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EXHIBIT 10.18
EXECUTION COPY
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RENTERS CHOICE, INC.
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$175,000,000
SENIOR SUBORDINATED
CREDIT AGREEMENT
dated as of August 5, 1998
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THE CHASE MANHATTAN BANK,
as Administrative Agent
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CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . 28
SECTION 2. AMOUNT AND TERMS OF LOANS . . . . . . . . . . . . . . . . . . . 28
2.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2 Procedure for Borrowing and Conversion . . . . . . . . . 29
2.3 Maturity and Exchange Notes . . . . . . . . . . . . . . . 29
2.4 Repayment of Loans . . . . . . . . . . . . . . . . . . . 29
2.5 Optional and Mandatory Prepayments . . . . . . . . . . . 29
2.6 Interest Rates and Payment Dates . . . . . . . . . . . . 31
2.7 Computation of Interest and Fees . . . . . . . . . . . . 32
2.8 Pro Rata Treatment and Payments . . . . . . . . . . . . . 32
2.9 Requirements of Law . . . . . . . . . . . . . . . . . . . 34
2.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.11 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 37
2.12 Change of Lending Office . . . . . . . . . . . . . . . . 37
2.13 Replacement Lenders . . . . . . . . . . . . . . . . . . . 37
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 38
3.1 Financial Condition . . . . . . . . . . . . . . . . . . . 38
3.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . 39
3.3 Corporate Existence; Compliance with Law . . . . . . . . 39
3.4 Corporate Power; Authorization; Enforceable
Obligations . . . . . . . . . . . . . . . . . . . . . . . 39
3.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . 39
3.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . 39
3.7 No Default . . . . . . . . . . . . . . . . . . . . . . . 40
3.8 Ownership of Property; Liens . . . . . . . . . . . . . . 40
3.9 Intellectual Property . . . . . . . . . . . . . . . . . . 40
3.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.11 Federal Regulations . . . . . . . . . . . . . . . . . . . 40
3.12 Labor Matters . . . . . . . . . . . . . . . . . . . . . . 40
3.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.14 Investment Company Act; Other Regulations . . . . . . . . 41
3.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 41
3.16 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 41
3.17 Environmental Matters . . . . . . . . . . . . . . . . . . 41
3.18 Accuracy of Information, etc . . . . . . . . . . . . . . 42
3.19 Solvency . . . . . . . . . . . . . . . . . . . . . . . . 42
3.20 Year 2000 Matters . . . . . . . . . . . . . . . . . . . . 42
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 45
5.1 Financial Statements . . . . . . . . . . . . . . . . . . 45
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Page
5.2 Certificates; Other Information . . . . . . . . . . . . . 46
5.3 Payment of Obligations . . . . . . . . . . . . . . . . . 47
5.4 Maintenance of Existence; Compliance . . . . . . . . . . 47
5.5 Maintenance of Property; Insurance . . . . . . . . . . . 47
5.6 Books and Records . . . . . . . . . . . . . . . . . . . . 47
5.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.8 Environmental Laws . . . . . . . . . . . . . . . . . . . 48
5.9 Take-Out Financing . . . . . . . . . . . . . . . . . . . 48
5.10 Exchange Notes . . . . . . . . . . . . . . . . . . . . . 48
5.11 Use of Proceeds of the Take-Out Debt . . . . . . . . . . 49
5.12 Future Subsidiary Guarantors . . . . . . . . . . . . . . 49
5.13 Further Assurances . . . . . . . . . . . . . . . . . . . 49
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 49
6.1 Limitation on Indebtedness . . . . . . . . . . . . . . . 50
6.2 Limitation on Restricted Payments . . . . . . . . . . . . 51
6.3 Limitation on Restrictions on Distributions from
Restricted Subsidiaries . . . . . . . . . . . . . . . . . 53
6.4 Limitation on Asset Dispositions . . . . . . . . . . . . 54
6.5 Limitation on Liens . . . . . . . . . . . . . . . . . . . 55
6.6 Limitation on Affiliate Transactions . . . . . . . . . . 55
6.7 Change of Control . . . . . . . . . . . . . . . . . . . . 56
6.8 Merger, Consolidation, etc . . . . . . . . . . . . . . . 57
6.9 Limitation on Lines of Business . . . . . . . . . . . . . 58
6.10 Limitation on Sale/Leaseback Transactions . . . . . . . . 58
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.1 Agreement To Subordinate . . . . . . . . . . . . . . . . 60
8.2 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . 60
8.3 Default on Senior Indebtedness . . . . . . . . . . . . . 60
8.4 Acceleration of Payment of Loans . . . . . . . . . . . . 61
8.5 When Distribution Must Be Paid Over . . . . . . . . . . . 61
8.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . 61
8.7 Relative Rights . . . . . . . . . . . . . . . . . . . . . 62
8.8 Subordination May Not Be Impaired By the Borrower . . . . 62
8.9 Rights of Administrative Agent . . . . . . . . . . . . . 62
8.10 Distribution or Notice to Representative . . . . . . . . 62
8.11 Section 8 Not To Prevent Events of Default or Limit
Right To Accelerate . . . . . . . . . . . . . . . . . . . 62
8.12 Administrative Agent Entitled to Rely . . . . . . . . . . 62
8.13 Administrative Agent to Effectuate Subordination . . . . 63
8.14 Administrative Agent Not Fiduciary for Lenders of
Senior Indebtedness . . . . . . . . . . . . . . . . . . . 63
8.15 Reliance by Lenders of Senior Indebtedness on
Subordination Provisions . . . . . . . . . . . . . . . . 63
SECTION 9. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . 63
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9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . 63
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . 64
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . 64
9.4 Reliance by Administrative Agent . . . . . . . . . . . . 64
9.5 Notice of Default . . . . . . . . . . . . . . . . . . . . 64
9.6 Non-Reliance on Administrative Agent and Other
Lenders . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . 65
9.8 Administrative Agent in Its Individual Capacity . . . . . 65
9.9 Successor Administrative Agent . . . . . . . . . . . . . 66
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 66
10.1 Amendments and Waivers . . . . . . . . . . . . . . . . . 66
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . 68
10.4 Survival of Representations and Warranties . . . . . . . 68
10.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . 68
10.6 Successors and Assigns; Participations and
Assignments . . . . . . . . . . . . . . . . . . . . . . . 69
10.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . 71
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . 72
10.9 Severability . . . . . . . . . . . . . . . . . . . . . . 72
10.10 Integration . . . . . . . . . . . . . . . . . . . . . . . 72
10.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 72
10.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . 72
10.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . 73
10.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . 73
10.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . 73
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SCHEDULES:
1.1 Commitments
3.4 Consents
3.6 Litigation
3.15 Subsidiaries
EXHIBITS:
EXHIBIT A Form of Subsidiary Guarantee
EXHIBIT B Form of Indenture
EXHIBIT C Form of Warrant Agreement
EXHIBIT D Form of Closing Certificate
EXHIBIT E Form of Assignment and Acceptance
EXHIBIT F-1 Form of Initial Loan Note
EXHIBIT F-2 Form of Term Note
EXHIBIT G-1 Form of Legal Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
EXHIBIT G-2 Form of Legal Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
EXHIBIT G-3 Form of Legal Opinion of ▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
EXHIBIT H Form of Exemption Certificate
EXHIBIT I Form of Compliance Certificate
EXHIBIT J Form of Lender Addendum
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SENIOR SUBORDINATED CREDIT AGREEMENT, dated as of August 5, 1998,
among RENTERS CHOICE, INC., a Delaware corporation (the "Borrower"), the
several lenders from time to time parties hereto (collectively, the "Lenders";
each, individually, a "Lender"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR Borrowing": a Borrowing comprised of ABR Loans.
"ABR Loan": a Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions
of Section 2.
"Accepting Holder": as defined in Section 2.5(d).
"Acquired Company": Thorn Americas, Inc., a Delaware
corporation.
"Acquisition": as defined in Section 4(d)(i).
"Acquisition Agreement": the Stock Purchase Agreement, dated
as of June 16, 1998, among the Borrower, the Seller and Thorn plc, in
each case as amended, supplemented or otherwise modified from time to
time.
"Acquisition Documentation": collectively, the Acquisition
Agreement and all schedules, exhibits and annexes thereto and all side
letters and agreements affecting the terms thereof or entered into in
connection therewith, in each case as amended, supplemented or
otherwise modified from time to time.
"Administrative Agent": as defined in the preamble hereto.
"Adjusted LIBO Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
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1.00 - Eurocurrency Reserve Requirements
"Adjusted Margin": with respect to any Loan, 0 basis points
during the three month period commencing on the Initial Maturity Date
and shall increase by an additional 50 basis points at the beginning
of each subsequent three-month period.
"Adjusted Rate": the rate equal to the greatest of (i) 50
basis points plus the interest rate borne by the Loans on the day
immediately preceding the Initial Maturity Date, (ii) 600 basis points
plus the Treasury Rate (as defined below) on the Initial Maturity
Date, (iii) 200
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basis points plus the CSI High Yield Index Rate on the Initial
Maturity Date and (iv) 10% per annum; for purposes hereof, the
"Treasury Rate" means (x) the rate borne by direct obligations of the
United States maturing on the tenth anniversary of the Closing Date or
(y) if there are no such obligations, the rate determined by linear
interpolation between the rates borne by the two direct obligations of
the United States maturing closest to, but straddling, the tenth
anniversary of the Closing Date, in each case as published by the
Board of Governors.
"Affiliate": as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether
by contract or otherwise.
"Affiliate Transaction": as defined in Section 6.6.
"Agreement": this Senior Subordinated Credit Agreement, as
amended, supplemented or otherwise 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 greater of
(a) the Prime Rate in effect on such day and (b) 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;
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 that 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 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 or the Federal Funds Effective Rate, respectively.
"Applicable Margin": with respect to any Loan, 550 basis
points during the six (6) month period commencing on the Closing Date
and shall increase by (i) 100 basis points commencing on the date
which is six months following the Closing Date and (ii) an additional
50 basis points at the end of each successive three month period
thereafter until (but excluding) the Initial Maturity Date.
"Apollo Preferred Stock": as defined in Section 4(d)(ii).
"Asset Disposition": any sale, lease, transfer or other
disposition of shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares), property or other assets
(each referred to for the purposes of this definition as a
"disposition") by the Borrower or any of its Restricted Subsidiaries
(including any disposition by means of a merger, consolidation or
similar transaction) other than (i) a disposition by a Restricted
Subsidiary to the Borrower or by the Borrower or a Restricted
Subsidiary to a Restricted Subsidiary, (ii) a disposition of
inventory, equipment, obsolete assets or surplus personal property in
the ordinary
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course of business, (iii) the sale of Temporary Cash Investments or
Cash Equivalents in the ordinary course of business, (iv) the sale or
discount (with or without recourse, and on commercially reasonable
terms) of accounts receivable or notes receivable arising in the
ordinary course of business, or the conversion or exchange of accounts
receivable for notes receivable, (v) the licensing of intellectual
property in the ordinary course of business, (vi) for purposes of
Section 6.4 only, a disposition subject to Section 6.2, (vii) a
disposition of property or assets that is governed by Section 6.8, or
(vii) an RTO Facility Swap.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Attributable Debt": in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate assumed in making calculations in
accordance with FAS 13) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in
such Sale/Leaseback Transaction (including any period for which such
lease has been extended).
"Average Life": as of any date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the
date of determination to the dates of each successive scheduled
principal payment of such Indebtedness or redemption or similar
payment with respect to such Indebtedness or Preferred Stock
multiplied by the amount of such payment by (ii) the sum of all such
payments.
"Bank Indebtedness": any and all amounts, whether outstanding
on the Closing Date or thereafter incurred, payable under or in
respect of the Senior Credit Facility, including, without limitation,
principal, premium (if any), interest (including interest accruing on
or after the filing of any petition in bankruptcy or for
reorganization relating to the Borrower or any Restricted Subsidiary
whether or not a claim for postfiling interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations,
guarantees, other monetary obligations of any nature and all other
amounts payable thereunder or in respect thereof.
"Benefitted Lender": as defined in Section 10.7(a).
"Blockage Notice": as defined in Section 8.3.
"Board of Directors": as to any Person the board of directors
of such Person or any committee thereof duly authorized to act on
behalf of such board.
"Board of Governors": the Board of Governors of the Federal
Reserve System (or any successor thereto).
"Borrowing": a group of Loans of a single Type made or
continued by the Lenders on a single date and as to which a single
Interest Period is in effect.
"Business": as defined in Section 3.17(b).
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"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close, provided, that with respect to notices and
determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, such day is also a day for trading by
and between banks in Dollar deposits in the interbank eurodollar
market.
"Capital Stock": as to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Capitalized Lease Obligations": an obligation that is
required to be classified and accounted for as a capitalized lease for
financial reporting purposes in accordance with GAAP; and the amount
of Indebtedness represented by such obligation shall be the
capitalized amount of such obligation determined in accordance with
GAAP; and the Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease.
"Cash Equivalents": any of the following: (a) securities
issued or fully guaranteed or insured by the United States Government
or any agency or instrumentality thereof, (b) time deposits,
certificates of deposit or bankers' acceptances of (i) any lender
under the Senior Credit Agreement or (ii) any commercial bank having
capital and surplus in excess of $500,000,000 and the commercial paper
of the holding company of which is rated at least "A-2" or the
equivalent thereof by S&P or at least P-2 or the equivalent thereof by
▇▇▇▇▇'▇ (or if at such time neither is issuing ratings, then a
comparable rating of another nationally recognized rating agency), (c)
commercial paper rated at least "A-1" or the equivalent thereof by S&P
or at least "P-1" or the equivalent thereof by ▇▇▇▇▇'▇ (or if at such
time neither is issuing ratings, then a comparable rating of another
nationally recognized rating agency), (d) investments in money market
funds complying with the risk limiting conditions of Rule 2a-7 or any
successor rule of the Securities and Exchange Commission under the
Investment Company Act, (e) repurchase obligations of any Lender or of
any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (f) securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or
A by ▇▇▇▇▇'▇; and (g) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition.
"Central Acquisition": the Borrower's acquisition of
substantially all of the assets of Central Rents, Inc.
"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 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.
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"Change of Control" means the occurrence of any of the
following events:
(i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one
or more Permitted Holders, is or becomes the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial
ownership" of all shares that any such Person has the right to
acquire within one year), directly or indirectly, of more than
50% of the Voting Stock of the Borrower or a Successor Company
(including, without limitation, through a merger or
consolidation or purchase of Voting Stock of the Borrower);
provided that the Permitted Holders do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors;
or
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors (together with any new directors whose
election by such Board of Directors or whose nomination for
election by the shareholders of the Borrower was approved by a
vote of a majority of the directors of the Borrower then still
in office who were either directors at the beginning of such
period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office; or
(iii) the sale, lease, transfer, conveyance or
other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of
all or substantially all of the assets of the Borrower and its
Restricted Subsidiaries taken as a whole to any Person or
group of related Persons (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) (a "Group") other than a
Permitted Holder; or
(iv) the adoption by the stockholders of a plan
for the liquidation or dissolution of the Borrower; or
(v) any event described in Section 8(k) of the
Senior Credit Agreement.
"Chase": The Chase Manhattan Bank, a New York banking
corporation.
"Closing Date": the date on which the conditions precedent
set forth in Section 4 shall be satisfied or waived.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment": as to any Lender, its obligation to make a Loan
to the Borrower on the Closing Date in an amount equal to the amount
set forth opposite such Lender's name in Schedule 1.1 under the
heading "Commitment"; collectively, as to all such Lenders, the
"Commitments," which aggregate $175,000,000 on the Closing Date.
"Commitment Percentage": as to any Lender at any time, the
percentage of the aggregate Commitments then constituted by such
Lender's Commitment (or, after the Loans are made on the Closing Date,
the percentage of the aggregate Loans then constituted by such
Lender's Loans).
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"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group that
includes the Borrower and that is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit I.
"Consolidated Coverage Ratio": as of any date of
determination means the ratio of (i) the aggregate amount of EBITDA of
the Borrower and its Restricted Subsidiaries for the period of the
most recent four consecutive fiscal quarters ending prior to the date
of such determination for which consolidated financial statements of
the Borrower are available to (ii) Consolidated Interest Expense for
such four fiscal quarters (in each case, determined, for each fiscal
quarter (or portion thereof) of the four fiscal quarters ending prior
to or including the Closing Date, on a pro forma basis to give effect
to the Central Acquisition and the Transactions (including the
anticipated disposition of any non-rent-to-own businesses under
contract for sale or held for sale following the Closing Date), the
offering of the Take- Out Debt and the application of the proceeds
thereof as if they had occurred at the beginning of such four-quarter
period); provided, however, that (1) if the Borrower or any Restricted
Subsidiary (x) has Incurred any Indebtedness since the beginning of
such period that remains outstanding on such date of determination or
if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first
day of such period (except that in making such computation, the amount
of Indebtedness under any revolving credit facility outstanding on the
date of such calculation shall be computed based on (A) the average
daily balance of such Indebtedness during such four fiscal quarters or
such shorter period for which such facility was outstanding or (B) if
such facility was created after the end of such four fiscal quarters,
the average daily balance of such Indebtedness during the period from
the date of creation of such facility to the date of such calculation)
and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of
such period, or (y) has repaid, repurchased, defeased or otherwise
discharged any Indebtedness since the beginning of the period that is
no longer outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated
Coverage Ratio involves a discharge of Indebtedness (in each case
other than Indebtedness Incurred under any revolving credit facility
unless such Indebtedness has been permanently repaid), EBITDA and
Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such discharge of such
Indebtedness, including with the proceeds of such new Indebtedness, as
if such discharge had occurred on the first day of such period, (2) if
since the beginning of such period the Borrower or any Restricted
Subsidiary shall have made any Asset Disposition of any company or any
business or any group of assets, the EBITDA for such period shall be
reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset
Disposition for such period or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Borrower or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Borrower and its continuing Restricted Subsidiaries in
connection with such Asset Disposition
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for such period (and, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Borrower and its continuing Restricted
Subsidiaries are no longer liable for such Indebtedness after such
sale), (3) if since the beginning of such period the Borrower or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Person that thereby becomes a Restricted Subsidiary,
or otherwise acquired any company or any business or any group of
assets, including any such acquisition of assets occurring in
connection with a transaction causing a calculation to be made
hereunder, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness and including the pro forma
expenses and cost reductions calculated on a basis consistent with
Regulation S-X under the Act) as if such Investment or acquisition
occurred on the first day of such period and (4) if since the
beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Borrower or any
Restricted Subsidiary since the beginning of such period) shall have
made any Asset Disposition or any Investment or acquisition of assets
that would have required an adjustment pursuant to clause (2) or (3)
above if made by the Borrower or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall
be calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition of assets occurred on the first
day of such period. For purposes of this definition, whenever pro
forma effect is to be given to an Asset Disposition, Investment or
acquisition of assets, or any transaction governed by Section 6.8, or
the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness
Incurred or repaid, repurchased, defeased or otherwise discharged in
connection therewith, the pro forma calculations in respect thereof
shall be determined in good faith by a responsible financial or
accounting officer of the Borrower, based on reasonable assumptions.
If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Indebtedness
shall be calculated at a fixed rate as if the rate in effect on the
date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term
as at the date of determination in excess of 12 months). If any
Indebtedness bears, at the option of the Borrower or a Restricted
Subsidiary, a fixed or floating rate of interest and is being given
pro forma effect, the interest expense on such Indebtedness shall be
computed by applying, at the option of the Borrower or such Restricted
Subsidiary, either a fixed or floating rate. If any Indebtedness
which is being given pro forma effect was Incurred under a revolving
credit facility, the interest expense on such Indebtedness shall be
computed based upon the average daily balance of such Indebtedness
during the applicable period.
"Consolidated Interest Expense": as to any Person, for any
period, the total consolidated interest expense of such Person and its
Subsidiaries determined in accordance with GAAP, minus, to the extent
included in such interest expense, amortization or write-off of
financing costs plus, to the extent incurred by such Person and its
Subsidiaries in such period but not included in such interest expense,
without duplication, (i) interest expense attributable to Capitalized
Lease Obligations and the interest component of rent expense
associated with Attributable Debt in respect of the relevant lease
giving rise thereto, determined as if such lease were a capitalized
lease, in accordance with GAAP, (ii) amortization of debt discount,
(iii) interest in respect of Indebtedness of any other Person that has
been Guaranteed by such Person or any Subsidiary, but only to the
extent that such interest is actually paid by such Person or any
Restricted Subsidiary, (iv) non-cash interest expense, (v) net costs
associated with Hedging
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Obligations, (vi) the product of (A) mandatory Preferred Stock cash
dividends in respect of all Preferred Stock of Subsidiaries of such
Person and Disqualified Stock of such Person held by Persons other
than such Person or a Subsidiary multiplied by (B) a fraction, the
numerator of which is one and the denominator of which is one minus
the then current combined federal, state and local statutory tax rate
of such Person, expressed as a decimal, in each case, determined on a
consolidated basis in accordance with GAAP; and (vii) the cash
contributions to any employee stock ownership plan or similar trust to
the extent such contributions are used by such plan or trust to pay
interest to any Person (other than the referent Person or any
Subsidiary thereof) in connection with Indebtedness Incurred by such
plan or trust; provided, however, that as to the Borrower, there shall
be excluded therefrom any such interest expense of any Unrestricted
Subsidiary to the extent the related Indebtedness is not Guaranteed or
paid by the Borrower or any Restricted Subsidiary. For purposes of
the foregoing, gross interest expense shall be determined after giving
effect to any net payments made or received by such Person and its
Subsidiaries with respect to Interest Rate Agreements.
"Consolidated Net Income": as to any Person, for any period,
the consolidated net income (loss) of such Person and its Subsidiaries
before preferred stock dividends, determined in accordance with GAAP;
provided, however, that there shall not be included in such
Consolidated Net Income: (a) any net income (loss) of any Person if
such Person is not (as to the Borrower) a Restricted Subsidiary and
(as to any other Person) an unconsolidated Person, except that (A)
subject to the limitations contained in clause (d) below, the referent
Person's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Person during such period
to the referent Person or a Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
to a Subsidiary, to the limitations contained in clause (c) below) and
(B) the net loss of such Person shall be included to the extent of the
aggregate Investment of the referent Person or any of its Subsidiaries
in such Person; (b) any net income (loss) of any Person acquired in a
pooling of interests transaction for any period prior to the date of
such acquisition; (c) any net income (loss) of any Restricted
Subsidiary (as to the Borrower) or of any Subsidiary (as to any other
Person) if such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions
by such Subsidiary, directly or indirectly, to the Borrower, except
that (A) subject to the limitations contained in (d) below, such
Person's equity in the net income of any such Subsidiary for such
period shall be included in Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such
Subsidiary during such period to such Person or another Subsidiary as
a dividend (subject, in the case of a dividend that could have been
made to another Restricted Subsidiary, to the limitation contained in
this clause) and (B) the net loss of such Subsidiary shall be included
in determining Consolidated Net Income; (d) any charges for costs and
expenses associated with the Transactions; (e) any extraordinary gain
or loss; and (f) the cumulative effect of a change in accounting
principles.
"Consolidated Tangible Assets": as of any date of
determination, the total assets, less goodwill and other intangibles
(other than patents, trademarks, copyrights, licenses and other
intellectual property), shown on the balance sheet of the Borrower and
its Restricted Subsidiaries as of the most recent date for which such
a balance sheet is available, determined on a consolidated basis in
accordance with GAAP, less all write-ups (other than write-ups in
connection with acquisitions) subsequent to the Closing Date in the
book value of any asset (except any such intangible assets) owned by
the Borrower or any of its Restricted Subsidiaries.
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"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person and (b) is
organized by such Person primarily for the purpose of making equity or
debt investments in one or more companies. For purposes of this
definition, "control" of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"CSI": Chase Securities Inc., a Delaware corporation.
"CSI High Yield Index Rate": means the average yield to worst
of the CSI High Yield Index as published in the Chase High Yield
Research Weekly Update Report as published by Chase.
"Currency Agreement": in respect of a Person, any foreign
exchange contract, currency swap agreement or other similar agreement
or arrangement (including derivative agreements or arrangements) as to
which such Person is a party or a beneficiary.
"Default": any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Designated Senior Indebtedness": (i) the Bank Indebtedness
and (ii) any other Senior Indebtedness which, at the date of
determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are
committed to lend up to, at least $50,000,000 and is specifically
designated by the Borrower in the instrument evidencing or governing
such Senior Indebtedness as "Designated Senior Indebtedness" for
purposes of this Agreement.
"Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof. The terms "Dispose" and "Disposed of" shall have
correlative meanings.
"Disqualified Stock": with respect to any Person, any Capital
Stock, excluding Apollo Preferred Stock (so long as the terms thereof
are not materially less favorable to the Lenders than those in effect
on the Closing Date), that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable
or exercisable) or upon the happening of any event (i) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part, in the case of clauses (i), (ii) or
(iii), on or prior to the 91st day after the Final Maturity Date,
provided that only the portion of Capital Stock which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so
redeemable at the option of the holder thereof prior to such Final
Maturity Date shall be deemed to be Disqualified Stock.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
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"EBITDA": as to any Person, for any period, the Consolidated
Net Income for such period, plus the following to the extent included
in calculating such Consolidated Net Income: (i) income tax expense,
(ii) Consolidated Interest Expense, (iii) depreciation expense (other
than depreciation expense relating to rental merchandise), (iv)
amortization of intangibles and (v) other non-cash charges or non-cash
losses, and minus any gain (but not loss) realized upon the sale or
other disposition of any asset of the Borrower or its Restricted
Subsidiaries (including pursuant to any Sale/Leaseback Transaction)
that is not sold or otherwise disposed of in the ordinary course of
business.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"Eurocurrency Reserves Requirements": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the
maximum rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board of
Governors) maintained by a member bank of such system.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined by the Administrative Agent to be the offered rate for
deposits in Dollars with a term comparable to such Interest Period
that appears on the applicable Telerate Page at approximately 11:00
A.M., London time, two Business Days prior to the beginning of such
Interest Period; provided, however, that if at any time for any reason
such offered rate does not appear on the applicable Telerate Page,
"Eurodollar Base Rate" shall mean, with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, such other
comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent, or, in the absence of
such availability, by the rate per annum equal to the rate at which
the Administrative Agent is offered Dollar deposits at or about 11:00
A.M., New York City time, two Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in respect of
its Eurodollar Loans are then being conducted for delivery on the
first day of such Interest Period for the number of days comprised
therein.
"Eurodollar Borrowing": a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan": a Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Section 2.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
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"Event of Default": any of the events specified in Section 7,
provided that all requirements for the giving of notice, the lapse of
time, or both, and any other conditions, have been satisfied.
"Exchange Act": the Securities Exchange Act of 1934, as
amended.
"Exchange Note": each note issued under the Indenture
delivered pursuant to Section 2.3 and 5.10; collectively, the
"Exchange Notes".
"Exchange Request": as defined in Section 5.10(b).
"Existing Credit Agreement": that certain Credit Agreement,
dated as of November 27, 1996, as amended, among the Borrower,
Comerica Bank, as administrative agent, and others.
"FDIC": the Federal Deposit Insurance Corporation and any
Governmental Authority which succeeds to the powers and functions
thereof.
"Final Maturity Date": the tenth anniversary of the Closing
Date.
"Foreign Subsidiary": any Restricted Subsidiary of the
Borrower that 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 on the date of this Agreement,
including those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such entity
as are approved by a significant segment of the accounting profession.
"Governmental Authority": any nation or government, any
state, province or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantee": any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other
nonfinancial obligation of any other Person, including any such
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or such other obligation of
such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a correlative meaning.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including any bank under any letter of credit) to induce the
creation of which the guaranteeing person has issued a reimbursement,
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counterindemnity or similar obligation, in either case guaranteeing or
in effect guaranteeing any Indebtedness, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly,
including any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided, however, that the term Guarantee
Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be
the lower of (a) an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantor Senior Indebtedness" means, with respect to a
Subsidiary Guarantor, the following obligations, whether outstanding
on the Closing Date or thereafter issued, without duplication: (i) any
Guarantee of the Senior Credit Facility by such Subsidiary Guarantor
and all other Guarantees by such Subsidiary Guarantor of Senior
Indebtedness of the Borrower or Guarantor Indebtedness for any other
Subsidiary Guarantor; and (ii) all obligations consisting of the
principal of and premium, if any, and accrued and unpaid interest
(including interest accruing on or after the filling of any petition
in bankruptcy or for reorganization relating to the Subsidiary
Guarantor regardless of whether post filing interest is allowed in
such proceeding) on, and fees and other amounts owing in respect of,
all other Indebtedness of the Subsidiary Guarantor, unless, in the
instrument creating or evidencing the same or pursuant to which the
same is outstanding, it is expressly provided that the obligations in
respect of such Indebtedness are not senior in right of payment to the
obligations of such Subsidiary Guarantor under the Subsidiary
Guarantee; provided, however, that Guarantor Senior Indebtedness will
not include (1) any obligations of such Subsidiary Guarantor to
another Subsidiary Guarantor or any other Affiliate of the Subsidiary
Guarantor or any such Affiliate's Subsidiaries, (2) any liability for
Federal, state, local, foreign or other taxes owed or owing by such
Subsidiary Guarantor, (3) any accounts payable or other liability to
trade creditors arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such liabilities) or
other current liabilities (other than current liabilities which
constitute Bank Indebtedness or the current portion of any long-term
Indebtedness which would constitute Senior Indebtedness but for the
operation of this clause (3), (4) any Indebtedness, Guarantee or
obligation of such Subsidiary Guarantor that is expressly subordinate
or junior to any other Indebtedness, Guarantee or obligation of such
Subsidiary Guarantor, including any Guarantor Senior Subordinated
Indebtedness and Guarantor Subordinated Obligations of such Subsidiary
Guarantor (5) Indebtedness which is represented by redeemable Capital
Stock or (6) that portion of any Indebtedness that is incurred in
violation of this Agreement. If any Designated Senior Indebtedness is
disallowed, avoided or subordinated pursuant to the provisions of
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Section 548 of Title 11 of the United States Code or any applicable
state fraudulent conveyance law, such Designated Senior Indebtedness
nevertheless will constitute Senior Indebtedness.
"Guarantor Senior Subordinated Indebtedness" means with
respect to a Subsidiary Guarantor, the obligations of such Subsidiary
Guarantor under the Subsidiary Guarantee and any other Indebtedness of
such Subsidiary Guarantor (whether outstanding on the Closing Date or
thereafter incurred) that specifically provides that such Indebtedness
is to rank pari passu in right of payment with the obligations of such
Subsidiary Guarantor under the Subsidiary Guarantee and is not
expressly subordinated by its terms in right of payment to any
Indebtedness of such Subsidiary Guarantor which is not Guarantor
Senior Indebtedness of such Subsidiary Guarantor.
"Guarantor Subordinated Obligation" means, with respect to a
Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor
(whether outstanding on the Closing Date or thereafter incurred) which
is expressly subordinate in right of payment to the obligations of
such Subsidiary Guarantor under its Subsidiary Guarantee pursuant to a
written agreement.
"Hedging Obligations": of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency
Agreement.
"Holder" or "Noteholder": the Person in whose name a Loan
(and any corresponding Note(s)) is registered.
"Incur": issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock
of a Person existing at the time such Person becomes a Restricted
Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Restricted
Subsidiary at the time it becomes a Restricted Subsidiary. Any
Indebtedness issued at a discount (including Indebtedness on which
interest is payable through the issuance of additional Indebtedness)
shall be deemed incurred at the time of original issuance of the
Indebtedness at the initial accreted amount thereof.
"Indebtedness": with respect to any Person on any date of
determination (without duplication):
(i) the principal of Indebtedness of such Person for borrowed money, (ii) the
principal of obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all reimbursement obligations of such
Person, including reimbursement obligations in respect of letters of credit or
other similar instruments (the amount of such obligations being equal at any
time to the aggregate then undrawn and unexpired amount of such letters of
credit or other instruments plus the aggregate amount of drawings thereunder
that have not then been reimbursed), (iv) all obligations of such Person to pay
the deferred and unpaid purchase price of property or services (except Trade
Payables), which purchase price is due more than one year after the date of
placing such property in final service or taking final delivery and title
thereto or the completion of such services, (v) all Capitalized Lease
Obligations and Attributable Debt of such Person, (vi) the redemption,
repayment or other repurchase amount of such Person with respect to any
Disqualified Stock or (if such Person is a Subsidiary of the Borrower) any
Preferred Stock of such Subsidiary, but excluding, in each case, any accrued
dividends (the amount of such obligation to be equal at any time to the maximum
fixed involuntary redemption, repayment or repurchase price for such Capital
Stock, or if such Capital Stock has no fixed price, to the involuntary
redemption, repayment or repurchase price therefor calculated in accordance
with the terms thereof as if then redeemed, repaid or repurchased, and if such
price is based upon or measured
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by the fair market value of such Capital Stock, such fair market value shall be
as determined in good faith by the Board of Directors or the board of directors
of the issuer of such Capital Stock), (vii) all Indebtedness of other Persons
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person; provided, however, that the amount of Indebtedness
of such Person shall be the lesser of (A) the fair market value of such asset
at such date of determination and (B) the amount of such Indebtedness of such
other Persons, (viii) all Indebtedness of other Persons to the extent
Guaranteed by such Person, and (ix) to the extent not otherwise included in
this definition, net Hedging Obligations of such Person (such obligations to be
equal at any time to the termination value of such agreement or arrangement
giving rise to such Hedging Obligation that would be payable by such Person at
such time).
The amount of Indebtedness of any Person at any date
shall be determined as set forth above or otherwise provided in this
Agreement, or otherwise in accordance with GAAP.
"Indenture": the Indenture, substantially in the form of
Exhibit B hereto (with such changes therein as the Borrower may
request and Administrative Agent may approve, such approval not to be
unreasonably withheld), if and when executed and delivered by the
Borrower and a trustee thereunder, as amended, waived, supplemented or
otherwise modified from time to time.
"Initial Loan": as defined in Section 2.1(a).
"Initial Maturity Date": the first anniversary of the Closing
Date.
"Initial Note": as defined in Section 10.6(f).
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to ▇▇▇ at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": with respect to any Loan, the last
day of the Interest Period applicable to the Loan, and in addition,
the date of any prepayment of such Loan.
"Interest Period": (i) prior to the Initial Maturity Date,
(a) as to any Eurodollar Borrowing, the periods commencing on the date
of such Eurodollar Borrowing and ending on the earlier of (A) the
numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is one
month thereafter and (B) the Initial Maturity Date, and (b) as to any
ABR Borrowing, the period commencing on the date of such ABR Borrowing
and ending on the earlier of (A) the last day of each consecutive
calendar month following the Closing Date, (B) the Initial Maturity
Date, and (C) the date of
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any conversion thereof to a Eurodollar Borrowing and (ii) following
the Initial Maturity Date, the period commencing on the Initial
Maturity Date and ending on the last day of each consecutive fiscal
quarter of the Borrower following the Initial Maturity Date, and the
period ending on the Final Maturity Date; provided, however, that if
any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding
Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest
Period.
"Interest Rate Agreement": with respect to any Person, any
interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement (including
derivative agreements or arrangements) as to which such Person is
party or a beneficiary; provided, however, any such agreement entered
into in connection with the Loans shall not be included.
"Investment": in any Person by any other Person means any
direct or indirect advance, loan (other than advances to customers in
the ordinary course of business) or other extension of credit
(including by way of Guarantee or similar arrangement, but excluding
any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by, such Person. If the Borrower or any
Restricted Subsidiary of the Borrower sells or otherwise disposes of
any Capital Stock of any direct or indirect Restricted Subsidiary of
the Borrower such that, after giving effect to any such sale or
disposition, the Borrower no longer owns, directly or indirectly, 100%
of the outstanding Capital Stock of such Restricted Subsidiary, the
Borrower shall be deemed to have made an Investment on the date of any
such sale or disposition equal to the fair market value of the Capital
Stock of such Restricted Subsidiary not sold or disposed of.
"Lenders": as defined in the preamble to this Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and
any capital lease having substantially the same economic effect as any
of the foregoing).
"Loans": as defined in Section 2.1.
"Loan Documents": this Agreement, the Warrant Agreement, the
Warrant Escrow Agreement, the Loan Notes, and the Subsidiary
Guarantees.
"Loan Notes": the collective reference to the Term Notes and
the Initial Notes.
"Loan Participants": as defined in Section 10.6(b).
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"Loan Parties": the collective reference to the Borrower and
each of its Subsidiaries which from time to time is a party to any
Loan Document.
"Material Adverse Effect": a material adverse effect on (a)
the business, property, operations, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole or
(b) the validity or enforceability of this Agreement or any of the
other Loan Documents or the rights or remedies of the Administrative
Agent or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., and its
successors.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Available Cash": from an Asset Disposition means cash
payments received (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment
receivable or otherwise, but only as and when received, but excluding
any other consideration received in the form of assumption by the
acquiring person of Indebtedness or other obligations relating to the
properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i)
all legal, accounting, investment banking, title and recording tax
expenses, commissions and other fees and expenses Incurred (including,
without limitation, fees and expenses of legal counsel, accountants
and financial advisors), and all Federal, state, provincial, foreign
and local taxes required to be paid or accrued as a liability under
GAAP as a consequence of such Asset Disposition, (ii) all payments
made on any Indebtedness that is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon such
assets, or that must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law be repaid out
of the proceeds from such Asset Disposition, (iii) all distributions
and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition
or to any other Person (other than the Borrower or any Restricted
Subsidiary) owning a beneficial interest in the assets disposed of in
such Asset Disposition, and (iv) the deduction of appropriate amounts
to be provided by the seller as a reserve, in accordance with GAAP,
against any liabilities associated with the assets disposed of in such
Asset Disposition and retained by the Borrower or any Restricted
Subsidiary after such Asset Disposition.
"Net Cash Proceeds": with respect to any issuance or sale of
Capital Stock or Indebtedness, the cash proceeds of such issuance or
sale net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage,
consultant and other fees actually Incurred in connection with such
issuance or sale and net of taxes paid or payable as a result of such
issuance or sale.
"Non-Excluded Taxes": as defined in Section 2.10(a).
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"Non-Recourse Debt": Indebtedness (i) as to which neither the
Borrower nor any Restricted Subsidiary (a) provides any Guarantee or
credit support of any kind (including any undertaking, Guarantee,
indemnity, agreement or instrument that would constitute Indebtedness)
or (b) is directly or indirectly liable (as a guarantor or otherwise)
and (ii) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or
both) any holder of any other Indebtedness of the Borrower or any
Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Notes": the Loan Notes and the Exchange Notes, as originally
executed or as subsequently amended from time to time pursuant to the
applicable provisions hereof.
"Officer" means the Chief Executive Officer, President, Chief
Financial Officer, any Vice President, Controller, Secretary or
Treasurer of the Borrower.
"Officer's Certificate" means a certificate signed by one
Officer.
"Original Initial Note": as defined in Section 10.6(f).
"Original Term Note": as defined in Section 10.6(g).
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Loan Document.
"Payment Blockage Period": as defined in Section 8.3.
"Payment Sharing Notice": a written notice from the Borrower
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 Borrower in accordance with the provisions of Section
2.8.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor
thereto).
"Permitted Holders": the collective reference to (i) the
Sponsor, (ii) the ▇▇▇▇▇▇ Persons and (iii) the ▇▇▇▇▇▇ Persons.
"Permitted Investment": an Investment by the Borrower or any
Restricted Subsidiary in (i) a Restricted Subsidiary, the Borrower or
a Person which will, upon the making of such Investment, become a
Restricted Subsidiary; provided, however, that the primary business of
such Restricted Subsidiary is a Related Business; (ii) another Person
if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Borrower or a Restricted
Subsidiary; provided, however, that such Person's primary business is
a Related Business; (iii) Cash Equivalents and Temporary Cash
Investments; (iv) receivables owing to the Borrower or any Restricted
Subsidiary, if created or acquired in the ordinary course of business
and payable or
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dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade
terms as the Borrower or any such Restricted Subsidiary deems
reasonable under the circumstances; (v) securities or other
Investments received as consideration in connection with RTO Facility
Swaps or in sales or other dispositions of property or assets made in
compliance with Section 6.4, (vi) securities or other Investments
received in settlement of debts created in the ordinary course of
business and owing to the Borrower or any Restricted Subsidiary, or as
a result of foreclosure, perfection or enforcement of any Lien, or in
satisfaction of judgments, including in connection with any bankruptcy
proceeding or other reorganization of another Person; (vii)
Investments in existence or made pursuant to legally binding written
commitments in existence on the Closing Date; (viii) Currency
Agreements, Interest Rate Agreements and related Hedging Obligations,
which obligations are Incurred in compliance with Section 6.1; and
(ix) pledges or deposits (A) with respect to leases or utilities
provided to third parties in the ordinary course of business or (B)
otherwise described in the definition of "Permitted Liens".
"Permitted Liens":
(i) Liens for taxes, assessments or other
governmental charges not yet delinquent or the nonpayment of
which in the aggregate would not be reasonably expected to
have a Material Adverse Effect, or that are being contested in
good faith and by appropriate proceedings if adequate reserves
with respect thereto are maintained on the books of the
Borrower or the relevant Subsidiary, as the case may be, in
accordance with GAAP;
(ii) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business in respect of
obligations that are not overdue for a period of more than 60
days or that are bonded or that are being contested in good
faith and by appropriate proceedings;
(iii) pledges, deposits or Liens in connection with
workers' compensation, unemployment insurance and other social
security legislation and/or similar legislation or other
insurance-related obligations (including, without limitation,
pledges or deposits securing liability to insurance carriers
under insurance or self-insurance arrangements);
(iv) pledges, deposits or Liens to secure the
performance of bids, tenders, trade, government or other
contracts (other than for borrowed money), obligations for or
under or in respect of utilities, leases, licenses, statutory
obligations, surety, judgment and appeal bonds, performance
bonds and other obligations of a like nature incurred in the
ordinary course of business;
(v) easements (including 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 interfere with the ordinary
conduct of the business of the Borrower and its Subsidiaries,
taken as a whole;
(vi) Liens existing on, or provided for under written
arrangements existing on, the Closing Date, or (in the case of
any such Liens securing Indebtedness of the
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Borrower or any of its Subsidiaries existing or arising under
written arrangements existing on the Closing Date) securing
any Refinancing Indebtedness in respect of such Indebtedness
so long as the Lien securing such Refinancing Indebtedness is
limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or
distributions in respect thereof) that secured (or under such
written arrangements could secure) the original Indebtedness;
(vii) Liens securing Hedging Obligations incurred in
compliance with Section 6.1;
(viii) Liens arising out of judgments, decrees,
orders or awards in respect of which the Borrower shall in
good faith be prosecuting an appeal or proceedings for review
which appeal or proceedings shall not have been finally
terminated, or the period within which such appeal or
proceedings may be initiated shall not have expired;
(ix) Liens securing (A) Indebtedness incurred in
compliance with clause (i), (ii) or (v) of Section 6.1(b) or
clause (iv) of Section 6.1(b) (other than Refinancing
Indebtedness Incurred in respect of Indebtedness permitted by
Section 6.1(a) thereof) or (B) Bank Indebtedness;
(x) Liens on properties or assets of the Borrower
securing Senior Indebtedness;
(xi) Liens existing on property or assets of a Person
at the time such Person becomes a Subsidiary of the Borrower
(or at the time the Borrower or a Restricted Subsidiary
acquires such property or assets); provided, however, that
such Liens are not created in connection with, or in
contemplation of, such other Person becoming such a Subsidiary
(or such acquisition of such property or assets), and that
such Liens are limited to all or part of the same property or
assets (plus improvements, accessions, proceeds or dividends
or distributions in respect thereof) that secured (or, under
the written arrangements under which such Liens arose, could
secure) the obligations to which such Liens relate;
(xii) Liens on Capital Stock of an Unrestricted
Subsidiary that secure Indebtedness or other obligations of
such Unrestricted Subsidiary;
(xiii) Liens securing the Loans; and
(xiv) Liens securing Refinancing Indebtedness
Incurred in respect of any Indebtedness secured by, or
securing any refinancing, refunding, extension, renewal or
replacement (in whole or in part) of any other obligation
secured by, any other Permitted Liens, provided that any such
new Lien is limited to all or part of the same property or
assets (plus improvements, accessions, proceeds or dividends
or distributions in respect thereof) that secured (or, under
the written arrangements under which the original Lien arose,
could secure) the obligations to which such Liens relate.
"Person": an individual, partnership, corporation, limited
liability company, association, business trust, joint stock company,
trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
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"PIK Interest Amount": the aggregate amount equal to the
amount of interest borne by an Initial Loan or a Term Loan in excess
of 15% per annum.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such corporation, over shares of Capital
Stock of any other class of such corporation.
"Projections": as defined in Section 5.2(c).
"Properties": as defined in Section 3.17(a).
"Purchase Money Obligations": any Indebtedness of the
Borrower or any Restricted Subsidiary incurred to finance the
acquisition, construction or capital improvement of any property or
business (including Indebtedness incurred within 90 days following
such acquisition or construction), including Indebtedness of a Person
existing at the time such Person becomes a Restricted Subsidiary or
assumed by the Borrower or a Restricted Subsidiary in connection with
the acquisition of assets from such Person; provided, however, that
any Lien on such Indebtedness shall not extend to any property other
than the property so acquired or constructed.
"Refinancing Indebtedness": Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant
to any defeasance or discharge mechanism) (collectively, "refinances,"
and "refinanced" shall have a correlative meaning) any Indebtedness
existing on the Closing Date or Incurred in compliance with this
Agreement (including Indebtedness of the Borrower that refinances
Indebtedness of any Restricted Subsidiary (to the extent permitted in
this Agreement) and Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary) including
Indebtedness that refinances Refinancing Indebtedness; provided,
however, that (i) the Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being
refinanced, (ii) the Refinancing Indebtedness has an Average Life at
the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced and
(iii) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to or less than the aggregate
principal amount (or if issued with original issue discount, the
aggregate accreted value) then outstanding of the Indebtedness being
refinanced, plus fees, underwriting discounts, premiums and other
costs and expenses incurred in connection with such Refinancing
Indebtedness; provided further, however, that Refinancing Indebtedness
shall not include (x) Indebtedness of a Restricted Subsidiary that
refinances Indebtedness of the Borrower or (y) Indebtedness of the
Borrower or a Restricted Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary.
"Register": as defined in Section 10.6(d).
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"Regulation U": Regulation U of the Board of Governors as in
effect from time to time.
"Regulation X": Regulation X of the Board of Governors as in
effect from time to time.
"Related Business": any business which is the same as or
related, ancillary or complementary to any of the businesses in which
the Borrower or any of its Restricted Subsidiaries is primarily
engaged on the Closing Date.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA and the regulations thereunder, other than those
events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"Representative": the trustee, agent or representative (if
any) for an issue of Senior Indebtedness.
"Required Lenders": at any time, Lenders holding more than
50% in principal amount of outstanding Loans (or, prior to the Closing
Date, more than 50% of the Commitments).
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any treaty, statute, rule, regulation,
or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer, the
president, chief financial officer or treasurer of the Borrower, but
in any event, with respect to financial matters, the chief financial
officer or president of the Borrower.
"Restricted Payments": as defined in Section 6.2(a).
"Restricted Subsidiary": any Subsidiary of the Borrower other
than an Unrestricted Subsidiary.
"RTO Facility": any facility through which the Borrower or any
of its Subsidiaries conducts the business of renting merchandise to
its customers and any facility through which a franchise of the
Borrower or any of its Subsidiaries conducts the business of renting
merchandise to customers.
"RTO Facility Swap": an exchange of assets (including Capital
Stock of a Subsidiary or the Borrower) of substantially equivalent
fair market value, as conclusively determined in good faith by the
Board of Directors, by the Borrower or a Restricted Subsidiary for one
or more RTO Facilities or for cash, Capital Stock, Indebtedness or
other securities of any Person owning or operating one or more RTO
Facilities and primarily engaged in a Related Business; provided,
however, that any Net Cash Proceeds received by the Borrower or any
Restricted
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Subsidiary in connection with any such transaction must be applied in
accordance with the covenant in Section 6.4.
"Sale/Leaseback Transaction": an arrangement relating to
property now owned or hereafter acquired by the Borrower or a
Restricted Subsidiary whereby the Borrower or such Restricted
Subsidiary transfers such property to a Person and the Borrower or
such Restricted Subsidiary leases it from such Person, other than
leases (x) between the Borrower and a Restricted Subsidiary or (y)
required to be classified and accounted for as capitalized leases for
financial reporting purposes in accordance with GAAP.
"SEC": the Securities and Exchange Commission or any
Governmental Authority which succeeds to the powers and functions
thereof.
"Securities": any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit sharing agreement or arrangement, bonds, debentures,
options, warrants, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"Securities Act": the Securities Act of 1933, as amended from
time to time.
"Seller": Thorn International BV.
"Senior Credit Agreement": (i) the Credit Agreement to be
entered into among the Borrower, Comerica Bank, as documentation
agent, NationsBank, N.A., as syndication agent, The Chase Manhattan
Bank, as Administrative Agent, and the Lenders parties thereto from
time to time, as the same may be amended, supplemented or otherwise
modified from time to time and any guarantees issued thereunder and
(ii) any renewal, extension, refunding, restructuring, replacement, or
refinancing thereof (whether with the original administrative agent or
other agents and Lenders or another administrative agent or agents or
other lenders and whether provided under the original Senior Credit
Agreement or any other agreement or indenture), provided that any such
renewal, extension, refunding, restructuring, replacement, or
refinancing shall be on terms that permit the Borrower to apply the
proceeds of any issuance of Specified Subordinated Indebtedness or
issuance of Capital Stock to prepay the Loans and the Exchange Notes.
"Senior Credit Documents": the Loan Documents (as defined in
the Senior Credit Agreement).
"Senior Credit Facility": the collective reference to the
Senior Credit Agreement, the Senior Credit Documents, any notes and
letters of credit issued pursuant thereto and any guarantee and
collateral agreement, patent and trademark security agreement,
mortgages, letter of credit applications and other security agreements
and collateral documents, and other instruments and documents,
executed and delivered pursuant to or in connection with any of the
foregoing, in each case as the same may be amended, supplemented,
waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or
extended from time to time (whether in whole or in part, whether with
the original
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agent and lenders or other agents and lenders or otherwise, and
whether provided under the original Senior Credit Agreement or
otherwise) (any such refunding, refinancing, restructuring,
replacement, renewal, repayment or increase, a "Refinancing").
Without limiting the generality of the foregoing, the term "Senior
Credit Facility" shall include any agreement (i) changing the maturity
of any Indebtedness incurred thereunder or contemplated thereby, (ii)
adding Subsidiaries of the Borrower as additional borrowers or
guarantors thereunder, (iii) increasing the amount of Indebtedness
incurred thereunder or available to be borrowed thereunder or (iv)
otherwise altering the terms and conditions thereof. Notwithstanding
the foregoing, "Senior Credit Facility" shall not include any
Refinancing or other modification of the Senior Credit Agreement
unless such Refinancing or other modification shall be on terms that
permit the Borrower to apply the proceeds of any issuance of Specified
Subordinated Indebtedness or issuance of Capital Stock to prepay the
Loans and the Exchange Notes.
"Senior Indebtedness": whether outstanding on the Closing
Date or thereafter issued, without duplication, (i) all obligations
consisting of Bank Indebtedness; and (ii) all obligations consisting
of the principal of and premium, if any, and accrued and unpaid
interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Borrower
regardless of whether postfiling interest is allowed in such
proceeding) on, and fees and other amounts owing in respect of, all
other Indebtedness of the Borrower, unless, in the instrument creating
or evidencing the same or pursuant to which the same is outstanding,
it is provided that the obligations in respect of such Indebtedness
are not superior in right of payment to the Loans; provided, however,
that Senior Indebtedness shall not include (1) any obligation of the
Borrower to any Subsidiary or any other Affiliate of the Borrower, or
any such Affiliate's Subsidiaries, (2) any liability for Federal,
state, foreign, local or other taxes owed or owing by the Borrower,
(3) any accounts payable or other liability to trade creditors arising
in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities) or other current liabilities
(other than current liabilities which constitute Bank Indebtedness or
the current portion of any long-term Indebtedness which would
constitute Senior Indebtedness but for the operation of this clause
(3)), (4) any Indebtedness, Guarantee or obligations of the Borrower
that is expressly subordinate or junior to any other Indebtedness,
Guarantee or obligation of the Borrower, (5) Indebtedness which is
represented by Capital Stock or (6) that portion of any Indebtedness
that is incurred in violation of this Agreement. If any Designated
Senior Indebtedness is disallowed, avoided or subordinated pursuant to
the provisions of Section 548 of Title 11 of the United States Code or
any applicable state fraudulent conveyance law, such Designated Senior
Indebtedness nevertheless will constitute Senior Indebtedness.
"Senior Subordinated Indebtedness": the Loans, the Exchange
Notes, and any other Indebtedness of the Borrower that (i)
specifically provides that such Indebtedness is to rank pari passu
with the Loans in right of payment or is otherwise entitled Senior
Subordinated Indebtedness and (ii) is not subordinated by its terms in
right of payment by its terms to any Indebtedness or other obligation
of the Borrower which is not Senior Indebtedness.
"Senior Subordinated Note Indenture": the Indenture entered
into by the Borrower and certain of its Subsidiaries in connection
with the issuance of the Senior Subordinated Notes, together with all
instruments and other agreements entered into by the Borrower or such
Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time.
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"Senior Subordinated Notes": the subordinated notes of the
Borrower issued pursuant to the Senior Subordinated Note Indenture.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent" and "Solvency": when used with respect to any
Person, means that, as of any date of determination, (a) the amount of
the "present fair saleable value" of the assets of such Person will,
as of such date, exceed the amount of all "liabilities of such Person,
contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present
fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the
liability of such Person on its debts as such debts become absolute
and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability
on a "claim", and (ii) "claim" means any (x) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured or (y) right to an equitable remedy
for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Subordinated Indebtedness": Indebtedness of the
Borrower that is subordinated to the Borrower's obligations under the
Senior Credit Facility.
"▇▇▇▇▇▇ Persons": the collective reference to ▇▇▇▇ ▇. ▇▇▇▇▇▇,
any person having a relationship with ▇▇▇▇ ▇. ▇▇▇▇▇▇ by blood,
marriage or adoption not more remote than first cousin and any trust
established for the benefit of any such person.
"Sponsor": Apollo Management IV, L.P., Apollo Investment Fund
IV, L.P., Apollo Overseas Partners IV, L.P. and their Control
Investment Affiliates.
"S&P": Standard & Poor's Ratings Service, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Stated Maturity": with respect to any Security, the date
specified in such Security as the fixed date on which the payment of
principal of such Security is due and payable, including pursuant to
any mandatory redemption provision (but excluding any provision
providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency beyond the
control of the issuer unless such contingency has occurred).
"Subordinated Obligation": any Indebtedness of the Borrower
(whether outstanding on the date of this Agreement or thereafter
Incurred) which is subordinate or junior in right of payment to the
Loans pursuant to a written agreement.
"Subsequent Initial Note": as defined in Section 10.6(f).
"Subsequent Term Note": as defined in Section 10.6(g).
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"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantee" means the Guarantee of the Loans and
Notes by a Subsidiary Guarantor substantially in the form of Exhibit A
hereto.
"Subsidiary Guarantor" means any Restricted Subsidiary which
guarantees the Bank Indebtedness after the Closing Date.
"Successor Company": as defined in Section 6.8.
"Take-Out Banks": one or more investment banks which may be
engaged by the Borrower to publicly sell or privately place the Take-
Out Debt in accordance with Section 5.10.
"Take-Out Debt": unsecured notes or debentures of the
Borrower, subordinated to the prior payment of the Bank Indebtedness
that may be issued by the Borrower after the Closing Date to refinance
the Loans or Exchange Notes.
"▇▇▇▇▇▇ Persons": the collective reference to J. ▇▇▇▇▇▇
▇▇▇▇▇▇, any person having a relationship with J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ by
blood, marriage or adoption not more remote than first cousin (other
than his children) and any trust established for the benefit of any
person having a relationship with J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ by blood, marriage
or adoption not more remote than first cousin.
"Telerate Page" means the display designated as Page 3750 on
the Dow ▇▇▇▇▇ Markets screen (or such other page as may replace such
page on such service for the purpose of displaying the rates at which
Dollar deposits are offered by leading banks in the London interbank
deposit market).
"Temporary Cash Investments" means any of the following: (i)
any investment in direct obligations (x) of the United States of
America or any agency thereof or obligations Guaranteed by the United
States of America or any agency thereof or (y) of any foreign country
recognized by the United States of America rated at least "A" by S&P
or "A1" by Moody's, (ii) investments in time deposit accounts,
certificates of deposit and money market deposits maturing within 180
days of the date of acquisition thereof issued by a bank or trust
company that is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the
United States of America having capital and surplus aggregating in
excess of $250 million (or the foreign currency equivalent thereof)
and whose long-term debt is rated "A" by S&P or "A-1" by Moody's,
(iii) repurchase obligations with a term of not more than 180 days for
underlying securities of the types described in clause (i) or (ii)
above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) Investments in commercial paper, maturing not
more than 180 days after the date of
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acquisition, issued by a corporation (other than an Affiliate of the
Borrower) organized and in existence under the laws of the United
States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any Investment
therein is made of "P-1" (or higher) according to Moody's or "A-1" (or
higher) according to S&P, (v) Investments in securities with
maturities of six months or less from the date of acquisition issued
or fully guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing
authority thereof, and rated at least "A" by S&P or "A" by Moody's,
(vi) any money market deposit accounts issued or offered by a domestic
commercial bank or a commercial bank organized and located in a
country recognized by the United States of America, in each case,
having capital and surplus in excess of $250 million (or the foreign
currency equivalent thereof), or investments in money market funds
complying with the risk limiting conditions of Rule 2a-7 (or any
short-term successor rule) of the SEC, under the Investment Company
Act of 1940, as amended, and (vii) similar short-term investments
approved by the Board of Directors in the ordinary course of business.
"Term Note": as defined in Section 10.6(g).
"Term Loan": as defined in Section 2.1(b).
"Trade Payables": with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary
course of business in connection with the acquisition of goods or
services.
"Transaction Documents": the collective reference to the Loan
Documents, the Senior Credit Documents, the Indenture and the Exchange
Notes.
"Transactions": the collective reference to the Acquisition,
the initial borrowings under this Agreement and the Senior Credit
Facility, and all other transactions relating to the Acquisition or
the financing thereof.
"Transferee": as defined in Section 10.6(f).
"Trustee": as defined in Section 2.5(d).
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or
Borrowing is determined. For purposes hereof, the term "Rate" shall
include the Adjusted LIBO Rate and the Alternate Base Rate.
"Unrestricted Subsidiary": (i) any Subsidiary of the Borrower
that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and
(ii) any Subsidiary of an Unrestricted Subsidiary. At any time after
the Initial Maturity Date, the Board of Directors may designate any
Subsidiary of the Borrower (including any newly acquired or newly
formed Subsidiary of the Borrower) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital
Stock or Indebtedness of, or owns or holds any Lien on any property
of, the Borrower or any Restricted Subsidiary of the Borrower that is
not a Subsidiary of the Subsidiary to be so designated; provided,
however, that either (A) the Subsidiary to be so designated has total
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consolidated assets of $10,000 or less or (B) if such Subsidiary has
consolidated assets greater than $10,000, then such designation would
be permitted under Section 6.2.
The Board of Directors of the Borrower may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if such
designation would not cause a Default. For purposes of making such
determination, all outstanding Investments by the Borrower and its
Restricted Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments at
the time of such designation and will reduce the amount available for
Restricted Payments under paragraph (3) of Section 6.2(b). All such
outstanding Investments will be deemed to constitute Investments in an
amount equal to the greater of the fair market value or the book value
of such Subsidiary at the time of such designation. Such designation
will only be permitted if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Borrower
could Incur at least $1.00 of additional Indebtedness under Section
6.1 and (y) no Default or Event of Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be
evidenced to the Administrative Agent by promptly filing with the
Administrative Agent a copy of the resolution of the Borrower's Board
of Directors giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the
foregoing provisions.
"Voting Stock": of an entity, all classes of Capital Stock of
such entity then outstanding and normally entitled to vote in the
election of directors or all interests in such entity with the ability
to control the management or actions of such entity.
"Warrants": the warrants of the Borrower as described in the
Warrant Agreement.
"Warrant Agreement": the Warrant Agreement, substantially in
the form of Exhibit C, to be executed and delivered by the Borrower.
"Warrant Escrow Agreement": the warrant escrow agreement
dated as of the date hereof between the Borrower and The Chase
Manhattan Bank, as escrow agent with respect to the Warrants.
"Wholly Owned Subsidiary": a Restricted Subsidiary of the
Borrower all the Capital Stock of which (other than directors'
qualifying shares) is owned by the Borrower or another Wholly Owned
Subsidiary.
1.2 Other Definitional Provisions. Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes, any other Loan Document or any certificate or
other document made or delivered pursuant hereto.
(a) As used herein and in any Notes and any other Loan
Document, and any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to the Borrower and its
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
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(b) 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, Annex and Exhibit references are to this
Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF LOANS
2.1 Loans. (a) Subject to the terms and conditions
hereof, each Lender severally agrees to make a loan (individually, an "Initial
Loan", and collectively, the "Initial Loans") to the Borrower on the Closing
Date, in an aggregate principal amount equal to such Lender's Commitment. Any
Commitments not drawn on the Closing Date automatically shall terminate. The
Initial Loans shall initially be ABR Loans, and may be converted into
Eurodollar Loans upon three Business Days' notice to the Administrative Agent.
(b) Subject to the terms and conditions hereof, each
Lender severally agrees, if the Initial Loans have not been repaid or exchanged
for Exchange Notes on the Initial Maturity Date, to convert the then
outstanding principal amount of its Initial Loans into a loan (individually, a
"Term Loan", and collectively, the "Term Loans"; the Initial Loans and the Term
Loans, collectively, the "Loans") to the Borrower, on the Initial Maturity
Date, in an aggregate principal amount equal to the then outstanding principal
amount of the Initial Loans held by such Lender. Upon the making by such
Lender of such Term Loan, each Lender shall cancel on its records a principal
amount of the Initial Loans held by such Lender corresponding to the principal
amount of Term Loans made by such Lender, which corresponding principal amount
of the Initial Loans shall be satisfied by the conversion thereof into Term
Loans in accordance with Section 2.2(b).
(c) Each Lender may at its option make any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the
same time in the event that the Administrative Agent gives notice as provided
in Section 2.6(c). For purposes of the foregoing, Borrowings having different
Interest Periods, regardless of whether they commence on the same date, shall
be considered separate Borrowings.
(d) The failure of any Lender to make the Initial Loan to
be made by it shall not relieve any other Lender of its obligation, if any, to
make its Initial Loan hereunder, but no Lender shall be responsible for the
failure of any other Lender to make the Initial Loan to be made by such other
Lender hereunder.
2.2 Procedure for Borrowing and Conversion. (a) Unless
otherwise agreed by the Administrative Agent, the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, two Business Days
prior to the anticipated Closing Date) requesting that the Lenders make the
Initial Loans on the Closing Date and specifying the amount to be borrowed.
Upon receipt of such notice the Administrative Agent shall promptly notify each
Lender thereof. Not later than 12:00 Noon, New York City time, on the Closing
Date each Lender shall make available to the Administrative Agent at
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its office specified in Section 10.2 an amount in immediately available funds
equal to the Initial Loans to be made by such Lender. The Administrative Agent
shall credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Lenders in immediately available funds.
(b) If the Borrower has not repaid the Initial Loans in
full on or prior to the Initial Maturity Date, then, subject to the right of
any Lender to exchange its Initial Loans for Exchange Notes on the Initial
Maturity Date pursuant to Section 2.3(c), each Lender shall convert the then
outstanding principal amount of the Initial Notes into Term Loans under this
Section 2.2.
2.3 Maturity and Exchange Notes. (a) All the Initial
Loans will mature on the Initial Maturity Date.
(b) All the Term Loans will mature on the Final Maturity
Date.
(c) Each Lender will have the option on or after the
Initial Maturity Date at any time or from time to time to receive Exchange
Notes in exchange for the Term Notes or, on the Initial Maturity Date, the
Initial Loans, of such Lender then outstanding in accordance with Section 5.10
of this Agreement. The principal amount of the Exchange Notes will equal
100.0% of the aggregate principal amount (including any accrued and unpaid
interest not required to be paid in cash) of the Loans for which they are
exchanged. If a Default (but not an Event of Default) shall have occurred and
be continuing on the date of such exchange, any notices given or cure periods
commenced while the Loan was outstanding shall be deemed given or commenced (as
of the actual dates thereof) for all purposes with respect to the Exchange Note
(with the same effect as if the Exchange Note had been outstanding as of the
actual dates thereof).
2.4 Repayment of Loans. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then due and unpaid principal amount of each Loan in accordance
with the terms hereof and of the Loan Notes. The Borrower hereby further
agrees to pay to the Administrative Agent for the account of each Lender
interest on the unpaid principal amount of the 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 Section 2.6.
2.5 Optional and Mandatory Prepayments. (a) The
Borrower may at any time and from time to time prepay the Loans, in whole or in
part, without premium or penalty, upon irrevocable notice delivered to the
Administrative Agent at least ten Business Days prior thereto, which notice
shall specify the date and amount of prepayment; provided, that if a Loan is
prepaid on any day earlier than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section
2.11, and provided, further, that on or after the Initial Maturity Date, any
prepayment shall be applied pro rata among the Loans and Exchange Notes as
provided in Section 2.5(d) below. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments of the Loans and the Exchange
Notes shall be in an aggregate principal amount equal to the lesser of (A)
$1,000,000, or a whole multiple thereof, and (B) the aggregate unpaid principal
amount of the Loans and Exchange Notes, as the case may be. Prepayments of the
Loans and Exchange Notes pursuant to this Section 2.5(a) shall be applied to
the outstanding principal amounts of the Loans and Exchange Notes ratably
according to the outstanding principal amounts of such Loans and Exchange Notes
as provided in Section 2.5(d) below.
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(b) (i) If, subsequent to the Closing Date, the Borrower
or any of its Subsidiaries shall issue any Indebtedness (other than, subject to
Section 5.11, the Take-Out Debt) or Capital Stock, an amount equal to 100% of
the Net Cash Proceeds thereof shall be promptly applied toward the prepayment
of the Loans and the Exchange Notes as provided in Section 2.5(d) below;
provided, however, that such Net Cash Proceeds need not be applied to the
prepayment of the Loans and the Exchange Notes to the extent that such Net Cash
Proceeds are applied pursuant to the Senior Credit Agreement.
(ii) If, subsequent to the Closing Date, the Borrower
or any of its Subsidiaries shall be required to apply any Net Available Cash
pursuant to Section 6.4(a)(iii)(B), an amount equal to the Net Available Cash to
be applied pursuant thereto shall be promptly applied toward the prepayment of
the Loans and the Exchange Notes as provided in Section 2.5(d) below.
(iii) The Borrower shall give the Administrative Agent
(which shall promptly notify each Lender) at least three Business Days' prior
written notice of each prepayment in whole or in part pursuant to this
Agreement setting forth the date and amount thereof.
(c) Accrued and unpaid interest on the amount of any
principal of the Loans prepaid under this Section 2.5 shall be paid to and on
the date of such prepayment.
(d) As promptly as practicable after the Administrative
Agent receives notice of a prepayment pursuant to Section 2.5(b)(iii), the
Administrative Agent, in cooperation with any trustee under the Indenture (the
"Trustee"), shall give notice to each holder of an Exchange Note of the pro
rata amount that would be payable to such holder in respect of such holder's
Exchange Note and the expected date of such prepayment. Any holder of
noncallable Exchange Notes that wishes to accept such prepayment (each, an
"Accepting Holder") shall promptly notify the Trustee and the Administrative
Agent in writing. Payments and offers to prepay the Loans and Exchange Notes
shall be made ratably among the Loans and Exchange Notes. After the
Administrative Agent receives the prepayment amount, such prepayment amount
shall be distributed by the Administrative Agent, in cooperation with the
Trustee, subject to Section 2.8(b), in the following order, with appropriate
adjustments being made to account for the receipt by the Trustee of any
prepayment in respect of the Exchange Notes: First, to the payment of all
amounts described in clauses "First" and "Second" of Section 2.8(b)(i); Second,
to the payment of interest then due and payable on the Loans, Exchange Notes of
Accepting Holders and callable Exchange Notes, ratably among the Lenders, the
Accepting Holders and Holders of callable Exchange Notes in accordance with the
aggregate amount of interest owed to each such Lender, Accepting Holder and
Holder; and Third, to the payment of the principal amount of the Loans, the
Exchange Notes of Accepting Holders and the callable Exchange Notes that is
then due and payable, ratably among the Lenders, the Accepting Holders and
Holders of callable Exchange Notes in accordance with the aggregate principal
amount owed to each such Lender, Accepting Holder and Holder. Amounts offered
to and rejected by any Exchange Note holder shall be ratably applied to prepay
the Loans, the Exchange Notes held by Accepting Holders and callable Exchange
Notes. Any offers to prepay non-callable Exchange Notes shall be made in
accordance with the provisions relating thereto in the Indenture, and with
applicable law, and the distribution of the relevant prepayment amount
hereunder shall be made promptly after the expiration of such offer.
2.6 Interest Rates and Payment Dates. (a) Subject to
the provisions of Section 2.6(c), Initial Loans comprising each Eurodollar
Borrowing shall bear interest for the period from and including the date such
Borrowings are made to, but excluding, the Initial Maturity Date on the unpaid
principal thereof at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin;
provided that, in the event of conditions described in
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clause (c) below, affected Initial Loans shall accrue interest from and
including the date of such event to, but excluding, the Initial Maturity Date
on the unpaid principal thereof at a rate per annum equal to the Alternate Base
Rate from time to time in effect plus the Applicable Margin, less 1%. Initial
Loans comprising ABR Borrowing shall bear interest for the period from and
including the date such Borrowings are made to, but excluding, the Initial
Maturity Date on the unpaid principal thereof at a rate per annum equal to the
Alternate Base Rate from time to time in effect plus the Applicable Margin,
less 1%.
(b) Term Loans shall bear interest for the period from
and including the Initial Maturity Date to, but excluding, the Final Maturity
Date or date of exchange for an Exchange Note on the unpaid principal thereof
at a rate per annum equal to the Adjusted Rate plus the Adjusted Margin.
(c) In the event, and on each occasion, that on the day
prior to the first day of any Interest Period for a Eurodollar Borrowing:
(i) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate
for such Interest Period, or
(ii) the Administrative Agent shall have received notice from
the Required Lenders that the Adjusted LIBO Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. In
the event of any such determination, until the Administrative Agent shall have
advised the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, each Borrowing shall, on the last day of the current
Interest Periods therefor shall be converted to an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
(d) Notwithstanding the foregoing clauses (a), (b), and
(c), the interest rate borne by the Loans shall not exceed 18% per annum. To
the extent the interest on any Loan exceeds a rate of 15% per annum, the
Borrower may elect to pay such excess interest (or portion thereof) by paying
the appropriate PIK Interest Amount through the increase in the principal
amount of the applicable Loans. If requested by any Lender, the Borrower shall
issue Subsequent Initial Notes or Subsequent Term Notes, as the case may be, in
an aggregate principal amount equal to all or a portion of such excess interest
to be paid.
(e) If all or a portion of (i) the principal amount of
any of the Loans, (ii) any interest payable thereon, or (iii) any commitment
fee or other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise, but taking into account any
applicable grace period under Section 7(a)), such Loan and any such overdue
amount shall, without limiting the rights of the Lenders under Section 7, bear
interest at a rate per annum which is (x) in the case of overdue principal, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this subsection plus 2% or (y) in the case of overdue interest,
commitment fees or other amounts due and payable hereunder, the applicable rate
hereunder for any Loan (but without giving effect to the foregoing clause (x))
plus 2%.
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(f) Interest shall be payable in arrears on each Interest
Payment Date and upon the maturity date of the Loan in respect of which any
such interest is accruing, provided that interest accruing pursuant to Section
2.6(e) shall be payable from time to time on demand.
2.7 Computation of Interest and Fees. (a) Interest, fees
and commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to ABR
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on
a Loan resulting from a change in the Alternate Base Rate or the Adjusted LIBO
Rate shall become effective as of the opening of business on the day on which
such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the Borrower a statement showing the quotations used by
the Administrative Agent in determining any interest rate pursuant to Section
2.6(a).
2.8 Pro Rata Treatment and Payments. (a) Except to the
extent otherwise provided herein, each borrowing of Loans by the Borrower 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 Loans borrowed or the Commitments to be reduced.
(b) Whenever any payment received by the Administrative
Agent under this Agreement or any Note or any Loan 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), subject to Section 8, such payment
shall be distributed by the Administrative Agent, in cooperation with
the Trustee, and applied by the Administrative Agent and the Lenders
in the following order, with appropriate adjustment being made to
account for any payment received by the Trustee in respect of the
Exchange Notes: First, to the payment of reasonable fees and expenses
due and payable to the Administrative Agent under and in connection
with this Agreement or any Note Guarantee or due and payable to the
Trustee under the Indenture; Second, to the payment of all reasonable
expenses due and payable under Section 10.5 and any equivalent section
of the Indenture, ratably among the Lenders and the Exchange Note
Holders in accordance with the aggregate amount of such payments owed
to each such Lender or Holder; Third, to the payment of accrued and
unpaid interest then due and payable on the Loans and the Exchange
Notes ratably among the Lenders and the Exchange Note Holders in
accordance with the aggregate amount of interest owed to each Lender
and Exchange Note Holder; and Fourth, to the payment of the principal
amount of the Loans and the Exchange Notes that is then due and
payable, ratably among the Lenders and the Exchange Note Holders in
accordance with the aggregate principal amount owed to each
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such Lender and Exchange Note Holder (and in the case of any Exchange
Notes that are not prepayable, subject to the provisions of Section
2.5(d)); or
(ii) if the Administrative Agent has received a Payment
Sharing Notice that remains in effect, subject to Section 8, 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, in cooperation with the Trustee, and the
Lenders in the following order, with appropriate adjustment being made
to account for any payment received by the Trustee in respect of the
Exchange Notes: First, to the payment of all amounts described in
clauses "First" and "Second" of the foregoing clause (i), in the order
set forth therein; Second, to the payment of the interest accrued and
unpaid on all Loans and Exchange Notes, regardless of whether any such
amount is then due and payable, ratably among the Lenders and the
Exchange Note Holders in accordance with the aggregate accrued
interest plus the aggregate principal amount owed to such Lender and
the Exchange Note Holders; and Third, to the payment of the principal
amount of all Loans and Exchange Notes, regardless of whether any such
amount is then due and payable, ratably among the Lenders and the
Exchange Note Holders in accordance with the aggregate principal
amount owed to each Lender and Exchange Note Holder (and in the case
of any Exchange Notes that are not prepayable, subject to the
provisions of Section 2.5(d)).
(c) All payments (including prepayments) to be made by
the Borrower on account of principal, interest and fees shall be made without
setoff or counterclaim and shall be made prior to 12:00 Noon, New York City
time, on the due date thereof to the Administrative Agent, for the account of
the Lenders at the Administrative Agent's office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly
upon receipt in like funds as received. If any payment hereunder (other than
payments on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension
of any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.
(d) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will
not make the amount that would constitute its share of such borrowing available
to the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this Section
2.8(d) shall be conclusive in the absence of manifest error. If such Lender's
share of such borrowing is not made available to the Administrative Agent by
such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to ABR Loans, on demand, from
the Borrower.
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2.9 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Taxes covered by Section 2.10 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable; provided that the Borrower shall not be required to compensate a
Lender pursuant to this paragraph for any amounts Incurred more than six months
prior to the date that such Lender notifies the Borrower of such Lender's
intention to claim compensation therefor. If any Lender becomes entitled to
claim any additional amounts pursuant to this Section 2.9, it shall promptly
notify (no more frequently than quarterly) the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so
entitled.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor (which may be submitted no more frequently than quarterly), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction; provided that the Borrower shall not
be required to compensate a Lender pursuant to this paragraph for any amounts
Incurred more than six months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; and
provided further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.
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(c) In determining any additional amounts payable
pursuant to this Section 2.9, each Lender will act reasonably and in good faith
and will use averaging and attribution methods which are reasonable, provided
that such Lender's determination of compensation owing under this Section 2.9
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto. Each Lender, upon determining that any additional amounts will
be payable pursuant to this Section 2.9, shall give prompt written notice of
such determination to the Borrower, which notice shall show the basis for
calculation of such additional amounts. The obligations of the Borrower
pursuant to this Section 2.9 shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.10 Taxes. (a) Subject to the last proviso of this
paragraph (a), all payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or any Lender as a result of a
present or former connection between the Administrative Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement, provided, however, that the Borrower shall not be
required to increase any such amounts payable to any Lender with respect to any
Non-Excluded Taxes (i) that are attributable to such Lender's failure to comply
with the requirements of paragraph (d) or (e) of this Section or (ii) that are
United States withholding taxes imposed on amounts payable to such Lender at
the time the Lender becomes a party to this Agreement, except to the extent
that such Lender's assignor (if any) was entitled, at the time of assignment,
to receive additional amounts from the Borrower with respect to such Non-
Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for its own account or for the account of the
relevant Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower
fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as
a result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the
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United States of America (or any state thereof), or any estate or trust that is
subject to federal income taxation regardless of the source of its income (a
"Non-U.S. Lender") shall deliver to the Borrower and the Administrative Agent
(or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) two copies of either U.S. Internal
Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest", a
statement substantially in the form of Exhibit H and a Form W-8, or any
subsequent versions thereof or successors thereto, properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. federal withholding tax on all payments by the Borrower under
this Agreement and the other Loan Documents. Such forms shall be delivered by
each Non-U.S. Lender on or before the date it becomes a party to this Agreement
(or, in the case of any Participant, on or before the date such Participant
purchases the related participation). In addition, each Non-U.S. Lender shall
deliver such forms promptly upon the request of the Borrower as a result of the
obsolescence, inaccuracy or invalidity of any form previously delivered by such
Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer qualified to provide or capable of
providing any previously delivered certificate to the Borrower (or any other
form of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate,
provided that such Lender is legally entitled to complete, execute and deliver
such documentation and in such Lender's judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
(f) If any Lender receives a refund of any Non-Excluded
Taxes or Other Taxes paid or indemnified by the Borrower under this Section
2.10, such Lender shall pay the amount of such refund to the Borrower within 15
days of the date it received such refund.
(g) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.11 Indemnity. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense that such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans
after the Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given
a notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such
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failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included
therein, if any) over (ii) the amount of interest (as reasonably determined by
such Lender) that would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurodollar market. A certificate as to any amounts payable pursuant
to this Section submitted to the Borrower by any Lender shall be conclusive in
the absence of manifest error. This covenant shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.12 Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.9 or
2.10(a) with respect to such Lender, it will use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another lending
office for any Loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section 2.12 shall affect or postpone
any of the obligations of any Borrower or the rights of any Lender pursuant to
Section 2.9 or 2.10(a).
2.13 Replacement Lenders. The Borrower shall be permitted
to replace any Lender which (a) requests reimbursement for amounts owing
pursuant to Section 2.9 or 2.10 or (b) defaults in its obligation to make loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall not have eliminated the
continued need for payment of amounts owing pursuant to Section 2.9 or 2.10,
(iv) the replacement financial institution shall purchase, at par, all Loans
and other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.11 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions
of Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.9 or 2.10, as the case may be,
and (ix) any such replacement shall not be deemed to be a waiver of any rights
which the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender as of the Closing Date
that:
3.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet and statement of operations of the Borrower and its
consolidated Subsidiaries as at, or for the period of four consecutive fiscal
quarters ended, March 31, 1998 (the "Pro Forma Financial Statements"), copies
of which have heretofore been furnished to each Lender, have been prepared
giving effect (as if such events had occurred on such date or at the beginning
of such period, as the case may be) to (i) the consummation of the Acquisition,
(ii) the Loans to be made, the loans under the Senior Credit
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Agreement to be made and the Preferred Stock to be issued on the Closing Date
and the use of proceeds thereof and (iii) the payment of fees and expenses in
connection with the foregoing. The Pro Forma Financial Statements have been
prepared based on the best information available to the Borrower as of the date
of delivery thereof, and present fairly on a pro forma basis the estimated
financial position of Borrower and its consolidated Subsidiaries as at, or for
the period of four consecutive fiscal quarters ended, March 31, 1998, assuming
that the events specified in the preceding sentence had actually occurred at
such date or at the beginning of such period, as the case may be.
(b) The audited consolidated balance sheets of the
Borrower as at December 31, 1995, December 31, 1996 and December 31, 1997, and
the related consolidated statements of operations, stockholder's equity and
cash flows for the fiscal years ended on such dates, reported on by and
accompanied by an unqualified report from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, present fairly
the consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. The unaudited consolidated balance sheet
of the Borrower as at March 31, 1998, and the related unaudited consolidated
statements of operations, stockholder's equity and cash flows for the three-
month period ended on such date, present fairly the consolidated financial
condition of the Borrower as at such date, and the consolidated results of its
operations and its consolidated cash flows for the three-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). The Borrower and its Subsidiaries do
not have any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this
paragraph. During the period from December 31, 1997 to and including the date
hereof there has been no Disposition by the Borrower or any of its Subsidiaries
of any material part of its business or property.
(c) The Borrower has provided to the Lenders the audited
consolidated balance sheets of the Acquired Company as at March 31, 1996, March
31, 1997 and March 31, 1998, and the related consolidated statements of
operations, stockholder's equity and cash flows for the fiscal years ended on
such dates, reported on by and accompanied by an unqualified report from Ernst
& Young LLP (the "Audited Acquired Company Financials"), as adjusted in certain
respects by the Borrower in order to achieve consistency with the Borrower's
customary presentation of financial information. Such adjustments do not
unfairly present the consolidated financial condition of the Acquired Company
as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended, in each
case as reflected in the Audited Acquired Company Financials.
3.2 No Change. Since March 31, 1998 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
3.3 Corporate Existence; Compliance with Law. Each of
the Borrower and its Subsidiaries (a) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (b)
has the corporate power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified and in good
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standing could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable
Obligations. Each Loan Party has the corporate power and authority, and the
legal right, to make, deliver and perform the Loan Documents to which it is a
party and, in the case of the Borrower, to borrow hereunder. Each Loan Party
has taken all necessary corporate action to authorize the execution, delivery
and performance of the Loan Documents to which it is a party and, in the case
of the Borrower, to authorize the borrowings on the terms and conditions of
this Agreement. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person
is required in connection with the Acquisition and the borrowings hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except consents, authorizations,
filings and notices described in Schedule 3.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and
effect. Each Loan Document has been duly executed and delivered on behalf of
each Loan Party party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
3.5 No Legal Bar. The execution, delivery and
performance of this Agreement and the other Loan Documents, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any material Contractual Obligation of the Borrower or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation. No Requirement of Law
or Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
3.6 Litigation. Except as set forth on Schedule 3.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of their respective properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b)
that could reasonably be expected to have a Material Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower
and its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its material real property, and good title to, or a valid leasehold
interest in, all its other material property, and none of such property is
subject to any Lien except as permitted by Section 6.5.
3.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently
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conducted. No material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does the Borrower know of
any valid basis for any such claim. The use of Intellectual Property by the
Borrower and its Subsidiaries does not infringe on the rights of any Person in
any material respect.
3.10 Taxes. Each of the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority to the extent due and payable
(other than any the amount or validity of that are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be); no material tax Lien has been filed, and, to
the knowledge of the Borrower, no claim is being asserted, with respect to any
such tax, fee or other charge.
3.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "buying" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
3.12 Labor Matters. Except as set forth on Schedule 3.6
and as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect: (a) there are no strikes or other labor disputes against the
Borrower or any of its Subsidiaries pending or, to the knowledge of the
Borrower, threatened; (b) hours worked by and payment made to employees of the
Borrower and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from the Borrower or any of its Subsidiaries
on account of employee health and welfare insurance have been paid or accrued
as a liability on the books of the Borrower or the relevant Subsidiary.
3.13 ERISA. Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan has
occurred, and no Lien against the Borrower or any Commonly Controlled Entity
and in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such Plans) did not, as of the last
annual valuation date prior to the date on which this representation is made or
deemed made, exceed the value of the assets of such Plan allocable to such
accrued benefits by a material amount. Neither the Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on
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which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or Insolvent.
3.14 Investment Company Act; Other Regulations. No Loan
Party is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
3.15 Subsidiaries. Except as disclosed to the
Administrative Agent by the Borrower in writing from time to time after the
Closing Date, (a) Schedule 3.15 sets forth the name and jurisdiction of
incorporation of each Subsidiary and, as to each such Subsidiary, the
percentage of each class of Capital Stock owned by any Loan Party and (b) there
are no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or
directors and directors' qualifying shares) of any nature relating to any
Capital Stock of the Borrower or any Subsidiary, except as created by the Loan
Documents.
3.16 Use of Proceeds. The proceeds of the Loans shall be
used to finance a portion of the Acquisition, to repay certain existing
Indebtedness of the Borrower and its Subsidiaries and to pay related fees and
expenses.
3.17 Environmental Matters. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated
by the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could
give rise to liability under, any Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by the
Borrower or any of its Subsidiaries (the "Business"), nor does the
Borrower have knowledge or reason to believe that any such notice will
be received or is being threatened;
(c) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in
a manner or to a location that could give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business;
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(e) there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any
Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are
in compliance, and have in the last five years been in compliance,
with all applicable Environmental Laws, and there is no contamination
at, under or about the Properties or violation of any Environmental
Law with respect to the Properties or the Business; and
(g) neither the Borrower nor any of its Subsidiaries has
assumed any liability of any other Person under Environmental Laws.
3.18 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished by or on behalf of any Loan Party
to the Administrative Agent or the Lenders, or any of them, for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount. As of the date hereof, the representations and
warranties made by the Borrower and, to the Borrower's knowledge, made by the
Seller and Thorn plc, in the Acquisition Documentation are true and correct in
all material respects. There is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Administrative Agent
and the Lenders for use in connection with the transactions contemplated hereby
and by the other Loan Documents.
3.19 Solvency. Each Loan Party is, and after giving
effect to the Acquisition and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and
will continue to be, Solvent.
3.20 Year 2000 Matters. Any reprogramming required to
permit the proper functioning (but only to the extent that such proper
functioning would otherwise be impaired by the occurrence of the year 2000) in
and following the year 2000 of computer systems and other equipment containing
embedded microchips, in either case owned or operated by the Borrower or any of
its Subsidiaries or used or relied upon in the conduct of their business
(including any such systems and other equipment supplied by others), and the
testing of all such systems and other equipment as so reprogrammed, will be
completed by June 30, 1999. The costs to the Borrower and its Subsidiaries
that have not been incurred as of the date hereof for such reprogramming and
testing and for the other reasonably foreseeable consequences to them of any
improper functioning of other computer systems and equipment containing
embedded microchips due to the occurrence of the year 2000 could not reasonably
be expected to result in a Default or Event of Default or to have a Material
Adverse Effect. Except for any reprogramming referred to above, the computer
systems of the Borrower and its
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Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient for the conduct of
their business as currently conducted.
SECTION 4. CONDITIONS PRECEDENT
The agreement of each Lender to make the Initial Loan
requested to be made by it is subject to the satisfaction, immediately prior to
or concurrently with the making of such Loan on the Closing Date, of the
following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower with a counterpart for each Lender,
(ii) for the account of each Lender requesting the same, a Loan Note
conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower (iii) the Warrant Agreement
(including the registration rights agreement attached thereto) and the
Warrant Escrow Agreement, each executed and delivered by a duly
authorized officer of the Borrower and the Borrower shall have
executed and placed in escrow under the Warrant Escrow Agreement
Warrants representing 2% of the Borrower's outstanding common equity
on a fully diluted basis and (iv) the Subsidiary Guarantees, each
executed and delivered by a duly authorized officer of the respective
Subsidiary Guarantors.
(b) Senior Credit Agreement. The Lenders shall have
received a complete and correct copy of the Senior Credit Agreement,
in form and substance satisfactory to the Lenders, and such agreement
shall be in full force and effect and none of the provisions thereof
shall have been amended, waived, supplemented, or otherwise modified
without the prior written consent of the Administrative Agent.
(c) Financings. All conditions precedent for the funding
of the Senior Credit Agreement shall have been satisfied or waived
contemporaneously with the satisfaction of the conditions hereunder
and such funding shall occur contemporaneously with the funding of the
Initial Loans, in each case on terms and conditions satisfactory to
the Administrative Agent, and none of the material terms and
conditions of the Transaction Documents shall have been waived without
the consent of the Administrative Agent.
(d) Acquisition, etc. The following transactions shall
have been consummated prior to or concurrently with the funding of the
initial Loans hereunder:
(i) the Borrower shall have acquired 100% of the
outstanding Capital Stock of the Acquired Company in
accordance with the terms and conditions of the Acquisition
Agreement (the "Acquisition") for a purchase price (including
approximately $27,000,000 of change of control bonuses paid on
the Closing Date on behalf of Thorn plc) not exceeding
$900,000,000;
(ii) the Borrower shall have received at least
$235,000,000 in gross cash proceeds from the issuance of
preferred stock (the "Apollo Preferred Stock") to the Sponsor;
(iii) the transaction fees and expenses to be
incurred in connection with the Acquisition and the financing
thereof shall not exceed $40,000,000; and
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(iv) (i) the Administrative Agent shall have
received satisfactory evidence that the Existing Credit
Agreement shall have been terminated and all amounts
thereunder shall have been paid in full and (ii) satisfactory
arrangements shall have been made for the termination of all
Liens granted in connection therewith.
(e) Pro Forma Financial Statements; Financial Statements.
The Lenders shall have received (i) the Pro Forma Financial Statements
and (ii) the consolidated financial statements of the Borrower and the
Acquired Company referred to in Sections 3.1(b) and 3.1(c).
(f) Approvals. All governmental and material third party
approvals necessary in connection with the Acquisition, the continuing
operations of the Borrower and its Subsidiaries and the transactions
contemplated hereby shall have been obtained and be in full force and
effect, and all applicable waiting periods shall have expired without
any action being taken by any competent authority that would restrain,
prevent or otherwise impose materially adverse conditions on the
Acquisition or the financing contemplated hereby.
(g) Closing Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of
each Loan Party, dated the Closing Date, substantially in the form of
Exhibit D, with appropriate insertions and attachments.
(h) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
P.C., counsel to the Borrower and its Subsidiaries;
(ii) the legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, New York
counsel to the Borrower and its Subsidiaries;
(iii) the legal opinion of ▇▇▇▇▇▇▇, Mag & Fizzell,
P.C., Kansas counsel of the Borrower and its Subsidiaries; and
(iv) to the extent consented to by the relevant
counsel, each legal opinion, if any, delivered in connection
with the Acquisition Agreement, accompanied by a reliance
letter in favor of the Lenders.
Each such legal opinion shall cover such matters incident to the
transactions contemplated by this Agreement as the Administrative
Agent may reasonably require.
(i) Solvency Opinion. The Administrative Agent shall
have received a solvency opinion from Valuation Research Corporation.
(j) Take-Out Debt. The Borrower shall have delivered to
the Administrative Agent a substantially complete initial draft of a
registration statement or a Rule 144A offering memorandum relating to
the Take-Out Debt (including audited financial statements or draft
audited financial statements for the three preceding years, pro forma
financial information and such other financial information as may be
required by applicable law).
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(k) Representations and Warranties. Each of the
representations and warranties made in or pursuant to Section 3 or
that are contained in any other Loan Document shall be true and
correct in all material respects on and as of the date of such Loan as
if made on and as of such date (unless stated to related 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).
(l) No Default. No Default or Event of Default shall
have occurred and be continuing on the Closing Date or after giving
effect to the Initial Loans to be made on the Closing Date.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Loan or Loan Note remains outstanding and unpaid, or any
other amount is owing to any Lender or the Administrative Agent hereunder or
under any of the other Loan Documents (other than the Exchange Notes or the
Indenture), the Borrower shall and shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to the Administrative
Agent with sufficient copies for each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence
of notes thereto).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 Certificates; Other Information. Furnish to the
Administrative Agent with sufficient copies for each Lender (or, in the case of
clause (g), to the relevant Lender):
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(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except
as specified in such certificate;
(b) concurrently with the delivery of any financial
statements pursuant to Section 5.1, (i) a certificate of a Responsible
Officer stating that, to the best of each such Responsible Officer's
knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and (ii) in the case of quarterly or annual financial
statements, (x) a Compliance Certificate containing all information
and calculations necessary for determining compliance by the Borrower
and its Subsidiaries with the provisions of this Agreement referred to
therein as of the last day of the fiscal quarter or fiscal year of the
Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent, a listing of each new
Subsidiary of any Loan Party;
(c) as soon as available, and in any event no later than
45 days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow, projected changes in
financial position and projected income and a description of the
underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with
respect to such fiscal year (collectively, the "Projections"), which
Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on
reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower, a narrative
discussion and analysis of the financial condition and results of
operations of the Borrower and its Subsidiaries for such fiscal
quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the
portion of the Projections covering such periods and to the comparable
periods of the previous year; provided that delivery of the Report on
Form 10-Q filed with the SEC with respect to such fiscal quarter shall
be deemed to satisfy the foregoing requirement;
(e) no later than five Business Days prior to the
effectiveness thereof, copies of substantially final drafts of any
proposed amendment, supplement, waiver or other modification with
respect to the Acquisition Documentation;
(f) within five Business Days after the same are sent,
copies of all financial statements and reports that the Borrower sends
to the holders of any class of its debt securities or public equity
securities and, within five Business Days after the same are filed,
copies of all financial statements and reports that the Borrower may
make to, or file with, the SEC; and
(g) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
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5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.
5.4 Maintenance of Existence; Compliance. (a) (i)
Preserve, renew and keep in full force and effect its corporate existence and
(ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 6.8 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
5.5 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 insurance on all its property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption expense coverage)
as are usually insured against in the same general area by companies engaged in
the same or a similar business.
5.6 Books and Records. Keep proper books of records and
account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities.
5.7 Notices. Promptly give notice to the Administrative
Agent with sufficient copies for each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries or
(ii) litigation, investigation or proceeding that may exist at any
time between the Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not cured or if
reasonably expected to be adversely determined, as the case may be,
could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower
or any of its Subsidiaries in which the amount claimed is $5,000,000
or more and not covered by insurance or in which injunctive or similar
relief is sought which could reasonably be expected to be granted and
which, if granted, could reasonably be expected to have a Material
Adverse Effect;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled
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Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Single
Employer Plan or Multiemployer Plan; and
(e) any development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
5.8 Environmental Laws. Except as could not reasonably
be expected to have a Material Adverse Effect:
(a) Comply in with, and contractually require compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws,
and obtain and comply with and maintain, and contractually require that all
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws.
5.9 Take-Out Financing. Use its commercially reasonable
best efforts to cause to be declared effective a registration statement with
respect to the Take-Out Debt or to effect a private placement thereof pursuant
to Rule 144A or Regulation S of the Securities Act as soon as reasonably
practicable after the Closing Date, provided, that if any Warrants have been
released from escrow, the Borrower's obligations under this sentence may be
satisfied only by causing to be declared effective a registration statement.
The Borrower will give the Administrative Agent prior notice of its intention
to file the registration statement or to effect a private placement of the
Take-Out Debt. The Borrower will notify the Administrative Agent promptly upon
the receipt of any comments from the SEC in connection with the registration
statement, will furnish the Administrative Agent with a copy of any written
comments from the SEC, will respond in a reasonably prompt manner and
appropriately to any such comments and will furnish a copy to the
Administrative Agent of any such response to the SEC.
5.10 Exchange Notes. (a) The Borrower shall, as promptly
as practicable after being requested to do so by the Administrative Agent at
any time after the nine-month anniversary of the Closing Date and in any event
prior to the Initial Maturity Date, select a trustee meeting the requirements
of Section 5.10(c) and enter into the Indenture. The bank or trust company
acting as trustee under the Indenture shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any state thereof, in good standing, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal or state authority and which has a combined capital and surplus of not
less than $50,000,000. The Borrower shall cause the Subsidiary Guarantors in
respect of the Subsidiary Guarantees then in effect to execute and deliver
senior subordinated guarantees of the Exchange Notes on terms similar to those
contained in such Subsidiary Guarantees.
(b) The Borrower shall, on or prior to the third Business
Day following the written request (the "Exchange Request") of any Lender,
execute and deliver to such Lender in accordance
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with the Indenture an Exchange Note bearing interest as set forth therein in
exchange for such Lender's Loan dated the date of the issuance of such Exchange
Note, payable to the order of such Lender, in a principal amount equal to 100%
of the aggregate principal amount (including any accrued and unpaid interest
not required to be paid in cash) of the Loans for which they are exchanged.
Each Exchange Request shall specify the principal amount of the Loans to be
exchanged pursuant to this Section 5.10, which shall be at least $1,000,000 and
in integral multiples of $100,000 in excess thereof and, if such Lender holds
Loan Notes, be accompanied by the Loan Notes to be exchanged for Exchange
Notes. No Exchange Request shall be made more than thirty (30) days prior to
the Initial Maturity Date. Any Loan Notes delivered to Borrower under this
Section 5.10 in exchange for Exchange Notes shall be canceled by the Borrower
and the corresponding amount of the Lender's Loan deemed repaid and the
Exchange Notes shall be governed by and construed in accordance with the terms
of the Indenture.
(c) If Exchange Notes are issued pursuant to the terms
hereof, then the holders of such Exchange Notes shall have the registration
rights set forth in Exhibit E to the Indenture.
5.11 Use of Proceeds of the Take-Out Debt. The Borrower
will use the net proceeds received by it from the sale of the Take-Out Debt to
repay the Loans and the Exchange Notes pursuant to Section 2.5(d).
5.12 Future Subsidiary Guarantors. The Borrower will
cause each Restricted Subsidiary acquired or created by the Borrower that
guarantees payment of the Bank Indebtedness to execute and deliver to the
Administrative Agent a Subsidiary Guarantee pursuant to which such Subsidiary
Guarantor will Guarantee payment of the Loans and Notes on a senior
subordinated basis. Each Subsidiary Guarantee will be limited to an amount not
to exceed the maximum amount that can be Guaranteed by that Subsidiary without
rendering the Subsidiary Guarantee, as it relates to such Subsidiary, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer
or similar laws affecting the rights of creditors generally.
5.13 Further Assurances. Upon the reasonable request of
the Administrative Agent, execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out the
purpose of this Agreement.
SECTION 6. NEGATIVE COVENANTS
So long as any Loan or Loan Note remains outstanding and
unpaid, or any other amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document:
6.1 Limitation on Indebtedness. (a) The Borrower shall
not, and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness; provided, however, that on or after the Initial Maturity Date the
Borrower and its Restricted Subsidiaries may Incur Indebtedness if on the date
thereof the Consolidated Coverage Ratio of the Borrower and its Restricted
Subsidiaries would be greater than (i) 2.25: 1.00, if such Indebtedness is
Incurred on or prior to the first anniversary of the Initial Maturity Date and
(ii) 2.50: 1.00, if such Indebtedness is Incurred thereafter.
(b) Notwithstanding Section 6.1(a), the Borrower and its
Restricted Subsidiaries may Incur the following Indebtedness:
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(i) Indebtedness Incurred pursuant to the Senior Credit
Facility (or, subject to the last sentence of the definition thereof,
any refinancing thereof) in a maximum principal amount not to exceed
$1,003,000,000;
(ii) The Subsidiary Guarantees and Guarantees of
Indebtedness incurred pursuant to paragraph (a) or clause (i) of this
paragraph (b) and Guarantee Obligations of the Borrower in respect of
Indebtedness of franchisees not to exceed $50,000,000 at any one time
outstanding;
(iii) Indebtedness (A) of the Borrower to any Restricted
Subsidiary and (B) of any Wholly Owned Subsidiary to the Borrower or
any Restricted Subsidiary; provided, however, that any subsequent
issuance or transfer of any Capital Stock or any other event that
results in any such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary or any other subsequent transfer of any such
Indebtedness (except to the Borrower or a Wholly Owned Subsidiary)
will be deemed, in each case, an Incurrence of Indebtedness by the
Borrower or such Restricted Subsidiary, as the case may be, in the
amount that remains outstanding following such issuance or transfer of
such securities;
(iv) Indebtedness represented by the Take-Out Debt, any
Indebtedness (other than the Indebtedness described in clauses (i),
(ii) or (iii) above) outstanding on the Closing Date and any
Refinancing Indebtedness Incurred in respect of any Indebtedness
described in this clause (iv) or Incurred pursuant to Section 6.1(a);
(v) Indebtedness of the Borrower or any Restricted
Subsidiary in the form of Capitalized Lease Obligations, Purchase
Money Obligations or Attributable Debt, and any Refinancing
Indebtedness with respect thereto, in an aggregate amount not in
excess of 7.5% of Consolidated Tangible Assets at any one time
outstanding;
(vi) Indebtedness under Hedging Obligations; provided,
however, that such Hedging Obligations are entered into for bona fide
hedging purposes of the Borrower or any Restricted Subsidiary and are
in the ordinary course of business or are required by the Senior
Credit Facility;
(vii) Indebtedness evidenced by letters of credit assumed
in the Transactions or issued in the ordinary course of business to
secure workers' compensation and other insurance coverages; and
(viii) Indebtedness (which may comprise Bank Indebtedness)
in an aggregate principal amount at any one time outstanding not in
excess of $75,000,000.
(c) Notwithstanding the foregoing, neither the Borrower
nor any Restricted Subsidiary shall Incur any Indebtedness under Section 6.1(b)
that permits Refinancing Indebtedness in respect of Indebtedness constituting
Subordinated Obligations if the proceeds thereof are used, directly or
indirectly, to refinance such Subordinated Obligations, unless such Refinancing
Indebtedness shall be subordinated to the Loans at least to the same extent as
such Subordinated Obligations. No Subsidiary Guarantor shall incur any
Indebtedness pursuant to the foregoing paragraph (b) that permits Refinancing
Indebtedness in respect of Indebtedness constituting Guarantor Subordinated
Obligations if the proceeds of such Refinancing Indebtedness are used, directly
or indirectly, to refinance such Guarantor Subordinated Obligations of such
Subsidiary Guarantor unless such Refinancing
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Indebtedness will be subordinated to the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee to at least the same extent as such
Guarantor Subordinated Obligations.
(d) For purposes of determining compliance with, and the
outstanding principal amount of any particular Indebtedness Incurred pursuant
to and in compliance with, this covenant, (i) in the event that Indebtedness
meets the criteria of more than one of the types of Indebtedness described in
paragraph (b) above, the Borrower, in its sole discretion, shall classify such
item of Indebtedness and only be required to include the amount and type of
such Indebtedness in one of such clauses; and (ii) the amount of Indebtedness
issued at a price that is less than the principal amount thereof shall be equal
to the amount of the liability in respect thereof determined in accordance with
GAAP.
(e) The Borrower shall not permit any Unrestricted
Subsidiary to Incur any Indebtedness other than Non-Recourse Debt; provided,
however, if any such Indebtedness ceases to be Non-Recourse Debt, such event
shall be deemed to constitute an incurrence of Indebtedness by the Borrower or
a Restricted Subsidiary.
(f) The Borrower shall not Incur any Indebtedness that is
expressly subordinate in right of payment to any Senior Indebtedness unless
such Indebtedness is Senior Subordinated Indebtedness or is contractually
subordinated in right of payment to Senior Subordinated Indebtedness. No
Subsidiary Guarantor shall Incur any Indebtedness that is expressly subordinate
in right of payment to any Senior Indebtedness of such Subsidiary Guarantor
unless such Indebtedness is Senior Subordinated Indebtedness of such Subsidiary
Guarantor or is contractually subordinated in right of payment to Senior
Subordinated Indebtedness of such Subsidiary Guarantor. Unsecured Indebtedness
is not deemed to be subordinate or junior to Secured Indebtedness merely
because it is unsecured, and Indebtedness that is not guaranteed by a
particular person is not deemed to be subordinate or junior to Indebtedness
that is so guaranteed merely because it is not so guaranteed.
6.2 Limitation on Restricted Payments. (a) On or prior
to the Initial Maturity Date, the Borrower shall not, and shall not permit any
Restricted Subsidiary, directly or indirectly, to (i) declare or pay any
dividend or make any distribution on or in respect of its Capital Stock
(including any payment in connection with any merger or consolidation involving
the Borrower) except (1) dividends or distributions payable in its Capital
Stock (other than Disqualified Stock) and (2) dividends or distributions
payable to the Borrower or any Restricted Subsidiary (and if such Restricted
Subsidiary is not a Wholly Owned Subsidiary, to its other holders of Capital
Stock on no more than a pro rata basis measured by value), (ii) purchase,
redeem, retire or otherwise acquire for value any Capital Stock of the Borrower
held by Persons other than a Restricted Subsidiary or any Capital Stock of a
Restricted Subsidiary held by any Affiliate of the Borrower, other than another
Restricted Subsidiary, in either case other than in exchange for its Capital
Stock (other than Disqualified Stock), (iii) purchase, repurchase, redeem,
defease or otherwise acquire or retire for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment any Subordinated
Obligations (other than the purchase, repurchase, redemption or other
acquisition of Subordinated Obligations in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in each case due
within one year of the date of acquisition) or (iv) make any Investment (other
than a Permitted Investment) in any Person (any such dividend, distribution,
purchase, redemption, repurchase, defeasance, other acquisition, retirement or
Investment being herein referred to as a "Restricted Payment").
(b) After the Initial Maturity Date, the Borrower shall
not, and shall not permit any of its Restricted Subsidiaries, directly or
indirectly, to make any Restricted Payment if at the time the
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Borrower or such Restricted Subsidiary makes such Restricted Payment: (1) a
Default shall have occurred and be continuing (or would result therefrom); or
(2) the Borrower is not able to Incur an additional $1.00 of Indebtedness
pursuant to Section 6.1; or (3) the aggregate amount of such Restricted Payment
and all other Restricted Payments (the amount so expended, if other than in
cash, to be determined in good faith by the Borrower's Board of Directors,
whose determination shall be conclusive and evidenced by a resolution of the
Borrower's Board of Directors) declared or made on or after the Initial
Maturity Date would exceed 25% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from (but excluding) the Closing
Date to (but excluding) the date of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such deficit).
(c) The provisions of Section 6.2(a) (in the case of
clause (v) and clause (vi) below only) and Section 6.2(b) shall not prohibit:
(i) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Capital Stock or Subordinated
Obligations of the Borrower made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the
Borrower (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary or an employee stock ownership plan or
other trust established by the Borrower or any of its Subsidiaries);
provided, however, that such purchase, redemption, repurchase,
defeasance, retirement or other acquisition shall be excluded in
subsequent calculations of the amount of Restricted Payments;
(ii) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent
sale of, Subordinated Obligations of the Borrower that is permitted to
be Incurred pursuant to Section 6.1; provided, however, that such
purchase, redemption, repurchase, defeasance, retirement or other
acquisition shall be excluded in subsequent calculations of the amount
of Restricted Payments;
(iii) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Subordinated Obligations from Net
Available Cash to the extent permitted by Section 6.4; provided,
however, that such purchase, redemption, repurchase, defeasance,
retirement or other acquisition shall be excluded in subsequent
calculations of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section 6.2; provided, however, that such
dividend shall be included in subsequent calculations of the amount of
Restricted Payments;
(v) any purchase or redemption of any shares of Capital
Stock of the Borrower from employees of the Borrower and its
Subsidiaries pursuant to the repurchase provisions under employee
stock option or stock purchase agreements or other agreements to
compensate management employees in an aggregate amount after the
Closing Date not in excess of $1,000,000 in any fiscal year, plus any
unused amounts under this clause (v) from prior fiscal years;
provided, however, that such purchases or redemptions shall be
excluded in subsequent calculations of the amount of Restricted
Payments; and
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(vi) the repurchase of the Borrower's common stock in an
aggregate amount not to exceed the amount by which the proceeds from
the issuance of the Apollo Preferred Stock exceeds $235,000,000;
provided, however, the aggregate amount of repurchases made pursuant
to this clause (vi) shall not exceed $25,000,000.
6.3 Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Borrower shall not, and shall not permit any of
its Restricted Subsidiaries to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of
any such Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock or pay any Indebtedness or other obligations
owed to the Borrower, (ii) make any loans or advances to the Borrower or (iii)
transfer any of its property or assets to the Borrower, except:
(a) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the Closing Date (including,
without limitation, the Senior Credit Facility);
(b) any encumbrance or restriction with respect to a
Restricted Subsidiary (x) pursuant to an agreement relating to any
Indebtedness Incurred by a Restricted Subsidiary prior to the date on
which such Restricted Subsidiary was acquired by the Borrower, or of
another Person that is assumed by the Borrower or a Restricted
Subsidiary in connection with the acquisition of assets from, or
merger or consolidation with, such Person (other than Indebtedness
Incurred as consideration in, or to provide all or any portion of the
funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the
Borrower, or such acquisition of assets, merger or consolidation) and
outstanding on the date of such acquisition, merger or consolidation
or (y) pursuant to any agreement (not relating to any Indebtedness) in
existence when a Person becomes a Subsidiary of the Borrower or when
such agreement is acquired by the Borrower or any Subsidiary thereof,
that is not created in contemplation of such Person becoming such a
Subsidiary or such acquisition (for purposes of this paragraph (b), if
another Person is the Successor Company, any Subsidiary or agreement
thereof shall be deemed acquired or assumed, as the case may be, by
the Borrower when such Person becomes the Successor Company);
(c) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement (a "Refinancing
Agreement") effecting a refinancing of Indebtedness Incurred pursuant
to, or that otherwise extends, renews, refinances or replaces, an
agreement referred to in Section 6.3(a) or (b) or this Section 6.3(c)
or contained in any amendment to an agreement referred to in Section
6.3(a) or (b) or this Section 6.3(c) (an "Initial Agreement") or
contained in any amendment to an Initial Agreement; provided, however,
that the encumbrances and restrictions contained in any such
Refinancing Agreement or amendment are no less favorable to the
Lenders taken as a whole than encumbrances and restrictions contained
in the Initial Agreement or Agreements to which such Refinancing
Agreement or amendment relates;
(d) any encumbrance or restriction (A) that restricts in
a customary manner the subletting, assignment or transfer of any
property or asset that is subject to a lease, license or similar
contract, or the assignment or transfer of any lease, license or other
contract, (B) by virtue of any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any property or assets of
the Borrower or any Restricted Subsidiary not otherwise prohibited by
this Agreement, (C) contained in mortgages, pledges or other security
agreements securing Indebtedness of a Restricted Subsidiary to the
extent such encumbrance or restrictions restrict
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the transfer of the property subject to such mortgages, pledges or
other security agreements or (D) pursuant to customary provisions
restricting dispositions of real property interests set forth in any
reciprocal easement agreements of the Borrower or any Restricted
Subsidiary;
(e) any restriction with respect to a Restricted
Subsidiary (or any of its property or assets) imposed pursuant to an
agreement entered into for the direct or indirect sale or disposition
of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary (or the property or assets that are subject to
such restriction) pending the closing of such sale or disposition; and
(f) any encumbrance or restriction on the transfer of
property or assets required by any regulatory authority having
jurisdiction over the Borrower or any Restricted Subsidiary or any of
their businesses.
6.4 Limitation on Asset Dispositions. (a) The Borrower
shall not, and shall not permit any of its Restricted Subsidiaries to, make any
Asset Disposition unless: (i) the Borrower or such Restricted Subsidiary
receives consideration at the time of such Asset Disposition at least equal to
the fair market value, as determined in good faith by the Borrower's senior
management or the Board of Directors, whose determination shall be conclusive
(including as to the value of all non-cash consideration), of the shares and
assets subject to such Asset Disposition; (ii) prior to the Initial Maturity
Date, at least 90%, and on or after the Initial Maturity Date, at least 75% of
the consideration therefor received by the Borrower or such Restricted
Subsidiary is in the form of cash or Cash Equivalents; and (iii) an amount
equal to 100% of the Net Available Cash from such Asset Disposition is applied
by the Borrower (or such Restricted Subsidiary, as the case may be) (A) first,
pursuant to the Senior Credit Agreement and, to the extent the Borrower or any
Restricted Subsidiary is required by the terms of any other Senior
Indebtedness, to prepay, repay or purchase such Senior Indebtedness; and (B)
second, to the extent of the balance of such Net Available Cash after
application in accordance with clause (A), to prepay or redeem the Loans and
Exchange Notes at par plus accrued and unpaid interest, if any, thereon in
accordance with Section 2.5(d); provided, however, that, in connection with any
prepayment, repayment or purchase of Indebtedness pursuant to clause (iii) (A),
the Borrower or such Restricted Subsidiary shall retire such Indebtedness and
shall cause the related loan commitment (if any) to be permanently reduced in
an amount equal to the principal amount so prepaid, repaid or purchased.
(b) Notwithstanding the foregoing provisions, the
Borrower and its Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance herewith except to the extent that the aggregate
Net Available Cash from all Asset Dispositions which are not applied in
accordance with this covenant exceeds (i) on or prior to the Initial Maturity
Date, $1,000,000 and (ii) after the Initial Maturity Date, $2,000,000.
(c) For the purposes of this Section 6.4, the following
will be deemed to be cash: (w) the assumption of Indebtedness of the Borrower
(other than Disqualified Stock of the Borrower) or any Restricted Subsidiary
and the release of the Borrower or such Restricted Subsidiary from all
liability on such Indebtedness in connection with such Asset Disposition, (x)
Indebtedness of any Restricted Subsidiary that is no longer a Restricted
Subsidiary as a result of such Asset Disposition, to the extent that the
Borrower and each other Restricted Subsidiary is released from any Guarantee of
such Indebtedness in connection with such Asset Disposition, (y) securities
received by the Borrower or any Restricted Subsidiary from the transferee that
are promptly converted by the Borrower or such
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Restricted Subsidiary into cash, and (z) consideration consisting of
Indebtedness of the Borrower or any Restricted Subsidiary.
6.5 Limitation on Liens. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, create, Incur, assume or
suffer to exist any Liens of any kind against or upon any of its property or
assets, or any proceeds therefrom, unless (i) in the case of Liens securing
Indebtedness that is expressly subordinate or junior in right of payment to the
Loans, the Loans are secured by a Lien on such property, assets or proceeds
that is senior in priority to such Liens and (ii) in all other cases, the Loans
are equally and ratably secured, except for (A) Liens existing as of the
Closing Date and any extensions, renewals or replacements thereof, (B) Liens
securing Senior Indebtedness, (C) Liens securing the Loans, (D) Liens of the
Borrower or a Wholly Owned Subsidiary of the Borrower on assets of any
Subsidiary of the Borrower, (E) Liens securing Indebtedness which is Incurred
to refinance Indebtedness which has been secured by a Lien permitted under this
Agreement and which has been Incurred in accordance with the provisions of this
Agreement; provided, however, that such Liens do not extend to or cover any
property or assets of the Borrower or any of its Restricted Subsidiaries not
securing the Indebtedness so refinanced, and (F) Permitted Liens.
6.6 Limitation on Affiliate Transactions. (a) The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or conduct any transaction or series of
transactions (including the purchase, sale, lease or exchange of any property
or the rendering of any service) with any Affiliate of the Borrower (an
"Affiliate Transaction") on terms (i) that taken as a whole are less favorable
to the Borrower or such Restricted Subsidiary, as the case may be, than those
that could be obtained at the time of such transaction in arm's-length dealings
with a Person who is not such an Affiliate and (ii) that, in the event such
Affiliate Transaction involves an aggregate amount in excess of $1,000,000, are
not in writing and have not been approved by a majority of the members of the
Board of Directors having no material personal financial interest in such
Affiliate Transaction or, in the event there are no such members, as to which
the Borrower has not obtained a Fairness Opinion (as hereinafter defined). In
addition, any such transaction involving aggregate payments or other transfers
by the Borrower and its Restricted Subsidiaries (i) on or prior to the Initial
Maturity Date in excess of $2,500,000 and (ii) after the Initial Maturity Date
in excess of $5,000,000 will also require an opinion (a "Fairness Opinion")
from an independent investment banking firm or appraiser, as appropriate, of
national prominence, to the effect that the terms of such transaction are fair
to the Borrower or such Restricted Subsidiary, as the case may be, from a
financial point of view.
(b) The foregoing provisions of Section 6.6(a) shall not
prohibit (i) any Restricted Payment permitted to be made pursuant to Section
6.2 or any Permitted Investment, (ii) the performance of the Borrower's or any
Restricted Subsidiary's obligations under any employment contract, collective
bargaining agreement, agreement for the provision of services, employee benefit
plan, related trust agreement or any other similar arrangement heretofore or
hereafter entered into in the ordinary course of business, (iii) payment of
compensation, performance of indemnification or contribution obligations, or
any issuance, grant or award of stock, options or other securities, to
employees, officers or directors in the ordinary course of business, (iv) any
transaction between the Borrower and a Restricted Subsidiary or between
Restricted Subsidiaries, (v) the Transactions and the incurrence and payment of
all fees and expenses payable in connection therewith as contemplated by
Section 4(d)(iv), (vi) any other transaction arising out of agreements in
existence on the Closing Date, and (vii) transactions with suppliers or other
purchasers or sellers of goods or services, in each case in the ordinary course
of business and on terms no less favorable to the Borrower or the Restricted
Subsidiary, as the case may be, than those that could be obtained at such time
in arm's-length dealings with a Person who is not an Affiliate.
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6.7 Change of Control. (a) Upon a Change of Control on
or after the Initial Maturity Date, each Holder shall have the right to require
the Borrower to repurchase all or any part of such Holder's Loans at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest on the
relevant interest payment date), such repurchase to be made in accordance with
Section 6.7(b).
(b) Within thirty days following any Change of Control on
or after the Initial Maturity Date, the Borrower shall mail a notice to each
Holder with a copy to the Administrative Agent stating:
(i) that a Change of Control has occurred and that such
Holder has the right to require the Borrower to purchase such Holder's
Loans at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of Holders of record on a record
date to receive interest on the relevant interest payment date);
(ii) the circumstances, facts and relevant financial
information related thereto;
(iii) the repurchase date (which shall be no earlier than
thirty days nor later than ninety days from the date such notice is
mailed); and
(iv) the procedures determined by the Borrower, consistent
with this Section, that a Holder must follow in order to have its
Loans purchased.
(c) Holders electing to have a Loan purchased will be
required to give notice in writing to the Borrower at the address specified in
Section 10.2 at least three Business Days prior to the purchase date. Each
Holder will be entitled to withdraw its election if the Borrower receives, not
later than one Business Day prior to the purchase date, a telegram, telex,
facsimile transmission or letter from such Holder setting forth the name of
such Holder, the principal amount of the Loan which was to be purchased and a
statement that such Holder is withdrawing its election to have such Loan
purchased.
(d) On the purchase date, the Borrower shall pay the
purchase price plus accrued and unpaid interest, if any, to the Holders
entitled thereto upon surrender of any Loan Notes for the Loans to be
purchased.
(e) The Borrower shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of Loans and
Notes pursuant to this Section. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section, the
Borrower shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section by
virtue thereof.
6.8 Merger, Consolidation, etc. (a) Prior to the Initial
Maturity Date, neither the Borrower nor any of its Subsidiaries may merge into
or consolidate with any other Person, or permit any other Person to merge into
or consolidate with it, or sell, transfer, lease or otherwise dispose of (in
one transaction or in a series of transactions) all or any substantial part of
its assets (whether now owned or hereafter acquired) or purchase, lease or
otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other Person, except that if at the time
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thereof and immediately after giving effect thereto no Default or Event of
Default shall have occurred and be continuing or would result therefrom, (i)
any Wholly Owned Subsidiary may merge into or consolidate with the Borrower in
a transaction in which the Borrower is the surviving corporation, (ii) any
Wholly Owned Subsidiary may merge into or consolidate with any other Wholly
Owned Subsidiary in a transaction in which the surviving entity is a Wholly
Owned Subsidiary and no Person other than the Borrower or a Wholly Owned
Subsidiary receives any consideration and (iii) the Borrower may make any
Permitted Investment, except that, if any Permitted Investment is structured as
a merger with or into the Borrower, the Borrower shall be the continuing or
surviving corporation, or structured as a merger with or into any Wholly Owned
Subsidiary, such Wholly Owned Subsidiary shall be the continuing or surviving
corporation.
(b) After the Initial Maturity Date, the Borrower shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation, partnership, trust, or
limited liability company organized and existing under the laws of the
United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Borrower) shall
expressly assume, by an assumption agreement supplemental hereto,
executed by the Successor Company and delivered to the Administrative
Agent, in form satisfactory to the Administrative Agent, all the
obligations of the Borrower under the Notes, the Loans and this
Agreement;
(ii) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default or Event of
Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction,
the Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 6.1; and
(iv) the Borrower shall have delivered to the
Administrative Agent a certificate of a Responsible Officer and an
opinion of counsel to Borrower, each stating that such consolidation,
merger, transfer or lease and such assumption agreement (if any)
comply with this Agreement.
The Successor Company shall succeed to, and be substituted
for, and may exercise every right and power of, the Borrower under this
Agreement, but in the case of a lease of all or substantially all its assets,
the Borrower shall not be released from the obligation to pay the principal of
and interest on the Loans and the Notes.
Notwithstanding clauses (ii) and (iii) of the first sentence
of this Section 6.8(b): (1) any Restricted Subsidiary of the Borrower may
consolidate with, merge into or transfer all or part of its properties and
assets to the Borrower; and (2) the Borrower may merge with an Affiliate
incorporated solely for the purpose of reincorporating the Borrower in another
jurisdiction to realize tax or other benefits.
6.9 Limitation on Lines of Business. The Borrower shall
not, and shall not permit any Restricted Subsidiary to, engage in any business
other than a Related Business.
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6.10 Limitation on Sale/Leaseback Transactions. The
Borrower shall not, and shall not permit any Restricted Subsidiary to, enter
into any Sale/Leaseback Transaction with respect to any property unless (i) the
Borrower or such Restricted Subsidiary would be entitled to Incur Indebtedness
in an amount equal to the Attributable Debt with respect to such Sale/Leaseback
Transaction pursuant to Section 6.1, (ii) the net proceeds received by the
Borrower or such Restricted Subsidiary in connection with such Sale/Leaseback
Transaction are at least equal to the fair value (as determined in good faith
by the Board of Directors) of such property and (iii) the transfer of such
property is permitted by, and the Borrower or such Restricted Subsidiary
applies the proceeds of such transaction in compliance with, Section 6.4.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms thereof or hereof, or shall
fail to redeem or purchase Loans when required pursuant to this
Agreement or any Note, in each case whether or not such payment,
redemption or purchase shall be prohibited by Section 8; or the
Borrower shall fail to 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, in each case, whether or not such payment shall be prohibited
by Section 8; or
(b) any representation or warranty made or deemed made by
the Borrower or any other Loan Party herein or in any other Loan
Document or which is contained in any certificate, document, or
financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall
prove to have been inaccurate in any material respect on or as of the
date made or deemed made; or
(c) the Borrower or any other Loan Party shall default in
the observance or performance of any agreement contained in clause (a)
or (b) of Section 5.1 (with respect to the Borrower only), Section
5.7(a), 5.9, 5.10, 5.11 or Section 6; or
(d) the Borrower or any other Loan Party shall default in
the observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section 7) and such default shall
continue unremedied for a period of 30 days after notice to the
Borrower from the Administrative Agent or the Required Lenders; or
(e) Indebtedness of the Borrower or any Loan Party is not
paid within any applicable grace period after maturity or is
accelerated by the holders thereof because of a default or other event
or condition thereunder prior to its stated maturity and the total
amount of such Indebtedness unpaid or accelerated exceeds $5,000,000
or its foreign currency equivalent at the time; or
(f) (i) the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent,
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or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or the Borrower or any of its
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or
any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in the
entry of an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any
of its Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due; or
(g) (i) any Person shall engage in any non-exempt
"prohibited transaction" (as defined in Section 406 and 408 of ERISA
or Section 4975 of the Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or
not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence under Title IV of ERISA to
have a trustee appointed, or a trustee shall be appointed under Title
IV of ERISA, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment
of a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title
IV of ERISA, (iv) any Single Employer Plan shall terminate in a
"distress termination: or "involuntary termination", as such terms are
defined in Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(h) one or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance as to
which the relevant insurance company has acknowledged coverage) of
$5,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) there shall have occurred a Change in Control prior
to the Initial Maturity Date; or
(j) any Subsidiary Guarantee shall cease, for any reason
(other than, (i) as a result of a merger of such Subsidiary into the
Borrower in accordance with the terms of this Agreement or (ii) as a
result of a release pursuant to Section 3 of the Subsidiary
Guarantee), to
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be in full force and effect (other than pursuant to the terms hereof
or thereof) or any Subsidiary Guarantor shall so assert in writing;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii) or (iii) of paragraph (f) of this Section with respect to
the Borrower, the Loans (with accrued interest thereon) and all other amounts
owing under this Agreement shall immediately become due and payable, and (B) if
such event is any other Event of Default, with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind (other
than notices expressly required pursuant to this Agreement and any other Loan
Document) are hereby expressly waived by the Borrower.
SECTION 8. SUBORDINATION
8.1 Agreement To Subordinate. The Borrower agrees, and
each Lender agrees, that the Loans and Indebtedness evidenced by the Notes are
subordinated in right of payment, to the extent and in the manner provided in
this Section 8, to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness and that the subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. The Loans shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Borrower and only indebtedness of the Borrower that is Senior Indebtedness
shall rank senior to the Loans in accordance with the provisions set forth
herein.
8.2 Liquidation; Dissolution; Bankruptcy. Upon any
payment or distribution of the assets of the Borrower to creditors upon a total
or partial liquidation or a total or partial dissolution of the Borrower or in
a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Borrower or its property:
(1) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents of the Senior
Indebtedness (including interest after, or which would accrue but for,
the commencement of any proceeding at the rate specified in the
applicable Senior Indebtedness, whether or not a claim for such
interest would be allowed) before Lenders shall be entitled to receive
any payment of principal of, or premium, if any, or interest on the
Loans; and
(2) until the Senior Indebtedness is paid in full in cash
or Cash Equivalents, any payment or distribution to which Lenders
would be entitled but for this Section 8 shall be made to holders of
Senior Indebtedness as their interests may appear.
8.3 Default on Senior Indebtedness. The Borrower may not
pay the principal of, premium, if any, or interest on, the Loans or make any
deposit pursuant to any defeasance provision or otherwise purchase or retire
any Loans (collectively, "pay the Loans") if (i) any Senior Indebtedness is not
paid when due or (ii) any other default on Senior Indebtedness occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with its
terms unless, in either case, (x) the default has been cured or waived in
writing and any such acceleration has been rescinded in writing or (y) such
Senior Indebtedness has been paid in full in cash or Cash Equivalents;
provided, however, that the
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Borrower may pay the Loans without regard to the foregoing if the Borrower and
the Administrative Agent receive written notice approving such payment from the
Representative of the Designated Senior Indebtedness with respect to which
either of the events set forth in (i) or (ii) above has occurred and is
continuing. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Borrower may not pay the Loans for a period (a "Payment Blockage
Period") commencing upon the receipt by the Borrower and the Administrative
Agent of written notice (a "Blockage Notice") of such default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the
Administrative Agent and the Borrower from the Person or Persons who gave such
Blockage Notice, (ii) by repayment in full of such Designated Senior
Indebtedness or (iii) because the default giving rise to such Blockage Notice
is no longer continuing). Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in the
first sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Borrower may resume
payments on the Loans after such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness during
such period; provided, however, that if any Blockage Notice within such 360-day
period is given by or on behalf of any holders of Designated Senior
Indebtedness (other than the Bank Indebtedness), the Representative of the Bank
Indebtedness may give another Blockage Notice within such period; provided
further, however, that in no event may the total number of days during which
any Payment Blockage Period or Periods is in effect exceed 179 days in the
aggregate during any 360 consecutive day period.
8.4 Acceleration of Payment of Loans. If payment of the
Loans is accelerated because of an Event of Default, the Borrower and the
Administrative Agent shall promptly notify the holders of the Designated Senior
Indebtedness of the acceleration. If any Designated Senior Indebtedness is
outstanding, the Borrower may not pay the Loans until five Business Days after
the Representative of the Designated Senior Indebtedness receives notice of
such acceleration and, thereafter, may pay the Loans only if this Section 8
otherwise permits the payment at that time.
8.5 When Distribution Must Be Paid Over. If a
distribution is made to the Lenders that because of this Section 8 should not
have been made to them, the Lenders who receive the distribution shall hold it
in trust for holders of Senior Indebtedness and pay it over to them as their
interests may appear.
8.6 Subrogation. After all Senior Indebtedness is paid
in full and until the Loans are paid in full, the Lenders shall be subrogated
to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness. A distribution made under this Section 8 to
holders of Senior Indebtedness that otherwise would have been made to the
Lenders is not, as between the Borrower and the Lenders, a payment by the
Borrower on Senior Indebtedness.
8.7 Relative Rights. This Section 8 defines the relative
rights of the Lenders and holders of Senior Indebtedness. Nothing in this
Agreement shall:
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(1) impair, as between the Borrower and the Lenders, the
obligation of the Borrower, which is absolute and unconditional, to
pay principal of, premium, if any, and interest on the Loans in
accordance with the terms of this Agreement; or
(2) prevent the Administrative Agent or any Lender from
exercising its available remedies upon a Default, subject to the
rights of holders of Senior Indebtedness to receive distributions
otherwise payable to Lenders.
8.8 Subordination May Not Be Impaired By the Borrower.
No right of any holder of Senior Indebtedness to enforce the subordination of
the Loans and the Indebtedness evidenced by the Notes shall be impaired by any
act or failure to act by the Borrower or by its failure to comply with this
Agreement.
8.9 Rights of Administrative Agent. Notwithstanding
Section 8.3, the Administrative Agent may continue to make payments on the
Loans and shall not be charged with knowledge of the existence of facts that
would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Responsible Officer of the
Administrative Agent receives notice to it that payments may not be made under
this Section 8. The Borrower, a Representative or a holder of Senior
Indebtedness may give the notice; provided, however, that, if an issue of
Senior Indebtedness has a Representative, only the Representative may give the
notice.
The Administrative Agent in its individual or any other
capacity may hold Senior Indebtedness with the same rights it would have if it
were not the Administrative Agent. The Administrative Agent shall be entitled
to all the rights set forth in this Section 8 with respect to any Senior
Indebtedness that may at any time be held by it, to the same extent as any
other holder of Senior Indebtedness; and nothing in Section 9 shall deprive the
Administrative Agent of any of its rights as such holder. Nothing in this
Section 8 shall apply to claims of, or payments to, the Administrative Agent
under or pursuant to Section 9.7.
8.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
8.11 Section 8 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Loans by
reason of any provision in this Section 8 shall not be construed as preventing
the occurrence of a Default. Nothing in this Section 8 shall have any effect
on the right of the Lenders or the Administrative Agent to accelerate the
maturity of the Loans, subject to Section 8.4.
8.12 Administrative Agent Entitled to Rely. Upon any
payment or distribution pursuant to this Section 8, the Administrative Agent
and the Lenders shall be entitled to rely (i) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature referred
to in Section 8.2 are pending, (ii) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the
Administrative Agent or to the Lenders or (iii) upon the Representatives for
the holders of Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Senior Indebtedness and other Indebtedness of the Borrower, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Section 8. In the event that the
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Administrative Agent determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Section 8, the
Administrative Agent may request such Person to furnish evidence to the
reasonable satisfaction of the Administrative Agent as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Section 8, and, if such evidence is not
furnished, the Administrative Agent may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Section 9 shall be applicable to all actions or
omissions of actions by the Administrative Agent pursuant to this Section 8.
8.13 Administrative Agent to Effectuate Subordination.
Each Lender hereby authorizes and directs the Administrative Agent on such
Lender's behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Lenders and the holders
of Senior Indebtedness as provided in this Section 8 and appoints the
Administrative Agent as attorney-in-fact for any and all such purposes.
8.14 Administrative Agent Not Fiduciary for Lenders of
Senior Indebtedness. The Administrative Agent shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to the Lenders
or the Borrower or any other Person, money or assets to which any holders of
Senior Indebtedness shall be entitled by virtue of this Section 8 or otherwise.
8.15 Reliance by Lenders of Senior Indebtedness on
Subordination Provisions. Each Lender acknowledges and agrees, that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness, whether such
Senior Indebtedness was created or acquired before or after the issuance of the
Loans, to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Lender
under the Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of the Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
in this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care.
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9.3 Exculpatory Provisions. Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing result from
its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
9.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Loans as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders (or, if so
specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be Incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has received notice
from a Lender or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
if so specified by this Agreement, all Lenders); provided that unless and until
the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it and
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that no act by the Administrative Agent hereinafter taken, including any review
of the affairs of the Borrower or any Affiliate of the Borrower, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower and its Affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower or any Affiliate
of the Borrower which may come into the possession of the Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought under this Section 9.7 (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with their Commitment Percentages immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, Incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements which result from the Administrative
Agent's gross negligence or willful misconduct. The Administrative Agent shall
have the right to deduct any amount owed to it by any Lender under this
subsection from any payment made by it to such Lender hereunder. The
agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder. With respect
to the Loans made or renewed by it, the Administrative Agent shall have the
same rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
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9.9 Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon ten days' notice to the Lenders
and the Borrower. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall (unless an Event of Default under Section 7(a) or
Section 7(f) with respect to the Borrower shall have occurred and be
continuing) be subject to the approval of the Borrower (which approval shall
not be unreasonably withheld or delayed), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term "Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor
agent has accepted appointment as Administrative Agent by the date that is 30
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor
any Loan Note, nor any Subsidiary Guarantee, nor any terms hereof or thereof,
may be amended, supplemented or modified except in accordance with the
provisions of this Section 10.1. The Required Lenders may, or, with the
written consent of the Required Lenders, the Administrative Agent may, from
time to time, (a) enter into with the Borrower and each Loan Party which is a
party to the relevant Loan Documents written amendments, supplements or
modifications hereto and to the Loan Documents for the purpose of adding any
provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of any Loan Party hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement, or modification shall (i) (A)
forgive the principal amount or extend the final scheduled date of maturity of
any Loan or extend the scheduled date of any amortization payment in respect of
any Loan, (B) reduce the stated rate of any interest or fee payable hereunder
or extend the scheduled date of any payment thereof or increase the aggregate
amount or extend the expiration date of any Lender's Commitment, (C) restrict
the right of each Lender to exchange Term Loans, or Initial Loans on the
Initial Maturity Date, for Exchange Notes or amend the rate of such exchange or
(D) make any change to the subordination provisions of this Agreement that
adversely affects the rights of any Lender, in each case without the written
consent of each Lender directly affected thereby, (ii) (A) amend, modify, or
waive any provision of this Section 10.1, (B) reduce the percentage specified
in the definition of Required Lenders, (C) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under the Loan
Documents except as expressly permitted hereby, (D) amend, modify or waive any
provision in the Exchange Notes that requires (or would, if any Exchange Notes
were outstanding, require) the approval of all holders of Exchange Notes, or
(E) release all or substantially all of the Subsidiary Guarantors from their
obligations under their respective Subsidiary Guarantees, in each case without
the consent of all of the Lenders, or (iii) amend, modify or waive any
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provision of Section 9 without the written consent of the then Administrative
Agent. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Borrower and the other Loan Parties, the Lenders, the Administrative Agent, and
all future holders of the Loans. In the case of any waiver, the Borrower and
the other Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former positions and rights hereunder and under the other
Loan Documents, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by facsimile transmission), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered, or
three days after being deposited in the mail, postage prepaid, or, in the case
of telecopy notice, when received, addressed as follows in the case of the
Borrower and the Administrative Agent, and as set forth in an administrative
questionnaire furnished to the Administrative Agent in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
the Borrower: Renters Choice, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative
Agent: The Chase Manhattan Bank
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services,
▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.2 or 2.5 shall not be effective until
received.
10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder or under the Loan
Notes and Subsidiary Guarantees shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the Loan Notes and Subsidiary
Guarantees and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees
(a) to pay or reimburse the Administrative Agent for all 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 Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent (in the case of each Lender,
after an Event of Default has occurred and is continuing) for all its
reasonable out-of-pocket costs and expenses Incurred in connection with the
enforcement or preservation of any rights under the Loan Documents and any such
other documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent and the Lenders, and (c)
to pay, indemnify, and hold each Lender and the Administrative Agent (and their
respective directors, officers, employees and agents) 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, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Loan Documents and any
such other documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent (and their respective Affiliates, directors, officers,
employees and 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 with respect to the
execution, delivery, enforcement, performance and administration of the
Transaction Documents or the use of the proceeds of the Loans in connection
with the Acquisition and the transactions contemplated by this Agreement and
any such other documents (all the foregoing in this clause (d), collectively,
the "indemnified liabilities"), provided that the Borrower shall have no
obligation hereunder to the Administrative Agent, or any Lender (or their
respective Affiliates, directors, officers, employees and agents) with respect
to indemnified liabilities to the extent such indemnified liabilities arise
from the gross negligence or wilful misconduct of the indemnified party or, in
the case of indemnified liabilities arising under the Loan Documents, from
material breach by the indemnified party of the Loan Documents, as the case may
be. The agreements in this subsection shall survive repayment of the Loans and
all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the
benefit of the Borrower the Lenders, the Administrative Agent
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and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender and any assignment or transfer
by any Lender of its rights or obligations under the Loan Documents must be
made in compliance with this Section 10.6 (and any purported assignment in
violation of this subsection shall be null and void).
(b) Any Lender may, in the ordinary course of its lending
or investment business and in accordance with applicable law, at any time sell
to one or more financial institutions or other entities ("Loan Participants")
participating interests in any Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender under the Loan Documents. In
the event of any such sale by a Lender of a participating interest to a Loan
Participant, (i) such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible for the performance thereof, (iii) such Lender shall remain
the holder of any such Loan (and any Note evidencing such Loan) for all
purposes under the Loan Documents, (iv) the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents, and (v) no
Loan Participant under any participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to
any departure by any Loan Party therefrom, except with respect to the matters
described in clauses (i) and (ii) of the proviso to the second sentence of
Section 10.1. The Borrower agrees that each Loan Participant shall be entitled
to the benefits of Sections 2.9 and 2.10 with respect to its participation in
the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.10 such Loan Participant shall
have complied with the requirements of said Section and provided, further, that
no Loan Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Loan Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in the ordinary
course of its lending or investment business and in accordance with applicable
law, at any time and from time to time assign to any other Lender or any
affiliate thereof or, with the consent of the Administrative Agent (which shall
not be unreasonably withheld or delayed), to an additional bank or financial
institution (an "Assignee"), all or any part of its rights and obligations
under the Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit E, executed by such Assignee, such
Assignor and, if required by this paragraph, the Administrative Agent, and
delivered to the Administrative Agent for its acceptance and recording in the
Register, provided that no such assignment to an Assignee (other than any
Lender or any affiliate thereof) shall be in an aggregate principal amount of
less than $5,000,000 (other than in the case of an assignment of all of a
Lender's interests under this Agreement), unless otherwise agreed by the
Administrative Agent. Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the Assignor thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto).
(d) The Administrative Agent, which for purposes of this
Section 10.6(d) only shall be deemed an agent of the Borrower, shall maintain
at the address of the Administrative Agent referred to in Section 10.2 a copy
of each Assignment and Acceptance delivered to it and a register (the
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"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders, shall treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of the Loan Documents.
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor, an Assignee and, if required by Section 10.6(c), the
Administrative Agent, together with payment to the Administrative Agent of a
registration and processing fee of $4,000, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower. On or prior to such effective date, the assigning Lender shall
surrender any outstanding Loan Notes held by it all or a portion of which are
being assigned, and the Borrower, at its own expense, shall, upon a request to
the Administrative Agent by the assigning Lender or the Assignee, as
applicable, execute and deliver to the Administrative Agent (in exchange for
outstanding Loan Notes of the assigning Lender, if any) a new Loan Note to the
order of such Assignee in an amount equal to the amount of such Assignee's
Loans after giving effect to such Assignment and Acceptance and, if the
assigning Lender has retained a Loan hereunder, a new Loan Note, to the order
of the assigning Lender in an amount equal to the amount of such Lender's Loans
after giving effect to such Assignment and Acceptance. Any such new Loan Notes
shall be dated the Closing Date and shall otherwise be in the form of the Loan
Note replaced thereby. Any Loan Notes surrendered by the assigning Lender
shall be returned by the Administrative Agent to the Borrower marked
"cancelled."
(f) To the extent requested by any Lender, the Borrower
shall execute and deliver to such Lender an Initial Note dated the Closing Date
substantially in the form of Exhibit F-1 hereto to evidence the portion of the
Initial Loan made by such Lender and with appropriate insertions ("Original
Initial Notes"). On each Interest Payment Date, to the extent requested by any
Lender, the Borrower shall execute and deliver to such Lender on such Interest
Payment Date a note dated such Interest Payment Date substantially in the form
of Exhibit F-1 hereto in a principal amount equal to such Lender's pro rata
portion of such PIK Interest Amount and with other appropriate insertions (each
a "Subsequent Initial Note" and, together with the Original Initial Notes, the
"Initial Notes"). A Subsequent Initial Note shall bear interest from the date
of its issuance at the same rate borne by all Initial Notes at the date of
issuance and from time to time thereafter.
(g) Unless converted to an Exchange Note and, to the
extent requested by any Lender, the Borrower shall execute and deliver to such
Lender a Term Note dated the Initial Maturity Date substantially in the form of
Exhibit F-2 hereto to evidence the Term Loan made on such date, in the
principal amount of the Initial Notes held by such Lender on such date and with
other appropriate insertions (collectively, the "Original Term Notes"). On or
after the Initial Maturity Date, on each Interest Payment Date, to the extent
requested by any Lender, the Borrower shall execute and deliver to such Lender
on such Interest Payment Date a Term Note dated such Interest Payment Date
substantially in the form of Exhibit F-2 hereto in a principal amount equal to
such Lender's pro rata portion of such PIK Interest Amount and with other
appropriate insertions (each a "Subsequent Term Note" and, together with the
Original Term Notes, the "Term Notes"). A Subsequent Term Note shall bear
interest from the date of its issuance at the same rate borne by all Term Notes
at the date of issuance and from time to time thereafter.
(h) The Borrower authorizes each Lender to disclose to
any Loan Participant or Assignee (each, a "Transferee") and any prospective
Transferee (to the extent such Persons agree to be
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bound by the provisions of Section 10.15 hereof) any and all financial
information in such Lender's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(i) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law, provided that no such
assignment, whether to a Federal Reserve Bank or other entity, shall release a
Lender from any of its obligations hereunder or substitute any such Federal
Reserve Bank or other entity for such Lender as a party hereto or permit an
absolute assignment to occur other than in accordance with such provisions of
this subsection.
10.7 Adjustments; Set-off. (a) If any Lender (a
"Benefitted Lender") shall at any time receive any payment of all or part of
its Loans or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans or interest thereon,
such Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loan, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder to set-off and appropriate and apply against such amount any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency,
in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
10.8 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of
the copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without, to the extent permitted by law, invalidating the
remaining
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provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not, to the extent permitted by law, invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
10.12 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement
of any judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court or forum and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, at the address specified in Section 10.2 or
at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of the Loan Documents;
(b) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower arising out of
or in connection with the Loan Documents, and the
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relationship between Administrative Agent and Lenders, on one hand,
and the Borrower, on the other hand, in connection herewith or
therewith is solely that of creditor and debtor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. The Administrative Agent and each
Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential by the
Borrower in accordance with such Lender's customary procedures for handling
confidential information of this nature, it being understood and agreed by the
Borrower that in any event a Lender may make disclosures reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participation therein (to the extent such Persons agree to be bound by the
provisions of this Section) or as required or requested by any governmental
agency or representative thereof or pursuant to legal process or by the
National Association of Insurance Commissioners or in connection with the
exercise of any remedy under the Loan Documents; provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information; and
provided, further that in no event shall any Lender be obligated or required to
return any materials furnished by the Borrower 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 by their proper and duly authorized
officers as of the day and year first above written.
RENTERS CHOICE, INC.
By:
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Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent and as Lender
By:
-------------------------------------
Title:
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SCHEDULE 1.1 TO
SENIOR SUBORDINATED
CREDIT AGREEMENT
COMMITMENTS
LENDERS Commitments
------- -----------
THE CHASE MANHATTAN BANK $64,625,000
BEAR, ▇▇▇▇▇▇▇ & CO., INC. $20,625,000
NATIONSBANK $16,500,000
CREDIT SUISSE FIRST BOSTON $8,250,000
FUJI BANK, LIMITED $20,000,000
KZH - IV CORPORATION $30,000,000
MASSMUTUAL HIGH YIELD PARTNERS II L.L.C. $ 5,000,000
MASSMUTUAL CORPORATE VALUE PARTNERS LTD. $ 5,000,000
PARIBAS CAPITAL FUNDING L.L.C. $ 5,000,000
TOTAL $175,000,000