consolidated Current Assets": at a particular date, all
amounts which would, in conformity with GAAP, be included under current
assets on a consolidated balance sheet of the Company and its
Subsidiaries as at such date.
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be included under current
liabilities on a consolidated balance sheet of the Company and its
Subsidiaries as at such date, excluding the current portion of
long-term debt and the entire outstanding principal amount of the
Revolving Credit Loans.
"Consolidated EBITDA": for any period, the Consolidated Net
Income of the Company and its Subsidiaries for such period, plus,
without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of
(a) total income tax expense (including any tax benefit or expense
related to the dividend on any preferred stock), (b) interest expense,
amortization or writeoff of debt discount, debt issuance, warrant and
other equity (including any preferred stock) issuance costs and
commissions, discounts, redemption premium and other fees and charges
associated with the Loans (including commitment fees and other periodic
bank charges), Standby L/Cs, the Permanent Subordinated Debt or with
the acquisition or repayment of any debt securities of the Company
permitted hereunder, and net costs associated with
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Interest Rate Agreements to which the Company is a party in respect of
the Loans, (c) costs of surety bonds, (d) depreciation and amortization
expense, (e) amortization of inventory write-up under APB 16,
amortization of intangibles (including, but not limited to, goodwill
and costs of interest-rate caps, leasehold interests and the cost of
non-competition agreements) and organization costs, (f) non-cash
amortization of Financing Leases, (g) franchise taxes, (h) all cash
dividend payments, (i) any fees and expenses incurred in connection
with the Transaction, (j) any other write-downs, write-offs, minority
interests and other non-cash charges in determining such Consolidated
Net Income for such period and (k) all extraordinary losses in
determining such Consolidated Net Income for such period, and minus,
without duplication and to the extent reflected as a credit in the
statement of such Consolidated Net Income for such period, the sum of
(A) extraordinary gains, (B) non-cash income and (C) non-cash gains;
provided that: (i) the cumulative effect of a change in accounting
principles (effected either through cumulative effect adjustment or a
retroactive application) shall be excluded and (ii) the impact of
foreign currency translations shall be excluded.
"Consolidated Funded Indebtedness": at a particular date, all
Indebtedness (other than Indebtedness described in clauses (b), (c) or
(d) (but only to the extent such Indebtedness consists of leases
entered into in connection with the Real Estate Financing Agreement
which on the Closing Date would be classified as off-balance sheet
operating leases but which, due to a change in Securities and Exchange
Commission regulations, accounting requirements or the opinion of the
Company's auditors, are included as on-balance sheet indebtedness) of
the definition of "Indebtedness" included in this subsection 1.1) of
the Company and its Subsidiaries determined on a consolidated basis in
accordance with GAAP at such date.
"Consolidated Net Income": for any period, net income of the
Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that: (i) the net income (but not loss)
of any Person that is not a Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the Company or a
wholly-owned Subsidiary, (ii) the net income of any Person acquired in
a pooling of interests transaction for any period prior to the date of
such acquisition shall be excluded and (iii) net income of any
Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of
that net income is prohibited or not permitted at the date of
determination.
"Consolidated Senior Funded Indebtedness": the Consolidated
Funded Indebtedness minus the Permanent Subordinated Debt and other
subordinated Indebtedness permitted pursuant to subsection 8.1(d).
"Contingent Obligation": as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness,
dividends or other obligations ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such
14
9
Person, whether or not contingent (a) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount (based on the
maximum reasonably anticipated net liability in respect thereof as
determined by the Company in good faith) of the primary obligation or
portion thereof in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated
net liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by the Company in good faith.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of
the property owned by it is bound.
"Credit Documents": the collective reference to this
Agreement, the Notes, the Pledge Agreements, the Security Agreements
and the Guarantees.
"Credit Parties": the collective reference to Holdings, the
Company and each Subsidiary of the Company from time to time party to a
Guarantee.
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Delivery Date": the date on which the Company shall have
delivered to the Administrative Agent and the Lenders its quarterly
financial statements for the fiscal quarter ending October 31, 1999.
"Documentation Agent": ▇▇▇▇▇▇, in its capacity as
documentation agent hereunder.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Company other
than a Foreign Subsidiary.
"Environmental Laws": any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any
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Governmental Authority or requirements of law (including court-ordered
requirements of common law) regulating or imposing liability or
standards of conduct concerning, environmental or public health
protection matters, including, without limitation, Hazardous Materials,
as now or may at any time hereafter be in effect.
"Environmental Reports": the Phase 1 environmental assessments
covering certain owned and leased real properties of the Company and
its Subsidiaries made available by the Company to the Administrative
Agent prior to the date of the 1996 Credit Agreement.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": as defined in the
definition of Eurodollar Rate.
"Eurodollar Lending Office": as to any Lender the office of
such Lender which shall be making or maintaining Eurodollar Loans.
"Eurodollar Loans": Loans at such time as they are made and/or
being maintained at a rate of interest based upon a Eurodollar Rate.
"Eurodollar Rate": with respect to each day during any
Interest Period for any Eurodollar Loan, the rate per annum equal to
the quotient of (a) the average (rounded upwards to the nearest whole
multiple of one sixteenth of one percent) of the respective rates
notified to the Administrative Agent by the Reference Lender as the
rate at which each of their Eurodollar Lending Offices is offered
Dollar deposits two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the foreign
currency and exchange operations of such Eurodollar Lending Office are
customarily conducted at or about 10:00 A.M., New York City time, 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 the
Eurodollar Loan of such Reference Lender to be outstanding during such
Interest Period, divided by (b) a number equal to 1.00 minus the
aggregate (without duplication) of the rates (expressed as a decimal)
of reserve requirements current on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board or other Governmental Authority having
jurisdiction with respect thereto), as now and from time to time
hereafter in effect, dealing with reserve requirements prescribed for
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) maintained by a member bank
of such System (such rates of reserve requirements being referred to
herein as "Eurocurrency Reserve Requirements") (such Eurodollar Rate to
be rounded upwards, if necessary, to the next higher 1/100 of one
percent).
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
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"Excess Cash Flow": at the end of any fiscal year of the
Company ending on or after January 31, 2000, the excess of (a) the sum,
without duplication, of (i) Consolidated EBITDA for the period from
February 1, 1998 to the end of such fiscal year and (ii) extraordinary
cash gains with respect to such period over (b) the sum, without
duplication, of (i) the aggregate amount actually paid by the Company
and its Subsidiaries in cash since February 1, 1998 on account of
capital expenditures (other than capital expenditures made with the
proceeds of eminent domain or condemnation proceedings to the extent
such proceeds are not included in the determination of Consolidated
EBITDA for such period), (ii) the aggregate amount of payments of
principal in respect of any Indebtedness since February 1, 1998 (other
than any such payments of principal pursuant to subsections 4.4(b)(i),
(ii), (iii) and (iv) or any such payment of principal in respect of any
revolving credit facility to the extent that there is not an equivalent
reduction in such facility), (iii) increases in working capital
(calculated as Consolidated Current Assets at the end of such period
minus Consolidated Current Liabilities as at the end of such period) of
the Company and its Subsidiaries since February 1, 1998 (excluding any
increase in cash or Cash Equivalents above an increase deemed in good
faith by the Company to be necessary or desirable for the operation of
the business of the Company and its Subsidiaries), (iv) cash interest
expense (including fees paid in connection with Letters of Credit,
surety bonds, commitment fees and other periodic bank charges) of the
Company since February 1, 1998, (v) the amount of dividends actually
paid in cash by the Company to Holdings to the extent not deducted from
revenues in determining Consolidated Net Income of the Company and its
Subsidiaries for such period, by subsections 8.11(c)(i) and (ii), (vi)
the amount of taxes actually paid in cash by the Company and its
Subsidiaries since February 1, 1998 either during such period or within
a normal payment period thereof, (vii) the amount of cash actually paid
to repurchase Capital Stock of Holdings pursuant to subsection
8.11(c)(iii) since February 1, 1998, (viii) extraordinary cash losses
with respect to such period, (ix) any fees and expenses incurred in
connection with the Transaction and (x) to the extent added to
Consolidated Net Income of the Company and its Subsidiaries in
calculating Consolidated EBITDA for such period, the net cost of
Interest Rate Agreements, franchise taxes and management fees during
such period.
"Existing Credit Agreement": as defined in the recitals
hereto.
"Fee Property": as defined in subsection 5.13.
"Financing Lease": (a) any lease of property, real or
personal, the obligations under which are capitalized on a consolidated
balance sheet of the Company and its consolidated Subsidiaries and (b)
any other such lease to the extent that the then present value of any
rental commitment thereunder should, in accordance with GAAP, be
capitalized on a balance sheet of the lessee.
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"Foreign Subsidiary": any Subsidiary of the Company which is
not organized under the laws of the United States of America or any
state thereof or the District of Columbia.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantees": the collective reference to the Holdings
Guarantee, the Subsidiary Guaranty and any other guarantee which may
from time to time be executed and delivered by a Subsidiary of the
Company pursuant to subsection 8.6(b).
"Hazardous Materials": any hazardous materials, hazardous
wastes, hazardous pesticides, hazardous or toxic substances, defined,
listed, classified or regulated as such in or under any Environmental
Law, including, without limitation, asbestos, petroleum, any other
petroleum products (including gasoline, crude oil or any fraction
thereof) polychlorinated biphenyls and urea-formaldehyde insulation.
"Holdings": CSK Auto Corporation, a Delaware corporation.
"Holdings Guarantee": the Holdings Guarantee, dated as of
October 30, 1996, made by Holdings in favor of the Administrative Agent
for the ratable benefit of the Lenders, a copy of which is attached
hereto as Exhibit F-1, as the same may be amended, modified or
supplemented from time to time.
"Holdings Pledge Agreement": the Holdings Pledge Agreement,
dated as of October 30, 1996, made by Holdings in favor of the
Administrative Agent for the ratable benefit of the Lenders, a copy of
which is attached hereto as Exhibit G-1, as the same may be amended,
modified or supplemented from time to time.
"Indebtedness": of a Person, at a particular date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (b) the undrawn face amount of
all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder and unpaid
reimbursement obligations with respect thereto, (c) all liabilities
(other than Lease Obligations) secured by any Lien on any property
owned by such Person, even though such Person has not assumed or become
liable for the payment thereof, (d) Financing Leases and (e) all
indebtedness of such Person arising under acceptance facilities; but
excluding (i) trade and other accounts payable and accrued expenses
payable in the ordinary course of business, (ii) letters of credit
supporting the purchase of goods in the ordinary course of business and
expiring no more than six months from the date of issuance and (iii)
obligations in respect of Interest Rate Agreements.
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"indemnified liabilities": as defined in subsection 11.5.
"Initial Shareholders": (a) INVESTCORP S.A. and its Affiliates
(provided that for purposes of clauses (a) and (b) of this definition
only, the reference to 25% in the definition of Affiliate contained in
this subsection 1.1 shall be deemed to be 51%) and Subsidiaries
(collectively, the "Investcorp Shareholders") and (b) the Carmel Trust
and its beneficiaries and their respective immediate family members,
heirs, estate, administrators and executors and trusts benefitting them
and Affiliates thereof.
"Insolvency": with respect to a Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term
as used in Section 4245 of ERISA.
"Installment Payment Date": as defined in subsection 4.4(c).
"Interest Coverage Ratio": on the last day of any fiscal
quarter of the Company, the ratio of (a) Consolidated EBITDA for the
period of four fiscal quarters ending on such day to (b) cash interest
expense (excluding fees payable on account of Letters of Credit and, to
the extent included in interest expense in accordance with GAAP, net
costs associated with Interest Rate Agreements to which the Company is
party in respect of the Loans, amortization of debt discount (including
discount of liabilities and reserves established under APB 16), costs
of debt issuance and interest expense on customer deposits) for the
period described in clause (a) above net of interest income, in each
case for or during such period on a consolidated basis for the Company
and its Subsidiaries.
"Interest Payment Date": (a) as to Alternate Base Rate Loans,
the last day of each March, June, September and December, commencing on
the first such day to occur after any Alternate Base Rate Loans are
made or any Eurodollar Loans are converted to Alternate Base Rate
Loans, (b) as to any Eurodollar Loan in respect of which the Company
has selected an Interest Period of one, two or three months, the last
day of such Interest Period and (c) as to any Eurodollar Loan in
respect of which the Company has selected an Interest Period longer
than three months, on each successive date three months after the first
day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on, as the case
may be, the Borrowing Date or conversion date with respect to
such Eurodollar Loan and ending one, two, three, six or, if
and when available to all the relevant Lenders, nine or twelve
months thereafter as selected by the Company in its notice of
borrowing as provided in subsection 4.1 or its notice of
conversion as provided in subsection 4.2; and
(b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three, six or, if and
when available to all the relevant Lenders, nine or twelve
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14
months thereafter as selected by the Company 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 to such Eurodollar Loan;
provided that the foregoing provisions relating to Interest Periods are
subject to the following:
(A) if any Interest Period would otherwise end on a
day which is not a Business Day, that 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;
(B) any Interest Period that would otherwise extend
beyond (i) in the case of an Interest Period for a Term Loan,
the final Installment Payment Date for such Term Loan shall
end on such Installment Payment Date or, if such Installment
Payment Date shall not be a Business Day, on the next
preceding Business Day and (ii) in the case of any Interest
Period for a Revolving Credit Loan, the Revolving Credit
Termination Date shall end on the Revolving Credit Termination
Date, or if the Revolving Credit Termination Date shall not be
a Business Day, on the next preceding Business Day;
(C) if the Company shall fail to give notice as
provided above in clause (b), it shall be deemed to have
selected a conversion of a Eurodollar Loan into an Alternate
Base Rate Loan (which conversion shall occur automatically and
without need for compliance with the conditions for conversion
set forth in subsection 4.2);
(D) any Interest Period that begins on the last 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
(E) the Company shall select Interest Periods so as
not to require a prepayment (to the extent practicable) or a
scheduled payment of a Eurodollar Loan during an Interest
Period for such Eurodollar Loan.
"Interest Rate Agreement": any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, currency
hedge agreement or other similar agreement or arrangement; provided
that the amount of any such Interest Rate Agreement for purposes of
subsection 9(e) shall be based on calculation of payments for early
termination in a reasonable manner in accordance with customary
industry practices.
"Inventory": as defined in the Uniform Commercial Code as in
effect in the State of New York; and, with respect to the Company and
its Subsidiaries, all such Inventory
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of the Company or such Subsidiary including, without limitation, all
finished goods, wares and merchandise, finished or unfinished parts,
components, assemblies held for sale to third party customers by the
Company or such Subsidiary.
"Investcorp Shareholders": as defined in the definition of
"Initial Shareholders."
"Investors": Investcorp Investment Equity Limited and certain
of its Affiliates and other international investors and the Carmel
Trust and its Affiliates.
"Issuing Lender": Chase and any of its Affiliates, including
Chase Bank Delaware or ▇▇▇▇▇ Fargo Bank, N.A., at the discretion of the
Company, as issuers of the Letters of Credit.
"L/C Application": as defined in subsection 3.5(a).
"L/C Obligations": the obligations of the Company to reimburse
the Issuing Lender for any payments made by the Issuing Lender under
any Letter of Credit that have not been reimbursed by the Company
pursuant to subsection 3.8(a).
"L/C Participating Interest": an undivided participating
interest (equal to such Lender's Revolving Credit Commitment
Percentage) in the face amount of each issued and outstanding Letter of
Credit and the L/C Application relating thereto.
"L/C Participation Certificate": the certificate in
substantially the form of Exhibit H.
"Lease Obligations": of the Company and its Subsidiaries, as
of the date of any determination thereof, the rental commitments of the
Company and its Subsidiaries determined on a consolidated basis, if
any, under leases for real and/or personal property (net of rental
commitments from sub-leases thereof), excluding however, obligations
under Financing Leases.
"Leased Property": as defined in subsection 5.13.
"▇▇▇▇▇▇": ▇▇▇▇▇▇ Commercial Paper Inc., a Delaware
corporation.
"Letters of Credit": the collective reference to the
Commercial L/Cs and the Standby L/Cs; individually, a "Letter of
Credit".
"Leverage Ratio": as defined in subsection 8.9(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or
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,
any financing lease
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having substantially the same economic effect as any of the foregoing,
and the filing of any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction in respect of any of the
foregoing except for the filing of financing statements in connection
with Lease Obligations incurred by the Company or its Subsidiaries to
the extent that such financing statements relate to the property
subject to such Lease Obligations).
"Loans": the collective reference to the Swing Line Loans, the
Term Loans and the Revolving Credit Loans; individually, a "Loan".
"Maturity Date": October 31, 2003.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds": the aggregate cash proceeds received by
Holdings, the Company or any Subsidiary of the Company in respect of:
(a) (i) any issuance or borrowing of any debt
securities or loans by the Company or any Subsidiary other
than debt or loans permitted to be incurred or borrowed
pursuant to subsection 8.1 or (ii) any issuance of Capital
Stock.
(b) any Asset Sale, excluding (i) any net proceeds
received upon any condemnation or exercise of rights of
eminent domain to the extent the same shall be deemed not to
constitute Net Proceeds pursuant to the proviso to subsection
8.5(d) and (ii) any proceeds of insurance received upon any
casualty or loss;
(c) any cash received in respect of substantially
like-kind exchanges of property to the extent provided in the
proviso to subsection 8.5(e); and
(d) any cash payments received in respect of
promissory notes delivered to the Company or such Subsidiary
in respect of an Asset Sale;
in each case net of (without duplication) (A) the amount required to
repay any Indebtedness (other than the Loans) secured by a Lien on any
assets of the Company or a Subsidiary of the Company that are
collateral for any such debt securities or loans that are sold or
otherwise disposed of in connection with such Asset Sale, (B) the
reasonable expenses (including legal fees and brokers' and
underwriters' commissions, lenders fees or credit enhancement fees, in
any case, paid to third parties or, to the extent permitted hereby,
Affiliates) incurred in effecting such issuance or sale and (C) any
taxes reasonably attributable to such sale and reasonably estimated by
the Company or such Subsidiary to be actually payable.
"1996 Credit Agreement": as defined in the recitals hereto.
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"1997 Closing Date": the date on which the Lenders made their
initial Loans under the Existing Credit Agreement.
"1997 Transaction": as defined in the recitals hereto.
"Non-Funding Lender": as defined in subsection 4.9(c).
"Notes": the collective reference to the Swing Line Note, the
Revolving Credit Notes and the Term Loan Notes; each of the Notes, a
"Note".
"Participants": as defined in subsection 11.6(b).
"Participating Lender": any Lender (other than the Issuing
Lender) with respect to its L/C Participating Interest in each Letter
of Credit.
"Payment Sharing Notice": a written notice from the Company or
any Lender informing the Administrative Agent that an Event of Default
has occurred and is continuing and directing the Administrative Agent
to allocate payments thereafter received from or on behalf of the
Company in accordance with the provisions of subsection 4.9.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
"Permanent Subordinated Debt": (a) the Indebtedness under the
Permanent Subordinated Notes and (b) unsecured notes or debentures of
the Company, subordinated to the prior payment of the Loans and the
other obligations under the Credit Documents, that may be issued by the
Company in order to refinance the Permanent Subordinated Debt, provided
that (i) the maturity date, the interest rate, the scheduled
amortization, the final maturity and the subordination provisions shall
be at least as favorable to the Company and the Lenders as such
refinanced Permanent Subordinated Debt and the other terms and
conditions thereof (including, without limitation, the covenant and
event of default provisions thereof but excluding any call protection
provisions) taken as a whole shall be at least as favorable to the
Company and the Lenders as such refinanced Permanent Subordinated Debt,
(ii) no covenant contained in this Agreement or any of the other Credit
Documents would be violated on the proposed issuance date after giving
effect to (A) the issuance of such notes or debentures, (B) the payment
of all issuance costs, commissions, discounts, redemption premiums and
other fees and charges associated therewith, (C) the use of proceeds
thereof and (D) the redemption, repayment, retirement and repurchase of
all Indebtedness of the Company and its Subsidiaries to be redeemed,
repaid or repurchased in connection therewith and (iii) substantially
final drafts of the documentation governing any such notes or
debentures, showing the terms thereof, shall have been furnished to the
Lenders at least 10 days prior to the date of issuance of such notes or
debentures.
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"Permanent Subordinated Note Indenture": the Indenture, dated
as of October 30, 1996, between the Company and The Bank of New York
(as successor to ▇▇▇▇▇ Fargo, N.A.), as trustee.
"Permanent Subordinated Notes": the 11% senior subordinated
notes due 2006 issued by the Company pursuant to the Permanent
Subordinated Note Indenture.
"Permitted Liens": Liens permitted to exist under subsection
8.2.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at any particular time, any employee benefit plan as
defined in Section 3(3) of ERISA and not excluded by Section 4(b) of
ERISA and in respect of which the Company 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.
"Pledge Agreements": the collective reference to the Holdings
Pledge Agreement, the Company Pledge Agreement and any pledge agreement
previously executed and delivered to the Administrative Agent and from
time to time executed and delivered by any Subsidiary of the Company
providing for the pledge of the Capital Stock of any Subsidiary
pursuant to subsection 8.6(b).
"Prepayment": as defined in the recitals hereto.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in subsection 5.1(c).
"Real Estate Financing Agreement": the arrangement which
became effective on or about February 1, 1998, between Franchise
Finance Corporation of America and the Company, or any other
substantially similar arrangement.
"Reference Lender": Chase.
"Refinancing": as defined in the recitals hereto.
"Refunded Swing Line Loans": as defined in subsection 3.4(b).
"Register": as defined in subsection 11.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System, as from time to time in effect.
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"Reorganization": with respect to a Multiemployer Plan, the
condition that such Plan is in reorganization as such term is used in
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) 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. Section 2615.
"Required Lenders": at a particular time, the holders of at
least 51% of the sum of (i) the aggregate unpaid principal amount of
the Term Loans, if any, and (ii) the Revolving Credit Commitments or,
if the Revolving Credit Commitments are terminated, the aggregate
unpaid principal amount of the Revolving Credit Loans, and
participations in Swing Line Loans, the aggregate amount available to
be drawn at such time under all outstanding Letters of Credit and L/C
Obligations. The Term Loans and the Revolving Credit Commitments of any
Non-Funding Lender shall be disregarded in determining Required Lenders
at any time.
"Requirement of Law": as to any Person, the Articles or
Certificate of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation, order, or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property, or to which such Person or any
of its property is subject.
"Responsible Officer": with respect to any Person, the
president, chief executive officer, the chief operating officer, the
chief financial officer, treasurer, controller or any vice president of
such Person.
"Revolving Credit Commitment": as to any Lender, its
obligations to make Revolving Credit Loans to the Company pursuant to
subsection 3.1, and to purchase its L/C Participating Interest in any
Letter of Credit, in an aggregate amount not to exceed the amount set
forth under such Lender's name in Schedule I opposite the caption
"Revolving Credit Commitment" or in Schedule 1 to the Assignment and
Acceptance by which such Lender acquired its Revolving Credit
Commitment, as the same may be reduced from time to time pursuant to
subsection 4.3 or 4.4(b) or adjusted pursuant to subsection 11.6(c);
collectively, as to all the Lenders, the "Revolving Credit
Commitments". The original aggregate principal amount of the Revolving
Credit Commitments is $125,000,000.
"Revolving Credit Commitment Percentage": as to any Lender at
any time, the percentage of the aggregate Revolving Credit Commitments
then constituted by such Lender's Revolving Credit Commitment.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to but not including the Revolving Credit
Termination Date.
"Revolving Credit Lender": as defined in subsection 10.10.
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"Revolving Credit Loan" and "Revolving Credit Loans": as
defined in subsection 3.1(a).
"Revolving Credit Note": as defined in subsection 4.13(e).
"Revolving Credit Termination Date": the earlier of (a)
October 31, 2001 and (b) such other date as the Revolving Credit
Commitments shall terminate hereunder.
"Section 4.4 Lenders": at a particular time, the holders of
(a) at least 51% of the aggregate unpaid principal amount of the Term
Loans, if any, and (b) at least 51% of the Revolving Credit Commitments
or, if the Revolving Credit Commitments are terminated, the aggregate
unpaid principal amount of the Revolving Credit Loans, and
participations in Swing Line Loans and the aggregate amount available
to be drawn at such time under all outstanding Letters of Credit. The
Term Loans and the Revolving Credit Commitments of any Non-Funding
Lender shall be disregarded in determining Section 4.4 Lenders at any
time.
"Security Agreements": the collective reference to the Company
Security Agreement, the Subsidiary Security Agreement and any other
security agreement previously executed and delivered to the
Administrative Agent and which may from time to time be executed and
delivered by a Subsidiary of the Company pursuant to subsection 8.6(b).
"Security Documents": the collective reference to the Pledge
Agreements and the Security Agreements.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA and which is not a Multiemployer Plan.
"Socal": as defined in the recitals hereto.
"Standby L/C": an irrevocable letter of credit under which the
Issuing Lender agrees to make payments in Dollars for the account of
the Company, on behalf of the Company or any Subsidiary thereof in
respect of obligations of the Company or such Subsidiary incurred
pursuant to contracts made or performances undertaken or to be
undertaken or like matters relating to contracts to which the Company
or such Subsidiary is or proposes to become a party in the ordinary
course of the Company's or such Subsidiary's business, including,
without limiting the foregoing, for insurance purposes or in respect of
advance payments or as bid or performance bonds or for any other
purpose for which a standby letter of credit might customarily be
issued.
"Subsection 4.11(d)(2) Certificate": as defined in subsection
4.11(d).
"Subsidiary": as to any Person, any corporation of which
shares of stock of each class having ordinary voting power (other than
stock having such power only by reason
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of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation are at the time owned
by such Person or by one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person. (A Subsidiary shall
be deemed wholly-owned by a Person who owns all of the voting shares of
stock of such Subsidiary having voting power under ordinary
circumstances to vote for directors, except for directors' qualifying
shares.) Unless otherwise qualified, all references to a "Subsidiary"
or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Company.
"Subsidiary Guarantee": the Subsidiary Guarantee, dated as of
June 22, 1999, made by each Domestic Subsidiary of the Company in favor
of the Administrative Agent for the ratable benefit of the Lenders, a
copy of which is attached hereto as Exhibit F-2, as the same may be
amended, modified or supplemented from time to time.
"Subsidiary Security Agreement": the Subsidiary Security
Agreement, dated as of June 22, 1999, made by each Domestic Subsidiary
of the Company in favor of the Administrative Agent for the ratable
benefit of the Lenders, a copy of which is attached hereto as Exhibit
E-2, as the same may be amended, modified or supplemented from time to
time.
"Supermajority Lenders": at a particular time, the holders of
at least 66-2/3% of the sum of (i) the aggregate unpaid principal
amount of the Term Loans, if any, and (ii) the Revolving Credit
Commitments or, if the Revolving Credit Commitments are terminated, the
aggregate unpaid principal amount of the Revolving Credit Loans, and
participations in Swing Line Loans and the aggregate amount available
to be drawn at such time under all outstanding Letters of Credit. The
Term Loans and the Revolving Credit Commitments of any Non-Funding
Lender shall be disregarded in determining Supermajority Lenders at any
time.
"Swing Line Commitment": the Swing Line Lender's obligation to
make Swing Line Loans pursuant to subsection 3.4.
"Swing Line Lender": Chase in its capacity as lender of the
Swing Line Loans.
"Swing Line Loan Participation Certificate": a certificate in
substantially the form of Exhibit I.
"Swing Line Loans": as defined in subsection 3.4(a).
"Swing Line Note": as defined in subsection 4.13(e).
"Term Loan Commitment Percentage": as to any Lender at any
time, the percentage of the aggregate Term Loan Commitments then
constituted by such Lender's Term Loan Commitment.
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"Term Loan Commitments": the collective reference to Tranche B
Term Loan Commitments and the Tranche B-1 Term Loan Commitments.
"Term Loan Note": as defined in subsection 4.13(e).
"Term Loans": as defined in subsection 2.1.
"Tranche B Lender": at any time, any Lender with a Tranche B
Term Loan Commitment or a Tranche B Term Loan.
"Tranche B Note": as defined in subsection 4.13(e)
"Tranche B-1 Lender": at any time, any Lender with a Tranche
B-1 Term Loan Commitment or a Tranche B-1 Term Loan.
"Tranche B-1 Note": as defined in subsection 4.13(e)
"Tranche B Term Loan Commitment": as to any Tranche B Lender,
the aggregate principal amount of Tranche B Term Loans outstanding on
the Closing Date as set forth under such Lender's name in Schedule I
opposite the caption "Tranche B Term Loan" or in Schedule 1 to the
Assignment and Acceptance pursuant to which a Tranche B Lender acquires
its Tranche B Term Loan Commitment, as the same may be adjusted
pursuant to subsection 11.6(c); collectively, as to all the Tranche B
Lenders, the "Tranche B Term Loan Commitments". The aggregate principal
amount outstanding of the Tranche B Term Loan Commitments on the
Closing Date is $146,160,000.
"Tranche B-1 Term Loan Commitment": as to any Tranche B-1
Lender, its obligation to make a Tranche B-1 Term Loan to the Company
pursuant to subsection 2.1 in an aggregate amount not to exceed the
amount set forth under such Tranche B-1 Lender's name in Schedule I
opposite the caption "Tranche B-1 Term Loan Commitment" or in Schedule
1 to the Assignment and Acceptance pursuant to which a Tranche B-1
Lender acquires its Tranche B-1 Term Loan Commitment, as the same may
be adjusted pursuant to subsection 11.6(c); collectively, as to all the
Tranche B-1 Lenders, the "Tranche B-1 Term Loan Commitments". The
original aggregate principal amount of the Tranche B-1 Term Loan
Commitments is $125,000,000.
"Tranche B Term Loan Commitment Percentage": as to any Tranche
B Lender at any time, the percentage of the aggregate Tranche B Term
Loan Commitments then constituted by such Lender's Tranche B Term Loan
Commitment.
"Tranche B-1 Term Loan Commitment Percentage": as to any
Tranche B-1 Lender at any time, the percentage of the aggregate Tranche
B-1 Term Loan Commitments then constituted by such Lender's Tranche B-1
Term Loan Commitment.
"Tranche B Term Loans": as defined in subsection 2.1.
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"Tranche B-1 Term Loans": as defined in subsection 2.1.
"Trak West": as defined in the recitals hereto.
"Trak West Acquisition": as defined in the recitals hereto.
"Transaction": as defined in the recitals hereto.
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an Alternate Base Rate
Loan or Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any amendments thereof.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the Notes, any other Credit Document or any certificate or
other document made or delivered pursuant hereto.
(b) As used herein and in the Notes, any other Credit
Document and any certificate or other document made or delivered pursuant
hereto, accounting terms relating to the Company 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. All computations determining compliance with financial covenants or
terms, including definitions used therein, shall be prepared in accordance with
generally accepted accounting principles in effect at the time of the
preparation of, and in conformity with those used to prepare, the historical
financial statements delivered to the Administrative Agent pursuant to
subsection 7.1. If at any time the computations for determining compliance with
financial covenants or provisions relating thereto utilize generally accepted
accounting principles different than those then being utilized in the financial
statements then being delivered to the Administrative Agent, such financial
statements shall be accompanied by a reconciliation statement with respect to
such computations.
(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 the singular and plural forms of such terms.
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SECTION 2. TERM LOANS
2.1 Term Loans. Each Tranche B Lender holds a loan in Dollars
(individually, a "Tranche B Term Loan"; and collectively, the "Tranche B Term
Loans") to the Company on the Closing Date in an aggregate principal amount as
set forth under such Lender's name in Schedule I opposite the caption "Tranche B
Term Loan". Subject to the terms and conditions hereof, each Tranche B-1 Lender
severally agrees to make a loan in Dollars (individually, a "Tranche B-1 Term
Loan"; and collectively, the "Tranche B-1 Term Loans"; Tranche B Term Loans,
together with the Tranche B-1 Term Loans, collectively, the "Term Loans") to the
Company on the Closing Date, in an aggregate principal amount equal to such
Lender's Tranche B-1 Term Loan Commitment.
2.2 Repayment of Term Loans. The Company shall repay the Term
Loans as provided in subsection 4.4(c).
2.3 Use of Proceeds. The proceeds of the Tranche B Term Loans
were used to finance in part the 1997 Transaction and to pay certain of the
fees, expenses and financing costs related to the 1997 Transaction. The proceeds
of the Tranche B-1 Term Loans will be used to finance in part the Transaction
and to pay certain of the fees, expenses and financing costs related to the
Transaction.
SECTION 3. AMOUNT AND TERMS OF REVOLVING
CREDIT COMMITMENTS
3.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to the extent of its Revolving
Credit Commitment (including such amount of the Revolving Credit Loans (as
defined below) outstanding on the Closing Date) to extend credit to the Company
from time to time on any Borrowing Date during the Revolving Credit Commitment
Period (i) by purchasing an L/C Participating Interest in each Letter of Credit
issued by the Issuing Lender and (ii) by making loans in Dollars (individually,
such a Loan is a "Revolving Credit Loan", and collectively such Loans are the
"Revolving Credit Loans") to the Company from time to time. Notwithstanding the
above, (x) in no event shall any Letter of Credit be issued if after giving
effect thereto the sum of the undrawn amount of all outstanding Letters of
Credit and the amount of all L/C Obligations would exceed $15,000,000 and (y) in
no event shall any Revolving Credit Loans be made, or Letters of Credit be
issued, if the aggregate amount of the Revolving Credit Loans to be made or
Letters of Credit to be issued would, after giving effect to the use of
proceeds, if any, thereof, exceed the aggregate Available Revolving Credit
Commitments. During the Revolving Credit Commitment Period, the Company 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, and/or by having the Issuing Lender issue Letters of Credit,
having such Letters of Credit expire undrawn upon or if drawn upon, reimbursing
the Issuing Lender for such drawing, and having the Issuing Lender issue new
Letters of Credit.
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(b) Each borrowing of Revolving Credit Loans pursuant to the
Revolving Credit Commitments shall be in an aggregate principal amount of the
lesser of (i) $1,000,000 or a whole multiple of $100,000 in excess thereof, in
the case of Alternate Base Rate Loans, and $2,000,000 or a whole multiple of
$1,000,000 in excess thereof, in the case of Eurodollar Loans and (ii) the
Available Revolving Credit Commitments, except that any borrowing of Revolving
Credit Loans to be used solely to pay a like amount of Swing Line Loans may be
in the aggregate principal amount of such Swing Line Loans.
3.2 Commitment Fee. The Company agrees to pay to the
Administrative Agent for the account of each Lender (other than any Non-Funding
Lender) a commitment fee from and including the Closing Date to and including
the Revolving Credit Termination Date, computed as follows: (a) from the Closing
Date until (and excluding) the Delivery Date, the commitment fee shall be
adjusted based upon the Company's Leverage Ratio as set forth in the Pricing
Grid, which Leverage Ratio during such initial period shall be determined from
the Company's financial statements for the latest quarterly period delivered to
the Administrative Agent and the Lenders, provided, that from the Closing Date
until (but excluding) the Delivery Date, the commitment fees shall in no event
be less than the rate of 0.375% per annum on the average daily amount of the
Available Revolving Credit Commitment of such Lender during the period for which
payment is made (whether or not the Company shall have satisfied the applicable
conditions to borrowing or issuance of a Letter of Credit set forth in Section
6) and (b) on the Delivery Date and on each Adjustment Date thereafter, such
commitment fee will be determined pursuant to the Pricing Grid. Such commitment
fee shall be payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Credit Termination Date, commencing
on the first such date to occur on or following the Closing Date (or, if
earlier, the Revolving Credit Termination Date).
3.3 Proceeds of Revolving Credit Loans. The Company shall use
the proceeds of Revolving Credit Loans for general corporate purposes of the
Company and its Subsidiaries, including (i) the redemption, repayment or
repurchase of up to $30,000,000 (plus, upon the occurrence of a "change of
control" as defined in the Permanent Subordinated Debt, an additional amount of
up to $15,000,000) aggregate principal amount of the Permanent Subordinated Debt
in accordance with subsection 8.13, (ii) acquisitions of companies engaged
primarily in businesses similar to the businesses in which the Company and its
Subsidiaries are engaged, in an aggregate amount of $50,000,000 in accordance
with subsection 8.7(b) and (iii) investments in the development of new or
relocated stores in an aggregate amount not to exceed at any one time
$50,000,000, against which amount shall be credited any funds from the
subsequent sale of any real property or fixtures purchased or developed in
connection therewith, in accordance with subsection 8.7(c).
3.4 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees, so long as the Administrative
Agent has not received notice that an Event of Default has occurred and is
continuing, to make swing line loans (individually, a "Swing Line Loan";
collectively, the "Swing Line Loans") to the Company from time to time during
the Revolving Credit Commitment Period in an aggregate principal amount at any
one time outstanding not to exceed $15,000,000, provided that no Swing Line Loan
may be made if
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the aggregate principal amount of the Swing Line Loans to be made would exceed
the aggregate Available Revolving Credit Commitments at such time. Amounts
borrowed by the Company under this subsection 3.4 may be repaid and, through but
excluding the Revolving Credit Termination Date, reborrowed. All Swing Line
Loans shall be made as Alternate Base Rate Loans and shall not be entitled to be
converted into Eurodollar Loans. The Company shall give the Swing Line Lender
irrevocable notice (which notice must be received by the Swing Line Lender prior
to 3:00 p.m., New York City time) on the requested Borrowing Date specifying the
amount of each requested Swing Line Loan, which shall be in an aggregate minimum
amount of $250,000 or a whole multiple of $100,000 in excess thereof. The
proceeds of each Swing Line Loan will be made available by the Swing Line Lender
to the Company by crediting the account of the Company at the office of the
Swing Line Lender with such proceeds. The proceeds of Swing Line Loans may be
used solely for the purposes referred to in subsection 3.3.
(b) The Swing Line Lender at any time in its sole and absolute
discretion may, and on the fifteenth day (or if such day is not a Business Day,
the next Business Day) and last Business Day of each month shall, on behalf of
the Company (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 (the "Refunded Swing
Line Loans") outstanding on the date such notice is given. Unless any of the
events described in paragraph (f) of Section 9 shall have occurred (in which
event the procedures of paragraph (c) of this subsection 3.4 shall apply) each
Lender shall make the proceeds of its Revolving Credit Loan available to the
Swing Line Lender for the account of the Swing Line Lender at the Alternate Base
Rate Lending Office of the Swing Line Lender prior to 2:00 p.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.
(c) If prior to the making of a Revolving Credit Loan pursuant
to paragraph (b) of this subsection 3.4 one of the events described in paragraph
(f) of Section 9 shall have occurred, each Lender will, on the date such Loan
was to have been made, purchase an undivided participating interest in the
Refunded Swing Line Loan in an amount equal to its Revolving Credit Commitment
Percentage of such Refunded Swing Line Loan. Each Lender will immediately
transfer to the Swing Line Lender in immediately available funds, the amount of
its participation and upon receipt thereof the Swing Line Lender will deliver to
such Lender a Swing Line Loan Participation Certificate dated the date of
receipt of such funds and in such amount.
(d) Whenever, at any time after the Swing Line Lender has
received from any Lender such Lender's participating interest in a Refunded
Swing Line Loan, the Swing Line Lender receives any payment on account thereof,
the Swing Line Lender will distribute to such Lender its participating interest
in such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded) in like funds as received; 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
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the Swing Line Lender any portion thereof previously distributed by the Swing
Line Lender to it in like funds as such payment is required to be returned by
the Swing Line Lender.
(e) Each Lender's obligation to purchase participating
interests pursuant to subsection 3.4(c) 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
may have against the Swing Line Lender, the Company or any other Person for any
reason whatsoever; (ii) the occurrence or continuance of an Event of Default;
(iii) any adverse change in the condition (financial or otherwise) of the
Company; (iv) any breach of this Agreement by the Company or any other Lender;
or (v) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
3.5 Issuance of Letters of Credit. (a) The Company may from
time to time request the Issuing Lender to issue a Standby L/C or a Commercial
L/C by delivering to the Issuing Lender at its address specified in subsection
11.2 or as otherwise agreed between the Company and the Issuing Lender a letter
of credit application in the Issuing Lender's then customary form (the "L/C
Application") completed to the satisfaction of the Issuing Lender, together with
the proposed form of such Letter of Credit (which shall comply with the
applicable requirements of paragraph (b) below) and such other certificates,
documents and other papers and information as the Issuing Lender may reasonably
request; provided that if the Issuing Lender informs the Company that it is for
any reason unable to open such Letter of Credit, the Company may request any
Lender to open such Letter of Credit upon the same terms offered to the Issuing
Lender and each reference to the Issuing Lender for purposes of subsections 3.5
through 3.14, 6.1 and 6.2 shall be deemed to be a reference to such Issuing
Lender.
(b) Each Standby L/C and Commercial L/C issued hereunder
shall, among other things, (i) be in such form requested by the Company as shall
be acceptable to the Issuing Lender in its sole discretion and (ii) in the case
of each Standby L/C, have an expiry date occurring not later than 365 days after
the date of issuance of such Standby L/C and, in the case of each Commercial
L/C, have an expiry date occurring not later than 120 days after the date of
issuance of such Commercial L/C (or such longer time as shall be agreed to by
the Issuing Lender thereof, in its sole discretion) and, in all cases, may be
automatically renewed on its expiry date for an additional period equal to the
initial term but in no case shall any Letter of Credit have an expiry date
occurring later than three Business Days before the Revolving Credit Termination
Date. Each L/C Application and 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, in the case of Chase and any of its Affiliates, including
Chase Bank Delaware, acting as Issuing Lender, or the State of California, in
the case of ▇▇▇▇▇ Fargo Bank, N.A. acting as Issuing Lender.
(c) Notwithstanding anything to the contrary herein, the
letters of credit listed on Schedule 3.5(c) shall be deemed to have been issued
hereunder and deemed to be Letters of Credit for all purposes hereof.
3.6 Participating Interests. Effective in the case of each
Standby L/C and Commercial L/C as of the date of the opening thereof, the
Issuing Lender agrees to allot and does
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allot, to itself and each other Lender, and each Lender severally and
irrevocably agrees to take and does take in such Letter of Credit and the
related L/C Application, an L/C Participating Interest in a percentage equal to
such Lender's Revolving Credit Commitment Percentage.
3.7 Procedure for Opening Letters of Credit. The Issuing
Lender will notify the Administrative Agent and each Lender after the end of
each calendar month of any L/C Applications received by the Issuing Lender from
the Company during such month. Upon receipt of any L/C Application from the
Company, the Issuing Lender will process such L/C Application, and the other
certificates, documents and other papers delivered to the Issuing Lender in
connection therewith, in accordance with its customary procedures and, subject
to the terms and conditions hereof, shall promptly open such Letter of Credit by
issuing the original of such Letter of Credit to the beneficiary thereof and by
furnishing a copy thereof to the Company, provided that no such Letter of Credit
shall be issued if subsection 3.1 would be violated thereby.
3.8 Payments in Respect of Letters of Credit. (a) The Company
agrees forthwith upon demand by the Issuing Lender and otherwise in accordance
with the terms of the L/C Application relating thereto (i) to reimburse the
Issuing Lender for any payment made by the Issuing Lender under any Letter of
Credit issued for the account of the Company and (ii) to pay interest on any
unreimbursed portion of any such payment from the date of such payment until
reimbursement in full thereof at a rate per annum equal to (A) on or prior to
the date which is one Business Day after the day on which the Issuing Lender
demands reimbursement from the Company for such payment, the Alternate Base Rate
plus the Applicable Margin for the Revolving Credit Loans and (B) thereafter,
the Alternate Base Rate plus the Applicable Margin for Revolving Credit Loans
plus 2%.
(b) In the event that the Issuing Lender makes a payment under
any Letter of Credit and is not reimbursed in full therefor forthwith upon
demand of the Issuing Lender, and otherwise in accordance with the terms of the
L/C Application relating to such Letter of Credit, the Issuing Lender will
promptly notify each other Lender. Forthwith upon its receipt of any such
notice, each other Lender will transfer to the Issuing Lender, in immediately
available funds, an amount equal to such other Lender's pro rata share of the
L/C Obligation arising from such unreimbursed payment. Promptly, upon its
receipt from such other Lender of such amount, the Issuing Lender will complete,
execute and deliver to such other Lender an L/C Participation Certificate dated
the date of such receipt and in such amount.
(c) Whenever, at any time after the Issuing Lender has made a
payment under any Letter of Credit and has received from any other Lender such
other Lender's pro rata share of the L/C Obligation arising therefrom, the
Issuing Lender receives any reimbursement on account of such L/C Obligation or
any payment of interest on account thereof, the Issuing Lender will promptly
distribute to such other Lender its pro rata share thereof in like funds as
received; provided, however, that in the event that the receipt by the Issuing
Lender of such reimbursement or such payment of interest (as the case may be) is
required to be returned, such other Lender will return to the Issuing Lender any
portion thereof previously distributed by the Issuing Lender to it in like funds
as such reimbursement or payment is required to be returned by the Issuing
Lender.
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3.9 Letter of Credit Fees. (a) In lieu of any letter of credit
commissions and fees provided for in any L/C Application relating to Standby or
Commercial L/Cs (other than standard issuance, amendment and negotiation fees),
the Company agrees to pay the Administrative Agent, for the account of the
Issuing Lender and the Participating Lenders, with respect to each Standby or
Commercial L/C issued for the account of the Company, a Standby or Commercial
L/C fee, as the case may be, equal to the Applicable Margin for Revolving Credit
Loans which are Eurodollar Loans (of which the Issuing Lender shall retain for
its own account, as the issuing bank and not on account of its L/C Participating
Interest therein, 1/4 of 1% per annum) on the daily average amount available to
be drawn under each Standby L/C in the case of a Standby L/C and on the maximum
face amount of each Commercial L/C in the case of a Commercial L/C, in either
case payable, in arrears, on the last day of each fiscal quarter of the Company.
The Administrative Agent will disburse any Standby or Commercial L/C fees
received pursuant to this subsection 3.9(a) to the respective Lenders and the
Issuing Lender promptly following the receipt of any such fees in the case of a
Standby L/C and, in the case of a Commercial L/C, promptly following the end of
the calendar month in which such Commercial L/C fees were received.
Notwithstanding the foregoing, the Company agrees to pay standard issuance,
amendment and negotiation fees to the Issuing Lender.
(b) For purposes of any payment of fees required pursuant to
this subsection 3.9, the Administrative Agent agrees to provide to the Company a
statement of any such fees to be so paid; provided that the failure by the
Administrative Agent to provide the Company with any such invoice shall not
relieve the Company of its obligation to pay such fees.
3.10 Letter of Credit Reserves. (a) If any Change in Law shall
either (i) impose, modify, deem or make applicable any reserve, special deposit,
assessment or similar requirement against letters of credit issued by the
Issuing Lender or (ii) impose on the Issuing Lender any other condition
regarding this Agreement (with respect to Letters of Credit) or any Letter of
Credit, and the result of any event referred to in clause (i) or (ii) above
shall be to increase the cost of the Issuing Lender of issuing or maintaining
any Letter of Credit (which increase in cost shall be the result of the Issuing
Lender's reasonable allocation of the aggregate of such cost increases resulting
from such events), then, upon demand by the Issuing Lender, the Company shall
immediately pay to the Issuing Lender, from time to time as specified by the
Issuing Lender, additional amounts which shall be sufficient to compensate the
Issuing Lender for such increased cost, together with interest on each such
amount from the date demanded until payment in full thereof at a rate per annum
equal to the rate applicable to Alternate Base Rate Loans pursuant to subsection
4.5(b). The Company shall not be required to make any payments to the Issuing
Lender for any additional amounts pursuant to this subsection 3.10(a) unless the
Issuing Lender has given written notice to the Company of its intent to request
such payments prior to or within 60 days after the date on which the Issuing
Lender became entitled to claim such amounts. A certificate, setting forth in
reasonable detail the calculation of the amounts involved, submitted by the
Issuing Lender to the Company concurrently with any such demand by the Issuing
Lender, shall be conclusive, absent manifest error, as to the amount thereof.
(b) In the event that any Change in Law with respect to the
Issuing Lender shall, in the opinion of the Issuing Lender, require that any
obligation under any Letter of Credit be
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treated as an asset or otherwise be included for purposes of calculating the
appropriate amount of capital to be maintained by the Issuing Lender or any
corporation controlling the Issuing Lender, and such Change in Law shall have
the effect of reducing the rate of return on the Issuing Lender's or such
corporation's capital, as the case may be, as a consequence of the Issuing
Lender's obligations under such Letter of Credit to a level below that which the
Issuing Lender or such corporation, as the case may be, could have achieved but
for such Change in Law (taking into account the Issuing Lender's or such
corporation's policies, as the case may be, with respect to capital adequacy) by
an amount deemed by the Issuing Lender to be material, then from time to time
following notice by the Issuing Lender to the Company of such Change in Law,
within 15 days after demand by the Issuing Lender, the Company shall pay to the
Issuing Lender such additional amount or amounts as will compensate the Issuing
Lender or such corporation, as the case may be, for such reduction. The Issuing
Lender agrees that, upon the occurrence of any event giving rise to the
operation of paragraph (a) or (b) of this subsection 3.10 with respect to the
Issuing Lender, it will, if requested by the Company and to the extent permitted
by law or by the relevant Governmental Authority, endeavor in good faith to
avoid or minimize the increase in costs or reduction in payments resulting from
such event; provided, however, that such avoidance or minimization can be made
in such a manner that the Issuing Lender, in its sole determination, suffers no
economic, legal or regulatory disadvantage. The Company shall not be required to
make any payments to the Issuing Lender for any additional amounts pursuant to
this subsection 3.10(b) unless the Issuing Lender has given written notice to
the Company of its intent to request such payments prior to or within 60 days
after the date on which the Issuing Lender became entitled to claim such
amounts. A certificate, in reasonable detail setting forth the calculation of
the amounts involved, submitted by the Issuing Lender to the Company
concurrently with any such demand by the Issuing Lender, shall be conclusive,
absent manifest error, as to the amount thereof.
(c) The Company and each Participating Lender agrees that the
provisions of the foregoing paragraphs (a) and (b) shall apply equally to each
Participating Lender in respect of its L/C Participating Interest in such Letter
of Credit, as if the references in such paragraphs and provisions referred to,
where applicable, such Participating Lender or, in the case of paragraph (b),
any corporation controlling such Participating Lender.
3.11 Further Assurances. The Company hereby agrees, from time
to time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender more fully to effect the
purposes of this Agreement and the issuance of Letters of Credit hereunder.
3.12 Obligations Absolute. The payment obligations of the
Company under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(i) the existence of any claim, set-off, defense or other
right which the Company or any of its Subsidiaries may have at any time
against any beneficiary, or any transferee, of any Letter of Credit (or
any Persons for whom any such beneficiary or any
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such transferee may be acting), the Issuing Lender, the Administrative
Agent or any Lender, or any other Person, whether in connection with
this Agreement, any Credit Document, the transactions contemplated
herein, or any unrelated transaction;
(ii) any statement or any other document presented under
any Letter of Credit proving to be forged, fraudulent or invalid or any
statement therein being untrue or inaccurate in any respect;
(iii) payment by the Issuing Lender under any Letter of
Credit against presentation of a draft or certificate or other document
which does not comply with the terms of such Letter of Credit or is
insufficient in any respect, except where such payment constitutes
gross negligence or willful misconduct on the part of the Issuing
Lender; or
(iv) any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing, except for any such
circumstances or happening constituting gross negligence or willful
misconduct on the part of the Issuing Lender.
3.13 Assignments. No Participating Lender's participation in
any Letter of Credit or any of its rights or duties hereunder shall be
subdivided, assigned or transferred (other than in connection with a transfer of
part or all of such Participating Lender's Revolving Credit Commitment in
accordance with subsection 11.6(c)) without the prior written consent of the
Issuing Lender, which consent will not be unreasonably withheld. Such consent
may be given or withheld without the consent or agreement of any other
Participating Lender. Notwithstanding the foregoing, a Participating Lender may
subparticipate its L/C Participating Interest without obtaining the prior
consent or agreement of the Issuing Lender.
3.14 Participations. Each Lender's obligation to purchase
participating interests pursuant to subsection 3.6 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 may have against the Issuing Lender, the Company or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of an Event
of Default; (iii) any adverse change in the condition (financial or otherwise)
of the Company; (iv) any breach of this Agreement by the Company or any other
Lender; or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS
4.1 Procedure for Borrowing. (a) The Company may borrow under
the Commitments on any Business Day, provided that, with respect to any
borrowing, the Company shall give the Administrative Agent irrevocable notice
(which notice must be received by the Administrative Agent prior to 2:00 p.m.
(or, with respect to Swing Line Loans, 3:00 p.m.), New York City time), (i)
three Business Days prior to the requested Borrowing Date if all or any part of
the Loans are to be Eurodollar Loans and (ii) one Business Day prior to the
requested Borrowing Date (or, in the case of Swing Line Loans and Loans made on
the Closing Date, on
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the requested Borrowing Date) if the borrowing is to be solely of Alternate Base
Rate Loans and specifying (A) the amount of the borrowing, (B) whether such
Loans are initially to be Eurodollar Loans or Alternate Base Rate Loans or a
combination thereof, (C) if the borrowing is to be entirely or partly Eurodollar
Loans, the length of the Interest Period for such Eurodollar Loans and (D)
whether the Loan is a Tranche B-1 Term Loan (with respect to Loans made on the
Closing Date), a Swing Line Loan or a Revolving Credit Loan; provided, however,
that the Loans made on the Closing Date shall be made initially as Alternate
Base Rate Loans. Upon receipt of such notice the Administrative Agent shall
promptly notify each Lender. Not later than 2:00 p.m., New York City time, on
the Borrowing Date specified in such notice, each Lender shall make available to
the Administrative Agent at the office of the Administrative Agent specified in
subsection 11.2 (or at such other location as the Administrative Agent may
direct) an amount in immediately available funds equal to the amount of the Loan
to be made by such Lender (except that proceeds of Swing Line Loans will be made
available to the Company in accordance with subsection 3.4(a)). Loan proceeds
received by the Administrative Agent hereunder shall promptly be made available
to the Company by the Administrative Agent's crediting the account of the
Company, at the office of the Administrative Agent specified in subsection 11.2,
with the aggregate amount actually received by the Administrative Agent from the
Lenders and in like funds as received by the Administrative Agent.
(b) Any borrowing of Eurodollar Loans hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving effect
thereto, (i) the aggregate principal amount of all Eurodollar Loans having the
same Interest Period shall not be less than $2,000,000 or a whole multiple of
$1,000,000 in excess thereof and (ii) no more than sixteen Interest Periods
shall be in effect at any one time.
4.2 Conversion and Continuation Options. (a) Subject to
subsection 4.12, the Company may elect from time to time to convert Eurodollar
Loans into Alternate Base Rate Loans by giving the Administrative Agent
irrevocable notice of such election, to be received by the Administrative Agent
prior to 2:00 p.m., New York City time, at least three Business Days prior to
the proposed conversion date. The Company may elect from time to time to convert
all or a portion of the Alternate Base Rate Loans (other than Swing Line Loans)
then outstanding to Eurodollar Loans by giving the Administrative Agent
irrevocable notice of such election, to be received by the Administrative Agent
prior to 2:00 p.m., New York City time, at least three Business Days prior to
the proposed conversion date, specifying the Interest Period selected therefor,
and, unless a Default or Event of Default has occurred and is continuing and the
Administrative Agent or the Required Lenders have given written notice thereof
to the Company, such conversion shall be made on the requested conversion date
or, if such requested conversion date is not a Business Day, on the next
succeeding Business Day. Upon receipt of any notice pursuant to this subsection
4.2, the Administrative Agent shall promptly notify each Lender thereof. All or
any part of the outstanding Loans (other than Swing Line Loans) may be converted
as provided herein, provided that partial conversions of Alternate Base Loans
shall be in the aggregate principal amount of $1,000,000 or a whole multiple of
$100,000 in excess thereof and the aggregate principal amount of the resulting
Eurodollar Loans outstanding in respect of any one Interest Period shall be at
least $2,000,000 or a whole multiple of $1,000,000 in excess thereof.
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(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company 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 or the
Required Lenders have, by written notice to the Company, determined that such a
continuation is not appropriate, (ii) if, after giving effect thereto,
subsection 4.1(b) would be contravened or (iii) after the date that is one month
prior to the Revolving Credit Termination Date (in the case of continuations of
Revolving Credit Loans) or the date of the final installment of principal of the
Term Loans, as applicable.
(c) Notwithstanding anything in this Agreement to the
contrary, unless otherwise agreed to by the Administrative Agent, no Tranche B-1
Term Loan shall be made as, converted to or continued as a Eurodollar Loan
during the period commencing on the Closing Date and ending on the 33rd day
following the Closing Date; provided that all or a portion of the Tranche B-1
Term Loans made on the Closing Date may, at the Company's option, subject to the
other provisions of this Agreement, be converted to Eurodollar Loans with an
Interest Period of one month on or after the third day following the Closing
Date.
4.3 Changes of Commitment Amounts. (a) The Company shall have
the right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate or, from time to time, permanently reduce the Revolving
Credit Commitments, subject to the provisions of this subsection 4.3. To the
extent, if any, that the sum of the amount of the Revolving Credit Loans, Swing
Line Loans and L/C Obligations then outstanding and the amounts available to be
drawn under outstanding Letters of Credit exceeds the amount of the Revolving
Credit Commitments as then reduced, the Company shall be required to make a
prepayment equal to such excess amount, the proceeds of which shall be applied
first, to payment of the Swing Line Loans then outstanding, second, to payment
of the Revolving Credit Loans then outstanding, third, to payment of any L/C
Obligations then outstanding, and fourth, to cash collateralize any outstanding
Letters of Credit on terms reasonably satisfactory to the Administrative Agent.
Any such termination of the Revolving Credit Commitments shall be accompanied by
prepayment in full of the Revolving Credit Loans, Swing Line Loans and L/C
Obligations then outstanding and by cash collateralization of any outstanding
Letters of Credit on terms reasonably satisfactory to the Administrative Agent.
Upon termination of the Revolving Credit Commitments, any Letter of Credit then
outstanding which has been so cash collateralized shall no longer be considered
a "Letter of Credit" as defined in subsection 1.1 and any L/C Participating
Interests heretofore granted by the Issuing Lender to the Lenders in such Letter
of Credit shall be deemed terminated (subject to automatic reinstatement in the
event that such cash collateral is returned and the Issuing Lender is not fully
reimbursed for any such L/C Obligations) but the Letter of Credit fees payable
under subsection 3.9 shall continue to accrue to the Issuing Lender and the
Participating Lenders (or, in the event of any such automatic reinstatement, as
provided in subsection 3.9) with respect to such Letter of Credit until the
expiry thereof.
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(b) In the case of termination of the Revolving Credit
Commitments, interest accrued on the amount of any prepayment relating thereto
and any unpaid commitment fee accrued hereunder shall be paid on the date of
such termination. Any such partial reduction of the Revolving Credit Commitments
shall be in an amount of $2,000,000, or a whole multiple of $1,000,000 in excess
thereof, and shall, in each case, reduce permanently the amount of the Revolving
Credit Commitments then in effect.
4.4 Optional and Mandatory Prepayments; Repayments of Term
Loans. (a) Subject to subsection 4.12, the Company may at any time and from time
to time prepay Loans, in whole or in part, without premium or penalty, upon at
least one Business Day's (or, in the case of Swing Line Loans, by 2:00 p.m., New
York City time, on the same Business Day) irrevocable notice to the
Administrative Agent in the case of Alternate Base Rate Loans, and three
Business Days' irrevocable notice to the Administrative Agent in the case of
Eurodollar Loans, specifying the date and amount of prepayment and whether the
prepayment is of Revolving Credit Loans, Tranche B Term Loans or Tranche B-1
Term Loans. Upon receipt of such notice the Administrative Agent shall promptly
notify each Lender thereof. If such notice is given, the Company shall make such
prepayment, and the payment amount specified in such notice shall be due and
payable, on the date specified therein. Partial prepayments (i) of Term Loans
shall be in an aggregate principal amount equal to the lesser of (A) (I)
$2,000,000, or a whole multiple of $1,000,000 in excess thereof with respect to
Eurodollar Loans or (II) $1,000,000, or a whole multiple of $100,000 in excess
thereof with respect to Alternate Base Rate Loans and (B) the aggregate unpaid
principal amount of the Term Loans and (ii) of Revolving Credit Loans shall be
in an aggregate principal amount equal to the lesser of (A) (I) $2,000,000 or a
whole multiple of $1,000,000 in excess thereof with respect to Eurodollar Loans
or (II) $1,000,000, or a whole multiple of $100,000 in excess thereof with
respect to Alternate Base Rate Loans and (B) the aggregate unpaid principal
amount of the Revolving Credit Loans, as the case may be. Prepayments of the
Term Loans pursuant to this subsection 4.4(a) shall be applied to the remaining
installments of each of the Tranche B Term Loans and Tranche B-1 Term Loans
ratably according to the amounts of such installments.
(b) (i) Unless the Section 4.4 Lenders shall otherwise agree,
if Holdings, the Company or any of its Subsidiaries shall issue any Capital
Stock subsequent to the Closing Date, 50% of the Net Proceeds thereof (excluding
amounts provided by the Investors or by management of the Company) shall be
promptly applied ratably toward the prepayment of the Term Loans (applied to the
remaining installments thereof ratably according to the amounts thereof);
provided, however, that so long as the ratio of Consolidated Senior Funded
Indebtedness to Consolidated EBITDA for the four fiscal quarters most recently
ended prior to such issuance for which financial information is available shall
be at or less than 3.25 to 1, the percentage of Net Proceeds derived from the
issuance of Capital Stock required to be applied toward the prepayment of the
Term Loans shall be reduced to zero.
(ii) Unless the Section 4.4 Lenders and the Company shall
otherwise agree, if the Company or any of its Subsidiaries shall incur or permit
the incurrence of any Indebtedness subsequent to the Closing Date (other than
Indebtedness permitted pursuant to subsections 8.1(b), (c), (d) (to the extent
the Net Proceeds of such Indebtedness are used to repay,
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redeem, retire or repurchase the then outstanding Permanent Subordinated Debt in
accordance with subsection 8.1(d)), (e), (f), (g), (h), (i) and (j) and
subordinated Indebtedness provided by the Investors), 100% of the Net Proceeds
thereof shall be promptly applied toward the prepayment of the Loans and
reduction of the Commitments as set forth in clause (v) of this subsection
4.4(b).
(iii) Unless the Section 4.4 Lenders shall otherwise agree,
the Company or any of its Subsidiaries shall receive Net Proceeds from any Asset
Sale subsequent to the Closing Date, such Net Proceeds shall be promptly applied
toward the prepayment of the Loans and reduction of the Commitments as set forth
in clause (v) of this subsection 4.4(b); provided, that such Net Proceeds need
not be applied to the prepayment of the Loans and the reduction of the
Commitments until the earlier of the date that the aggregate amount of Net
Proceeds received by the Company or any of its Subsidiaries from any Asset Sales
exceeds $2,000,000 since the Closing Date (and has not yet been applied to the
prepayment of the Loans and the reduction of the Commitments hereunder) and the
date which is six months after the last application of Net Proceeds pursuant to
this subsection 4.4(b)(iii).
(iv) So long as there are any Term Loans outstanding, unless
the Section 4.4 Lenders and the Company shall otherwise agree, if there shall be
Excess Cash Flow as at the end of any fiscal year commencing with the Company's
fiscal year ending on February 1, 2000, 50% of such Excess Cash Flow, less the
portion of any Excess Cash Flow which has been previously applied toward
prepayments of the Term Loans pursuant to this clause (iv), shall be applied
toward prepayment of the Term Loans (applied to the remaining installments
thereof ratably according to the amounts thereof) provided, however, so long as
the ratio of Consolidated Senior Funded Indebtedness to Consolidated EBITDA for
the four fiscal quarters ending at the end of any fiscal year shall be at or
less than 3.25 to 1, the amount of Excess Cash Flow required to be applied
toward the prepayment of the Term Loans shall be reduced to zero. Each such
prepayment shall be made not later than 120 days after the end of such fiscal
year.
(v) Except as otherwise provided in this subsection 4.4(b),
prepayments made pursuant to this subsection 4.4(b) shall be applied by the
Company, first, to the ratable prepayment of the Term Loans (applied to the
remaining installments thereof ratably according to the amounts thereof) and,
second, to reduce permanently the Revolving Credit Commitments. Any such
reduction of the Revolving Credit Commitments shall be accompanied by prepayment
of, first, the Swing Line Loans, second, the Revolving Credit Loans and, third,
the L/C Obligations to the extent, if any, that the sum of the aggregate
outstanding principal amount of Revolving Credit Loans, the aggregate
outstanding principal amount of all Swing Line Loans, the aggregate amount
available to be drawn under all outstanding Letters of Credit and the aggregate
outstanding amount of all L/C Obligations, in each case of all Lenders, exceeds
the amount of the aggregate Revolving Credit Commitments as so reduced, provided
that if the aggregate principal amount of Revolving Credit Loans, Swing Line
Loans and L/C Obligations then outstanding is less than the amount of such
excess (because Letters of Credit constitute a portion thereof), the Company
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established for the benefit of the Lenders.
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(vi) The Company shall give the Administrative Agent (which
shall promptly notify each Lender) at least one Business Day's notice of each
prepayment or mandatory reduction pursuant to this subsection 4.4(b) setting
forth the date and amount thereof. Except as otherwise may be agreed by the
Company and the Required Lenders, any prepayment of Loans pursuant to this
subsection 4.4 shall be applied, first, to any Alternate Base Rate Loans then
outstanding and the balance of such prepayment, if any, to the Eurodollar Loans
then outstanding; provided that prepayments of Eurodollar Loans, if not on the
last day of the Interest Period with respect thereto, shall, at the Company's
option, be prepaid subject to the provisions of subsection 4.12 or the amount of
such prepayment (after application to any Alternate Base Rate Loans) shall be
deposited with the Administrative Agent as cash collateral for the Loans on
terms reasonably satisfactory to the Administrative Agent and thereafter shall
be applied in the order of the Interest Periods next ending most closely to the
date such prepayment is required to be made and on the last day of each such
Interest Period. After such application, unless an Event of Default shall have
occurred and be continuing, any remaining interest earned on such cash
collateral shall be paid to the Company.
(c) (i) The Tranche B Term Loans shall be repaid in ten
consecutive semi-annual installments each on the dates set forth below (each
such day, an "Installment Payment Date") in an aggregate amount equal to the
amount specified for each such Installment Payment Date, as such amounts may be
reduced pursuant to subsection 4.4(b):
Installment Payment Date Installment Amount
------------------------ ------------------
June 30, 1999 $ 420,000
December 31, 1999 $ 420,000
June 30, 2000 $ 420,000
December 31, 2000 $ 420,000
June 30, 2001 $19,320,000
December 31, 2001 $19,320,000
June 30, 2002 $26,460,000
December 31, 2002 $26,460,000
June 30, 2003 $26,460,000
October 31, 2003 $26,460,000
(ii) The Tranche B-1 Term Loans shall be repaid in nine
consecutive semi-annual installments each on the Installment Payment Dates set
forth below in an aggregate amount equal to the amount specified for each such
Installment Payment Date, as such amounts may be reduced pursuant to subsection
4.4(b):
Installment Payment Date Installment Amount
------------------------ ------------------
December 31, 1999 $ 500,000
June 30, 2000 $ 500,000
December 31, 2000 $ 500,000
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June 30, 2001 $ 500,000
December 31, 2001 $ 500,000
June 30, 2002 $ 500,000
December 31, 2002 $ 500,000
June 30, 2003 $60,750,000
October 31, 2003 $60,750,000
(d) Any and all amounts repaid on account of the Term Loans
pursuant to this subsection 4.4 or otherwise may not be reborrowed. Accrued
interest on the amount of any prepayments shall be paid on the Interest Payment
Date next succeeding the date of any partial prepayment and on the date on such
prepayment in the case of a prepayment in full of any Loans.
4.5 Interest Rates and Payment Dates. (a) Eurodollar Loans
shall bear interest for each day during each Interest Period applicable thereto,
commencing on (and including) the first day of such Interest Period to, but
excluding, the last day of such Interest Period, on the unpaid principal amount
thereof at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
(b) Alternate Base Rate Loans shall bear interest for the
period from and including the date such Loans are made to, but excluding, the
maturity date thereof, or to, but excluding, the conversion date if such Loans
are earlier converted into Eurodollar Loans on the unpaid principal amount
thereof at a rate per annum equal to the Alternate Base Rate plus the Applicable
Margin.
(c) If all or a portion of (i) the principal amount of any of
the Loans or (ii) any interest payable thereon shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise) such Loan, if a
Eurodollar Loan, shall be converted into an Alternate Base Rate Loan at the end
of the then-current Interest Period for said Eurodollar Loan (which conversion
shall occur automatically and without need for compliance with the conditions
for conversion set forth in subsection 4.2), and any such overdue amount shall,
without limiting the rights of the Lenders under Section 9, bear interest (which
shall be payable on demand) at a rate per annum which is 2% above the Alternate
Base Rate plus the Applicable Margin (or, in the case of a Eurodollar Loan, the
Eurodollar Rate for the Interest Period plus the Applicable Margin plus 2%, if
higher) from the date of such non-payment until paid in full (as well after as
before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date and on the date of payment in full of the respective Loans and in
the case of the Revolving Credit Loans on date of termination of the Revolving
Credit Commitments.
4.6 Computation of Interest and Fees. (a) Interest in respect
of Alternate Base Rate Loans, at any time that the Alternate Base Rate is
determined by reference to the Prime Rate, and all fees hereunder shall be
calculated on the basis of a 365 (or 366 as the case may be) day year for the
actual days elapsed. Interest in respect of Eurodollar Loans and in respect of
Alternate Base Rate Loans, at any time that the Alternate Base Rate is
determined by reference to
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the Base CD Rate or the Federal Funds Effective Rate, shall be calculated on the
basis of a 360 day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Company and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Alternate Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change in the Alternate Base Rate is announced or such change in the
Eurocurrency Reserve Requirements becomes effective, as the case may be. The
Administrative Agent shall as soon as practicable notify the Company and the
Lenders of the effective date and the amount of each such change.
(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 Company and the Lenders in the absence of manifest
error. The Administrative Agent shall, at the request of the Company, deliver to
the Company a statement showing the quotations used by the Administrative Agent
in determining the Eurodollar Rate.
(c) If at any time the Reference Lender shall cease to be a
Lender hereunder, such Lender shall cease to be the Reference Lender, and then
the Administrative Agent, upon agreement with the Company, shall, by notice to
the Company and the Lenders, designate another Lender as reference Lender.
(d) Each Reference Lender shall use its best efforts to
furnish quotations of rates to the Administrative Agent as contemplated hereby.
4.7 Certain Fees. The Company agrees to pay to the
Administrative Agent, for its own account, a non-refundable agent's fee, in the
amount per annum as set forth in the fee letter, dated as of May 18, 1999,
between Chase and the Company payable as set forth therein.
4.8 Inability to Determine Interest Rate. In the event that
the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that (a) by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period with respect
to (i) proposed Loans that the Company has requested be made as Eurodollar
Loans, (ii) any Eurodollar Loans that will result from the requested conversion
of all or part of the Alternate Base Rate Loans into Eurodollar Loans or (iii)
the continuation of any Eurodollar Loan as such for an additional Interest
Period, or (b) dollar deposits in the relevant amount and for the relevant
period with respect to any such Eurodollar Loan are not generally available to
the Lenders in their respective Eurodollar Lending Offices' interbank eurodollar
markets, the Administrative Agent shall forthwith give telecopy notice of such
determination, confirmed in writing, to the Company and the Lenders at least one
day prior to, as the case may be, the requested Borrowing Date, the conversion
date or the last day of such Interest Period. If such notice is given (i) any
requested Eurodollar Loans shall be made as Alternate Base Rate Loans, (ii) any
Alternate Base Rate Loans that were to have been converted to Eurodollar Loans
shall be continued as Alternate Base Rate Loans, and (iii) any outstanding
Eurodollar Loans shall be converted, on the last day of the then current
Interest Period applicable thereto, into Alternate
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Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made and no Alternate Base Rate
Loans shall be converted to Eurodollar Loans.
4.9 Pro Rata Treatment and Payments. (a) Except to the extent
otherwise provided herein, each borrowing of Loans by the Company from the
Lenders and any reduction of the Commitments of the Lenders hereunder shall be
made pro rata according to the relevant Commitment Percentages of the Lenders
with respect to the respective Class of Loans borrowed or the respective Class
of Commitments to be reduced. Each payment (including each prepayment) by the
Company on account of principal of and interest on (i) the Tranche B Term Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Tranche B Term Loans then held by the Tranche B Lenders and (ii) the
Tranche B-1 Term Loans shall be made pro rata according to the respective
outstanding principal amounts of the Tranche B-1 Term Loans then held by the
Tranche B-1 Lenders.
(b) Whenever any payment received by the Administrative Agent
under this Agreement or any Note or any Credit Document is insufficient to pay
in full all amounts then due and payable to the Administrative Agent and the
Lenders under this Agreement:
(i) If the Administrative Agent has not received a
Payment Sharing Notice (or, if the Administrative Agent has received a
Payment Sharing Notice but the Event of Default specified in such
Payment Sharing Notice has been cured or waived in accordance with the
provisions of this Agreement), such payment shall be distributed by the
Administrative Agent and applied by the Administrative Agent and the
Lenders in the following order: First, to the payment of fees and
expenses due and payable to the Administrative Agent under and in
connection with this Agreement and the other Credit Documents; Second,
to the payment of all expenses due and payable under subsection 11.5,
ratably among the Lenders in accordance with the aggregate amount of
such payments owed to each such Lender; Third, to the payment of fees
due and payable under subsections 3.2 and 3.9, ratably among the
Lenders in accordance with the Commitment Percentage of each Lender of
the Commitment for which such payment is owed and, in the case of an
Issuing Lender, the amount retained by such Issuing Lender for its own
account pursuant to subsection 3.9; Fourth, to the payment of interest
then due and payable on the Loans and on the L/C Obligations, ratably
in accordance with the aggregate amount of interest owed to each such
Lender; and Fifth, to the payment of the principal amount of the Loans
and the L/C Obligations which is then due and payable, ratably among
the Lenders in accordance with the aggregate principal amount owed to
each such Lender; or
(ii) If the Administrative Agent has received a
Payment Sharing Notice which remains in effect, all payments received
by the Administrative Agent under this Agreement or any Note shall be
distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the following order: First, to
the payment of all amounts described in clauses "First" through "Third"
of the foregoing clause (i), in the order set forth therein; Second, to
the payment of the interest accrued on all Loans and
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L/C Obligations, regardless of whether any such amount is then due
and payable, ratably among the Lenders in accordance with the aggregate
accrued interest plus the aggregate principal amount owed to such
Lender; and Third, to the payment of the principal amount of all
Loans and L/C Obligations, regardless of whether any such amount is
then due and payable, ratably among the Lenders in accordance with
the aggregate principal amount owed to such Lender.
(c) If any Lender (a "Non-Funding Lender") has (x) failed to
make a Revolving Credit Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make such
Revolving Credit Loan or (y) given notice to the Company or the Administrative
Agent that it will not make, or that it has disaffirmed or repudiated any
obligation to make, any Revolving Credit Loan, in each case by reason of the
provisions of the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended, or otherwise, (i) any payment made on account of the principal
of the Revolving Credit Loans outstanding shall be made as follows:
(A) in the case of any such payment made on any date when and
to the extent that, in the determination of the Administrative Agent,
the Company would be able, under the terms and conditions hereof, to
reborrow the amount of such payment under the Commitments and to
satisfy any applicable conditions precedent set forth in Section 6 to
such reborrowing, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Lenders other than the
Non-Funding Lender pro rata according to the respective outstanding
principal amounts of the Revolving Credit Loans of such Lenders; and
(B) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Lenders pro rata
according to the respective outstanding principal amounts of such
Revolving Credit Loans; and
(ii) any payment made on account of interest on the Revolving Credit Loans shall
be made pro rata according to the respective amounts of accrued and unpaid
interest due and payable on the Revolving Credit Loans with respect to which
such payment is being made. The Company agrees to give the Administrative Agent
such assistance in making any determination pursuant to subparagraph (i)(A) of
this paragraph as the Administrative Agent may reasonably request. The
Administrative Agent shall notify the Lenders of any such determination, which
shall be conclusive and binding on the Lenders.
(d) All payments (including prepayments) to be made by the
Company on account of principal, interest and fees shall be made without set-off
or counterclaim and shall be made to the Administrative Agent, for the account
of the Lenders at the Administrative Agent's office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in
immediately available funds. The Administrative Agent shall promptly distribute
such payments in accordance with the provisions of subsection 4.9(b) promptly
upon receipt in like funds as received. If any payment hereunder (other than
payments on Eurodollar Loans) would become due and payable on a day other than a
Business Day, such payment shall
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become due and payable on 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 thereon shall be payable 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.
(e) 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 which would constitute its Commitment Percentage 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 in
accordance with subsection 4.1 and the Administrative Agent may, in reliance
upon such assumption, make available to the Company thereof 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 4.9(e) shall be conclusive, absent
manifest error. If such Lender's Commitment Percentage of such borrowing is not
in fact 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 Alternate Base Rate Loans hereunder, on demand, from the Company,
without prejudice to any rights which the Company or the Administrative Agent
may have against such Lender hereunder. Nothing contained in this subsection 4.9
shall relieve any Lender which has failed to make available its ratable portion
of any borrowing hereunder from its obligation to do so in accordance with the
terms hereof.
(f) The failure of any Lender to make the Loan to be made by
it on any Borrowing Date shall not relieve any other Lender of its obligation,
if any, hereunder to make its Loan on such Borrowing Date, but no Lender shall
be responsible for the failure of any other Lender to make the Loan to be made
by such other Lender on such Borrowing Date.
(g) All payments and optional prepayments (other than
prepayments as set forth in subsection 4.11 with respect to increased costs) of
Eurodollar Loans hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of all Eurodollar Loans with the same Interest Period shall not be less than
$2,000,000 or a whole multiple of $1,000,000 in excess thereof.
4.10 Illegality. Notwithstanding any other provision herein,
if any Change in Law occurring after the date that any lender becomes a Lender
party to this Agreement, shall make it unlawful for such Lender to make or
maintain Eurodollar Loans as contemplated by this Agreement, the commitment of
such Lender hereunder to make Eurodollar Loans or to convert
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all or a portion of Alternate Base Rate Loans into Eurodollar Loans shall
forthwith be suspended until such time, if any, as such illegality shall no
longer exist and such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Alternate Base Rate Loans for the
duration of the respective Interest Periods (or, if permitted by applicable law,
at the end of such Interest Periods) and all payments of principal which would
otherwise be applied to such Eurodollar Loans shall be applied instead to such
Lender's Alternate Base Rate Loans. The Company hereby agrees to pay any Lender,
promptly upon its demand, any amounts payable pursuant to subsection 4.12 in
connection with any conversion in accordance with this subsection 4.10 (such
Lender's notice of such costs, as certified in reasonable detail as to such
amounts to the Company through the Administrative Agent, to be conclusive absent
manifest error).
4.11 Requirements of Law. (a) In the event that any Change in
Law or compliance by any Lender with any request or directive (whether or not
having the force of law) from any central bank or other Governmental Authority
occurring after the date that any lender becomes a Lender party to this
Agreement:
(i) does or shall subject any such Lender or its
Eurodollar Lending Office to any tax of any kind whatsoever with
respect to this Agreement, any Note or any Eurodollar Loans made by it,
or change the basis of taxation of payments to such Lender or its
Eurodollar Lending Office of principal, the commitment fee, interest or
any other amount payable hereunder (except for (x) net income and
franchise taxes imposed on the net income of such Lender or its
Eurodollar Lending Office by the jurisdiction under the laws of which
such Lender is organized or any political subdivision or taxing
authority thereof or therein, or by any jurisdiction in which such
Lender's Eurodollar Lending Office is located or any political
subdivision or taxing authority thereof or therein, including changes
in the rate of tax on the overall net income of such Lender or such
Eurodollar Lending Office, and (y) taxes resulting from the
substitution of any such system by another system of taxation, provided
that the taxes payable by Lenders subject to such other system of
taxation are not generally charged to borrowers from such Lenders
having loans or advances bearing interest at a rate similar to the
Eurodollar Rate);
(ii) does or shall impose, modify or hold applicable
any reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender which are not
otherwise included in the determination of the Eurodollar Rate; or
(iii) does or shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender or
its Eurodollar Lending Office of making, converting, renewing or maintaining
advances or extensions of credit or to reduce any amount receivable hereunder,
in each case, in respect of its Eurodollar Loans, then, in any such case, the
Company shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such additional cost or reduced amount
receivable which such Lender deems to be material as determined by such Lender
with
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respect to such Eurodollar Loans, together with interest on each such amount
from the date demanded until payment in full thereof at a rate per annum equal
to the Alternate Base Rate plus 1%.
(b) In the event that any Change in Law occurring after the
date that any lender becomes a Lender party to this Agreement with respect to
any such Lender shall, in the opinion of such Lender, require that any
Commitment of such Lender be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
such Lender or any corporation controlling such Lender, and such Change in Law
shall have the effect of reducing the rate of return on such Lender's or such
corporation's capital, as the case may be, as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation, as the case may be, could have achieved but for such Change in Law
(taking into account such Lender's or such corporation's policies, as the case
may be, with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time following notice by such Lender to the
Company of such Change in Law as provided in paragraph (c) of this subsection
4.11, within 15 days after demand by such Lender, the Company shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
corporation, as the case may be, for such reduction.
(c) The Company shall not be required to make any payments to
any Lender for any additional amounts pursuant to this subsection 4.11 unless
such Lender has given written notice to the Company, through the Administrative
Agent, of its intent to request such payments prior to or within 60 days after
the date on which such Lender became entitled to claim such amounts. If any
Lender has notified the Company through the Administrative Agent of any
increased costs pursuant to paragraph (a) of this subsection 4.11, the Company
at any time thereafter may, upon at least three Business Days' notice to the
Administrative Agent (which shall promptly notify the Lenders thereof), and
subject to subsection 4.12, prepay (or convert into Alternate Base Rate Loans)
all (but not a part) of the Eurodollar Loans then outstanding. Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
paragraph (a) of this subsection 4.11 with respect to such Lender, it will, if
requested by the Company and to the extent permitted by law or by the relevant
Governmental Authority, endeavor in good faith to avoid or minimize the increase
in costs or reduction in payments resulting from such event (including, without
limitation, endeavoring to change its Eurodollar Lending Office); provided,
however, that such avoidance or minimization can be made in such a manner that
such Lender, in its sole determination, suffers no economic, legal or regulatory
disadvantage. If any Lender requests compensation from the Company under this
subsection 4.11, the Company may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender thereafter to make
or continue Loans of the Type with respect to which such compensation is
requested, or to convert Loans of any other Type into Loans of such Type, until
the Requirement of Law giving rise to such request ceases to be in effect,
provided that such suspension shall not affect the right of such Lender to
receive the compensation so requested.
(d) Each Lender that is not a United States Person (as defined
in Section 7701(a)(30) of the Code) for federal income tax purposes either (1)
in the case of a Lender that is a "bank" within the meaning of Section
881(c)(3)(A) of the Code, (i) represents to the Company
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(for the benefit of the Company and the Administrative Agent) that under
applicable law and treaties no taxes are required to be withheld by the Company
or the Administrative Agent with respect to any payments to be made to such
Lender in respect of the Loans or the L/C Participating Interests, (ii) agrees
to furnish to the Company, with a copy to the Administrative Agent, either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001
(wherein such Lender claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (iii) agrees (for the
benefit of the Company and the Administrative Agent), to the extent it may
lawfully do so at such times, to provide the Company, with a copy to the
Administrative Agent, a new Form 4224 or Form 1001 upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Lender, and to comply from time to time with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption or (2) in the case of a Lender that is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code, (i) represents to the Company (for the
benefit of the Company and the Administrative Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Code, (ii) agrees to furnish
to the Company, with a copy to the Administrative Agent, (A) a certificate
substantially in the form of Exhibit K hereto (any such certificate, a
"Subsection 4.11(d)(2) Certificate") and (B) two accurate and complete original
signed copies of Internal Revenue Service Form W-8, certifying to such Lender's
legal entitlement at the Closing Date to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Code with respect to all payments
to be made under this Agreement, and (iii) agrees, to the extent legally
entitled to do so, upon reasonable request by the Company, to provide to the
Company (for the benefit of the Company and the Administrative Agent) such other
forms as may be required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to payments under this
Agreement. Notwithstanding any provision of this subsection 4.11 to the
contrary, the Company shall have no obligation to pay any amount to or for the
account of any Lender (or the Eurodollar Lending Office of any Lender) on
account of any taxes pursuant to this subsection 4.11, to the extent that such
amount results from (i) the failure of any Lender to comply with its obligations
pursuant to this subsection 4.11, (ii) any representation or warranty made or
deemed to be made by any Lender pursuant to this subsection 4.11(d) proving to
have been incorrect, false or misleading in any material respect when so made or
deemed to be made or (iii) any Change in Law or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority, the effect of which would be to
subject to any taxes any payment made pursuant to this Agreement to any Lender
making the representation and covenants set forth in subsection 4.11(d)(2),
which payment would not be subject to such taxes were such Lender eligible to
make and comply with, and actually made and complied with, the representation
and covenants set forth in subsection 4.11(d)(1) hereinabove.
(e) A certificate in reasonable detail as to any amounts
submitted by such Lender, through the Administrative Agent, to the Company,
shall be conclusive in the absence of manifest error. The covenants contained in
this subsection 4.11 shall survive the termination of this Agreement and
repayment of the Loans.
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4.12 Indemnity. The Company agrees to indemnify each Lender
and to hold such Lender harmless from any loss or expense (but without
duplication of any amounts payable as default interest) which such Lender may
sustain or incur as a consequence of (a) default by the Company in payment of
the principal amount of or interest on any Eurodollar Loans of such Lender,
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its Eurodollar Loans hereunder, (b) default by the Company in making
a borrowing after the Company has given a notice in accordance with subsection
4.1 or in making a conversion of Alternate Base Rate Loans to Eurodollar Loans
or in continuing Eurodollar Loans as such, in either case, after the Company has
given notice in accordance with subsection 4.2, (c) default by the Company in
making any prepayment after the Company has given a notice in accordance with
subsection 4.4 or (d) a payment or prepayment of a Eurodollar Loan or conversion
(including without limitation, a conversion pursuant to subsection 4.10) of any
Eurodollar Loan into an Alternate Base Rate Loan, in either case on a day which
is not the last day of an Interest Period with respect thereto, including, but
not limited to, any such loss or expense arising from interest or fees payable
by such Lender to lenders of funds obtained by it in order to maintain its
Eurodollar Loans hereunder (but excluding loss of profit). This covenant shall
survive termination of this Agreement and repayment of the Loans.
4.13 Repayment of Loans; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender (i) the then unpaid principal amount of each Revolving
Credit Loan of such Lender on the Revolving Credit Termination Date, (ii) the
principal amount of the Term Loan of such Lender, in ten consecutive
installments with respect to the Tranche B Term Loans and nine consecutive
installments with respect to the Tranche B-1 Term Loans, payable on each
Installment Payment Date (or the then unpaid principal amount of such Term Loan,
or the date that the Term Loans become due and payable pursuant to Section 9)
and on the Maturity Date and (iii) the then unpaid principal amount of the Swing
Line Loans of the Swing Line Lender on the Revolving Credit Termination Date.
The Company hereby further agrees to pay interest on the unpaid principal amount
of the 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
4.5.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Company to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to subsection 11.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Revolving Credit Loan, Tranche B
Term Loan and Tranche B-1 Term 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 Company to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Company and each Lender's share thereof.
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(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 4.13(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that the failure
of any Lender or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Company to repay (with applicable interest) the Loans made to such Company
by such Lender in accordance with the terms of this Agreement.
(e) The Company agrees that, upon the request to the
Administrative Agent by any Lender and receipt by the Company of any notes
issued to such Lender under the Existing Credit Agreement, the Company will
execute and deliver to such Lender (i) a promissory note of the Company
evidencing the Revolving Credit Loans of such Lender, substantially in the form
of Exhibit A with appropriate insertions as to date and principal amount (a
"Revolving Credit Note"), and/or (ii) a promissory note of the Company
evidencing the Tranche B Term Loan of such Lender, substantially in the form of
Exhibit B with appropriate insertions as to date and principal amount (a
"Tranche B Note"), and/or (iii) a promissory note of the Company evidencing the
Tranche B-1 Term Loan of such Lender, substantially in the form of Exhibit B-1
with appropriate insertions as to date and principal amount (a "Tranche B-1
Note"; each Tranche B Note and Tranche B-1 Note, a "Term Loan Note", and
collectively, "Term Loan Notes"), and/or (iv) in the case of the Swing Line
Lender, a promissory note of the Company evidencing the Swing Line Loans of the
Swing Line Lender, substantially in the form of Exhibit C with appropriate
insertions as to date and principal amount (the "Swing Line Note ").
4.14 Replacement of Lenders. In the event any Lender or the
Issuing Lender exercises its rights pursuant to subsection 4.10 or requests
payments pursuant to subsections 3.10 or 4.11, the Company may require, at the
Company's expense and subject to subsection 4.12, such Lender or the Issuing
Lender to assign, at par plus accrued interest and fees, without recourse (in
accordance with subsection 11.6) all of its interests, rights and obligations
hereunder (including all of its Commitments and the Loans and other amounts at
the time owing to it hereunder and its Notes and its interest in the Letters of
Credit) to a bank, financial institution or other entity specified by the
Company, provided that (i) such assignment shall not conflict with or violate
any law, rule or regulation or order of any court or other Governmental
Authority, (ii) the Company shall have received the written consent of the
Administrative Agent, which consent shall not be unreasonably withheld, to such
assignment, (iii) the Company shall have paid to the assigning Lender or the
Issuing Lender all monies other than principal, interest and fees accrued and
owing hereunder to it (including pursuant to subsections 3.10, 4.10 and 4.11)
and (iv) in the case of a required assignment by the Issuing Lender, the Letters
of Credit shall be canceled and returned to the Issuing Lender.
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SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement
and to make the Loans and to induce the Issuing Lender to issue, and the
Participating Lenders to participate in, the Letters of Credit, the Company
hereby represents and warrants to each Lender and the Administrative Agent, as
of the Closing Date and as of the making of any extension of credit hereunder:
5.1 Financial Condition. (a) The consolidated balance sheet of
the Company and its consolidated Subsidiaries as at January 31, 1999 and the
related consolidated statement of operations for the fiscal year ended on such
date, audited by PricewaterhouseCoopers LLP, or any successor thereto, a copy of
which has heretofore been furnished to each Lender, present fairly in accordance
with GAAP the consolidated financial condition of the Company and its
consolidated Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the fiscal year then ended. 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). Neither the Company nor any of its
consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Contingent 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) The unaudited consolidated balance sheet of the Company
and its consolidated Subsidiaries as at May 2, 1999 and the related unaudited
consolidated statements of income and cash flows of the Company and its
Subsidiaries for the quarter ending May 2, 1999, certified by a Responsible
Officer of the Company, copies of which have heretofore been furnished to each
Lender, present fairly in accordance with GAAP the financial position of the
Company and its consolidated Subsidiaries as at such dates. Such balance sheet
and statements of income and cash flows, including the related schedules and
notes thereto, have been prepared in accordance with GAAP (except as approved by
such Responsible Officer and disclosed therein). The Company and its
consolidated Subsidiaries did not have at the date of such balance sheet and
statements of income and cash flows, any material Contingent 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, statements of income and cash flows or in the notes thereto.
During the period from May 2, 1999 to the Closing Date, no dividends or other
distributions have been declared, paid or made upon the Capital Stock of the
Company or any of its consolidated Subsidiaries nor has any of the Capital Stock
of the Company or any of its consolidated Subsidiaries been redeemed, retired,
purchased or otherwise acquired for value by the Company or any of its
consolidated Subsidiaries, respectively, except as permitted by subsection 8.11.
(c) The unaudited consolidated pro forma balance sheet of the
Company and its consolidated Subsidiaries as at January 31, 1999, certified by a
Responsible Officer of the
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Company (the "Pro Forma Balance Sheet"), a copy of which has heretofore been
furnished to each Lender, is the unaudited balance sheet of the Company and its
consolidated Subsidiaries, adjusted to give effect (as if such events had
occurred on such date, but excluding any purchase accounting adjustments) to (i)
the Transaction, (ii) and the issuance of the Letters of Credit to be incurred
or issued, as the case may be, on the Closing Date and (iii) the incurrence of
all Indebtedness that the Company and its consolidated Subsidiaries expect to
incur, and the payment of all amounts the Company and its consolidated
Subsidiaries expect to pay, in connection with the Transaction. The Pro Forma
Balance Sheet, together with the notes thereto, was prepared based on good faith
assumptions in accordance with GAAP, excluding any purchase accounting
adjustments, and is based on the best information available to the Company and
its consolidated Subsidiaries as of the date of delivery thereof, and reflects
on a pro forma basis the financial position of the Company and its consolidated
Subsidiaries as of the Closing Date as adjusted, as described above, assuming
that the events specified in the preceding sentence had actually occurred at the
Closing Date.
5.2 No Change. Since January 31, 1999, (a) there has been no
change, and (as of the Closing Date only) no development or event, which has had
or could reasonably be expected to have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole, and (b) no dividends or other
distributions have been declared, paid or made upon the Capital Stock of the
Company nor has any of the Capital Stock of the Company been redeemed, retired,
repurchased or otherwise acquired for value by the Company or any of its
Subsidiaries, except as permitted by subsection 8.11.
5.3 Corporate Existence; Compliance with Law. Each of the
Company and its Subsidiaries (a) is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation, (b) has full
corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to use
its corporate name and to own, lease or otherwise hold its properties and assets
and to carry on its business as presently conducted other than such franchises,
licenses, permits, authorizations and approvals the lack of which, individually
or in the aggregate, would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, (c) is duly qualified and in
good standing to do business in each jurisdiction in which the nature of its
business or the ownership, leasing or holding of its properties makes such
qualification necessary, except such jurisdictions where the failure so to
qualify would not have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries, taken as a whole, and (d) except as disclosed in the
Environmental Reports, is in compliance with all applicable statutes, laws,
ordinances, rules, orders, permits and regulations of any governmental authority
or instrumentality, domestic or foreign (including, without limitation, those
related to Hazardous Materials and substances), except where noncompliance would
not be reasonably likely to have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole. Except as disclosed in the
Environmental Reports, none of the Company or any of its Subsidiaries has
received any written communication from a Governmental Authority that
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alleges that the Company or any of its Subsidiaries is not in compliance, in all
material respects, with all material federal, state, local or foreign laws,
ordinances, rules and regulations.
5.4 Corporate Power; Authorization. Each of the Company and
its Subsidiaries has the corporate power and authority to make, deliver and
perform each of the Credit Documents to which it is a party, and the Company has
the corporate power and authority and legal right to borrow hereunder and to
have Letters of Credit issued for its account hereunder. Each of the Company and
its Subsidiaries has taken all necessary corporate action to authorize the
execution, delivery and performance of each of the Credit Documents to which it
is or will be a party and the Company has taken all necessary corporate action
to authorize the borrowings hereunder and the issuance of Letters of Credit for
its account hereunder. No consent or authorization of, or filing with, any
Person (including, without limitation, any Governmental Authority) is required
in connection with the execution, delivery or performance by the Company or any
of its Subsidiaries, or for the validity or enforceability against the Company
or any of its Subsidiaries, of any Credit Document except for consents,
authorizations and filings which have been obtained or made and are in full
force and effect and except (i) such consents, authorizations and filings, the
failure to obtain or perform (x) which would not have a material adverse effect
on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole, and (y) which
would not adversely affect the validity or enforceability of any of the Credit
Documents or the rights or remedies of the Administrative Agent or the Lenders
thereunder and (ii) such filings as are necessary to perfect the Liens of the
Lenders created pursuant to this Agreement and the Security Documents.
5.5 Enforceable Obligations. This Agreement and the Asset
Purchase Agreement have been, and each of the other Credit Documents and any
other agreement to be entered into by any Credit Party pursuant to the Asset
Purchase Agreement will be, duly executed and delivered on behalf of such Credit
Party that is party thereto. The Asset Purchase Agreement has been duly executed
and delivered, to the best knowledge of the Company, on behalf of the other
parties thereto. This Agreement constitutes, and each of the other Credit
Documents and any other agreement to be entered into by any Credit Party
pursuant to the Asset Purchase Agreement will constitute upon execution and
delivery, the legal, valid and binding obligation of such Credit Party, and is
enforceable against such Credit Party in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors' rights generally and by general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law). The Asset Purchase Agreement constitutes the legal, valid and
binding obligation of, to the best knowledge of the Company, the parties thereto
enforceable against such Persons in accordance with its terms, except, in each
case, as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
5.6 No Legal Bar. The execution, delivery and performance of
each Credit Document, the incurrence or issuance of and use of the proceeds of
the Loans and of drawings under the Letters of Credit and the transactions
contemplated by the Asset Purchase Agreement and the Credit Documents, (a) will
not violate any Requirement of Law or any Contractual
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Obligation applicable to or binding upon the Company or any Subsidiary of the
Company or any of their respective properties or assets, in any manner which,
individually or in the aggregate, (i) would have a material adverse effect on
the ability of the Company or any such Subsidiary to perform its obligations
under the Credit Documents, the Asset Purchase Agreement, or any other agreement
to be entered into pursuant to the Asset Purchase Agreement to which it is a
party, (ii) would give rise to any liability on the part of the Administrative
Agent or any Lender or (iii) would have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole, and (b) will not result in
the creation or imposition of any Lien on any of its properties or assets
pursuant to any Requirement of Law applicable to it, as the case may be, or any
of its Contractual Obligations, except for the Liens arising under the Security
Documents.
5.7 No Material Litigation. No litigation by, investigation
known to the Company by, or proceeding of, any Governmental Authority is pending
against the Company or any of its Subsidiaries (including after giving effect to
the Transaction) with respect to the validity, binding effect or enforceability
of the Asset Purchase Agreement, any Credit Document, the Loans made hereunder,
the use of proceeds hereof, or of any drawings under a Letter of Credit and the
other transactions contemplated hereby. No lawsuits, claims, proceedings or
investigations pending or, to the best knowledge of the Company, threatened as
of the Closing Date against or affecting the Company or any Subsidiary of the
Company or any of their respective properties, assets, operations or businesses
(including after giving effect to the Transaction) in which there is a
probability of an adverse determination, is reasonably likely, if adversely
decided, to have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole.
5.8 Investment Company Act. Neither the Company nor any
Subsidiary of the Company is an "investment company" or a company "controlled"
by an "investment company" (as each of the quoted terms is defined or used in
the Investment Company Act of 1940, as amended).
5.9 Federal Regulation. No part of the proceeds of any of the
Loans or any drawing under a Letter of Credit will be used for any purpose which
violates the provisions of Regulation T, U or X of the Board. Neither the
Company nor any of its Subsidiaries is engaged or will engage, principally or as
one of its important activities, in the business of extending credit for the
purpose of "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under said Regulation U.
5.10 No Default. The Company and each of its Subsidiaries have
performed all material obligations required to be performed by them under their
respective Contractual Obligations (including after giving effect to the
Transaction) and they are not (with or without the lapse of time or the giving
of notice, or both) in breach or default in any respect thereunder, except to
the extent that such breach or default would not have a material adverse effect
on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole. Neither the
Company nor any of its Subsidiaries (including after giving effect to the
Transaction) is in default under any material judgment, order or decree
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of any Governmental Authority, domestic or foreign, applicable to it or any of
its respective properties, assets, operations or business, except to the extent
that any such defaults would not, in the aggregate, have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
5.11 Taxes. Each of the Company and its Subsidiaries
(including after giving effect to the Transaction) has filed or caused to be
filed all material tax returns which, to the best knowledge of the Company, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any amount of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves (or other sufficient provisions) in conformity with GAAP have been
provided on the books of the Company or its Subsidiaries (including after giving
effect to the Transaction), as the case may be); no tax Lien has been filed,
and, to the best knowledge of the Company, no written claim is being asserted,
with respect to any such taxes, fees or other charges.
5.12 Subsidiaries. As of the Closing Date, the only
Subsidiaries of the Company are those listed on Schedule 5.12. On the Closing
Date and at all times thereafter, Holdings owns 100% of the issued and
outstanding Capital Stock of the Company.
5.13 Ownership of Property; Liens. As of the Closing Date and
as of the making of any extension of credit hereunder (subject to transfers and
dispositions of property permitted under subsection 8.5) each of the Company and
its Subsidiaries has good and valid title to all of its material assets (other
than real property or interests in real property) in each case free and clear of
all mortgages, liens, security interests or encumbrances of any nature
whatsoever except Permitted Liens. With respect to real property or interests in
real property, as of the Closing Date, each of the Company and its Subsidiaries
has (i) fee title to all of the real property listed on Schedule 5.13 under the
heading "Fee Properties" (each, a "Fee Property"), and (ii) good and valid title
to the leasehold estates in all of the real property leased by it and listed on
Schedule 5.13 under the heading "Leased Properties" (each, a "Leased Property"),
in each case free and clear of all mortgages, liens, security interests,
easements, covenants, rights-of-way and other similar restrictions of any nature
whatsoever, except Permitted Liens. The Fee Properties and the Leased Properties
constitute, as of the Closing Date, all of the real property owned in fee or
leased by the Company and its Subsidiaries.
5.14 ERISA. The "amount of unfunded benefit liabilities"
(within the meaning of Section 4001(a)(18) of ERISA) of any Single Employer Plan
of the Company or any Commonly Controlled Entity would not result in a material
liability to the Company if any or all such Single Employer Plans were
terminated. None of the Company, any Subsidiary of the Company or any Commonly
Controlled Entity would be liable for any amount pursuant to Sections 4063 or
4064 of ERISA, if any Single Employer Plan were to terminate. Neither the
Company nor any Commonly Controlled Entity has been involved in any transaction
that would cause the Company to be subject to material liability with respect to
a Single Employer Plan to which the Company or any Commonly Controlled Entity
contributed or was obligated to contribute during
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the six-year period ending on the date this representation is made under
Sections 4062 or 4069 of ERISA. Neither the Company nor any Commonly Controlled
Entity has incurred any material liability under Title IV of ERISA which could
become or remain a material liability of the Company after the Closing Date and
the consummation of the Transaction. None of the Company, any Subsidiary of the
Company, or, to the best knowledge of the Company, any director, officer or
employee thereof, or any of the Plans or any trust created thereunder, or any
fiduciary thereof, has engaged in a transaction or taken any other action or
omitted to take any action involving any Plan which could constitute a
prohibited transaction within the meaning of Section 406 of ERISA which is not
otherwise exempted and which would result in a material liability to the
Company, or would cause the Company to be subject to either a material liability
or material civil penalty assessed pursuant to Sections 409 or 502(i) or (l) of
ERISA or a material tax imposed pursuant to Sections 4975 or 4976 of the Code.
Each of the Plans (to the best knowledge of the Company with respect to any
Multiemployer Plan) has been operated and administered in all material respects
in accordance with applicable laws, including but not limited to ERISA and the
Code. There are no material pending or, to the best knowledge of the Company,
threatened claims by or on behalf of any of the Plans or any fiduciary, by any
employee or beneficiary covered under any such Plan, or otherwise involving any
such Plan or fiduciary for which the Company could have any material liability
(other than routine claims for benefits). To the best knowledge of the Company,
no condition exists, and no event has occurred with respect to any Multiemployer
Plan which presents a material risk of a complete or partial withdrawal under
Subtitle E of Title IV of ERISA for which the Company could have any material
liability, nor has the Company or any Commonly Controlled Entity been notified
that any such Multiemployer Plan is insolvent or in reorganization within the
meaning of Section 4241 of ERISA. Neither the Company nor any Commonly
Controlled Entity nor any Subsidiary has been a party to any transaction or
agreement to which the provisions of Section 4204 of ERISA were applicable. None
of the Company, or any Commonly Controlled Entity or any of their respective
Subsidiaries is obligated to contribute to a Multiemployer Plan, on behalf of
any current or former employee of the Company, any Commonly Controlled Entity or
such Subsidiary. The liability to which the Company, any Commonly Controlled
Entity or any of their respective Subsidiaries would become subject under ERISA
if all such Persons were to withdraw completely from all Plans on the Closing
Date (after giving effect to the Transaction) is not in excess of $2,000,000.
None of the Plans or any trust established thereunder has incurred any
"accumulated funding deficiency" (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, as of the last day of the most recent
fiscal year of each of the Plans. No contribution failure has occurred with
respect to any Plan sufficient to give rise to a lien under Section 302(f) of
ERISA.
5.15 Collateral Documents. (a) At all times after the
execution and delivery of the Pledge Agreements, each of the Pledge Agreements
and all supplements thereto is effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable security interest in the pledged stock described therein and, so
long as stock certificates representing or constituting the pledged stock
described in each of the Pledge Agreements are in the possession of the
Administrative Agent, such security interest, subject to the existence of
Permitted Liens and, with respect to the Company Pledge Agreement, the merger of
any Subsidiary with and into the Company or another Subsidiary of the Company
permitted
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under subsection 8.4(b) or 8.5(b), constitute a perfected first lien on, and
security interest in, all right, title and interest of the pledgor party thereto
in the pledged stock described therein.
(b) At all times after the execution and delivery of the
Security Agreements and all supplements thereto, each of the Security Agreements
and all supplements thereto is effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable security interest in the collateral described therein and Uniform
Commercial Code financing statements have been filed in each of the
jurisdictions listed on Schedule 5.15(b), or arrangements have been made for
such filing in such jurisdictions, and upon such filing, and upon the taking of
possession by the Administrative Agent of any such collateral the security
interests in which may be perfected only by possession, such security interests
will, subject to the existence of Permitted Liens and, with respect to the
Subsidiary Security Agreement, the merger of any Subsidiary with and into the
Company or another Subsidiary of the Company permitted under subsection 8.4(b)
or 8.5(b), constitute perfected first liens on, and security interests in, all
right, title and interest of the debtor party thereto in the collateral
described therein, except to the extent that a security interest cannot be
perfected therein by the filing of a financing statement or the taking of
possession under the Uniform Commercial Code of the relevant jurisdiction.
5.16 Copyrights, Permits, Trademarks and Licenses. Schedule
5.16 sets forth 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 Company and its Subsidiaries
(after giving effect to the Transaction) and, with respect to registered
trademarks (if any), contains a list of all jurisdictions in which such
trademarks are registered or applied for and all registration and application
numbers. Except as disclosed on Schedule 5.16, the Company or a Subsidiary
(after giving effect to the Transaction) owns or has the right to use, without
payment to any other party, trademarks (registered or unregistered), trade
names, service marks, copyrights and applications therefor referred to in such
Schedule. To the best knowledge of the Company, no claims are pending by any
Person with respect to the ownership, validity, enforceability or the Company's
or any Subsidiary's use of any such trademarks (registered or unregistered),
trade names, service marks, copyrights, or applications therefor, challenging or
questioning the validity or effectiveness of any of the foregoing, in any
jurisdiction, domestic or foreign.
5.17 Environmental Matters. Except as set forth in the
Environmental Reports and except to the extent that the facts and circumstances
giving rise to the failure of any of the following to be true and correct would
not be reasonably likely to have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole:
(a) To the best knowledge of the Company, no parcel of real
property owned or operated by the Company or any of its Subsidiaries contains,
and has not previously contained, in, on or under including, without limitation,
the soil and groundwater thereunder, any Hazardous Materials in amounts or
concentrations that constitute or constituted a material violation of, or could
reasonably give rise to material liability under, Environmental Laws.
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(b) To the best knowledge of the Company, each parcel of real
property owned or operated by the Company or any of its Subsidiaries and all
operations and facilities at such properties taken as a whole are in material
compliance with all Environmental Laws, and there is no contamination or
violation of any Environmental Law which could materially interfere with the
continued operation of, or materially impair the fair saleable value of, the
such property taken as a whole.
(c) To the best knowledge of the Company, neither the Company
nor any of its Subsidiaries has received or is aware of any complaint, notice of
violation, alleged violation, or notice of investigation or of potential
liability under Environmental Laws with regard to any parcel of real property
owned or operated by the Company or any of its Subsidiaries or the operations of
the Company or its Subsidiaries, nor does the Company or any of its Subsidiaries
have knowledge that any such action is being contemplated, considered or
threatened.
(d) To the best knowledge of the Company, Hazardous Materials
have not been generated, treated, stored, disposed of, at, on or under any
parcel of real property owned or operated by the Company or any of its
Subsidiaries, nor have any Hazardous Materials been transported from such
properties, in material violation of or in a manner that could reasonably give
rise to material liability under any Environmental Laws.
(e) There are no governmental administrative actions or
judicial proceedings pending or, to the best knowledge of the Company and its
Subsidiaries, threatened, under any Environmental Law to which the Company or
any of its Subsidiaries is a party with respect to any parcel of real property
owned or operated by the Company or any of its Subsidiaries, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements, other than permits
authorizing operations at facilities at the real property, outstanding under any
Environmental Law with respect to such properties.
5.18 Accuracy and Completeness of Information. The factual
statements contained in the financial statements referred to in subsection
5.1(a), the Credit Documents, the Asset Purchase Agreement and any other
certificates or documents furnished or to be furnished to the Administrative
Agent or the Lenders from time to time in connection with this Agreement, taken
as a whole, do not and will not, to the best knowledge of the Company, as of the
date when made, contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances in which the same were made, all except
as otherwise qualified herein or therein, such knowledge qualification being
given only with respect to factual statements made by Persons other than the
Company or any of its Subsidiaries.
5.19 Year 2000 Matters. Any reprogramming required to permit
the proper functioning (but only to the extent that such proper functioning
would otherwise be impaired by the occurrence of the year 2000) in and following
the year 2000 of the Company's and its Subsidiaries' computer systems as so
reprogrammed, will be completed in all material respects
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by November 15, 1999. The costs to the Company and its Subsidiaries for such
reprogramming and testing and for the other reasonably foreseeable consequences
of year 2000 to the Company and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of others' systems and equipment) would not
reasonably be expected to result in a Default or Event of Default or to have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole. Except for any reprogramming referred to above, as may be necessary,
the computer systems of the Company and its Subsidiaries are and, with ordinary
course of upgrading and maintenance, will continue for the term of this
Agreement to be, sufficient for the conduct of their respective businesses
without resulting in a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operation of the Company and
its Subsidiaries taken as a whole.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Loans and Letters of Credit. The
obligation of each Lender to make its Tranche B-1 Term Loans and the obligation
of the Issuing Lender to issue any Letter of Credit on the Closing Date (which,
in any event, shall be no later than July 30, 1999) are subject to the
satisfaction, or waiver by such Lender, immediately prior to or concurrently
with the making of such Tranche B-1 Term Loans or the issuance of such Letters
of Credit, as the case may be, of the following conditions:
(a) Agreement; Notes. (i) The Administrative Agent shall have
received a counterpart of (x) this Agreement for the Borrower, the
Documentation Agent, the Administrative Agent and the Section 4.4
Lenders, and (y) such other amendments and/or supplements to the
Security Documents and the Guarantees as may be necessary to create in
favor of the Administrative Agent, for the ratable benefit of the
Lenders, a legal, valid and enforceable security interest in the
Collateral (subject to Schedule 8.2) including, but not limited to, the
assets acquired by the Company and its Subsidiaries in the Big Wheel
Acquisition, each reasonably satisfactory in form and substance to the
Administrative Agent, conforming to the requirements hereof and
executed by a duly authorized officer of the respective parties.
(ii) The Administrative Agent shall have received (w) a
counterpart of this Agreement for each Lender duly executed and
delivered by a duly authorized officer of the Company, (x) for the
account of each Revolving Credit Lender (which has surrendered any
notes held by such Lender in connection with the Existing Credit
Agreement) requesting the same pursuant to subsection 4.13, a Revolving
Credit Note of the Company conforming to the requirements hereof and
executed by a duly authorized officer of the Company, (y) for the
account of each Lender (which has surrendered any notes held by such
Lender in connection with the Existing Credit Agreement) holding a Term
Loan and requesting the same pursuant to subsection 4.13, a Term Loan
Note of the Company conforming to the requirements hereof and executed
by a duly authorized officer of the Company, and (z) for the account of
Chase, a Swing Line Note, conforming to the requirements hereof and
executed by a duly authorized officer of the Company.
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(b) Big Wheel Acquisition. The Big Wheel Acquisition shall
have been consummated pursuant to the Asset Purchase Agreement; all of
the conditions to such documentation shall have been substantially
satisfied and no material provision thereof shall have been amended,
supplemented, waived or otherwise modified without the prior written
consent of the Administrative Agent, which consent shall not be
unreasonably withheld.
(c) Capital Structure.
(i) The Company and its Subsidiaries shall have no
Indebtedness except as permitted by this Agreement.
(ii) The execution, delivery and performance of this
Agreement and the other Credit Documents and the related documentation
with respect to the Commitments and the making of the Loans shall not
violate any of the provision of any of the Permanent Subordinated Note
Indenture.
(iii) Any changes since December 8, 1997 to the
certificate of incorporation, by-laws, other governing documents and
corporate structure of the Company and its Subsidiaries, in each case
after giving effect to the consummation of the Transaction, shall be in
form and substance satisfactory to the Administrative Agent and the
Documentation Agent (the execution and delivery of this Agreement by
the Lenders, the Documentation Agent and the Administrative Agent being
deemed to evidence the satisfaction of the Administrative Agent and the
Documentation Agent with such of the above-referenced matters as shall
have been disclosed and made available to the Administrative Agent and
the Documentation Agent prior to the date hereof).
(d) Fees. The Administrative Agent, the Documentation Agent
and the Lenders shall have received all fees, expenses and other
consideration required to be paid or delivered on or before the Closing
Date.
(e) Lien Searches. The Administrative Agent shall have
received the results of searches, at the Secretary of State and local
levels in Minnesota, North Dakota and Wisconsin, of Uniform Commercial
Code, tax and judgment filings made with respect to Big Wheel, together
with copies of financing statements disclosed by such searches and such
searches shall disclose no Liens on any assets encumbered by any
Security Document, except for Liens permitted hereunder or, if
unpermitted Liens are disclosed, the Administrative Agent shall have
received satisfactory evidence of release of such Liens.
(f) Actions to Perfect Liens. The Administrative Agent shall
have received evidence in form and substance satisfactory to it that
all (i) filings, recordings, registrations and other actions,
including, without limitation, the filing of duly executed financing
statements on form UCC-1, necessary or, in the opinion of the
Administrative
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Agent, desirable to perfect the Liens created by the Security
Documents, including, but not limited to, Liens on the assets acquired
by the Company and its Subsidiaries in the Big Wheel Acquisition shall
have been completed, and (ii) the Administrative Agent, for the benefit
of the Lenders, shall have a perfected security in all of the
Collateral including, but not limited to, the assets acquired by the
Company and its Subsidiaries in the Big Wheel Acquisition.
(g) Pledge Agreements. The Administrative Agent shall have
received, in form and substance satisfactory to it (i) a written
confirmation of the Holdings Pledge Agreement executed and delivered by
a duly authorized officer of Holdings and a written confirmation of the
acknowledgment and consent of the Company thereunder and (ii) a written
confirmation of the Company Pledge Agreement executed and delivered by
a duly authorized officer of the Company and a written confirmation of
each of the acknowledgments and consents of each of the Domestic
Subsidiaries thereunder, in the form annexed to the Company Pledge
Agreement.
(h) Security Agreements. The Administrative Agent shall have
received, in form and substance satisfactory to it (i) a written
confirmation of the Company Security Agreement, executed and delivered
by a duly authorized officer of the Company and (ii) a written
confirmation of each of the Subsidiary Security Agreements, executed
and delivered by a duly authorized officer of each of the respective
Domestic Subsidiaries of the Company.
(i) Guarantees. The Administrative Agent shall have received,
in form and substance satisfactory to it (i) a written confirmation of
the Holdings Guarantee, executed and delivered by a duly authorized
officer of Holdings and (ii) a written confirmation of each of the
Subsidiary Guarantees, executed and delivered by a duly authorized
officer of each of the respective Domestic Subsidiaries of the Company.
(j) Legal Opinions. The Administrative Agent shall have
received, dated the Closing Date and addressed to the Administrative
Agent and the Lenders, an opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
counsel to Holdings and the Company, in substantially the form of
Exhibit J-1 with such changes thereto as may be approved by the
Administrative Agent and its counsel. The Administrative Agent shall
have received, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, an opinion of ▇▇▇▇▇ ▇▇▇▇ LLP,
Arizona counsel to the Company, in substantially the form of Exhibit
J-2 with such changes as may be approved by the Administrative Agent
and its counsel.
(k) Closing Certificate. The Administrative Agent shall have
received a Closing Certificate of the Company and Holdings dated the
Closing Date, in substantially the form of Exhibits ▇-▇, ▇-▇ ▇▇▇ ▇-▇,
respectively, with appropriate insertions and attachments, in form and
substance satisfactory to the Administrative Agent and its counsel,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Company and Holdings, respectively.
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(l) Consents, Authorizations and Filings, etc. Except for
financing statements to be filed in connection herewith, all consents,
approvals, authorizations and filings with any Person (including,
without limitation, any Governmental Authority), if any, required in
connection with the Transaction and the execution, delivery and
performance by Holdings or the Company, and the validity and
enforceability against Holdings and the Company, of the Credit
Documents to which any of them is a party, shall have been obtained or
made, and such consents, approvals, authorizations and filings shall be
in full force and effect, except such consents, approvals,
authorizations and filings, the failure to obtain which would not have
a material adverse effect on the business, assets, condition (financial
or otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole.
(m) Financial Statements. The Lenders shall have received
satisfactory (a) Pro Forma Balance Sheet reflecting and giving effect
to the Transaction and the other transactions contemplated hereby, but
excluding any purchase accounting adjustments and (b) all financial
statements set forth in subsection 5.1(b), each certified by a
Responsible Officer of the Company.
(n) Financial Covenants. The Company and its Subsidiaries
shall be in compliance, after giving effect to the Transaction, with
the financial covenants set forth in subsections 8.8, 8.9 and 8.10 of
this Agreement on a pro forma basis after giving effect to the
Transaction.
6.2 Conditions to All Loans and Letters of Credit. The
obligation of each Lender to make any Loan (other than any Revolving Credit Loan
the proceeds of which are to be used to repay Refunded Swing Line Loans) and the
obligation of the Issuing Lender to issue any Letter of Credit is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Representations and Warranties. Each of the
representations and warranties made in or pursuant to Section 5 or
which are contained in any other Credit Document shall be true and
correct in all material respects on and as of the date of such Loan or
of the issuance of such Letter of Credit as if made on and as of such
date (unless stated to relate to a specific 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 or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such Borrowing Date or
after giving effect to such Loan to be made or such Letter of Credit to
be issued on such Borrowing Date.
Each borrowing by the Company hereunder and the issuance of each Letter of
Credit by the Issuing Lender hereunder shall constitute a representation and
warranty by the Company as of the date of such borrowing or issuance that the
conditions in clauses (a) and (b) and of this subsection 6.2 have been
satisfied.
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SECTION 7. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments
remain in effect, any Loan, Note or L/C Obligation remains outstanding and
unpaid, any amount (unless cash in an amount equal to such amount has been
deposited to a cash collateral account established by the Administrative Agent)
remains available to be drawn under any Letter of Credit or any other amount is
owing to any Lender or the Administrative Agent hereunder or under any of the
other Credit Documents, it shall, and, in the case of the agreements contained
in subsections 7.3 through 7.6, 7.8 and 7.9, the Company shall cause each of its
Subsidiaries to:
7.1 Financial Statements. Furnish to the Administrative Agent
(with sufficient copies for each Lender which the Administrative Agent shall
promptly furnish to each Lender):
(a) as soon as available, but in any event within 95 days
after the end of each fiscal year of the Company, a copy of the
consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of such fiscal year and the related
consolidated statements of stockholders' equity and cash flows and the
consolidated statements of income of the Company and its Subsidiaries
for such fiscal year, setting forth in each case in comparative form
the figures for the previous year and, in the case of the consolidated
balance sheet referred to above, reported on, without a "going concern"
or like qualification or exception, or qualification arising out of the
scope of the audit, or qualification which would affect the computation
of financial covenants, by independent certified public accountants of
nationally recognized standing;
(b) as soon as available, but in any event not later than 50
days after the end of each of the first three quarterly periods of each
fiscal year of the Company, the unaudited consolidated balance sheet of
the Company and its Subsidiaries as at the end of each such quarter and
the related unaudited consolidated statements of income and cash flows
of the Company and its Subsidiaries for such quarterly period and the
portion of the fiscal year of the Company through such date, setting
forth in each case in comparative form the figures for the
corresponding quarter in, and year to date portion of, the previous
year, and the figures for such periods in the budget prepared by the
Company and furnished to the Administrative Agent, certified by the
chief financial officer, controller or treasurer of the Company as
being fairly stated in all material respects; and
(c) (i) as soon as available, but in any event not later than
30 days after the beginning of each fiscal year of the Company to which
such budget relates, a preliminary consolidated operating budget for
the Company and its Subsidiaries taken as a whole and (ii) as soon as
available, any material revision to or any final revision of, any such
preliminary annual operating budget or any such consolidated operating
budget.
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and (except in the case of
the statements referred to in paragraphs (b) and (c) of this subsection 7.1) in
accordance with GAAP.
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7.2 Certificates; Other Information. Furnish to the
Administrative Agent (with sufficient copies for each Lender which the
Administrative Agent shall promptly deliver to each Lender):
(a) concurrently with the delivery of the consolidated
financial statements referred to in subsection 7.1(a), a letter from
the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary
to express their opinion on such financial statements no knowledge was
obtained of any Default or Event of Default under subsections 4.4(b),
8.1, 8.3, and 8.6 through 8.11, except as specified in such letter;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a certificate of the chief
financial officer of the Company (i) stating that, to the best of such
officer's knowledge, each of the Company and its Subsidiaries has
observed or performed all of its respective covenants and other
agreements, and satisfied every material condition, contained in this
Agreement, the Notes and the other Credit Documents to be observed,
performed or satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate, (ii) showing in detail as of the end of the related
fiscal period the figures and calculations supporting such statement in
respect of subsections 8.7 through 8.12 and any other calculations
reasonably requested by the Administrative Agent with respect to the
quantitative aspects of the other covenants contained herein and (iii)
if not specified in the financial statements delivered pursuant to
subsection 7.1, specifying the aggregate amount of interest paid or
accrued by the Company and its Subsidiaries, and the aggregate amount
of depreciation, depletion and amortization charged on the books of the
Company and its Subsidiaries, during such accounting period;
(c) promptly upon receipt thereof, copies of all final reports
submitted to the Company or to any of its Subsidiaries by independent
certified public accountants in connection with each annual, interim or
special audit of the books of the Company or any of its Subsidiaries
made by such accountants, including, without limitation, any final
comment letter submitted by such accountants to management in
connection with their annual audit;
(d) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available to holders of the Permanent Subordinated Debt and the
public generally by the Company or any of its Subsidiaries, if any, and
all regular and periodic reports and all final registration statements
and final prospectuses, if any, filed by the Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any Governmental Authority succeeding to any of
its functions;
(e) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a management summary
describing and analyzing the
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performance of the Company and its Subsidiaries during the periods
covered by such financial statements;
(f) within 45 days after the end of each fiscal quarter, a
summary of all Asset Sales during such fiscal quarter including the
amount of all Net Proceeds from such Asset Sales not previously applied
to prepayments of the Loans and reductions of the Commitments pursuant
to the proviso to subsection 4.4(b)(iii); and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations and liabilities of whatever nature including tax
liabilities, except (a) when the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Company or
any of its Subsidiaries, as the case may be, (b) for delinquent obligations
which do not have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole, and (c) for trade and other accounts payable in
the ordinary course of business.
7.4 Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as now conducted by it (after
giving effect to the Transaction), and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all material rights, material privileges, franchises, copyrights, trademarks and
trade names necessary or desirable in the normal conduct of its business except
for rights, privileges, franchises, copyrights, trademarks and tradenames the
loss of which would not in the aggregate have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole, and except as otherwise
permitted by subsections 8.4 and 8.5; and comply with all applicable
Requirements of Law and Contractual Obligations except to the extent that the
failure to comply therewith would not, in the aggregate, have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
7.5 Maintenance of Property; Insurance. (a) Keep all property
useful and necessary in its business in good working order and condition
(ordinary wear and tear excepted); and
(b) Maintain with financially sound and reputable insurance
companies (x) insurance on all its property in at least such amounts and with
only such deductibles as are usually maintained by, and against at least such
risks (but including, in any event, public liability insurance) as are usually
insured against in the same general area, by companies engaged in the same or a
similar business and (y) flood insurance, if required, and furnish to each
Lender, (i) annually, a schedule disclosing all insurance against products
liability risk maintained by the
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Company and its Subsidiaries pursuant to this subsection 7.5(b) or otherwise and
(ii) upon written request of any Lender, full information as to the insurance
carried; provided that the Company may implement programs of self insurance in
the ordinary course of business and in accordance with industry standards for a
company of similar size so long as reserves are maintained in accordance with
GAAP for the liabilities associated therewith.
7.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, complete and correct
entries in conformity with all material Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of any Lender upon reasonable notice (but, with respect to all
Lenders, no more frequently than monthly unless a Default or Event of Default
shall have occurred and be continuing) to visit and inspect any of its
properties and examine and, to the extent reasonable, make abstracts from any of
its books and records, and to discuss the business, operations, properties and
financial and other condition of the Company and its Subsidiaries with officers
and employees of the Company and its Subsidiaries and (in coordination with such
officers and employees) with its independent certified public accountants, in
each case at any reasonable time, upon reasonable notice, and as often as may
reasonably be desired.
7.7 Notices. Promptly give notice to the Administrative Agent
and each Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any
instrument or other agreement, guarantee or collateral document of the
Company or any of its Subsidiaries which default or event of default
has not been waived and would have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole, or any
other default or event of default under any such instrument, agreement,
guarantee or other collateral document which, but for the proviso to
clause (e) of Section 9, would have constituted a Default or Event of
Default under this Agreement, or (ii) litigation, investigation or
proceeding which may exist at any time between the Company or any of
its Subsidiaries and any Governmental Authority, or receipt of any
notice of any environmental claim or assessment against the Company or
any of its Subsidiaries by any Governmental Authority, which in any
such case would have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole;
(c) of any litigation or proceeding against the Company or any
of its Subsidiaries (i) in which more than $2,000,000 of the amount
claimed is not covered by insurance or (ii) in which injunctive or
similar relief is sought which if obtained would have a material
adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries
taken as a whole;
(d) of the following events, as soon as practicable after, and
in any event within 30 days after, the Company knows or has reason to
know thereof: (i) the occurrence of any Reportable Event with respect
to any Plan which Reportable Event could reasonably
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result in material liability to the Company and its Subsidiaries taken
as a whole or (ii) the institution of proceedings or the taking of any
other action by PBGC, the Company or any Commonly Controlled Entity to
terminate, withdraw or partially withdraw from any Plan and, with
respect to a Multiemployer Plan, the Reorganization or Insolvency of
the Plan, in each of the foregoing cases which could reasonably result
in material liability to the Company and its Subsidiaries taken as a
whole, and in addition to such notice, deliver to the Administrative
Agent and each Lender whichever of the following may be applicable: (A)
a certificate of a Responsible Officer of the Company setting forth
details as to such Reportable Event and the action that the Company or
such Commonly Controlled Entity proposes to take with respect thereto,
together with a copy of any notice of such Reportable Event that may be
required to be filed with PBGC or (B) any notice delivered by PBGC
evidencing its intent to institute such proceedings or any notice to
PBGC that such Plan is to be terminated, as the case may be; and
(e) of a material adverse change known to the Company or its
Subsidiaries in the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries
taken as a whole.
Each notice pursuant to this subsection 7.7 shall be accompanied by a statement
of a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and (in the cases of clauses (a) through (d)) stating what
action the Company proposes to take with respect thereto.
7.8 Environmental Laws. (a) Comply with, and use reasonable
efforts to insure compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and
require that all tenants and subtenants obtain and comply with and maintain, all
licenses, approvals, registrations or permits required by Environmental Laws,
except to the extent that failure to do so would not be reasonably likely to
have a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, or on the validity or enforceability of any of the Credit Documents or
the rights and remedies of the Administrative Agent or the Lenders thereunder;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions, lawfully required
under applicable Environmental Laws, and promptly comply with all lawful orders
and directives of all Governmental Authorities respecting Environmental Laws,
except to the extent that the same are being contested in good faith by
appropriate proceedings; and
(c) In regard to this Agreement or in any way relating to the
Company or its Subsidiaries or their current or former operations, defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to Hazardous Material or Environmental
Laws, including, without limitation, any orders, requirements or demands of
Governmental Authorities
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related thereto, including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, remediation costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in this subsection 7.8(c) shall survive
repayment of the Loans and all other amounts payable hereunder.
7.9 Receipt of Stock Certificates and Supplements to
Subsidiary Guarantee and Subsidiary Security Agreement. As soon as practicable,
deliver to the Administrative Agent stock certificates representing 100% of all
issued and outstanding shares of Capital Stock of all Subsidiaries of the
Company and undated stock powers for each such certificate, executed in blank
and delivered by a duly authorized officer of the Company, and executed
supplements to the Subsidiary Guarantee and Subsidiary Security Agreement, in
form and substance satisfactory to the Administrative Agent, whereby such
Subsidiaries become party to such Subsidiary Guarantee and Subsidiary Security
Agreement, each of which stock certificates, stock powers and supplements have
not been previously delivered to the Administrative Agent.
SECTION 8. NEGATIVE COVENANTS
The Company hereby agrees that it shall not, and the Company
shall not permit any of its Subsidiaries to, directly or indirectly so long as
the Commitments remain in effect or any Loan, Note or L/C Obligation remains
outstanding and unpaid, any amount (unless cash in an amount equal to such
amount has been deposited to a cash collateral account established by the
Administrative Agent) remains available to be drawn under any Letter of Credit
or any other amount is owing to any Lender or the Administrative Agent hereunder
or under any other Credit Document (it being understood that each of the
permitted exceptions to each of the covenants in this Section 8 is in addition
to, and not overlapping with, any other of such permitted exceptions except to
the extent expressly provided):
8.1 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) the Indebtedness outstanding on the Closing Date and
reflected on Schedule 8.1(a), but excluding the refinancing of any such
Indebtedness;
(b) Indebtedness consisting of the Loans and in connection
with the Letters of Credit and this Agreement;
(c) Indebtedness (i) of the Company to any Subsidiary and (ii)
of any Subsidiary to the Company or any other Subsidiary;
(d) Indebtedness consisting of the Permanent Subordinated Debt
outstanding on the Closing Date and Indebtedness of the Company in
respect of any Permanent Subordinated Debt the net proceeds of which
are used to prepay, redeem, retire or repurchase the outstanding
principal amount of the then outstanding Permanent
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Subordinated Debt (if any) (including fees and expenses in connection
therewith) or to prepay the Loans and reduce the Commitments in
accordance with subsection 4.4(b)(ii), provided that, to the extent
there are additional Net Proceeds remaining after any such repayment,
redemption, retirement or repurchase of the then outstanding Permanent
Subordinated Debt, or to the extent such Net Proceeds are not used to
repay, redeem, retire or repurchase the then outstanding Permanent
Subordinated Debt, such Net Proceeds shall be used to prepay the Loans
and reduce the Commitments in accordance with subsection 4.4(b)(ii);
(e) (i) Indebtedness of the Company and its Subsidiaries for
(A) industrial revenue bonds or other similar governmental and
municipal bonds and (B) the deferred purchase price of newly acquired
property of the Company and its Subsidiaries (pursuant to purchase
money mortgages or otherwise, whether owed to the seller or otherwise)
used in the ordinary course of business of the Company and its
Subsidiaries (provided such financing is entered into within 270 days
of the acquisition of such property) in an amount (based on the
remaining balance of the obligations therefor on the books of the
Company and its Subsidiaries) which in the case of preceding clauses
(A) and (B) shall not exceed $10,000,000 in the aggregate at any one
time outstanding and (ii) Indebtedness of the Company and its
Subsidiaries in respect of Financing Leases to the extent subsections
8.7 and 8.10 would not be contravened;
(f) Indebtedness of the Company and Subsidiaries in aggregate
principal amount not to exceed at any one time outstanding $20,000,000;
(g) Indebtedness in respect of letters of credit (other than
Letters of Credit issued hereunder) in aggregate principal amount not
to exceed at any one time outstanding $10,000,000;
(h) (i) Indebtedness assumed in connection with acquisitions
permitted by subsection 8.6(h) (so long as such Indebtedness was not
incurred in anticipation of such acquisitions), (ii) Indebtedness of
newly acquired Subsidiaries acquired in such acquisitions (so long as
such Indebtedness was not incurred in anticipation of such acquisition)
and (iii) Indebtedness owed to the seller in any acquisition permitted
by subsection 8.6(h) constituting part of the purchase price thereof,
all of which Indebtedness permitted by this subsection 8.1(h) shall not
exceed an aggregate principal amount at any one time outstanding of
$25,000,000;
(i) Indebtedness in connection with workers' compensation
obligations and general liability exposure of the Company and its
Subsidiaries; and
(j) subordinated Indebtedness in aggregate principal amount
not to exceed at any one time outstanding $25,000,000 plus any
additional principal amount of such subordinated Indebtedness issued in
lieu of cash interest thereon (and any refinancing thereof shall be
permitted in the amount of such sum), which subordinated Indebtedness
(i) is subordinated to the Indebtedness hereunder on terms not less
favorable to the
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Lenders than the subordination provisions of the Permanent Subordinated
Debt, (ii) has an interest rate not exceeding 12% per annum and (iii)
has a maturity date after the Maturity Date.
8.2 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets, income or profits, whether now
owned or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges
not yet delinquent or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or such Subsidiary, as the case
may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations which are not yet due or
which are bonded or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or such Subsidiary, as the case
may be, in accordance with GAAP;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, tenders, trade
or government contracts (other than for borrowed money), leases,
licenses, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(e) easements (including, without limitation, reciprocal
easement agreements), rights-of-way, building, zoning and similar
restrictions, utility agreements, covenants, reservations,
restrictions, encroachments, changes, and other similar encumbrances or
title defects incurred, or leases or subleases granted to others, in
the ordinary course of business, which do not in the aggregate
materially detract from the aggregate (i) value of the properties of
the Company and its Subsidiaries, taken as a whole or (ii) materially
interfere with or adversely affect in any material respect the ordinary
conduct of the business of the Company and its Subsidiaries taken as a
whole;
(f) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Credit Documents and bankers' liens arising by
operation of law;
(g) Liens on property of the Company or any of its
Subsidiaries created solely for the purpose of securing Indebtedness
permitted by subsection 8.1(e) or 8.1(h)(i) or (ii) (so long as such
Lien was not incurred in anticipation of the related acquisition),
representing or incurred to finance, refinance or refund the purchase
price of property, provided that no such Lien shall extend to or cover
other property of the Company or such Subsidiary other than the
respective property so acquired, and the principal amount of
Indebtedness
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secured by any such Lien shall at no time exceed the original purchase
price of such property;
(h) Liens existing on the Closing Date after giving effect to
the consummation of the Transaction, and described in subsection 5.13
or Schedule 8.2, provided that no such Lien shall extend to or cover
other property of the Company or the respective Subsidiary other than
the respective property so encumbered, and the principal amount of
Indebtedness secured by any such Lien shall at no time exceed the
original principal amount of the Indebtedness so secured;
(i) Liens on documents of title and the property covered
thereby (and Proceeds thereof) securing Indebtedness in respect of the
Commercial L/Cs or securing reimbursement obligations in respect of
letters of credit permitted under this Agreement;
(j) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by
any developer, landlord or other third party on property over which the
Company or any Subsidiary of the Company has easement rights or on any
Leased Property and subordination or similar agreements relating
thereto and (ii) any condemnation or eminent domain proceedings
affecting any real property;
(k) Liens in connection with workers' compensation obligations
and general liability exposure of the Company and its Subsidiaries; and
(l) Liens on Fee Properties and/or Leased Properties
consisting of (i) any conditions that may be shown by a current,
accurate survey or physical inspection of such Fee Property or Leased
Property, (ii) as to Leased Property, the terms and provisions of the
respective lease therefor and any matters affecting the fee title and
any estate superior to the leasehold estate related thereto, and (iii)
title defects, or leases or subleases granted to others, which are not
material to the Fee Properties or Leased Properties, as the case may
be, taken as a whole.
8.3 Limitation on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligation except:
(a) the Guarantees;
(b) other guarantees by the Company incurred in the ordinary
course of business for an aggregate amount not to exceed $20,000,000 at
any one time;
(c) guarantees by the Company of obligations of its
Subsidiaries;
(d) Contingent Obligations existing on the Closing Date and
described in Schedule 8.3(d);
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(e) guarantees of obligations to third parties in connection
with relocation of employees of the Company or any of its Subsidiaries,
in an amount which, together with all loans and advances made pursuant
to subsection 8.6(f), shall not exceed $4,000,000 at any time
outstanding;
(f) Contingent Obligations in connection with workers'
compensation obligations and general liability exposure of the Company
and its Subsidiaries; and
(g) subordinated guarantees of the Permanent Subordinated Debt
issued by Subsidiaries of the Company which have also issued
Guarantees, provided such subordinated guarantees are subordinated to
the Guarantees on the same basis as the Permanent Subordinated Debt is
subordinated to the Loans;
(h) guarantees by the Company of loans to employees of the
Company and its Subsidiaries, the proceeds of which are used to
purchase stock of Holdings, in an aggregate amount not to exceed, when
added to the amount of loans made by the Company to employees pursuant
to subsection 8.6(g), at any one time outstanding $8,000,000; and
(i) guarantees by the Company of loans to employees of the
Company and its Subsidiaries, the proceeds of which are used for travel
and other ordinary expenses for which advances to employees are
generally made, in an aggregate amount not to exceed, when added to the
amount of loans made by the Company to employees pursuant to subsection
8.6(i), at any one time outstanding $1,000,000.
8.4 Prohibition of Fundamental Changes. Enter into any merger
or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or engage in any type of business other
than of the same general type now conducted by it, except (a) for the
transactions otherwise permitted pursuant to clause (b) of subsection 8.5, (b)
any Subsidiary of the Company may be merged with and into the Company or a
Subsidiary of the Company, (c) any Subsidiary may be dissolved, provided,
however, that prior to the dissolution of any Subsidiary whose book value
exceeds $100,000, the assets of such Subsidiary are transferred to the Company
or a wholly-owned Domestic Subsidiary of the Company subject to the conditions
set forth in subsection 8.5(b) and (d) the Company may be reincorporated under
the laws of Delaware, provided that the Administrative Agent, in its sole
discretion, determines that such reincorporation will not alter the obligations
of any Credit Party under any Credit Document or cause a material impairment of
the value of the Collateral taken as a whole, after giving effect to such
reincorporation.
8.5 Prohibition on Sale of Assets. Convey, sell, lease (other
than a sublease of real property), assign, transfer or otherwise dispose of
(including through a transaction of merger or consolidation of any Subsidiary of
the Company) any of its property, business or assets (including, without
limitation, tax benefits and receivables but excluding leasehold interests),
whether now owned or hereafter acquired, except:
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(a) for (i) sales or other dispositions of inventory made in
the ordinary course of business, (ii) sales or other dispositions of
uneconomic, obsolete or worn-out property in the ordinary course of
business and (iii) any sale of a store and/or fixtures to a third party
pursuant to a sale-leaseback transaction;
(b) that any Subsidiary of the Company may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to, or merge with and into, the
Company or a wholly-owned Subsidiary of the Company and any Subsidiary
of the Company may sell or otherwise dispose of, or part with control
of any or all of, the stock of any Subsidiary to a wholly-owned
Subsidiary of the Company, provided that no such transaction may be
effected if it would result in the transfer of any assets of, or any
stock of, a Subsidiary to, or the merger with and into, another
Subsidiary all of the Capital Stock of which owned by the Company or
any Subsidiary has not been pledged to the Administrative Agent and
which has not guaranteed the obligations of the Company under the Notes
and this Agreement, and granted liens or security interests in favor of
the Administrative Agent, for the benefit of the Lenders, on
substantially all of its assets to secure such guarantee, pursuant to a
guarantee, security agreement and other documentation reasonably
satisfactory to the Administrative Agent;
(c) leases of Fee Properties and other real property owned in
fee and subleases of Leased Properties;
(d) any condemnation or eminent domain proceedings affecting
any real property, provided, however, that the parties hereto agree
that the net proceeds received in connection with such proceeding shall
be deemed not to constitute "Net Proceeds" if such net proceeds are
reinvested in new or existing properties within eighteen months;
(e) substantially like-kind exchanges of real property,
provided that any cash received by the Company or any Subsidiary of the
Company in connection with such an exchange (net of all costs and
expenses incurred in connection with such transaction or with the
commencement of operation of real property received in such exchange)
shall be deemed to be Net Proceeds and shall be applied as provided for
herein; and
(f) for the sale or other disposition of any property the
aggregate amount of the net proceeds received in respect of which shall
not exceed $4,000,000; and
(g) for the sale of owned real property and/or fixtures.
8.6 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 make any other
investment (except as provided in subsection 8.13) in (including, without
limitation, any acquisition of all or any substantial portion of the assets, and
any acquisition of a business or a product line, of other companies, other than
the acquisition of inventory in the ordinary course of business), any Person,
except:
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(a) the Company may make loans or advances to any Subsidiary,
and any Subsidiary may make loans or advances to the Company or any
other Subsidiary, to the extent in each case the Indebtedness created
thereby is permitted by paragraph (c) of subsection 8.1;
(b) (i) any Subsidiary may make investments in the Company (by
way of capital contribution or otherwise) and (ii) the Company and any
Subsidiary may make investments in, or create, any wholly-owned
Domestic Subsidiary (by way of capital contribution or otherwise) or
make investments permitted by subsection 8.5(b), provided that, in any
such case, (x) if stock is issued or otherwise acquired in connection
with such investment, or if the stock of such Subsidiary was not
previously pledged to the Administrative Agent, such stock is pledged
to the Administrative Agent for the benefit of the Lenders so that 100%
of the Capital Stock of such Subsidiary is pledged to the
Administrative Agent and (y) such Subsidiary guarantees the obligations
of the Company under the Notes and this Agreement, and grants liens or
security interests in favor of the Administrative Agent, for the
benefit of the Lenders, on substantially all of its assets to secure
such guarantee, pursuant to a guarantee, a security agreement and other
documentation reasonably satisfactory to the Administrative Agent;
(c) the Company and its Subsidiaries may invest in, acquire
and hold Cash Equivalents;
(d) the Company or any of its Subsidiaries may make payroll
advances in the ordinary course of business;
(e) the Company or any of its Subsidiaries may acquire and
hold receivables owing to it, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms, (provided that nothing in this clause (e) shall
prevent the Company or any Subsidiary from offering such concessionary
trade terms, or from receiving such investments in connection with the
bankruptcy or reorganization of their respective suppliers or customers
or the settlement of disputes with such customers or suppliers arising
in the ordinary course of business, as management deems reasonable in
the circumstances); and
(f) the Company or any of its Subsidiaries may make relocation
and other loans to officers and employees of the Company or any such
Subsidiary, provided that the aggregate principal amount of all such
loans and advances outstanding at any one time, together with the
guarantees of such loans and advances made pursuant to subsection
8.3(e), shall not exceed $4,000,000 at any one time outstanding;
(g) the Company may make loans to employees of the Company and
its Subsidiaries the proceeds of which are used by such employees to
purchase stock of Holdings, provided that the aggregate principal
amount of all such loans shall not exceed, together with any guarantees
of loans made pursuant to subsection 8.3(h), at any one time
outstanding $8,000,000;
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(h) the Company and its Subsidiaries may make acquisitions of
companies engaged primarily in businesses similar to the businesses in
which the Company and its Subsidiaries are engaged to the extent that
the amount expended to make such acquisitions is permitted pursuant to
subsection 8.7 (a), (b) or (d); provided that, if permitted pursuant to
clause (b) of subsection 8.7, the acquisitions shall be permitted only
if the Company complies with the covenants contained in subsections
8.8, 8.9 and 8.10 of this Agreement on a pro forma basis after giving
effect to such acquisitions; and
(i) the Company may make loans to employees of the Company and
its Subsidiaries, the proceeds of which are used by such employees for
travel and other ordinary expenses for which advances to employees are
generally made in an aggregate principal amount not to exceed when
added to the amount of guarantees made by the Company pursuant to
subsection 8.3(i), at any one time outstanding $1,000,000.
8.7 Capital Expenditures. Make or commit to make any Capital
Expenditures, except that the Company and its Subsidiaries may make or commit to
make Capital Expenditures
(a) in connection with the Big Wheel Acquisition; plus
(b) consisting of acquisitions of companies engaged primarily
in businesses similar to the businesses in which the Company and its
Subsidiaries are engaged, in an aggregate amount of $50,000,000; plus
(c) consisting of investments in the development of new or
relocated stores in an aggregate amount not to exceed at any one time
$50,000,000, against which amount shall be credited any funds from the
subsequent sale of any real property (including leasehold interests) or
fixtures purchased or developed in connection therewith; plus
(d) of any other type in amounts not exceeding the amount set
forth below (the "Base Amount") for each of the fiscal years of the
Company (or other period) set forth below:
Fiscal Year
or Period Base Amount
--------- -----------
1998 $30,000,000
1999 $45,000,000
Each fiscal year thereafter $40,000,000
provided, however, that (i) for any fiscal year of the Company, the
Base Amount for such fiscal year set forth above shall be increased by
an amount equal to the aggregate amount of proceeds received by the
Company or any of its Subsidiaries in such fiscal year with respect to
sales of real property by the Company or such Subsidiary, which real
property had been originally acquired or developed by the Company or
such Subsidiary with the proceeds of Revolving Credit Loans, but only
if such acquisition and development costs
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had been originally included as Capital Expenditures in the fiscal year
or years when such acquisition and development costs were incurred and
(ii) for any fiscal year of the Company, the Base Amount for such
fiscal year set forth above (as increased with respect to such fiscal
year pursuant to clause (i) of this proviso) may be increased by an
amount not in excess of $15,000,000 by carrying over to such fiscal
year the unused portion of the Base Amount for the immediately
preceding fiscal year (as increased pursuant to this proviso).
8.8 Consolidated EBITDA. At the last day of any fiscal quarter
set forth below, permit Consolidated EBITDA for the period of four fiscal
quarters ending on such day to be less than the amount set forth opposite such
fiscal quarter below:
Fiscal Year Fiscal Quarter Amount
----------- -------------- ------
1999 First $74,000,000
1999-2003 Each fiscal quarter $75,000,000
thereafter
8.9 Debt to EBITDA. (a) At the last day of any fiscal quarter
set forth below, permit the ratio of Consolidated Funded Indebtedness as at such
day to Consolidated EBITDA for the period of four fiscal quarters ending on such
day (the "Leverage Ratio") to be greater than the ratio set forth below for such
fiscal quarter; provided, that, with respect to any acquisition permitted by
subsection 8.6(h), the last four fiscal quarters of Consolidated EBITDA (as may
be adjusted for post-acquisition cost savings reasonably agreed to by the
Company and the Administrative Agent) of the acquired company shall be added to
the Consolidated EBITDA of the Company for the purposes of calculating this
ratio:
Fiscal Year Fiscal Quarter Ratio
----------- -------------- -----
1999 First 4.50 to 1
Second 4.50 to 1
Third 4.50 to 1
1999-2003 Each fiscal quarter 4.00 to 1
thereafter
(b) In the event the Company elects to prepay the Permanent
Subordinated Debt in excess of $30,000,000 as provided for in clause (x)(2) of
subsection 8.13, at the time of such prepayment and at all times thereafter, the
ratio of Consolidated Senior Funded Indebtedness (after giving pro forma effect
to any redemption, repayment or repurchase of Permanent Subordinated Debt as
provided in subsection 8.13 and the incurrence of any Consolidated Senior Funded
Indebtedness in connection therewith) to Consolidated EBITDA for the four fiscal
quarters most recently ended for which financial information is available shall
be at or less than 3.25 to 1, which ratio shall be tested on a quarterly basis.
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8.10 Interest Coverage. At the last day of any fiscal quarter
set forth below, permit the Interest Coverage Ratio to be less than the ratio
set forth below for such fiscal quarter:
Interest
Coverage
Fiscal Year Fiscal Quarter Ratio
----------- -------------- -----
1999 First 2.25 to 1
Second 2.25 to 1
Third 2.25 to 1
1999-2003 Each fiscal quarter 2.75 to 1
thereafter
8.11 Limitation on Dividends. Declare any dividends on any
shares of any class of stock, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
retirement or other acquisition of any shares of any class of stock, or any
warrants or options to purchase 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 Company or
any of its Subsidiaries; except that:
(a) Subsidiaries may pay dividends to the Company or to
Subsidiaries which are directly or indirectly wholly owned by the
Company;
(b) the Company may pay or make dividends or distributions to
any holder of its capital stock in the form of additional shares of
Capital Stock of the same class and type, provided such shares of
Capital Stock are pledged to the Administrative Agent for the benefit
of the Lenders;
(c) the Company may pay dividends or make other distributions:
(i) to Holdings in amounts equal to amounts required
for Holdings to pay franchise taxes and other fees required to
maintain its corporate existence and provide for other
operating costs;
(ii) to Holdings in amounts equal to amounts required
for Holdings to pay Federal, state and local income taxes to
the extent such income taxes are attributable to the income of
the Company and its Subsidiaries; and
(iii) to Holdings in amounts equal to amounts
expended by Holdings to repurchase Capital Stock of Holdings
owned by former employees of the Company or its Subsidiaries
or their assigns, estates and heirs, provided that the
aggregate amount paid, loaned or advanced to Holdings pursuant
to this clause (iii) shall not, in the aggregate, exceed the
sum of $5,000,000 plus any amounts contributed by Holdings to
the Company as a result of resales of such repurchased shares
of Capital Stock.
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8.12 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 except for transactions
which are otherwise permitted under this Agreement and which are in the ordinary
course of the Company's or a Subsidiary's business and which are upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
would obtain in a hypothetical comparable arm's length transaction with a Person
not an Affiliate; provided, however, that nothing in this subsection 8.12 shall
prohibit the Company or any of its Subsidiaries from engaging in the following
transactions: (x) the performance of the Company's or such Subsidiary's
obligations under any employment contract, collective bargaining agreement,
employee benefit plan, related trust agreement or any other similar arrangement
heretofore or hereafter entered into in the ordinary course, (y) payment of
compensation to employees, officers, directors or consultants in the ordinary
course of business and (z) maintenance of benefit programs or arrangements for
employees, officers or directors, including, without limitation, vacation plans,
health and life insurance plans, deferred compensation plans, and retirement or
savings plans and similar plans.
8.13 Prepayments and Amendments of Permanent Subordinated
Debt. (a) Optionally prepay, optionally retire, optionally redeem, optionally
purchase, optionally defease or optionally exchange, or make any mandatory
prepayment or any mandatory repurchase of any Permanent Subordinated Debt (other
than (y) any refinancing of the Permanent Subordinated Debt contemplated in the
definition thereof and (z) any redemption of the Permanent Subordinated Debt
with the proceeds of the issuance of Capital Stock to the extent permitted by
subsection 4.4(b)) or pay any interest on the Permanent Subordinated Debt in
cash if such interest may be paid by the issuance of additional Permanent
Subordinated Debt or (b) amend, supplement or otherwise modify any documentation
governing any Permanent Subordinated Debt (other than (i) amendments to such
Permanent Subordinated Debt which reduce the interest rate or extend the
maturity thereof and (ii) waivers of compliance by the Company with any of the
terms or conditions of such Permanent Subordinated Debt (except those terms or
conditions which by their terms run to the benefit of the Lenders)).
Notwithstanding anything to the contrary in this subsection 8.13 and in addition
to that which is permitted pursuant to the parenthetical in clause (a) of this
subsection 8.13, (x) so long as there is no Default or Event of Default existing
and no Default or Event of Default (except as would result from this subsection
8.13 but for the last sentence hereof) would result therefrom, the Company may
redeem, repay or repurchase (1) up to $30,000,000 aggregate principal amount of
the Permanent Subordinated Debt (which amount shall be in addition to
$15,000,000 aggregate principal amount of Permanent Subordinated Debt allowed to
be repurchased pursuant to clause (y) below) and (2) in excess of $30,000,000
aggregate principal amount of Permanent Subordinated Debt so long as the ratio
of Consolidated Senior Funded Indebtedness (after giving pro forma effect to any
redemption, repayment or repurchase of Permanent Subordinated Debt as provided
herein and the incurrence of any Consolidated Senior Funded Indebtedness in
connection therewith) to Consolidated EBITDA for the four fiscal quarters most
recently ended for which financial information is available shall be at or less
than 3.25 to 1 and if the Company complies with the covenant in subsection
8.9(b); and may amend, supplement or otherwise modify such documents governing
the Permanent Subordinated Debt as may be necessary to effect such redemption,
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repayment or repurchase pursuant to this clause (x), and (y) upon the occurrence
of a "change of control" as defined in the Permanent Subordinated Note
Indenture, so long as there is no Default or Event or Default existing and no
Default or Event of Default would result therefrom, the Company may repurchase
up to $15,000,000 of the Permanent Subordinated Debt as required under the
Permanent Subordinated Note Indenture without resulting in a breach of the
covenant set forth in this subsection 8.13 whereby mandatory repurchase of
Permanent Subordinated Debt is prohibited.
8.14 Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Company to end on a day other than the Sunday closest to January 31.
8.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Company is engaged on the date of this Agreement or which are directly
related thereto.
8.16 Limitation on Interest Rate Agreements. Enter into,
create, incur, assume or suffer to exist any Interest Rate Agreements or
obligations in respect thereof except in the ordinary course of business for
non-speculative purposes.
SECTION 9. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following events:
(a) The Company shall fail (i) to pay any principal of any
Note when due in accordance with the terms hereof or thereof or to
reimburse the Issuing Lender in accordance with subsection 3.8 or (ii)
pay any interest on any Loan or any other amount payable hereunder
within five 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 any
Credit Party in any Credit Document shall prove to have been incorrect
in any material respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or performance
of any agreement contained in subsection 7.7(a) or Section 8 of this
Agreement or Holdings shall default in the observance or performance of
any agreement contained in Section 5 of the Holdings Pledge Agreement
or the Company shall default in the observance or performance of any
agreement contained in subsections 5(a), (h) through (k) and (o) of the
Company Security Agreement or Holdings shall default in the observance
or performance of any agreement contained in Section 10 of the Holdings
Guarantee, or, with respect to any Subsidiary which becomes a Credit
Party on or after the Closing Date, the Company or such Subsidiary
shall default in the observance or performance of the corresponding
provisions of the pledge agreement, guarantee and security agreement to
which it is a party; or
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(d) Any Credit Party shall default in the observance or
performance of any other agreement contained in any Credit Document and
such default shall continue unremedied for a period of 30 days; or
(e) The Company or any of its Subsidiaries shall (i) default
in any payment of principal of or interest on or other amounts in
respect of any Indebtedness (other than the Loans, the L/C Obligations
and any inter-company debt) or Interest Rate Agreement or in the
payment of any Contingent Obligation, beyond the period of grace, if
any, provided in the instrument or agreement under which such
Indebtedness, Interest Rate Agreement or Contingent Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness, Interest Rate
Agreement or Contingent 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 Contingent
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,
any applicable grace period having expired, or such Contingent
Obligation to become payable, any applicable grace period having
expired; in each case, provided that the aggregate principal amount of
all such Indebtedness, Interest Rate Agreements and Contingent
Obligations under which a payment default exists as in (a) above or
which would then become due or payable equals or exceeds $10,000,000;
or
(f) (i) The Company or any of its Subsidiaries or Holdings
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 as 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 or
other similar official for it or for all or any substantial part of its
assets, or the Company or any of its Subsidiaries or Holdings shall
make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Company or any of its Subsidiaries
or Holdings 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 commenced against the Company or any of its Subsidiaries
or Holdings any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Company or any of its Subsidiaries or
Holdings 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 Company or any of its
Subsidiaries or Holdings shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due; or
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(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 which is not otherwise exempted, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, (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 likely to result in the termination of such Single Employer
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Company or
any Commonly Controlled Entity shall incur any material liability in
connection with a withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan; and in each case in clauses (i) through (v)
above, such event or condition, together with all other such events or
conditions relating to a Plan, if any, would be reasonably likely to
subject the Company or any of its Subsidiaries to any tax, penalty or
other liabilities in the aggregate material in relation to the
business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole; or
(h) One or more judgments or decrees shall be entered against
the Company or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $10,000,000 or
more and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within the time required by
the terms of such judgment; or
(i) Any Credit Document shall cease, for any reason, to be in
full force and effect or any Credit Party or any of its Subsidiaries
shall so assert in writing, or any Pledge Agreement or Security
Agreement shall cease to be effective to grant a perfected Lien on the
collateral described therein with the priority purported to be created
thereby (other than as a result of any action or inaction on the part
of the Administrative Agent or the Lenders), subject to such exceptions
as may be permitted therein, and in the case of any Security Agreement
such condition shall continue unremedied for 30 days after notice
thereof to the Company by the Administrative Agent or any Lender; or
(j) There shall have occurred a Change of Control; or
(k) Holdings shall engage in any business or activity other
than owning the Capital Stock of the Company and activities reasonably
incidental thereto;
(l) (i) There shall have occurred any amendment, supplement or
other modification of any of the Permanent Subordinated Debt or the
documents governing such Permanent Subordinated Debt, which in any such
case shall not have been consented to in advance in writing by the
Administrative Agent and the Required Lenders, except (A) as otherwise
expressly permitted by subsection 8.13 or (B) to the extent such
amendment, supplement or modification gives effect to any prepayment,
retirement or
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redemption of Permanent Subordinated Debt expressly permitted by this
Agreement or (ii) the subordination provisions of any document
governing any Permanent Subordinated Debt shall cease, for any reason,
to be valid or any Credit Party or any of its Subsidiaries shall so
assert in writing;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Company,
automatically (i) the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement, the Notes and the other Credit Documents shall immediately become due
and payable, and (ii) all obligations of the Company in respect of the Letters
of Credit, although contingent and unmatured, shall become immediately due and
payable and the Issuing Lender's obligations to issue the Letters of Credit
shall immediately terminate and (b) if such event is any other Event of Default,
so long as any such Event of Default shall be continuing, 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 Company, declare the Commitments
and the Issuing Lender's obligations to issue the Letters of Credit to be
terminated forthwith, whereupon the Commitments and such obligations 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 of default to the Company, (A) declare all
or a portion of the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable, and (B)
declare all or a portion of the obligations of the Company in respect of the
Letters of Credit, although contingent and unmatured, to be due and payable
forthwith, whereupon the same shall immediately become due and payable and/or
demand that the Company discharge any or all of the obligations supported by the
Letters of Credit by paying or prepaying any amount due or to become due in
respect of such obligations. All payments under this Section 9 on account of
undrawn Letters of Credit shall be made by the Company directly to a cash
collateral account established by the Administrative Agent for such purpose for
application to the Company's reimbursement obligations under subsection 3.8 as
drafts are presented under the Letters of Credit, with the balance, if any, to
be applied to the Company's obligations under this Agreement and the Notes as
the Administrative Agent shall determine with the approval of the Required
Lenders. Except as expressly provided above in this Section 9, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT; THE ISSUING LENDER
10.1 Appointment. Each Lender hereby irrevocably designates
and appoints Chase as the Administrative Agent and ▇▇▇▇▇▇ as the Documentation
Agent under this Agreement and irrevocably authorizes Chase as Administrative
Agent for such Lender, to take such action on its behalf under the provisions of
the Credit Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of the Credit
Documents, together with such other powers as are reasonably incidental
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thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, neither the Administrative Agent nor the Documentation Agent shall
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 the
Credit Documents or otherwise exist against the Administrative Agent or the
Documentation Agent.
10.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and each of the other Credit
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, except
as otherwise provided in subsection 10.3.
10.3 Exculpatory Provisions. None of the Administrative Agent
or 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 the Credit Documents
(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 any Credit Party or any
officer thereof contained in the Credit Documents 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 the Credit Documents or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
the Credit Documents or for any failure of any Credit Party to perform its
obligations 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, any Credit
Document or to inspect the properties, books or records of any Credit Party.
10.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, the writings maintained in the Register, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, 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 Company), 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 any Credit Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, where a higher percentage of the Lenders is expressly required hereunder,
such Lenders) 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 any Credit Document in accordance with a request
of the Required Lenders (or, where a higher percentage
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of the Lenders is expressly required hereunder, such Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
10.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received written notice
from a Lender or the Company 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 promptly 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;
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.
10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that none of the Administrative Agent, the
Documentation Agent or any of their respective 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, the Documentation
Agent or any such Person hereinafter taken, including any review of the affairs
of the Credit Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent, the Documentation Agent or any such Person
to any Lender. Each Lender represents to the Administrative Agent and the
Documentation Agent that it has, independently and without reliance upon the
Administrative Agent, the Documentation Agent or any such Person 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
Holdings, the Company and its Subsidiaries and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also represents that
it will, independently and without reliance upon the Administrative Agent, the
Documentation Agent or any such Person 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 the Credit 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 Holdings, the Company and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent, 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,
financial and other condition or creditworthiness of the Credit Parties which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
10.7 Indemnification. The Lenders agree to indemnify each of
the Administrative Agent and the Documentation Agent in its capacity as such (to
the extent not reimbursed by the Credit Parties and without limiting the
obligation of the Credit Parties to do
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so), ratably according to the respective amounts of their respective Commitments
(or, to the extent such Commitments have been terminated, according to the
respective outstanding principal amounts of the Loans and the L/C Obligations
and the respective obligations, whether as Issuing Lender or a Participating
Lender, under the Letter of Credit), 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 Notes) be
imposed on, incurred by or asserted against the Administrative Agent or the
Documentation Agent in any way relating to or arising out of the Credit
Documents or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the
Administrative Agent or the Documentation 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 or the Documentation Agent's respective gross negligence
or willful misconduct. The agreements in this subsection 10.7 shall survive the
payment of the Notes and all other amounts payable hereunder.
10.8 The Administrative Agent in its Individual Capacity. The
Administrative Agent, the Documentation Agent and their respective Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with Holdings, the Company and its Subsidiaries as though the
Administrative Agent was not the Administrative Agent hereunder and the
Documentation Agent was not the Documentation Agent hereunder. With respect to
its Loans made or renewed by it and any Note issued to either of them, the
Administrative Agent and the Documentation Agent shall each have the same rights
and powers, duties and liabilities under the Credit Documents as any Lender and
may exercise the same as though it were not the Administrative Agent and the
Documentation Agent, respectively, and the terms "Lender" and "Lenders" shall
include the Administrative Agent and the Documentation Agent in their respective
individual capacities.
10.9 Successor Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days' notice to the Lenders. If the Administrative
Agent shall resign as Administrative Agent under the Credit Documents, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders which successor agent shall, so long as no Event of Default has occurred
and is continuing, be approved by the Company, which shall not unreasonably
withhold its approval, 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 its
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 Notes. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under the Credit
Documents.
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10.10 Issuing Lender as Issuer of Letters of Credit. Each
Lender which is a holder of a Revolving Credit Commitment (collectively
"Revolving Credit Lenders") hereby acknowledges that the provisions of this
Section 10 shall apply to the Issuing Lender, in its capacity as issuer of the
Letters of Credit, in the same manner as such provisions are expressly stated to
apply to the Administrative Agent, except that obligations to indemnify the
Issuing Lender shall be ratable among the Revolving Credit Lenders in accordance
with their respective Revolving Credit Commitments (or, if the Revolving Credit
Commitments have been terminated, the outstanding principal amount of their
respective Revolving Credit Loans and L/C Obligations and their respective
participating interests in the outstanding Letters of Credit).
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Except as otherwise expressly set
forth in this Agreement, no Credit Document nor any terms thereof may be
amended, supplemented, waived or modified except in accordance with the
provisions of this subsection 11.1. With the written consent of the Required
Lenders, the Administrative Agent and the respective Credit Parties or their
Subsidiaries may, from time to time, enter into written amendments, supplements
or modifications hereto for the purpose of adding any provisions to any Credit
Document to which they are parties or changing in any manner the rights of the
Lenders or of any such Credit Party or its Subsidiaries thereunder or waiving,
on such terms and conditions as the Administrative Agent may specify in such
instrument, any of the requirements of any such Credit Document or any Default
or Event of Default and its consequences; provided, however, that:
(a) no such waiver and no such amendment, supplement or
modification shall release collateral not required or permitted by any
Credit Document to be released and which, in the aggregate with all
other collateral released pursuant to this clause (a) (other than
collateral released pursuant to the proviso to this clause (a)) during
the calendar year in which such proposed release would be effected and
the immediately preceding calendar year, has fair market value on the
proposed date of release in excess of 20% of the fair market value of
all collateral on such date without the written consent of the
Supermajority Lenders; provided that, notwithstanding the foregoing,
this clause (a) shall not be applicable to and no consent shall be
required for (i) releases of collateral in connection with any Asset
Sales permitted by subsection 8.5, (ii) releases of collateral in
accordance with subsection 11.11 or (iii) upon the reincorporation of
the Company or any Subsidiary in a new jurisdiction or the creation of
a new Subsidiary of the Company, any release of collateral in
connection with the transfer of such released collateral to such
reincorporated entity or new Subsidiary in compliance with subsection
8.4, provided that the Administrative Agent, in its sole discretion,
determines that such release and transfer, together with any grant and
perfection of a new Lien therein in favor of the Administrative Agent,
will cause no material impairment of the value of the collateral taken
as a whole, after giving effect to such release and transfer;
(b) no such waiver and no such amendment, supplement or
modification shall extend the final maturity date of any Note or the
scheduled payment date of any
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installment of any Loan, or reduce the rate or extend the time of
payment of interest thereon, or change the method of calculating
interest thereon, or reduce any fee payable to the Lenders hereunder,
or reduce the principal amount thereof, or change the amount of any
Lender's Commitment or Commitment Percentage, or amend, modify or waive
any provision of subsection 4.9(b) or this subsection 11.1 or reduce
the percentage specified in the definition of Required Lenders or
reduce the percentage specified in the definition of Supermajority
Lenders or reduce the percentage specified in the definition of Section
4.4 Lenders or consent to the assignment or transfer by any Credit
Party of any of its rights and obligations under any Credit Document,
in each case, without the prior written consent of each Lender directly
affected thereby;
(c) no such waiver and no such amendment, supplement or
modification affecting the then Administrative Agent or Issuing Lender
shall amend, modify or waive any provision of Section 10 without the
written consent of such Administrative Agent or Issuing Lender;
(d) without the consent of the Lenders which are holders of
the Revolving Credit Loans only, the Lenders which are holders of all
the Term Loans may amend this Agreement and the Term Loan Notes to
extend the maturities of the installments of the Term Loans; and
without the consent of the Lenders which are holders of the Term Loans,
all the Revolving Credit Lenders may amend this Agreement and the
Revolving Credit Notes to extend the Revolving Credit Termination Date;
and
(e) no such waiver, and no such amendment, supplement or
modification shall amend, modify or waive the Section 4.4 Lenders'
ability to act pursuant to subsection 4.4(b)(i), (ii), (iii) or (iv)
without the written consent of the Section 4.4 Lenders.
Any such waiver and any such amendment, supplement or modification described in
this subsection 11.1 shall apply equally to each of the Lenders and shall be
binding upon each Credit Party and its Subsidiaries, the Lenders, the
Administrative Agent and Issuing Lender and all future holders of the Notes and
the Loans. Any extension of a Letter of Credit by the Issuing Lender shall be
treated hereunder as a new Letter of Credit. In the case of any waiver, the
Credit Parties, the Lenders, the Administrative Agent and Issuing Lender shall
be restored to their former position and rights hereunder and under the
outstanding Notes, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex, if one is listed), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when sent, confirmation of receipt received, or,
in the case of telex notice, when sent, answerback received, addressed as
follows in the case of the Company and the Administrative Agent and as set forth
in Schedule I in the case of any Lender,
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or to such other address as may be hereafter notified by the respective parties
hereto and any future holders of the Notes:
The Company: CSK Auto, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: The Chase Manhattan Bank Loan and Agency
Services
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsections 3.4, 3.5, 4.1, 4.2, 4.3 and 4.4 shall not
be effective until received and provided that the failure to provide the copies
of notices to the Company provided for in this subsection 11.2 shall not result
in any liability to the Administrative Agent.
11.3 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, 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.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant
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hereto or in connection herewith shall survive the execution and delivery of
this Agreement, the Letters of Credit and the Notes.
11.5 Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse the Administrative Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, the Credit
Documents and any other documents prepared in connection herewith, and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of one counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the Administrative
Agent for all their costs and expenses incurred in connection with, and to pay,
indemnify, and hold the Administrative Agent and each Lender harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever arising out of or in connection with, the enforcement or
preservation of any rights under any Credit Document and any such other
documents, including, without limitation, reasonable fees and disbursements of
counsel to the Administrative Agent and each Lender incurred in connection with
the foregoing and in connection with advising the Administrative Agent with
respect to its rights and responsibilities under this Agreement and the
documentation relating thereto, (c) to pay, indemnify, and to hold the
Administrative Agent and each Lender harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes (other than withholding
taxes), if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, any Credit Document and any such other
documents, and (d) to pay, indemnify, and hold the Administrative Agent and each
Lender and their respective Affiliates, officers, directors, trustees, employees
or agents harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
reasonable fees and disbursements of counsel) which may be incurred by or
asserted against the Administrative Agent or the Lenders or such Affiliates,
officers, directors, trustees, employees, and agents (x) arising out of or in
connection with any investigation, litigation or proceeding related to this
Agreement, the other Credit Documents, the proceeds of the Loans or the
Permanent Subordinated Debt and the transactions contemplated by or in respect
of such use of proceeds, or any of the other transactions contemplated hereby,
whether or not the Company, the Administrative Agent or any of the Lenders or
such Affiliates, officers or directors is a party thereto, 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 Company, any of its Subsidiaries or any of the facilities and properties
owned, leased or operated by the Company or any of its Subsidiaries, or (y)
without limiting the generality of the foregoing, by reason of or in connection
with the execution and delivery or transfer of, or payment or failure to make
payments under, Letters of Credit (it being agreed that nothing in this
subsection 11.5(d)(y) is intended to limit the Company's obligations pursuant to
subsection 3.8) (all the foregoing, collectively, the "indemnified
liabilities"), provided that the Company shall have no obligation hereunder with
respect to indemnified liabilities of the Administrative Agent
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or any Lender or any of their respective Affiliates, officers and directors
arising from (i) the gross negligence or willful misconduct of such
Administrative Agent or Lender or their respective directors or officers or (ii)
legal proceedings commenced against the Administrative Agent or a 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 or
(iii) legal proceedings commenced against the Administrative Agent or any such
Lender by any Transferee (as defined in subsection 11.6(f)). The agreements in
this subsection 11.5 shall survive repayment of the Loans and all other amounts
payable hereunder.
11.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the Lenders, the Administrative Agent, all future holders of the Notes
and the Loans, and their respective successors and assigns, except that the
Company may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking or lending business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any participating interest in the
Letters of Credit of such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender hereunder. In the event of
any such sale by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement and the other Credit Documents to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement and Holdings, the
Company 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 Credit Documents. The Company agrees that if
amounts outstanding under this Agreement and the Notes are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any Note; provided, that such right of setoff shall be subject to
the obligation of such Participant to share with the Lenders, and the Lenders
agree to share with such Participant, as provided in subsection 11.7. The
Company also agrees that each Participant shall be entitled to the benefits of
subsections 3.10, 4.11 and 4.12 with respect to its participation in the Letters
of Credit and in the Commitments and the Loans outstanding from time to time as
if it were a Lender; provided, that no Participant shall be entitled to receive
any greater amount pursuant to any such subsection than the transferor Lender
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred. Each Lender agrees that the participation agreement
pursuant to which any Participant acquires its participating interest (or any
other document) may afford voting rights to such Participant, or any right to
instruct such Lender with respect to voting hereunder, only with respect to
matters requiring the consent of either all of the Lenders hereunder or all of
the Lenders holding the relevant Term Loans or Revolving Credit Commitments
subject to such participation.
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(c) Subject to paragraph (g) of this subsection 11.6, any
Lender may, in the ordinary course of its commercial banking, lending or other
business and in accordance with applicable law, (i) at any time and from time to
time assign all or any part of its rights and obligations under this Agreement
and the Notes to any Lender or any Affiliate thereof, provided that, in the
event of a sale of less than all of such rights and obligations, such assigning
Lender after any such sale to any other Lender or any Affiliate of such Lender
shall retain Commitments and/or Loans and/or L/C Participating Interests
aggregating at least $5,000,000 (or such lesser amount as the Administrative
Agent may determine), and, (ii) with the consent of the Company and the
Administrative Agent (which in each case shall not be unreasonably withheld or
delayed) at any time and from time to time assign to one or more additional
banks, mutual funds or financial institutions or entities (each, an "Assignee"),
all or any part of its rights and obligations under this Agreement and the
Notes, pursuant to an Assignment and Acceptance, executed by such Assignee, such
transferor Lender (and, in the case of an Assignee that is not then a Lender or
an Affiliate thereof, by the Company and the Administrative Agent), and
delivered to the Administrative Agent for its acceptance and recording in the
Register (as defined below); provided that, unless otherwise consented to by the
Company and the Administrative Agent, (A) each such sale pursuant to clause (ii)
of this subsection 11.6(c) shall be in a principal amount of $5,000,000 or more
unless the Assigning Lender is transferring all of its rights and obligations
and (B) in the event of a sale of less than all of such rights and obligations,
such Lender after any such sale shall retain Commitments and/or Loans and/or L/C
Participating Interests aggregating at least $5,000,000. 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, if any,
as set forth therein, and (y) the assigning Lender thereunder shall, to the
extent of the interest transferred, as reflected in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of a Assignment and Acceptance covering all or the remaining portion of a
transferor Lender's rights and obligations under this Agreement, such transferor
Lender shall cease to be a party hereto, except that it shall remain entitled to
the benefit of all indemnities and other provisions stated to survive the
termination hereof).
(d) The Administrative Agent, which for purposes of this
subsection 11.6(d) only shall be deemed the agent of the Company, shall maintain
at the address of the Administrative Agent referred to in subsection 11.2 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 Company, 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 Credit Documents, notwithstanding any
notice to the contrary. Any assignment of any Loan or other obligation hereunder
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Company
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
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(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 Company and the Administrative
Agent), together with payment to the Administrative Agent of a registration and
processing fee of $2,500 if the Assignee is not a Lender prior to the execution
of such supplement and $1,000 otherwise, 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 Company. On or prior to such effective date, the Company at its own expense,
shall execute and deliver to the Administrative Agent (in exchange for any or
all of the Term Loan Notes, or Revolving Credit Notes of the assigning Lender,
if any ) new Term Loan Notes, or Revolving Credit Notes, as the case may be, to
the order of such Assignee (if requested by such Assignee) in an amount equal to
the Revolving Credit Commitment or the Term Loans, as the case may be, assumed
by it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment or any Term Loans hereunder, new Term Loan Notes, or
Revolving Credit Notes, as the case may be, to the order of the assigning Lender
in an amount equal to the Commitment or such Term Loans, as the case may be,
retained by it hereunder (if requested). Such new Notes shall be dated the
Closing Date and shall otherwise be in the form of the Notes replaced thereby.
(f) The Lenders agree that they will use reasonable efforts to
protect the confidentiality of any confidential information concerning Holdings,
the Company and its Subsidiaries and Affiliates. Notwithstanding the foregoing,
the Company authorizes each Lender to disclose to any Participant or Assignee
(each, a "Transferee") and any prospective Transferee or to any Person who is
required to approve, structure or administer the Loans on behalf of a Lender any
and all information in such Lender's possession concerning Holdings, the Company
and its Subsidiaries which has been delivered to such Lender by or on behalf of
Holdings or the Company pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of Holdings, or the Company in connection with
such Lender's credit evaluation of Holdings, the Company and its Subsidiaries
and Affiliates prior to becoming a party to this Agreement; provided that each
Lender shall cause its respective prospective Transferees and such other Persons
to agree in writing to protect the confidentiality of any confidential
information concerning Holdings, the Company and its Subsidiaries.
(g) If, pursuant to this subsection 11.6, any interest in this
Agreement or any Note is transferred to any Transferee which is organized under
the laws of any jurisdiction other than the United States or any State thereof,
the transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer either (1) in the case of a Transferee that is a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, (i) to represent
to the transferor Lender (for the benefit of the transferor Lender, the
Administrative Agent and the Company) that under applicable law and treaties no
taxes will be required to be withheld by the Administrative Agent, the Company
or the transferor Lender with respect to any payments to be made to such
Transferee in respect of the Loans or L/C Participating Interests, (ii) to
furnish to the transferor Lender (and, in the case of any Transferee registered
in the Register, the Administrative Agent and the Company) either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue
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Service Form 1001 (wherein such Transferee claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments hereunder)
and (iii) to agree (for the benefit of the transferor Lender, the Administrative
Agent and the Company) to provide the transferor Lender (and, in the case of any
Transferee registered in the Register, the Administrative Agent and the Company)
a new Form 4224 or Form 1001 upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such Transferee, and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax exemption or (2) in the
case of any Transferee that is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code, (i) to represent to the transferor Lender (for the
benefit of the transferor Lender, the Administrative Agent and the Company) that
it is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (ii)
to furnish to the transferor Lender (and, in the case of any Transferee
registered in the Register, to the Company), with a copy to the Administrative
Agent, (A) a Subsection 4.11(d)(2) Certificate and (B) two (2) accurate and
complete original signed copies of Internal Revenue Service form W-8, certifying
to such Transferee's legal entitlement on the date of the effectiveness of such
transfer to an exemption from U.S. withholding tax under the provisions of
Section 881(c) of the Code with respect to all payments to be made under this
Agreement, and (iii) to agree (for the benefit of the transferor Lender, the
Administrative Agent and the Company), to the extent legally entitled to do so,
upon reasonable request by the transferor Lender (or, in the case of any
Transferee registered in the Register, the Administrative Agent or the Company),
to provide to the transferor Lender, the Administrative Agent and the Company
such other forms as may be required in order to establish the legal entitlement
of such Transferee to an exemption from withholding tax with respect to payments
under this Agreement.
(h) 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.
11.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of any of its
Loans or L/C Participating Interests, as the case may be, 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 clause (f) of Section 9, or otherwise) in a greater proportion
than any such payment to and collateral received by any other Lender, if any, in
respect of such other Lender's Loans or L/C Participating Interests, as the case
may be, or interest thereon, such benefitted Lender shall purchase for cash from
the other Lenders such portion of each such other Lender's Loans or L/C
Participating Interests, as the case may be, 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. The Company agrees
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that each Lender so purchasing a portion of another Lender's Loans and/or L/C
Participating Interests may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion. The Administrative Agent shall
promptly give the Company notice of any set-off, provided that the failure to
give such notice shall not affect the validity of such set-off.
(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
Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon the filing of a petition under any of the
provisions of the federal bankruptcy code or amendments thereto, by or against;
the making of an assignment for the benefit of creditors by; the application for
the appointment, or the appointment, of any receiver of, or of any substantial
portion of the property of; the issuance of any execution against any
substantial portion of the property of; the issuance of a subpoena or order, in
supplementary proceedings, against or with respect to any substantial portion of
the property of; or the issuance of a warrant of attachment against any
substantial portion of the property of; the Company to set-off and apply against
any indebtedness, whether matured or unmatured, of the Company to such Lender,
any amount owing from such Lender to the Company, at or at any time after, the
happening of any of the above mentioned events, and as security for such
indebtedness, the Company hereby grants to each Lender a continuing security
interest in any and all deposits, accounts or moneys of the Company then or
thereafter maintained with such Lender, subject in each case to subsection
11.7(a) of this Agreement. The aforesaid right of set-off may be exercised by
such Lender against the Company or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver or execution,
judgment or attachment creditor of the Company, or against anyone else claiming
through or against the Company or such trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the making, filing
or issuance, or service upon such Lender of, or of notice of, any such petition;
assignment for the benefit of creditors; appointment or application for the
appointment of a receiver; or issuance of execution, subpoena, order or warrant.
Each Lender agrees promptly to notify the Company 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.
11.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company and the Administrative Agent. This
Agreement shall become effective with respect to the Company, the Administrative
Agent and the Lenders when the Administrative Agent shall have received copies
of this Agreement executed by the Company and the Lenders, or, in the case of
any Lender, shall have received telephonic confirmation from such Lender stating
that such Lender has executed counterparts of this Agreement or the signature
pages hereto and sent the same to the Administrative Agent.
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11.9 Governing Law; No Third Party Rights. This Agreement and
the Notes and the rights and obligations of the parties under this Agreement and
the Notes shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York. This Agreement is solely for the benefit
of the parties hereto and their respective successors and assigns, and, except
as set forth in subsection 11.6, no other Persons shall have any right, benefit,
priority or interest under, or because of the existence of, this Agreement.
11.10 Submission to Jurisdiction; Waivers. (a) Each party to
this Agreement hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any of the other
Credit Documents, 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;
(ii) 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;
(iii) 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 such party at its address set forth in subsection 11.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto; and
(iv) 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.
(b) Each party hereto unconditionally waives trial by jury in
any legal action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
11.11 Releases. The Administrative Agent and the Lenders agree
to cooperate with the Company and its Subsidiaries with respect to any sale or
other disposition permitted by subsection 8.5 and promptly take such action and
execute and deliver such instruments and documents necessary to release the
liens and security interests created by the Security Documents relating to any
of the assets or property affected by any such sale permitted by subsection 8.5
including, without limitation, any Uniform Commercial Code amendment, release or
termination or partial release or termination statements.
11.12 Interest. Each provision in this Agreement and each
other Credit Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, by the Company for the use,
forbearance or detention of the money to be loaned under this Agreement or any
other Credit Document or otherwise (including any sums
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paid as required by any covenant or obligation contained herein or in any other
Credit Document which is for the use, forbearance or detention of such money),
exceed that amount of money which would cause the effective rate of interest to
exceed the highest lawful rate permitted by applicable law (the "Highest Lawful
Rate"), and all amounts owed under this Agreement and each other Credit Document
shall be held to be subject to reduction to the effect that such amounts so paid
or agreed to be paid which are for the use, forbearance or detention of money
under this Agreement or such Credit Document shall in no event exceed that
amount of money which would cause the effective rate of interest to exceed the
Highest Lawful Rate. Notwithstanding any provision in this Agreement or any
other Credit Document to the contrary, if the maturity of the Loans or the
obligations in respect of the other Credit Documents are accelerated for any
reason, or in the event of any prepayment of all or any portion of the Loans or
the obligations in respect of the other Credit Documents by the Company or in
any other event, earned interest on the Loans and such other obligations of the
Company may never exceed the Highest Lawful Rate, and any unearned interest
otherwise payable on the Loans or the obligations in respect of the other Credit
Documents that is in excess of the Highest Lawful Rate shall be cancelled
automatically as of the date of such acceleration or prepayment or other such
event and (if theretofore paid) shall, at the option of the holder of the Loans
or such other obligations, be either refunded to the Company or credited on the
principal of the Loans. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the Highest Lawful Rate, the
Company and the Lenders shall, to the maximum extent permitted by applicable
law, amortize, prorate, allocate and spread, in equal parts during the period of
the actual term of this Agreement, all interest at any time contracted for,
charged, received or reserved in connection with this Agreement.
11.13 Special Indemnification. Notwithstanding any provision
in this Agreement to the contrary, (A) each Lender, or Transferee of any Lender
pursuant to subsection 11.6(g) of this Agreement, shall indemnify the Company
and the Administrative Agent, and hold each of them harmless against any and all
payments, expenses or taxes which the Company or the Administrative Agent may
become subject to or obligated to pay if and to the extent that, (i) on the
Closing Date or the effective date of transfer, as the case may be, such Lender,
or such Transferee of a Lender pursuant to subsection 11.6(g) of this Agreement,
(a) makes the representation and covenants set forth in subsection 4.11(d)(2) of
this Agreement, or, in the case of a Transferee, pursuant to subsection
11.6(g)(2) of this Agreement and the Assignment and Acceptance and (b) is not in
fact also qualified to make the representation and covenants set forth in
subsection 4.11(d)(1) of this Agreement or, in the case of a Transferee,
pursuant to subsection 11.6(g)(1) of this Agreement and the Assignment and
Acceptance and (ii) as a result of any Change in Law or compliance by such
Lender, or Transferee, with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority the Company
or the Administrative Agent are required to make any additional payments on
account of U.S. withholding taxes and amounts related thereto with respect to
any payments under this Agreement, any Note, or a Eurodollar Loan, made prior to
such Change in Law or request or directive, none of which payments would have
been required if such Lender, or Transferee, was qualified on the Closing Date
or the date of the transfer, as the case may be, to make the representation and
covenants set forth in subsection 4.11(d)(1) of this Agreement or pursuant to
subsection 11.6(g)(1) of this Agreement and the Assignment and Acceptance, as
the
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case may be, and (B) each Lender, or Transferee, agrees that to the extent any
amount payable by such Lender or Transferee pursuant to this subsection 11.13
remains unpaid on any Interest Payment Date or the date on which any prepayment
is made, the Company shall have the right to set-off against any payment due to
such Lender or Transferee on such date any amounts owing to the Company pursuant
to this subsection 11.13.
11.14 Permitted Payments and Transactions. Notwithstanding any
provision to the contrary contained in this Agreement, the Company and its
Subsidiaries shall be permitted to pay fees and expenses pursuant to or in
respect of, the following agreements, and, in the case of clauses (a) and (d)
below, to engage in the following transactions: (a) (i) the Real Estate
Financing Agreement and (ii) the Asset Purchase Agreement; (b) agreements with
any Person or Persons providing for the payment of customary fees in connection
with serving as a director of the Company or any Subsidiary of the Company; (c)
agreements providing for the payment of commercially reasonable fees in
connection with any permitted financing, refinancing, sale, transfer, sale and
leaseback or other permitted disposition of any stock or assets of the Company
or its Subsidiaries; (d) the borrowing of any Indebtedness to the extent, and
upon the terms and conditions, the same is expressly permitted under subsection
8.1; and (e) agreements providing for commercially reasonable fees in connection
with any permitted purchase or acquisition of assets by the Company or any of
its Subsidiaries.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above written.
CSK AUTO, INC.
By:/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer & Treasurer
100
THE CHASE MANHATTAN BANK,
as Administrative Agent, Issuing Lender
and a Lender
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
101
▇▇▇▇▇▇ COMMERCIAL PAPER, INC.
as Documentation Agent
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
102
▇▇▇▇▇▇ SYNDICATED LOANS, INC.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
103
▇▇▇▇▇ FARGO BANK
By:/s/ ▇▇▇▇ ▇▇▇▇▇
Title: Relationship Manager
104
FIRST UNION NATIONAL BANK
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
105
FIRSTSTAR BANK, N.A.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
106
NATIONAL WESTMINSTER BANK, PLC
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
107
BANKBOSTON, N.A.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇▇▇ BRANCH
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Director
By:/s/ ▇▇▇▇▇▇▇ Ziwey
Title: Director
109
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, NEW YORK BRANCH
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Manager
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
111
BANK POLSKA KASA OPIEKI S.A.
GROUP PEKAO S.A.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Senior Lending Officer
112
SENIOR DEBT PORTFOLIO
By:/s/ ▇▇▇▇▇ ▇. Page
Title: Vice President
113
PILGRIM PRIME RATE TRUST
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
114
SEQUILS I, LTD
by: TCW ADVISORS, INC.
AS ITS COLLATERAL MANAGER
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
115
CRESCENT/MACH I PARTNERS, L.P.
by: TCW Asset Management Company
Its Investment Manager
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
116
KZH CRESCENT LLC
By:/s/ ▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
117
KZH CRESCENT-3 LLC
By:/s/ ▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
118
ALLIANCE INVESTMENTS LIMITED
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
119
TRANSAMERICA BUSINESS CREDIT
CORP.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
120
KZH SOLEIL-2 LLC
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
121
KZH SHOSHONE LLC
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
122
▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE
PORTFOLIO
by: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ASSET
MANAGEMENT, L.P.,
AS INVESTMENT ADVISOR
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
123
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
124
FLEET BANK, NATIONAL ASSOCIATION
By:/s/ ▇▇▇▇▇▇▇ So
Title: Assistant Vice President
125
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
PRIME INCOME TRUST
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
126
SPS SWAPS
By:/s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
127
▇▇▇ ▇▇▇▇▇▇ CLO II, LIMITED
BY: ▇▇▇ ▇▇▇▇▇▇ MANAGEMENT INC.,
as Collateral Manager
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
128
▇▇▇ ▇▇▇▇▇▇ CLO I, LIMITED
BY: ▇▇▇ ▇▇▇▇▇▇ MANAGEMENT INC.,
as Collateral Manager
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
129
ANNEX A
PRICING GRID
Revolving
Credit Loans Term Loans
--------------------------------------------- -------------------------------------------- -------------------
Leverage Alternate Base Eurodollar Alternate Base Eurodollar Commitment
Ratio Rate Loans Rate Loans Rate Loans Rate Loans Fee Rate
---------------------------------------------------------------------------------------------------------------------------------
Less than or equal to 4.5 to 1 1.25% 2.25% 1.50% 2.50% .50%
Less than or equal to 4.5 to 1 1.00% 2.00% 1.25% 2.25% .50%
Less than or equal to 4.0 to 1 .75% 1.75% 1.00% 2.00% .375%
Less than or equal to 3.5 to 1 .50% 1.50% .75% 1.75% .375%
Less than or equal to 3.0 to 1 .25% 1.25% .75% 1.75% .30%
---------------------------------------------------------------------------------------------------------------------------------
Changes in the Applicable Margin or the Commitment Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 7.1(a) or (b) (but in any event not later than the 50th
day after the end of each of the first three quarterly periods of each fiscal
year or the 95th day after the end of each fiscal year, as the case may be) and
(b) and shall remain in effect until the next change to be effected pursuant to
this paragraph. If any financial statements referred to above are not delivered
within the time periods specified in subsection 7.1, then, until such financial
statements are delivered, the Leverage Ratio shall be deemed to be the same as
with respect to the immediately preceding period; provided, however, that if
such financial statements, when actually delivered, would have required an
increase in the Applicable Margin or Commitment Fee Rate over the Applicable
Margin or Commitment Fee Rate, as the case may be, in effect immediately prior
to the date such financial statements were due, the Company shall promptly pay
to the Lenders and the Administrative Agent any additional amounts of interest
or fees which would have been payable on any previous Interest Payment Date had
such higher Applicable Margin or Commitment Fee Rate, as the case may be, been
in effect from the date such financial statements were required to be delivered.