EXHIBIT 10.1
Execution Copy
================================================================================
(JPMORGAN LOGO)
$450,000,000 TERM CREDIT AGREEMENT
dated as of
June 30, 2006
among
CSK AUTO, INC.
The Lenders Party Hereto,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
WACHOVIA BANK, NATIONAL ASSOCIATION
as Co-Syndication Agents
----------
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
▇▇▇▇▇▇ BROTHERS INC.
as Joint Lead Arrangers
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
▇▇▇▇▇▇ BROTHERS INC.
WACHOVIA CAPITAL MARKETS, LLC
as Joint Bookrunners
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.................................................... 1
SECTION 1.01. Defined Terms........................................... 1
SECTION 1.02. Classification of Loans and Borrowings.................. 17
SECTION 1.03. Terms Generally......................................... 17
SECTION 1.04. Accounting Terms; GAAP.................................. 17
ARTICLE II THE CREDITS................................................... 18
SECTION 2.01. Commitments............................................. 18
SECTION 2.02. Loans and Borrowings.................................... 18
SECTION 2.03. Requests for Borrowings................................. 18
SECTION 2.04. Repayment of Loans/Put Rights........................... 19
SECTION 2.05. Optional Prepayment..................................... 19
SECTION 2.06. Mandatory Prepayment.................................... 19
SECTION 2.07. Funding of Borrowings................................... 20
SECTION 2.08. Interest Elections...................................... 20
SECTION 2.09. Termination and Reduction of Commitments................ 21
SECTION 2.10. Repayment of Loans; Evidence of Debt.................... 22
SECTION 2.11. Intentionally Deleted................................... 23
SECTION 2.12. Fees.................................................... 23
SECTION 2.13. Interest................................................ 23
SECTION 2.14. Alternate Rate of Interest.............................. 24
SECTION 2.15. Increased Costs......................................... 24
SECTION 2.16. Break Funding Payments.................................. 25
SECTION 2.17. Taxes................................................... 25
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of
Set-offs................................................ 27
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.......... 28
SECTION 2.20. Returned Payments....................................... 29
ARTICLE III REPRESENTATIONS AND WARRANTIES............................... 29
SECTION 3.01. Financial Condition..................................... 29
SECTION 3.02. No Change............................................... 29
SECTION 3.03. Corporate Existence; Compliance with Law................ 30
SECTION 3.04. Corporate Power; Authorization.......................... 30
SECTION 3.05. Enforceable Obligations................................. 30
SECTION 3.06. No Legal Bar............................................ 31
SECTION 3.07. No Material Litigation.................................. 31
SECTION 3.08. Investment Company Act.................................. 31
SECTION 3.09. Federal Regulation...................................... 31
SECTION 3.10. No Default.............................................. 31
SECTION 3.11. Taxes................................................... 32
SECTION 3.12. Subsidiaries............................................ 32
SECTION 3.13. Ownership of Property; Liens............................ 32
SECTION 3.14. ERISA................................................... 32
SECTION 3.15. Security Interest....................................... 33
SECTION 3.16. Copyrights, Permits, Trademarks and Licenses............ 33
SECTION 3.17. Environmental Matters................................... 34
SECTION 3.18. Accuracy and Completeness of Information................ 34
SECTION 3.19. Solvency................................................ 35
-i-
Page
----
SECTION 3.20. Labor Matters........................................... 35
SECTION 3.21. Purpose................................................. 35
ARTICLE IV CONDITIONS.................................................... 35
SECTION 4.01. Conditions to Initial Extension of Credit............... 35
SECTION 4.02. Conditions to All Loans and Letters of Credit........... 38
ARTICLE V AFFIRMATIVE COVENANTS.......................................... 39
SECTION 5.01. Financial Statements.................................... 39
SECTION 5.02. Certificates; Other Information......................... 40
SECTION 5.03. Payment of Obligations.................................. 41
SECTION 5.04. Conduct of Business and Maintenance of Existence........ 41
SECTION 5.05. Maintenance of Property; Insurance...................... 41
SECTION 5.06. Books and Records; Inspection Rights.................... 42
SECTION 5.07. Notices................................................. 42
SECTION 5.08. Environmental Laws...................................... 43
SECTION 5.09. Additional Collateral, etc.............................. 44
SECTION 5.10. Post-Closing Items...................................... 45
ARTICLE VI NEGATIVE COVENANTS............................................ 45
SECTION 6.01. Indebtedness............................................ 46
SECTION 6.02. Liens................................................... 47
SECTION 6.03. Limitation on Contingent Obligations.................... 49
SECTION 6.04. Prohibition of Fundamental Changes...................... 50
SECTION 6.05. Prohibition on Sale of Assets........................... 50
SECTION 6.06. Limitation on Investments, Loans and Advances........... 51
SECTION 6.07. Financial Covenants..................................... 53
SECTION 6.08. Limitation on Dividends................................. 53
SECTION 6.09. Transactions with Affiliates............................ 54
SECTION 6.10. Prepayment and Amendments of Material Indebtedness...... 54
SECTION 6.11. Changes in Fiscal Year.................................. 55
SECTION 6.12. Limitation on Lines of Business......................... 55
SECTION 6.13. Limitation on Swap Agreements........................... 55
SECTION 6.14. Existing Notes.......................................... 55
ARTICLE VII EVENTS OF DEFAULT............................................ 55
ARTICLE VIII THE ADMINISTRATIVE AGENT.................................... 58
ARTICLE IX MISCELLANEOUS................................................. 60
SECTION 9.01. Notices................................................. 60
SECTION 9.02. Waivers; Amendments..................................... 61
SECTION 9.03. Expenses; Indemnity; Damage Waiver...................... 62
SECTION 9.04. Successors and Assigns.................................. 64
SECTION 9.05. Survival................................................ 66
SECTION 9.06. Counterparts; Integration; Effectiveness................ 66
SECTION 9.07. Severability............................................ 67
SECTION 9.08. Right of Setoff......................................... 67
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process................................................. 67
SECTION 9.10. WAIVER OF JURY TRIAL.................................... 67
SECTION 9.11. Headings................................................ 68
-ii-
Page
----
SECTION 9.12. Confidentiality......................................... 68
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law...... 68
SECTION 9.14. USA PATRIOT Act......................................... 68
SECTION 9.15. Disclosure.............................................. 69
SECTION 9.16. Appointment for Perfection.............................. 69
SECTION 9.17. Call Agreement and Exchangeable Note Indentures......... 69
SECTION 9.18. Co-Syndication Agents................................... 69
SCHEDULES:
Commitment Schedule
Schedule 3.11 Asserted Tax Claims
Schedule 3.12 Subsidiaries
Schedule 3.13 Fee and Leased Properties
Schedule 3.15(a) UCC Filing Offices
Schedule 3.16 Intellectual Property
Schedule 6.01(a) Indebtedness to Remain Outstanding
Schedule 6.02 Existing Liens
Schedule 6.03(d) Existing Contingent Obligations
EXHIBITS:
Exhibit A Form of Note
Exhibit B Form of Intercreditor Agreement
Exhibit C Form of Assignment and Assumption
Exhibit E Form of Guarantee and Collateral Agreement
Exhibit F-1 Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Exhibit F-2 Form of Opinion of ▇▇▇▇▇ ▇▇▇▇ LLP
Exhibit F-3 Form of Opinion of In-House Counsel of Holdings, the Company and its
Subsidiaries
Exhibit G-1 Form of Company Closing Certificate
Exhibit G-2 Form of Holdings Closing Certificate
Exhibit G-3 Form of Subsidiary Closing Certificate
-iii-
CREDIT AGREEMENT dated as of June 30, 2006 (as it may be amended or
modified from time to time, this "Agreement"), among CSK AUTO, INC. (the
"Company"), the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as
Administrative Agent., and ▇▇▇▇▇▇ COMMERCIAL PAPER INC. and WACHOVIA BANK,
NATIONAL ASSOCIATION, as Co-Syndication Agents.
WITNESSETH:
WHEREAS, the Company desires (i) to refinance or repurchase some or
all of the Company's $225,000,000 7% Senior Subordinated Notes due 2014 ("Senior
Subordinated Notes"), the $125,000,000 3 3/8% Exchangeable Senior Notes due 2025
(the "3 3/8% Senior Notes") and the $100,000,000 4 5/8% Exchangeable Senior
Notes due 2025 (the "4 5/8% Senior Notes" and such refinance or repurchase, the
"Refinancing"), and (ii) provided that some or all of the Existing Notes have
been refinanced or repurchased with the proceeds of Loans (as defined below),
(A) to pay consent fees to holders of Existing Notes not so refinanced, and (B)
to pay related transaction fees and expenses; and
WHEREAS, in connection with the Refinancing, the Company has requested
that the Lenders make available a senior secured credit facility and the Lenders
have agreed to provide such a facility subject to the terms and conditions set
forth herein;
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"2005 Filings" means the filing by Holdings with the Securities and
Exchange Commission of the audited financial statements for the 2005 fiscal year
and the other normal quarterly and annual financial statements that are delayed
until the filing of such statements for the 2005 fiscal year.
"3 3/8% Senior Notes" has the meaning set forth in the recitals
hereto.
"4 5/8% Senior Notes" has the meaning set forth in the recitals
hereto.
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Account" has the meaning assigned to such term in the Guarantee and
Collateral Agreement.
"Account Debtor" means any Person obligated on an Account.
"Act" has the meaning set forth in Section 9.14.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
2
"Administrative Agent" means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" means the collective reference to the Administrative Agent
and the Co-Syndication Agents.
"Alternate Base Rate" means, for any day, a rate per annum 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%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, a
percentage equal to a fraction the numerator of which is the aggregate of such
Lender's Commitment and outstanding Loans and the denominator of which is the
aggregate Commitment and outstanding Loans of all Lenders (if the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon such Lender's share of the aggregate Loans at that time).
"Applicable Rate" means, for any day, with respect to any Eurodollar
Loan or ABR Loan, the applicable rate per annum set forth below under the
caption "Eurodollar Spread" or "ABR Spread" as applicable, based upon the then
current ratings issued by Moody's and S&P for the Loans, provided that, if at
any time the Loans are not rated by ▇▇▇▇▇'▇ and S&P, the corporate rating for
the Company shall apply, and provided further that, if at any time either of
Moody's or S&P does not have or withdraws its rating on both the Loan and the
Company, for the purposes hereof, the rating shall be deemed to be B3 or B-, as
the case may be:
RATING EURODOLLAR SPREAD ABR SPREAD
-------------- ----------------- ----------
> or = Ba3/BB- 2.75% 1.75%
Ba3/B+ 3.00% 2.00%
B1/B+ 3.25% 2.25%
B2/B 3.50% 2.50%
< or = B3/B- 4.00% 3.00%
If the Loans (or the Company, if applicable), have at any time a split
rating then the lower rating shall apply (other than in the case of a Ba3/B+
rating). If any Event of Default shall have occurred and be continuing as of any
date on which the Applicable Rate would have otherwise been adjusted in
accordance with this definition, the Applicable Rate shall in no event be
reduced on such date (from the Applicable Rate as in effect prior to such date)
until such Event of Default is cured or waived.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit C or any other form approved by the Administrative Agent.
3
"Available Commitment" means, at any time, the Commitment then in
effect minus the aggregate amount of Loans outstanding at such time.
"Availability Period" means the period from and including the Closing
Date to but excluding the earlier of December 16, 2006 and the date of
termination of the Commitments.
"Bank Drafts" means drafts issued by the Company or its designee on
behalf of a Credit Party in connection with the SunTrust Draft Program or
similar program, pursuant to documentation reasonably acceptable to the
Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrowing" means Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" means a request by the Company for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Call Agreement" means the Confirmation Re: Call Option, dated as of
July 25, 2005, among JPMorgan Chase Bank, the Company and Holdings, as the same
may be amended and replaced from time to time in a manner not adverse to the
Lenders.
"Capital Expenditures" means for any period, all amounts which would,
in accordance with GAAP, be set forth as capital expenditures (exclusive of any
amount attributable to capitalized interest) on the consolidated statement of
cash flows or other similar statement of the Company and its Subsidiaries for
such period but shall exclude (a) any expenditures made with the proceeds of
condemnation or eminent domain proceedings affecting real property or with
insurance proceeds and (b) expenditures made in connection with Sections 6.06(h)
and 6.06(j); provided that any Capital Expenditures financed with the proceeds
of any Indebtedness permitted hereunder (other than Indebtedness incurred
hereunder) shall be deemed to be a Capital Expenditure only in the period in
which, and by the amount which, any principal of such Indebtedness is repaid.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition, (b) certificates of deposit and eurodollar time deposits
with maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any Lender or with any domestic commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (a) and (b) entered into with any financial institution
meeting the qualifications specified in clause (b) above, (d) commercial paper
issued by any Lender or the parent corporation of any Lender, and commercial
paper
4
rated A-1 or the equivalent thereof by Standard & Poor's Ratings Group or P-1 or
the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and in each case
maturing within one year after the date of acquisition, (e) investment funds
investing 95% of their assets in securities of the type described in clauses (a)
through (d) above, (f) readily marketable direct obligations issued by any state
of the United States or any political subdivision thereof having one of the two
highest rating categories obtainable from either S&P or Moody's and (g)
indebtedness with a rating of "A" or higher from S&P or "A2" or higher from
Moody's.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Change of Control" shall be considered to have occurred if (a)(1) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), whether acting singly or in
concert with one or more other "persons" or "groups," other than any Person
acting in the capacity of an underwriter, shall, directly or indirectly, have
acquired, or acquire the power to vote or direct the voting of, 30% or more on a
fully diluted basis, of the outstanding Capital Stock of Holdings or (2) during
any period of two consecutive calendar years, individuals who at the beginning
of such period constituted the board of directors of Holdings together with any
new members of such board of directors whose elections by such board of
directors or whose nomination for election by the stockholders of Holdings was
approved by a vote of a majority of the members of such board of directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved shall cease
for any reason to constitute a majority of the directors of Holdings then in
office, or (b) Holdings shall cease to own and control directly, of record and
beneficially, 100% of each class of outstanding Capital Stock of the Company,
free and clear of all Liens, other than Liens in favor of the Administrative
Agent and the Lenders pursuant to the Credit Documents.
"Closing Date" means the date on which the conditions specified in
Section 4.01 are satisfied or waived.
"Co-Syndication Agents" means ▇▇▇▇▇▇ Commercial Paper Inc. and
Wachovia Bank, National Association, in their capacities as co-syndication
agents hereunder.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all property owned, leased or operated by a
Person with respect to which a security interest is granted pursuant to the
Security Documents and any and all other property of any Credit Party, now
existing or hereafter acquired, that may at any time be or become subject to a
security interest or Lien in favor of Administrative Agent, on behalf of itself
and the Lenders, to secure the Obligations.
"Collateral Access Agreement" has the meaning assigned to such term in
the Guarantee and Collateral Agreement.
"Collection Account" has the meaning assigned to such term in the
Guarantee and Collateral Agreement.
5
"Commitment" means, with respect to each Lender, the obligation of
such Lender to make Loans to the Company in a principal amount not to exceed
such Lender's Commitment. The initial amount of each Lender's Commitment is set
forth on the Commitment Schedule, or in the Assignment and Assumption pursuant
to which such Lender shall have assumed its Commitment, as applicable. The
original aggregate amount of the Commitments is $450,000,000.
"Commitment Fee Rate" means (i) for the period from the Closing Date
until (but excluding) October 16, 2006, 1.50% per annum, and (ii) thereafter,
3.00%.
"Commitment Schedule" means the Schedule attached hereto identified as
such.
"Commonly Controlled Entity" means any entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414 of the Code.
"Company" means CSK Auto Inc., an Arizona corporation.
"Consolidated EBITDA" means, for any period, the Consolidated EBITDAR
of the Company and its Subsidiaries for such period, minus, Consolidated Lease
Expense for such period.
"Consolidated EBITDAR" means, for any period, with respect to the
Company and its Subsidiaries on a consolidated basis, without duplication, all
calculated in accordance with GAAP, Consolidated Net Income, plus, (a) to the
extent reflected as a charge in determining Consolidated Net Income, (i)
provision for taxes, (ii) gross Interest Expense (including any amortization of
consent fees and expenses, included in gross Interest Expense, paid in
connection with any consents obtained to waive the Specified Defaults) less
gross interest income, (iii) depreciation expense, (iv) amortization expense,
(v) extraordinary, non-recurring or unusual losses, (vi) any non-cash
non-recurring charges or non-cash restructuring charges, (vii) cash dividends
paid in such period, (viii) to the extent relating to matters disclosed in the
Press Releases and within the amounts set forth therein, any other write-downs,
write-offs, minority interests and other non-cash charges in determining such
Consolidated Net Income for such period, (ix) cash investigation and cash
restructuring fees and expenses incurred and paid in connection with and as a
result of the Audit Committee investigation described in the Press Releases, (x)
cash fees and expenses for financial and legal advisors paid in connection with
negotiations with the holders of the Existing Notes as described in the Press
Releases, (xi) Consolidated Lease Expense, and (xii) any expense associated with
termination of the Call Agreement, the Warrant Agreement and/or the Swap
Agreement with respect to the Senior Subordinated Notes less (b) (i)
extraordinary, non-recurring or unusual gains, (ii) non-cash income and (iii)
non-cash gains.
"Consolidated Lease Expense" means, for any period, the aggregate
amount of fixed and contingent rentals payable by the Company and its
Subsidiaries for such period with respect to leases of real and personal
property, determined on a consolidated basis in accordance with GAAP plus the
aggregate amount of any such rentals included in the ▇▇▇▇▇▇'▇ Pro-Forma Results
for such period; provided that payments in respect of Financing Leases shall not
constitute Consolidated Lease Expense.
"Consolidated Net Income" means, for any period, net income of the
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, plus any net income included in the ▇▇▇▇▇▇'▇ Pro-Forma Results for
such period; provided that: (i) the net income (but not loss) of any Person that
is not a Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or distributions
paid in cash to the Company or a Wholly-Owned Subsidiary, (ii) the net income of
any Person acquired in a pooling of interests transaction
6
for any period prior to the date of such acquisition shall be excluded and (iii)
net income of any Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that net income is prohibited or not permitted at the date of determination.
"Contingent Obligation" means, as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent (a) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (b) to advance
or supply funds (i) for the purchase or payment of any such primary obligation
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount (based on the maximum
reasonably anticipated net liability in respect thereof as determined by the
Company in good faith) of the primary obligation or portion thereof in respect
of which such Contingent Obligation is made or, if not stated or determinable,
the maximum reasonably anticipated net liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by the Company in
good faith.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of the property owned by it
is bound.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Documents" means this Agreement, any promissory notes issued
pursuant to this Agreement, the Security Documents and all other agreements,
instruments, documents and certificates identified in Section 4.01 executed and
delivered to, or in favor of, the Administrative Agent or any Lenders and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to the Administrative Agent or any Lender in
connection with this Agreement or the transactions contemplated hereby. Any
reference in this Agreement or any other Credit Document to a Credit Document
shall include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
this Agreement or such Credit Document as the same may be in effect at any and
all times such reference becomes operative.
"Credit Parties" means Holdings, the Company and each of the Company's
Domestic Subsidiaries from time to time party to a Credit Document and their
successors and assigns.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Departing Lender" has the meaning set forth in Section 2.19(b).
7
"Document" has the meaning assigned to such term in the Guarantee and
Collateral Agreement.
"dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Subsidiary" means any Subsidiary of the Company other than a
Foreign Subsidiary.
"Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any Governmental Authority or requirements of law (including
court-ordered requirements of common law) regulating or imposing liability or
standards of conduct concerning, environmental or public health protection
matters, including, without limitation, Hazardous Materials, as now or may at
any time hereafter be in effect.
"Environmental Reports" means the Phase 1 environmental assessments
covering certain owned and leased real properties of the Company and its
Subsidiaries made available by the Company to the Administrative Agent prior to
October 30, 1996.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" means any of the events specified in Article VII,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Exchangeable Note Indentures" means the Indentures dated July 29,
2005 (in the case of the 3 3/8% Senior Notes), and December 19, 2005 (in the
case of the 4 5/8% Senior Notes), each between the Company and The Bank of New
York, as trustee, pursuant to which the Exchangeable Notes were issued, in each
case as the same may be amended or modified in accordance with the terms
thereof.
"Exchangeable Notes" means the 3 3/8% Senior Notes and the 4 5/8%
Senior Notes, collectively.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Company hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Company is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Company under
Section 2.19(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.17(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Company with respect to such withholding tax pursuant to Section 2.17(a).
8
"Existing Credit Agreement" means the (i) Second Amended and Restated
Credit Agreement, dated as of July 25, 2005 among the Company, the financial
institutions party thereto as lenders and the Administrative Agent as
administrative agent thereunder, as the same may be amended, supplemented or
modified from time to time, or (ii) a Replacement Facility.
"Existing Notes" means the Senior Subordinated Notes, the 3 3/8%
Senior Notes and the 4 5/8% Senior Notes, collectively.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) 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 (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Property" has the meaning assigned to such term in Section 3.13.
"Financial Officer" means the chief financial officer of the Company
or such other person as may be acceptable to the Administrative Agent.
"Financing Lease" means (a) any lease of property, real or personal,
the obligations under which are capitalized on a consolidated balance sheet of
the Company and its consolidated Subsidiaries and (b) any other such lease to
the extent that the then present value of any rental commitment thereunder
should, in accordance with GAAP, be capitalized on a balance sheet of the
lessee.
"Fixed Charges" means, with reference to any period, without
duplication, cash Interest Expense, plus Consolidated Lease Expense, each
calculated for the Company and its Subsidiaries on a consolidated basis.
"Fixed Charge Coverage Ratio" means, the ratio, determined as of the
end of each fiscal quarter of the Company for the most-recently ended four
fiscal quarters, of (a) Consolidated EBITDAR to (b) Fixed Charges, each
calculated for the Company and its Subsidiaries on a consolidated basis.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which the Company is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary of the Company which is not
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
9
"Guarantee and Collateral Agreement" means that certain Guarantee and
Collateral Agreement, dated as of the date hereof, between the Credit Parties
and the Administrative Agent, for the benefit of the Administrative Agent and
the Lenders, substantially in the form of Exhibit E and any other pledge or
security agreement entered into, after the date of this Agreement by any other
Credit Party (as required by this Agreement or any other Credit Document), or
any other Person, as the same may be amended, restated or otherwise modified
from time to time.
"Guarantor" means Holdings and each Subsidiary Guarantor.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Holdings" means CSK Auto Corporation, a Delaware corporation.
"Indebtedness" means, of a Person, at a particular date, means (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) the undrawn face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder and unpaid reimbursement obligations with respect
thereto, (c) all liabilities (other than Lease Obligations and liabilities in
connection with reserves established in accordance with GAAP) secured by any
Lien on any property owned by such Person, even though such Person has not
assumed or become liable for the payment thereof, (d) Financing Leases and (e)
all indebtedness of such Person arising under acceptance facilities; but
excluding (i) trade and other accounts payable, (including Bank Drafts issued in
connection therewith, so long as no such Bank Drafts in an aggregate amount
outstanding in excess of $10,000,000 (x) are in default as a result of which the
maturity of such Bank Drafts has been accelerated prior to their stated due
dates or (y) are in payment default (after expiration of any applicable grace
period)) and accrued expenses payable in the ordinary course of business, (ii)
letters of credit supporting the purchase of goods in the ordinary course of
business and expiring no more than six months from the date of issuance and
(iii) obligations in respect of Swap Agreements.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Information" has the meaning set forth in Section 9.12.
"Insolvency" means, with respect to a Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Intercreditor Agreement" means that certain Intercreditor Agreement,
substantially in the form of Exhibit B hereto, dated as of the date hereof among
the Administrative Agent, the administrative agent under the Existing Credit
Agreement and the Company, as the same may be amended, restated or otherwise
modified from time to time.
"Interest Election Request" means a request by the Company to convert
or continue a Borrowing in accordance with Section 2.08.
"Interest Expense" means, with reference to any period, cash interest
expense (excluding, to the extent included in interest expense in accordance
with GAAP, non-cash expenses associated with
10
Swap Agreements to which the Company is party in respect of the Loans),
amortization of debt discount (including discount of liabilities and reserves
established under APB 16), costs of debt issuance and interest expense on
customer deposits) for such period net of interest income and amortization of
deferred non-cash interest income associated with the settlement of Swap
Agreements, in each case for or during such period on a consolidated basis for
the Company and its Subsidiaries, plus any such expense items included in the
▇▇▇▇▇▇'▇ Pro-Forma Results for such period.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and the Maturity Date and
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period
and the Maturity Date.
"Interest Period" means (a) with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of each Lender, nine or twelve months)
thereafter, as the Company may elect; provided, that (i) 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 and (ii) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Inventory" has the meaning assigned to such term in the Guarantee and
Collateral Agreement.
"Investment" has the meaning set forth in Section 6.06.
"Investment Grade Securities" means (i) securities issued or directly
and fully guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents), (ii) debt securities or
debt instruments with a rating of BBB or higher by S&P and Baa3 or higher by
Moody's or the equivalent of such rating by such rating organization, or if no
rating of S&P's or Moody's then exists, the equivalent of such rating by any
other nationally recognized securities rating agency, but excluding any debt
securities or instruments constituting loans or advances among the Company and
its Subsidiaries and (iii) investments in any fund that invests exclusively in
investments of the type described in clauses (i) and (ii) which fund may also
hold immaterial amounts of cash and Cash Equivalents pending investment and/or
distribution.
"JPMorgan Chase Bank" means JPMorgan Chase Bank, N.A., a national
banking association, in its individual capacity, and its successors.
"Leased Property" has the meaning assigned to such term in Section
3.13.
"Lenders" means the Persons listed on the Commitment Schedule and any
other Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.
11
"Leverage Ratio" means the ratio, determined as of the end of each
fiscal quarter of the Company, of (a) Total Debt as of such fiscal quarter end
to (b) Consolidated EBITDA for the most recently ended four fiscal quarters, all
calculated for the Company and its Subsidiaries on a consolidated basis.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset or (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset.
"Loans" means the loans and advances made by the Lenders pursuant to
this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, condition (financial or otherwise), or results of operations
of the Company and its Subsidiaries taken as a whole, since October 30, 2005,
(b) the ability of the Company and its Subsidiaries (taken as a whole) to
perform their material obligations under the Credit Documents, (c) the
Collateral (taken as a whole), or the Administrative Agent's Liens (on behalf of
itself and the Lenders) on the Collateral (taken as a whole) or the priority of
such Liens, or (d) the validity or enforceability of any material Credit
Document or the rights or remedies of the Lenders or the Administrative Agent
thereunder.
"Maturity Date" means the date that is (i) if the Senior Subordinated
Notes are repurchased or repaid in full or the Senior Subordinated Note
Indenture is amended to permit such a Maturity Date, the sixth anniversary of
the Closing Date, or (ii) until such time as the events described in clause (i)
have occurred, the twentieth anniversary of the Closing Date.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means any mortgage, deed of trust or other agreement which
conveys or evidences a Lien in favor of the Administrative Agent, for the
benefit of the Administrative Agent and the Lenders, on real property of a
Credit Party, including any amendment, modification or supplement thereto.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
12
"▇▇▇▇▇▇'▇ Pro Forma Results" means for any period beginning before
December 19, 2005, the portion, if any, of the net income (or net loss) of
▇▇▇▇▇▇'▇ Discount Auto Parts ("▇▇▇▇▇▇'▇") for such period that is not included
in Consolidated Net Income but that would have been included therein had
▇▇▇▇▇▇'▇ been a consolidated Subsidiary of the Company throughout such period.
"Net Cash Proceeds" means (a) in connection with any Restricted Asset
Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received), net of
attorneys' fees, accountants' fees, investment banking fees, amounts required to
be applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset that is the subject of such Restricted Asset
Sale or Recovery Event (other than any Lien pursuant to a Security Document) and
other customary fees and expenses actually incurred in connection therewith and
net of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements) and (b) in connection with any issuance or sale of Capital
Stock or any incurrence of Indebtedness, the cash proceeds received from such
issuance or incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.
"Non-Consenting Lender" has the meaning assigned to such term in
Section 9.02(d).
"Notes" means the collective reference to the promissory notes
evidencing Loans; each of the Notes, a "Note".
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans together with all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Credit
Parties to the Lenders or to any Lender, the Administrative Agent or any
indemnified party arising under the Credit Documents.
"Other Taxes" means 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.
"Participant" has the meaning set forth in Section 9.04.
"PartsAmerica Services Agreement" means the services agreement between
Advance Stores and the Company and any related agreements, as the same may be
amended, modified, restated or supplemented from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Discretion" means a determination made in good faith and in
the exercise of reasonable business judgment.
"Permitted Encumbrances" means any Lien permitted by paragraphs (a),
(b), (c), (d), (e) or (n) of Section 6.02; provided that the term "Permitted
Encumbrances" shall not include any Lien securing Indebtedness.
"Permitted Liens" means any Lien permitted to exist under Section
6.02.
13
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Press Releases" the press releases of CSK Auto Corporation dated
March 27, 2006, May 22, 2006 and June 19, 2006 concerning possible adjustments
to inventory accounting, vendor allowances and store surplus fixtures and
supplies.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank as its prime rate; each change in the
Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.
"Projections" has the meaning assigned to such term in Section
5.01(d).
"Recovery Event" any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Credit Party.
"Refinancing" has the meaning set forth in the recitals to this
Agreement.
"Register" has the meaning set forth in Section 9.04.
"Reinvestment Deferred Amount" means, with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by any Credit Party in
connection therewith that are not applied to prepay the Loans pursuant to
Section 2.06(b) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event" means any Restricted Asset Sale or Recovery Event
in respect of which the Company has delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by a Financial
Officer stating that no Event of Default has occurred and is continuing and that
the Company (directly or indirectly through a Subsidiary) intends and expects to
use all or a specified portion of the Net Cash Proceeds of a Restricted Asset
Sale or Recovery Event to acquire or repair assets useful in its business.
"Reinvestment Prepayment Amount" means with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire or
repair assets useful in the Company's business.
"Reinvestment Prepayment Date" means with respect to any Reinvestment
Event, the earlier of (a) the date occurring twelve months after such
Reinvestment Event and (b) the date on which the Company shall have determined
not to, or shall have otherwise ceased to, acquire or repair assets useful in
the Company's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
14
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization as such term is used in Section
4241 of ERISA.
"Replacement Facility" means a replacement credit facility, the
proceeds of which are initially used to repay all amounts outstanding under the
Existing Credit Agreement and thereafter for general corporate purposes,
providing for a commitment of at least $250,000,000, and with terms and
conditions acceptable to the Administrative Agent and the Required Lenders.
"Report" means reports prepared by the Administrative Agent or another
Person showing the results of appraisals, field examinations or audits
pertaining to the Company's assets from information furnished by or on behalf of
the Company, after the Administrative Agent has exercised its rights of
inspection pursuant to this Agreement, which Reports may be distributed to the
Lenders by the Administrative Agent.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under Sections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. Section 4043.
"Required Lenders" means, at any time, Lenders having Loans and unused
Commitments representing more than 50% of the sum of the total Loans and unused
Commitments at such time.
"Requirement of Law" means as to any Person, any requirements imposed
by the Certificate of Incorporation and By-Laws or other organizational or
governing documents of such Person, or any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" means, with respect to any Person, the
president, chief executive officer, the chief operating officer, the chief
financial officer, treasurer, controller or any vice president of such Person.
"Restricted Asset Sale" means any sale, sale-leaseback, or other
disposition by the Company or any Subsidiary thereof of any of its property or
assets, including the stock of any Subsidiary of the Company that is restricted
by Section 6.05, other than sales and dispositions permitted by Sections
6.05(a), (b), (c), (f), (h), (j) and (k).
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Security Documents" means, collectively, the Intercreditor Agreement,
the Guarantee and Collateral Agreement, any Mortgages and any other documents
granting a Lien upon the Collateral as security for payment of the Obligations.
"Senior Subordinated Debt" means (a) the Indebtedness under the Senior
Subordinated Notes and (b) any unsecured notes or debentures of the Company,
subordinated to the prior payment of the Loans and the other obligations under
the Credit Documents, that may be issued by the Company in order to refinance
the Senior Subordinated Notes and/or prepay the Loans, provided that (i) the
scheduled amortization, the final maturity and any scheduled put dates shall be
at least one year beyond the corresponding amortization dates, the Maturity Date
and the put dates for the Loans, respectively, and the subordination provisions
shall be at least as favorable to the Lenders as those in the Senior
Subordinated Notes, and the other terms and conditions thereof (including,
without limitation, the covenant and event of
15
default provisions thereof but excluding the interest rate and any call
protection provisions) taken as a whole shall be at least as favorable to the
Company and the Lenders as those in the Senior Subordinated Notes, (ii) no
covenant contained in this Agreement or any of the other Credit Documents would
be violated on the proposed issuance date after giving effect to (A) the
issuance of such notes or debentures, (B) the payment of all issuance costs,
commissions, discounts, redemption premiums and other fees and charges
associated therewith, (C) the use of proceeds thereof and (D) the redemption,
repayment, retirement and repurchase of all Indebtedness of the Company and its
Subsidiaries to be redeemed, repaid or repurchased in connection therewith and
(iii) substantially final drafts of the documentation governing any such notes
or debentures, showing the terms thereof, shall have been furnished to the
Lenders at least 10 days prior to the date of issuance of such notes or
debentures.
"Senior Subordinated Notes" means the 7% senior subordinated notes due
2014 issued by the Company pursuant to the Senior Subordinated Note Indenture.
"Senior Subordinated Note Indenture" means the Indenture, dated as of
January 16, 2004, between the Company and The Bank of New York, as trustee, as
the same may be amended or modified in accordance with the terms thereof.
"Senior Unsecured Debt" means (a) the Indebtedness under the
Exchangeable Notes and (b) unsecured notes or debentures of the Company that may
be issued by the Company in order to refinance the Exchangeable Notes or other
Senior Unsecured Debt and/or prepay the Loans, provided that (i) the scheduled
amortization, the final maturity and any scheduled put dates shall be at least
one year beyond the corresponding amortization dates, the Maturity Date and the
put dates for the Loans, respectively, and the other terms and conditions
thereof (including, without limitation, the covenant and event of default
provisions thereof but excluding the interest rate and any call protection
provisions) taken as a whole shall be at least as favorable to the Company and
the Lenders as those in the Exchangeable Notes, (ii) no covenant contained in
this Agreement or any of the other Credit Documents would be violated on the
proposed issuance date after giving effect to (A) the issuance of such notes or
debentures, (B) the payment of all issuance costs, commissions, discounts,
redemption premiums and other fees and charges associated therewith, (C) the use
of proceeds thereof and (D) the redemption, repayment, retirement and repurchase
of all Indebtedness of the Company and its Subsidiaries to be redeemed, repaid
or repurchased in connection therewith and (iii) substantially final drafts of
the documentation governing any such notes or debentures, showing the terms
thereof, shall have been furnished to the Lenders at least 10 days prior to the
date of issuance of such notes or debentures.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA and which is not a Multiemployer Plan.
"Solvent" has the meaning set forth in Section 3.19.
"Specified Adjustments" means the possible adjustments to inventory
accounting, vendor allowances and store surplus fixtures and supplies by the
Company, as disclosed in the Press Releases, together with other adjustments of
an immaterial nature that may be included in any restated financial statements
issued to reflect the adjustments described in the Press Releases.
"Specified Defaults" means the defaults and events of default that
have occurred, may occur, or which are alleged to have occurred under each
series of the Existing Notes as a result, directly or indirectly, of the failure
of the Company to timely make the 2005 Filings.
"Statutory Reserve Rate" means with respect to the Adjusted LIBO Rate,
a fraction (expressed as a decimal), the numerator of which is the number one
and the denominator of which is the
16
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock of each class
or other interests having ordinary voting power (other than stock or other
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, by such Person or by one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. A Subsidiary shall be deemed wholly-owned by a Person who owns
directly or indirectly all of the voting shares of stock or other interests of
such Subsidiary having voting power under ordinary circumstances to vote for
directors or other managers of such corporation, partnership or other entity,
except for (i) directors' qualifying shares and (ii) shares owned by employees.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company; provided that any joint venture in which an investment is made
pursuant to Section 6.06(j) shall at the option of the Company, so long as (a)
such investment is maintained in reliance on such Section 6.06(j) and (b) such
joint venture is not included in the consolidated financial statements of the
Company, not be a "Subsidiary" of the Company for any purpose of this Agreement.
"Subsidiary Guarantor" means each Credit Party other than the Company
and Holdings.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Company or the Subsidiaries shall be a Swap Agreement.
"Synthetic Purchase Agreement" means any agreement pursuant to which
the Company or any of its Subsidiaries is or may become obligated to make (a)
any payment in connection with the purchase by any third party from a Person
other than the Company or any of its Subsidiaries of any Capital Stock of the
Company or any of its Subsidiaries or any Indebtedness referred to in Section
6.08 (other than in connection with any such payment which the Company or any of
its Subsidiaries would be permitted to make pursuant to Section 6.08 or 6.10, as
applicable) or (b) any payment (except as otherwise expressly permitted by
Section 6.08 or 6.10) the amount of which is determined by reference to the
price or value at any time of any such Capital Stock or Indebtedness; provided,
that no phantom stock or similar plan providing for payments only to current or
former directors, officers or employees of the Company or any of its
Subsidiaries (or to their heirs or estates) shall be deemed to be a Synthetic
Purchase Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
17
"Total Debt" means, at any time, all Indebtedness (including all
Obligations hereunder) of the Company and its consolidated Subsidiaries at such
time.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
"Warrant Agreement" means the Confirmation Re: Warrants, dated as of
July 25, 2005, between JPMorgan Chase Bank and Holdings, as the same may be
amended and replaced from time to time in a manner not adverse to the Lenders.
"Wholly-Owned Domestic Subsidiary" means each Domestic Subsidiary
which is also a Wholly-Owned Subsidiary.
"Wholly-Owned Subsidiary" means each Subsidiary of the Company which
is wholly-owned by it, as provided in the second sentence of the definition of
Subsidiary contained herein.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans and Borrowings may be classified and referred to by Type
(e.g., a "Eurodollar Loan" or a "Eurodollar Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
18
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans to the Company from time to time
during the Availability Period in an aggregate principal amount not exceeding
such Lender's Commitment. The Loans may from time to time be Eurodollar Loans or
ABR Loans, as determined by the Company and notified to the Administrative Agent
in accordance with Sections 2.03 and 2.08. Once repaid, Loans may not be
re-borrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Company may request
in accordance herewith. Each Lender at its option may 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 Company to repay such Loan in accordance with the terms of
this Agreement.
(b) The Company may request Loans to be made on no more than five
Business Days during the Availability Period. The conversion or continuation of
a Borrowing under Section 2.08 shall not be considered the making of a Loan for
purposes of this restriction.
(c) Notwithstanding any other provision of this Agreement, the Company
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the
Company shall notify the Administrative Agent of such request either in writing
(delivered by hand or facsimile) in a form approved by the Administrative Agent
and signed by the Company or by telephone (a) in the case of a Eurodollar
Borrowing, not later than 2:00 p.m., New York City time, three Business Days
before the date of the proposed Borrowing or (b) in the case of an ABR
Borrowing, not later than 2:00 p.m., New York City time, not later than one
Business Day before the date of the proposed Borrowing. Each such Borrowing
Request shall be irrevocable and, if telephonic, shall be confirmed promptly by
hand delivery or facsimile to the Administrative Agent of a written Borrowing
Request in a form approved by the Administrative Agent and signed by the
Company. Each such telephonic and written Borrowing Request shall specify the
following information:
(i) the aggregate amount of the requested Borrowing and a
breakdown of the separate wires comprising such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the purpose for which the proceeds of such Borrowing shall be
used.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Company shall be deemed
to have selected an Interest Period of one month's duration. Promptly
19
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Repayment of Loans/Put Rights. The Loan of each Lender
shall be repaid in consecutive quarterly installments, each of which shall be in
an amount equal to such Lender's Applicable Percentage of the aggregate
installment payable on such date, payable on the last Business Day of March,
June, September and December each year, commencing on December 31, 2006 in an
amount equal to 0.25% of the aggregate principal amount of the Loans, with the
balance payable in full on the Maturity Date.
(b) If the Maturity Date is the date that is the twentieth anniversary
of the Closing Date, on each of the sixth, tenth and fifteenth anniversary (each
a "Put Date") of the Closing Date, the Administrative Agent shall have the
right, upon written notice to the Company given no later than 30 days prior to
such anniversary, to require the Company to repay the Loans in full, together
with all unpaid interest thereon and any other amounts payable hereunder, it
being acknowleged that, unless all Lenders direct the Administrative Agent to
the contrary, no later than 30 days prior to each Put Date, if the Loans are
still outstanding at such time, the Administrative Agent shall give such notice
to the Company. If notice is given pursuant to this Section 2.04(b), the Loans
together with all unpaid interest thereon and any other amounts payable
hereunder shall be payable in full on such anniversary.
SECTION 2.05. Optional Prepayment. The Company 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 no later
than 11:00 A,M., New York City time, three Business Days prior thereto, in the
case of Eurodollar Loans, and no later than 11:00 A.M., New York City time, one
Business Day prior thereto, in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Company
shall also pay any amounts owing pursuant to Section 2.16; and provided further,
that any such prepayment with the proceeds of any loans under any credit
facility and any repricing of the Loans effected at any time prior to the first
anniversary of the Closing Date shall be subject to a prepayment premium equal
to 1% of the aggregate Loans so prepaid or repriced, which premium shall be
payable on the date of such prepayment or repricing. 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 (and premium, if applicable). Partial
prepayments of Loans shall be in an aggregate principal amount of $1,000,000 or
a whole multiple thereof.
SECTION 2.06. Mandatory Prepayment. (a) If any Capital Stock or
Indebtedness shall be issued or incurred by any Credit Party (excluding any
Indebtedness incurred in accordance with Section 6.01), an amount equal to (i)
100% of the Net Cash Proceeds of such Indebtedness, and (ii) 75% of the Net Cash
Proceeds of such Capital Stock, shall be applied on the date of such issuance or
incurrence toward the prepayment of the Loans as set forth in paragraph (c) of
this Section.
(b) If on any date any Credit Party shall receive Net Cash Proceeds
from any Restricted Asset Sale or Recovery Event and Availability as of such
date (as such term is defined in the Existing Credit Agreement) is more than
$30,000,000, then, unless a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Loans as set forth in paragraph (c) of this Section; provided,
that, notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of
Restricted Asset Sales and Recovery Events that may be excluded from the
foregoing requirement pursuant to a Reinvestment Notice shall not exceed
$2,000,000 in any
20
fiscal year of the Company and (ii) on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Loans as set
forth in paragraph (c) of this Section.
(c) Amounts to be applied in connection with prepayments made pursuant
to Section 2.06 shall be applied in accordance with Section 2.18(a). The
application of any prepayment pursuant to this Section shall be made, first, to
ABR Loans and, second, to Eurodollar Loans and shall be applied pro-rata to each
remaining installment of the Loans. Each prepayment of the Loans under this
Section shall be accompanied by accrued interest to the date of such prepayment
on the amount prepaid.
SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders in an amount equal to such Lender's Applicable Percentage.
The Administrative Agent will make such Loans available to the Company by
promptly crediting the amounts so received, in like funds, to the account at the
Administrative Agent designated to receive such funds by the Company.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Company a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Company severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Company to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the greater of the Federal Funds Effective Rate and
a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Company, the
interest rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.08. Interest Elections. (a) Each Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Company may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Company may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b) To make an election pursuant to this Section, the Company shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Company were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile to the Administrative Agent of a written Interest Election Request in
a form approved by the Administrative Agent and signed by the Company.
21
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Company shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein,
the Company shall be deemed to have delivered an Interest Election Request
requesting that such Eurodollar Borrowing be converted to a Eurodollar Borrowing
with an Interest Period of one month at the end of such Interest Period.
Notwithstanding any contrary provision hereof, if a Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders,
so notifies the Company, then, so long as a Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.
(f) Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions and continuations of Eurodollar Loans and all selections
of Interest Periods shall be in such amounts and be made pursuant to such
elections so that, (a) after giving effect thereto, the aggregate principal
amount of each Eurodollar Loan shall be equal to $5,000,000 or a whole multiple
of $1,000,000 in excess thereof and (b) no more than five Eurodollar Loans shall
be outstanding at any one time.
SECTION 2.09. Termination and Reduction of Commitments. (a) Unless
previously terminated all Commitments shall terminate at the end of the
Availability Period.
(b) The Company may at any time terminate all or part of the
Commitments upon the payment in full of any accrued and unpaid fees in respect
of the Commitments so terminated (it being agreed that if all or any part of the
Commitments are terminated prior to the Closing Date and before July 16, 2006 no
additional commitment fees shall be payable with respect to the portion so
terminated) and the payment in full of all reimbursable expenses and other
Obligations together with accrued and unpaid interest thereon.
22
(c) The Commitments shall automatically be reduced (i) to the extent
(on a dollar for dollar basis) that the Company repurchases or refinances any of
the Existing Notes other than with the proceeds of Loans hereunder, (ii) if the
Company obtains waivers or amendments of or to the terms of any of the issues of
the Exchangeable Notes which prevents the occurrence of or cures all events of
default thereunder (prior to any repurchase or acceleration) that may arise from
the Specified Defaults, in which case the Commitments shall be reduced by the
outstanding amount of the relevant issue of Exchangeable Notes (less the amount
of any consent fees and advisory and legal fees and expenses in connection
therewith), (iii) if (x) the Company obtains waivers or amendments of or to the
terms of the Senior Subordinated Notes which prevents the occurrence of or cures
all events of default thereunder (prior to any repurchase or acceleration) that
may arise from the Specified Defaults, (y) the tender offer related to the
obtaining of such waivers or amendments has expired and (z) payment has been
made for the Senior Subordinated Notes tendered pursuant to such tender offer,
in which case the Commitments shall be reduced by the outstanding amount of the
Senior Subordinated Notes not so tendered and repaid (less the amount of any
consent fees and advisory and legal fees and expenses in connection therewith),
or (iv) if the Company makes the 2005 Filings and delivers the related financial
statements as required by the relevant indenture prior to any repurchase or
acceleration of any of the Existing Notes and receives confirmation from the
relevant indenture trustee that the Specified Defaults have been cured, in which
case the Commitments shall be reduced by the outstanding amount of the relevant
issue of Existing Notes. In the event one of the events above occurs with
respect to all the Existing Notes, the Commitments shall be reduced to zero and
cancelled
(d) The Company shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least one Business Day prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Company pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Company may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Company (by notice to the Administrative Agent
on or prior to the specified effective date) if such condition is not satisfied.
Any termination or reduction of the Commitments shall be permanent. Each
reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the principal amount of each Loan of such Lender in
installments as set forth in Section 2.04 (or on such earlier date on which the
Loans become due and payable pursuant to Article VII).
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Company to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded
23
therein; provided that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Company to repay the Loans in accordance with the terms of
this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Company shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11. Intentionally Deleted.
SECTION 2.12. Fees (a) The Company agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at the
Commitment Fee Rate on the Available Commitment of such Lender determined daily
during the period from and including the Closing Date to but excluding the date
on which the Lenders' Commitments terminate. Accrued commitment fees shall be
payable in arrears on September 30, 2006 and December 16, 2006 and on any other
date on which the Commitments are fully utilized or terminate. All commitment
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).
(b) The Company agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of commitment fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, (A) if any principal of or interest
on any Loan or any fee or other amount payable by the Company hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section and (B) at
any time that an Event of Default (other than as described in (A) above) has
occurred and is continuing, all Loans shall bear interest, after as well as
before judgment, at a rate per annum equal to 2% plus the rate otherwise
applicable to such Loans as provided in the preceding paragraphs of this
Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or
24
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end
of the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period,
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans made by such
Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Company will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender, to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such
25
Lender's holding company with respect to capital adequacy), then from time to
time the Company will pay to such Lender such additional amount or amounts as
will compensate such Lender or such Lender's holding company for any such
reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Company and shall be conclusive absent manifest error. The Company shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Company shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender
notifies the Company of the Change in Law giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.09(d) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Company pursuant to
Section 2.19 then, in any such event, the Company shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Company and shall be conclusive absent manifest error. The Company shall
pay such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
obligation of the Company hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Company
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent or Lender (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions and (iii) the
Company shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
26
(b) In addition, the Company shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Administrative Agent and each
Lender within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Company hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Company by a Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Company to a Governmental Authority, the Company shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Company is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Company as will permit such payments to be
made without withholding or at a reduced rate. For avoidance of doubt, the
documentation covered by this Section 2.17(e) shall include but not be limited
to U.S. Internal Revenue Service Forms W-8BEN, Form W-8ECI, or W-8IMY or any
subsequent versions thereof or successors thereto or, in the case of a Foreign
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", such
Foreign Lender delivers a Form W-8BEN or W-8IMY with the appropriate forms
attached thereto, or any subsequent versions thereof or successors thereto
properly completed and duly executed by such Foreign Lender and represents that
such Foreign Lender is the sole record and beneficial owner of the Loans or the
obligations evidenced by Note(s) in respect of which it is providing the
following representations and is not (A) a "bank" within the meaning of Section
881(c)(3)(A) of the Code and furthermore (i) is not subject to regulatory or
other legal requirements as a bank in any jurisdiction, and (ii) has not been
treated as a bank for purposes of any tax, securities law or other filing or
submission made to any Governmental Authority, any application made to a rating
agency or qualification for any exemption from tax, securities law or other
legal requirements, (B) a "10 percent shareholder" of the Company within the
meaning of Section 881(c)(3)(B) of the Code, or (C) a "controlled foreign
corporation" described in Section 881(c)(3)(C) of the Code. Such forms shall be
delivered by each Foreign Lender on or before the date it becomes a party to
this Agreement. In addition, each Foreign Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Foreign Lender. Each Foreign Lender shall promptly notify the Company at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Company (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Company or with respect to which the
Company has paid additional amounts pursuant to this Section 2.17, it shall pay
over such refund to the Company (but only to the extent of indemnity payments
made, or additional
27
amounts paid, by the Company under this Section 2.17 with respect to the Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Company, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to the Company (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Company or any other Person.
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of
Set-offs. (a) The Company shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., New York City
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, except that payments pursuant to Sections
2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
(b) Any proceeds of Collateral received by the Administrative Agent
pursuant to the terms of the Security Documents (i) not constituting a specific
payment of principal, interest, fees or other sum payable under the Credit
Documents (which shall be applied as specified by the Company) or (ii) after an
Event of Default has occurred and is continuing and the Administrative Agent so
elects or the Required Lenders so direct, such funds shall be applied ratably
first, to pay any fees, indemnities, or expense reimbursements including amounts
then due to the Administrative Agent from the Company, second, to pay any fees
or expense reimbursements then due to the Lenders from the Company, third, to
pay interest then due and payable on the Loans ratably, fourth, to prepay
principal on the Loans ratably, and fifth, to the payment of any other Secured
Obligation due to the Administrative Agent or any Lender by the Company.
Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by the Company, or unless a Default is in existence, neither the
Administrative Agent nor any Lender shall apply any payment which it receives to
any Eurodollar Loan except (a) on the expiration date of the Interest Period
applicable to any such Eurodollar Loan or (b) in the event, and only to the
extent, that there are no outstanding ABR Loans and, in any event, the Company
shall pay the break funding payment required in accordance with Section 2.16.
The Administrative Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Obligations.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i)
28
if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Company pursuant to and in accordance with the express terms
of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Company or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Company consents
to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Company rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Company in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Company prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Company will not make
such payment, the Administrative Agent may assume that the Company has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Company has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it hereunder, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations hereunder until all such unsatisfied obligations are
fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. If any
Lender requests compensation under Section 2.15, or if the Company is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then:
(a) such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender (and the Company hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment);
and
(b) the Company may, at its sole expense and effort, require such
Lender or any Lender that defaults in its obligation to fund Loans hereunder
(herein, a "Departing Lender"), upon notice to the Departing Lender and the
Administrative Agent, to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in Section 9.04), all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Company shall have received the
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) the Departing Lender shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from
29
a claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Departing Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Company to require
such assignment and delegation cease to apply.
SECTION 2.20. Returned Payments. If after receipt of any payment which
is applied to the payment of all or any part of the Obligations, the
Administrative Agent or any Lender is for any reason compelled to surrender such
payment or proceeds to any Person because such payment or application of
proceeds is invalidated, declared fraudulent, set aside, determined to be void
or voidable as a preference, impermissible setoff, or a diversion of trust
funds, or for any other reason, then the Obligations or part thereof intended to
be satisfied shall be revived and continued and this Agreement shall continue in
full force as if such payment or proceeds had not been received by the
Administrative Agent or such Lender. The provisions of this Section 2.20 shall
be and remain effective notwithstanding any contrary action which may have been
taken by the Administrative Agent or any Lender in reliance upon such payment or
application of proceeds. The provisions of this Section 2.20 shall survive the
termination of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans, the Company hereby represents and warrants to each Lender and
the Administrative Agent, as of the Closing Date and as of the making of any
extension of credit hereunder:
SECTION 3.01. Financial Condition. Other than as described in and
qualified by the Press Releases and subject to all changes necessitated by the
Specified Adjustments that are within the scope of the Press Releases but also
including other adjustments of an immaterial nature that may be included in any
restated financial statements issued to reflect the adjustments described in the
Press Releases, the consolidated balance sheet of the Company and its
consolidated Subsidiaries as at January 30, 2005 and the related consolidated
statement of operations for the fiscal year of the Company ended on such date,
audited by Pricewaterhouse Coopers LLP, or any successor thereto, a copy of
which has heretofore been furnished to each Lender, present fairly in accordance
with GAAP the consolidated financial condition of the Company and its
consolidated Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the fiscal year of the Company
then ended. All such financial statements have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
such accountants and as disclosed therein and except as described in and
qualified by the Press Releases and subject to all changes within the scope of
the Press Releases necessitated by the Specified Adjustments). Neither the
Company nor any of its consolidated Subsidiaries had, at the date of the most
recent balance sheet referred to above, any material Contingent Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any material
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto or expressly
permitted to be incurred hereunder. During the period from January 30, 2005, to
and including the date hereof there has been no Disposition by the Company or
any of its Subsidiaries of any material part of its business or property.
SECTION 3.02. No Change. Since October 30, 2005, (a) there has been no
change, and (as of the Closing Date only) no development or event (other than
any changes in the financial condition of the Company resulting from (i) the
matters described in the Press Releases; (ii) the need to make any or all of the
Specified Adjustments and (iii) the occurrence of the Specified Defaults), which
30
has had or could reasonably be expected to have a Material Adverse Effect and
(b) no dividends or other distributions have been declared, paid or made upon
the Capital Stock of the Company nor has any of the Capital Stock of the Company
been redeemed, retired, purchased or otherwise acquired for value by the
Company, except as permitted by Section 6.08.
SECTION 3.03. Corporate Existence; Compliance with Law. Each of the
Company and its Subsidiaries (a) is duly organized and validly existing under
the laws of the jurisdiction of organization, (b) has full power and authority
and possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to use its name and to own, lease or otherwise
hold its properties and assets and to carry on its business as presently
conducted other than such franchises, licenses, permits, authorizations and
approvals the lack of which, individually or in the aggregate, would not have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries, taken
as a whole, (c) is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership, leasing or
holding of its properties makes such qualification necessary, except such
jurisdictions where the failure so to qualify would not have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole, and (d) except
as disclosed in the Environmental Reports, is in compliance with all applicable
statutes, laws, ordinances, rules, orders, permits and regulations of any
governmental authority or instrumentality, domestic or foreign (including,
without limitation, those related to Hazardous Materials and substances), except
where noncompliance would not be reasonably likely to have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole. Except as
disclosed in the Environmental Reports and except with respect to the matters
described in the Press Releases, none of the Company or any of its Subsidiaries
has received any written communication from a Governmental Authority that
alleges that the Company or any of its Subsidiaries is not in compliance with
all material federal, state, local or foreign laws, ordinances, rules and
regulations, except to the extent such noncompliance, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
SECTION 3.04. Corporate Power; Authorization. Each of the Company and
its Subsidiaries has the power and authority to make, deliver and perform each
of the Credit Documents to which it is a party, and the Company has the
corporate power and authority and legal right to borrow hereunder. Each of the
Company and its Subsidiaries has taken all necessary action to authorize the
execution, delivery and performance of each of the Credit Documents to which it
is or will be a party and the Company has taken all necessary corporate action
to authorize the borrowings hereunder. No consent or authorization of, or filing
with, any Person (including, without limitation, any Governmental Authority) is
required in connection with the execution, delivery or performance by the
Company or any of its Subsidiaries, or for the validity or enforceability in
accordance with its terms against the Company or any of its Subsidiaries, of any
Credit Document except for consents, authorizations and filings which have been
obtained or made and are in full force and effect and except (i) such consents,
authorizations and filings, the failure to obtain or perform (x) which would not
have a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, and (y) which would not adversely affect the validity or enforceability
of any of the Credit Documents or the rights or remedies of the Administrative
Agent or the Lenders thereunder and (ii) such filings as are necessary to
perfect the Liens of the Lenders created pursuant to this Agreement and the
Security Documents.
SECTION 3.05. Enforceable Obligations. This Agreement and each of the
other Credit Documents and any other agreement to be entered into by any Credit
Party pursuant to the Credit
31
Documents have been duly executed and delivered on behalf of such Credit Party
that is party thereto. This Agreement constitutes, and each of the other Credit
Documents and any other agreement to be entered into by any Credit Party
pursuant to the Credit Documents will constitute upon execution and delivery,
the legal, valid and binding obligation of such Credit Party, and is enforceable
against such Credit Party in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, or similar
laws affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
SECTION 3.06. No Legal Bar. The execution, delivery and performance of
each Credit Document, the incurrence or issuance of and use of the proceeds of
the Loans and the transactions contemplated by Credit Documents, (a) will not
violate any Requirement of Law or any Contractual Obligation applicable to or
binding upon the Company or any Subsidiary of the Company or any of their
respective properties or assets, in any manner which, individually or in the
aggregate, (i) would have a material adverse effect on the ability of the
Company or its Subsidiaries taken as a whole to perform their obligations under
the Credit Documents, (ii) would give rise to any liability on the part of the
Administrative Agent or any Lender or (iii) would have a material adverse effect
on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole, and (b) will
not result in the creation or imposition of any Lien on any of its properties or
assets pursuant to any Requirement of Law applicable to it or any of its
Contractual Obligations, except for the Liens arising under the Security
Documents.
SECTION 3.07. No Material Litigation. No litigation by, investigation
known to the Company by, or proceeding of, any Governmental Authority is pending
against the Company or any of its Subsidiaries (including after giving effect to
the Refinancing) with respect to the validity, binding effect or enforceability
of this Agreement or any other Credit Document, the Loans made hereunder, the
use of proceeds hereof, and the other transactions contemplated hereby. No
lawsuits, claims, proceedings or investigations pending or, to the best
knowledge of the Company, threatened as of the Closing Date against or affecting
the Company or any Subsidiary of the Company or any of their respective
properties, assets, operations or businesses (including after giving effect to
the Refinancing) in which there is a probability of an adverse determination, is
reasonably likely, if adversely decided, to have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
SECTION 3.08. Investment Company Act. Neither the Company nor any
Subsidiary of the Company is an "investment company" or a company "controlled"
by an "investment company" (as each of the quoted terms is defined or used in
the Investment Company Act of 1940, as amended).
SECTION 3.09. Federal Regulation. No part of the proceeds of any of
the Loans or any drawing under a Letter of Credit will be used for any purpose
which violates the provisions of Regulation T, U or X of the Board. Neither the
Company nor any of its Subsidiaries is engaged or will engage, principally or as
one of its important activities, in the business of extending credit for the
purpose of "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under said Regulation U or for any purpose
that violates the provisions of the Regulations of the Board.
SECTION 3.10. No Default. Except for the Specified Defaults, the
Company and each of its Subsidiaries have performed all material obligations
required to be performed by them under their respective Contractual Obligations
(including after giving effect to the Refinancing) and they are not (with or
without the lapse of time or the giving of notice, or both) in breach or default
in any respect thereunder, except to the extent that such breach or default
would not have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole. Neither the Company nor any of its Subsidiaries
(including after giving
32
effect to the Refinancing) is in default under any material judgment, order or
decree of any Governmental Authority, domestic or foreign, applicable to it or
any of its respective properties, assets, operations or business, except to the
extent that any such defaults would not, in the aggregate, have a material
adverse effect on the business, assets, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
SECTION 3.11. Taxes. Each of the Company and its Subsidiaries has
filed or caused to be filed all material tax returns which, to the best
knowledge of the Company, are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any amount which
is currently being contested in good faith by appropriate proceedings and with
respect to which reserves (or other sufficient provisions) in conformity with
GAAP have been provided on the books of the Company or its Subsidiaries, as the
case may be); and no tax Lien has been filed, and, to the best knowledge of the
Company, no written claim is being asserted, with respect to any such taxes,
fees or other charges other than as disclosed on Schedule 3.11.
SECTION 3.12. Subsidiaries. As of the Closing Date, the only
Subsidiaries of the Company are those listed on Schedule 3.12. On the Closing
Date and at all times thereafter, Holdings owns 100% of the issued and
outstanding Capital Stock of the Company.
SECTION 3.13. Ownership of Property; Liens. As of the Closing Date and
as of the making of any extension of credit hereunder (subject to transfers and
dispositions of property permitted under Section 6.05) each of the Company and
its Subsidiaries has good and valid title to all of its material assets (other
than real property or interests in real property) in each case free and clear of
all mortgages, liens, security interests or encumbrances of any nature
whatsoever except Permitted Liens. With respect to real property or interests in
real property, as of the Closing Date, each of the Company and its Subsidiaries
has (i) fee title to all of the real property listed on Schedule 3.13 under the
heading "Fee Properties" (each, a "Fee Property"), and (ii) good and valid title
to the leasehold estates in all of the real property leased by it and, in the
case of any such leasehold estates located in the United States with an
aggregate annual base rent in excess of $100,000 listed on Schedule 3.13 under
the heading "Leased Properties" (each, a "Leased Property"), in each case free
and clear of all mortgages, liens, security interests, easements, covenants,
rights-of-way and other similar restrictions of any nature whatsoever, except
Permitted Liens, including with respect to Leased Property, the terms and
provisions of the respective lease therefor, including, without limitation, any
matters affecting the fee title and any estate superior to the leasehold estate
related thereto. The Fee Properties and the Leased Properties constitute, as of
the Closing Date, all of the real property (with an aggregate annual base rent
in excess of $100,000, with respect to Leased Properties) owned in fee or leased
by the Company and its Subsidiaries.
SECTION 3.14. ERISA. The "amount of unfunded benefit liabilities"
(within the meaning of Section 4001(a)(18) of ERISA) of any Single Employer Plan
of the Company or any Commonly Controlled Entity would not result in a material
liability to the Company if any or all such Single Employer Plans were
terminated. None of the Company, any Subsidiary of the Company or any Commonly
Controlled Entity would be liable for any material amount pursuant to Sections
4063 or 4064 of ERISA, if any Single Employer Plan were to terminate. Neither
the Company nor any Commonly Controlled Entity has been involved in any
transaction that would cause the Company to be subject to material liability
with respect to a Single Employer Plan to which the Company or any Commonly
Controlled Entity contributed or was obligated to contribute during the six-year
period ending on the date this representation is made under Sections 4062 or
4069 of ERISA. Neither the Company nor any Commonly Controlled Entity has
incurred any material liability under Title IV of ERISA which could become or
remain a material liability of the Company after the Closing Date and the
consummation of the Transaction. None of the Company, any Subsidiary of the
Company, or, to the best knowledge of the
33
Company, any director, officer or employee thereof, or any of the Plans or any
trust created thereunder, or any fiduciary thereof, has engaged in a transaction
or taken any other action or omitted to take any action involving any Plan which
could constitute a prohibited transaction within the meaning of Section 406 of
ERISA which is not otherwise exempted and which would result in a material
liability to the Company, or would cause the Company to be subject to either a
material liability or material civil penalty assessed pursuant to Sections 409
or 502(i) or (l) of ERISA or a material tax imposed pursuant to Sections 4975 or
4976 of the Code. Each of the Plans (to the best knowledge of the Company with
respect to any Multiemployer Plan) has been operated and administered in all
material respects in accordance with applicable laws, including but not limited
to ERISA and the Code. There are no material pending or, to the best knowledge
of the Company, threatened claims by or on behalf of any of the Plans or any
fiduciary, by any employee or beneficiary covered under any such Plan, or
otherwise involving any such Plan or fiduciary for which the Company could have
any material liability (other than routine claims for benefits). To the best
knowledge of the Company, no condition exists, and no event has occurred with
respect to any Multiemployer Plan which presents a material risk of a complete
or partial withdrawal under Subtitle E of Title IV of ERISA for which the
Company could have any material liability, nor has the Company or any Commonly
Controlled Entity been notified that any such Multiemployer Plan is Insolvent or
in Reorganization. Neither the Company nor any Commonly Controlled Entity nor
any Subsidiary has been a party to any transaction or agreement to which the
provisions of Section 4204 of ERISA were applicable that could reasonably be
expected to result in any material liability for the Company. None of the
Company, or any Commonly Controlled Entity or any of their respective
Subsidiaries is obligated to contribute to a Multiemployer Plan, on behalf of
any current or former employee of the Company, any Commonly Controlled Entity or
such Subsidiary. The liability to which the Company, any Commonly Controlled
Entity or any of their respective Subsidiaries would become subject under ERISA
if all such Persons were to withdraw completely from all Plans on the Closing
Date (after giving effect to the Transaction) is not in excess of $2,000,000.
None of the Plans or any trust established thereunder (to the best knowledge of
the Company with respect to any Multiemployer Plan) has incurred any
"accumulated funding deficiency" (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, as of the last day of the most recent
fiscal year of each of the Plans. No contribution failure has occurred with
respect to any Plan sufficient to give rise to a lien under Section 302(f) of
ERISA.
SECTION 3.15. Security Interest. The provisions of this Agreement and
the other Credit Documents are effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein. In the case
of the Pledged Stock described in the Guarantee and Collateral Agreement, so
long as stock certificates representing such Pledged Stock are in the possession
of the Administrative Agent, and in the case of the other Collateral described
in the Guarantee and Collateral Agreement, as of the date when financing
statements and other filings specified on Schedule 3.15(a) in appropriate form
were filed in the offices specified on Schedule 3.15(a), the Guarantee and
Collateral Agreement constituted, and such Lien and security interest continue
to constitute, a fully perfected Lien on, and security interest in, all right,
title and interest of the Credit Parties in such Collateral, as security for the
Obligations, in each case prior and superior in right to any other Person but in
the case of Liens securing the obligations outstanding under the Existing Credit
Agreement, subject to the Intercreditor Agreement, except to the extent that a
security interest cannot be perfected therein by the filing of a financing
statement or the taking of possession under the UCC and subject to Liens
permitted by Section 6.02.
SECTION 3.16. Copyrights, Permits, Trademarks and Licenses. As of the
Closing Date, Schedule 3.16 sets forth a true and complete list of all material
registered trademarks, trade names, service marks, patents, pending patent
applications and registered copyrights and applications therefor owned, used or
filed by or licensed to the Company and its Subsidiaries and, with respect to
registered trademarks (if any), contains a list of all jurisdictions in which
such trademarks are registered or applied
34
for and all registration and application numbers. Except as disclosed on
Schedule 3.16, the Company or a Subsidiary owns or has the right to use, without
payment to any other party, registered trademarks, trade names, service marks,
patents, pending patent applications and copyrights and applications therefor
referred to in such schedule. To the best knowledge of the Company, no claims
are pending by any Person with respect to the ownership, validity,
enforceability or the Company's or any Subsidiary's use of any such registered
trademarks, trade names, service marks, patents, pending patent applications and
copyrights, or applications therefor, challenging or questioning the validity or
effectiveness of any of the foregoing, in any jurisdiction, domestic or foreign,
except to the extent such claims could not reasonably be expected to have a
material adverse effect on the Company and its Subsidiaries, taken as a whole.
SECTION 3.17. Environmental Matters. Except as set forth in the
Environmental Reports and except to the extent that the facts and circumstances
giving rise to the failure of any of the following to be true and correct would
not be reasonably likely to have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole:
(a) to the best knowledge of the Company, no parcel of real property
owned or operated by the Company or any of its Subsidiaries contains, or has
previously contained, in, on or under including, without limitation, the soil
and groundwater thereunder, any Hazardous Materials in amounts or concentrations
that constitute or constituted a material violation of, or could reasonably give
rise to material liability under, Environmental Laws.
(b) to the best knowledge of the Company, each parcel of real property
owned or operated by the Company or any of its Subsidiaries and all operations
and facilities at such properties taken as a whole are in material compliance
with all Environmental Laws, and there is no contamination or violation of any
Environmental Law which could materially interfere with the continued operation
of, or materially impair the fair saleable value of, the such property taken as
a whole.
(c) neither the Company nor any of its Subsidiaries has received or is
aware of any written complaint, written notice of violation, written alleged
violation, or written notice of investigation or of potential liability under
Environmental Laws with regard to any parcel of real property owned or operated
by the Company or any of its Subsidiaries or the operations of the Company or
its Subsidiaries, nor does the Company or any of its Subsidiaries have knowledge
that any such action is being contemplated, considered or threatened.
(d) to the best knowledge of the Company, Hazardous Materials have not
been generated, treated, stored, disposed of, at, on or under any parcel of real
property owned or operated by the Company or any of its Subsidiaries, nor have
any Hazardous Materials been transported from such properties, in material
violation of or in a manner that could reasonably give rise to material
liability of the Company or any of its Subsidiaries under any Environmental
Laws.
(e) there are no governmental administrative actions or judicial
proceedings pending or, to the best knowledge of the Company and its
Subsidiaries, threatened, under any Environmental Law to which the Company or
any of its Subsidiaries is a party with respect to any parcel of real property
owned or operated by the Company or any of its Subsidiaries, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements, other than permits
authorizing operations at facilities at the real property, outstanding under any
Environmental Law with respect to such properties.
SECTION 3.18. Accuracy and Completeness of Information. Other than as
described in and qualified by the Press Releases and subject to all changes
within the scope of the Press Releases
35
necessitated by the Specified Adjustments, the factual statements contained in
the financial statements referred to in Section 3.01, the Credit Documents
(including the schedules thereto) and any other certificates or documents
furnished or to be furnished to the Administrative Agent or the Lenders from
time to time in connection with this Agreement, taken as a whole, do not and
will not, to the best knowledge of the Company, as of the date when made,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances in which the same were made, all except as otherwise
qualified herein or therein, such knowledge qualification being given only with
respect to factual statements made by Persons other than the Company or any of
its Subsidiaries; provided, that with respect to projected financial
information, the Company represents only that such information has been and will
be prepared in good faith based upon assumptions believed by the Company to be
reasonable at the time.
SECTION 3.19. Solvency. As of the Closing Date, each Credit Party is,
and after giving effect to the Refinancing and the incurrence of all
Indebtedness and obligations being incurred in connection herewith will be
Solvent. For purposes hereof, "Solvent" means, with respect to any Person on a
particular date, that on such date, (i) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (ii) the present fair
saleable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (iii) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (iv) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute an unreasonably
small amount of capital.
SECTION 3.20. Labor Matters. As of the Closing Date only, there are no
strikes or other labor disputes against the Company or any of its Subsidiaries
pending or, to the knowledge of the Company, threatened that (individually or in
the aggregate) would reasonably be expected to have a material adverse effect on
the business, operations, property or financial condition of the Company and its
Subsidiaries taken as a whole. As of the Closing Date only, hours worked by and
payment made to employees of the Company 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 that (individually or in the aggregate) would
reasonably be expected to have a material adverse effect on the business,
operations, property or financial condition of the Company and its Subsidiaries
taken as a whole. As of the Closing Date only, all payments due from the Company
or any of its Subsidiaries on account of employee health and welfare insurance
that (individually or in the aggregate) would reasonably be expected to have a
material adverse effect on the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole if not paid have
been paid or accrued as a liability on the books of the Company or the relevant
Subsidiary.
SECTION 3.21. Purpose. The proceeds of the Loans shall be used solely
to pay transaction fees or expenses or to refinance, repurchase or pay consent
fees in respect of the (i) Senior Subordinated Notes, (ii) the 3 3/8% Senior
Notes, and (iii) the 4 5/8% Senior Notes.
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to Initial Extension of Credit. The
effectiveness of this Credit Agreement and the making of the Loans, if any, on
the Closing Date are subject to the fulfillment, to the satisfaction of the
Administrative Agent, of each of the following conditions:
36
(a) Credit Agreement; Guarantee and Collateral Agreement; Notes. The
Administrative Agent (or its counsel) shall have received (i) from each party
hereto either (A) a counterpart of this Agreement signed on behalf of such party
or (B) written evidence satisfactory to the Administrative Agent (which may
include facsimile transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement and (ii) duly
executed copies of the Credit Documents and such other certificates, documents,
instruments and agreements as the Administrative Agent shall reasonably request
in connection with the transactions contemplated by this Agreement and the other
Credit Documents, including any Notes requested by a Lender pursuant to Section
2.10 payable to the order of each such requesting Lender.
(b) Capital Structure. (i) Holdings, the Company and its Subsidiaries
shall have no Indebtedness other than the Existing Notes and except as otherwise
permitted by this Agreement.
(ii) The execution, delivery and performance of this Agreement
and the other Credit Documents and the related documentation with respect
to the Commitments and the making of Loans as contemplated hereby and the
proposed Refinancing of any Existing Notes shall not violate any of the
provisions of the indentures for any Existing Notes which shall remain
outstanding after such Refinancing and the Company shall have provided a
certificate in reasonable detail to such effect.
(iii) Any changes since July 25, 2005 to the certificate of
incorporation, by-laws, other governing documents and corporate structure
of the Company and its Subsidiaries shall be in form and substance
reasonably satisfactory to the Administrative Agent (the execution and
delivery of this Agreement by the Lenders and the Administrative Agent
being deemed to evidence the satisfaction of the Administrative Agent with
such of the above-referenced matters as shall have been disclosed and made
available to the Administrative Agent prior to the date hereof).
(c) Fees. The Joint Lead Arrangers, the Joint Bookrunners, the
Administrative Agent and the Lenders shall have received all fees required to be
paid and all expenses for which invoices have been presented, on or before the
Closing Date.
(d) Filings, Recordings; and Registrations. The Administrative Agent
shall have received evidence in form and substance satisfactory to it that (i)
all filings, recordings, registrations and other actions, including, without
limitation, the filing of financing statements on form UCC-1, necessary or, in
the opinion of the Administrative Agent, desirable to perfect the Liens created
by the Security Documents, have been filed, recorded, registered or taken and
(ii) the Administrative Agent, for the benefit of the Lenders, shall have a
perfected security interest in all of the Collateral, other than with respect to
the Mortgage over the property located at ▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ which
shall be delivered in accordance with Section 5.10.
(e) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in blank
by a duly authorized officer of the pledgor thereof and (ii) each promissory
note (if any) pledged to the Administrative Agent pursuant to the Guarantee and
Collateral Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank) by the pledgor thereof.
(f) Legal Opinions. The Administrative Agent shall have received,
dated the Closing Date and addressed to the Administrative Agent and the
Lenders, (i) an opinion of ▇▇▇▇▇▇, ▇▇▇▇
37
& ▇▇▇▇▇▇▇▇ LLP, counsel to Holdings and the Company, in substantially the form
of Exhibit F-1 with such changes thereto as may be approved by the
Administrative Agent and its counsel, (ii) an opinion of ▇▇▇▇▇ ▇▇▇▇ LLP, Arizona
counsel to the Company, in substantially the form of Exhibit F-2 with such
changes as may be approved by the Administrative Agent and its counsel, (iii) an
opinion of in-house counsel of Holdings, the Company and its Subsidiaries, in
substantially the form of Exhibit F-3 and (iv) opinions of such local counsel as
may have been reasonably requested by the Administrative Agent, which opinions
shall be in form and substance reasonably satisfactory to the Administrative
Agent.
(g) Closing Certificate. The Administrative Agent shall have received
a Closing Certificate of the Company, Holdings and each Subsidiary dated the
Closing Date, in substantially the form of Exhibit G-1, Exhibit G-2 and Exhibit
G-3, respectively, with appropriate insertions and attachments, in form and
substance satisfactory to the Administrative Agent and its counsel, executed by
the President or any Vice President and the Secretary or any Assistant Secretary
of the Company, Holdings and each Subsidiary, respectively.
(h) Consents, Authorizations and Filings, etc. Except for financing
statements to be filed in connection herewith, all consents, approvals,
authorizations and filings (other than in connection with the mortgage required
by Section 5.10) with any Person (including, without limitation, any
Governmental Authority), if any, required in connection with the Refinancing and
the execution, delivery and performance by Holdings or the Company, and the
validity and enforceability against Holdings and the Company, of the Credit
Documents to which any of them is a party, shall have been obtained or made, and
such consents, approvals, authorizations and filings shall be in full force and
effect, except such consents, approvals, authorizations and filings, the failure
to obtain which would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole.
(i) Existing Credit Facilities. The Administrative Agent shall have
received satisfactory evidence that (i) the lenders under the Existing Credit
Facility shall have consented to the entry by the Company and the Guarantors
into this Agreement, the incurrence of the obligations hereunder and under the
Security Documents and the entry into the Intercreditor Agreement; or (ii) a
Replacement Facility shall be in place and available for use by the Company, and
in each case no default or event of default shall have occurred and shall be
continuing thereunder.
(j) Restrictions. The consummation of the Refinancing and the other
transactions contemplated hereby shall not (i) violate any order, judgment,
writ, injunction, determination, award, decree, law, statute, rule or regulation
applicable to Holdings, the Company or any of its Subsidiaries or any portion of
their properties or assets, or (ii) after giving effect to the Refinancing, the
obtaining of waivers of the Specified Defaults and the other transactions
contemplated hereby, require any consent, approval or notice under, or conflict
with or result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, agreement
(including material supplier contracts) or other instrument or obligation to
which Holdings, the Company or any of its Subsidiaries is a party or by which
any of them or any portion of their properties or assets may be bound, except in
the case of clauses (i) and (ii), with respect to matters that are not,
individually or in the aggregate, reasonably likely to (x) result in a Material
Adverse Effect with respect to the Company or (y) delay in any material respect
or prevent the consummation of the Refinancing.
(k) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets of the
Credit Parties are located, and such search shall reveal no liens on any of the
assets of the Credit Parties except for liens permitted by Section
38
6.02 or discharged on or prior to the Closing Date pursuant to a pay-off letter
or other documentation reasonably satisfactory to the Administrative Agent.
(l) Borrowing Base Certificate. The Administrative Agent shall have
received a Borrowing Base Certificate which calculates the Borrowing Base (as
each such term is defined in the Existing Credit Agreement) as of the close of
business on June 25, 2006, which Borrowing Base may be subject to adjustment to
incorporate the changes required to implement the Specified Adjustments.
(m) Insurance. The Administrative Agent shall have received evidence
of insurance coverage in form, scope, and substance reasonably satisfactory to
the Administrative Agent and otherwise in compliance with the terms of Section
5.05 of this Agreement and Section 6.17 of the Guarantee and Collateral
Agreement.
(n) Projections. The Administrative Agent shall have received copies
of all monthly financial statements for the Company delivered to the
administrative agent under the Existing Credit Agreement during the period from
January 1, 2006 through the Closing Date. The Lenders shall have received
projections from the Company through 2012.
(o) Intercreditor Agreement. The Intercreditor Agreement shall have
been executed and delivered by each of the parties thereto and shall contain
terms and conditions reasonably satisfactory in all respects to the
Administrative Agent and the Lenders.
(p) Ratings. The Company shall have used commercially reasonable
efforts to obtain for the Loans ratings from S&P and ▇▇▇▇▇'▇, and the Company
shall have in effect either a corporate rating, or a rating as to the Loans,
from each of them.
(q) Other Documents. The Administrative Agent shall have received such
other documents as the Administrative Agent, any Lender or their respective
counsel may have reasonably requested.
The Administrative Agent shall notify the Company and the Lenders of
the Closing Date, and such notice shall be conclusive and binding.
SECTION 4.02. Conditions to All Loans and Letters of Credit. The
obligation of each Lender to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties made in or pursuant to Article III or which are contained in any
other Credit Document shall be true and correct in all material respects on and
as of the date of such Loan or as if made on and as of such date (unless stated
to relate to a specific earlier date, in which case, such representations and
warranties shall be true and correct in all material respects as of such earlier
date).
(b) No Default or Event of Default. At the time of and immediately
after giving effect to such Borrowing, no Default shall have occurred and be
continuing.
(c) Chief Financial Officer. With respect to a Loan being requested to
be made on or before the earlier of (i) the completion of the syndication of the
Loans and (ii) September 16, 2006, the Chief Financial Officer of the Company
shall be reasonably acceptable to each Lender.
39
Each borrowing by the Company hereunder shall constitute a
representation and warranty by the Company as of the date of such borrowing or
issuance that the conditions in clauses (a) and (b) of this Section 4.02 have
been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in
effect, any Loan or 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 Credit Documents, it shall, and, in the case of the agreements contained
in Sections 5.03 through 5.06, 5.08 and 5.09, the Company shall cause each of
its Subsidiaries to:
SECTION 5.01. Financial Statements. Furnish to the Administrative
Agent (with sufficient copies for each Lender which the Administrative Agent
shall promptly deliver to each Lender):
(a) as soon as available, but in any event within 5 days of the 2005
Filings, copies thereof, and thereafter within (i) 95 days after the end of each
fiscal year of the Company or (ii) if earlier, five days after the filing
thereof with the Securities and Exchange Commission, a copy of the consolidated
balance sheet of the Company and its consolidated Subsidiaries as at the end of
such fiscal year and the related consolidated statements of stockholders' equity
and cash flows and the consolidated statements of income of the Company and its
Subsidiaries for such fiscal year, setting forth in each case in comparative
form the figures for the previous year and, in the case of the consolidated
balance sheet referred to above, reported on, without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, or qualification which would affect the computation of financial
covenants, by independent certified public accountants of nationally recognized
standing;
(b) after the 2005 Filings, as soon as available, but in any event not
later than (i) 50 days after the end of each of the first three quarterly
periods of each fiscal year of the Company, or (ii) if earlier, five days after
the filing thereof with the Securities and Exchange Commission, the unaudited
consolidated balance sheet of the Company and its Subsidiaries as at the end of
each such quarter and the related unaudited consolidated statements of income
and cash flows of the Company and its Subsidiaries for such quarterly period
(including calculations of quarterly and trailing twelve-month Consolidated
EBITDA and Consolidated EBITDAR for such quarter) and the portion of the fiscal
year of the Company through such date, setting forth in each case in comparative
form the figures for the corresponding quarter in, and year to date portion of,
the previous year, and the figures for such periods in the budget prepared by
the Company and furnished to the Administrative Agent, certified by a Financial
Officer as being fairly stated in all material respects;
(c) as soon as available, but in any event within 35 days after the
end of each fiscal month of the Company, the unaudited consolidated balance
sheet of the Company and its Subsidiaries as at the end of each such fiscal
month and the related unaudited consolidated statements of income and cash flows
of the Company and its Subsidiaries for such fiscal month (including
calculations of monthly and trailing twelve-month Consolidated EBITDA and
Consolidated EBITDAR for such month) and the portion of the fiscal year of the
Company through such date, setting forth in each case in comparative form the
figures for the corresponding fiscal month in, and year to date portion of, the
previous year, and the figures for such periods in the budget prepared by the
Company and furnished to the Administrative Agent, certified by a Financial
Officer as being fairly stated in all material respects, but until the making of
the 2005 Filings, subject to any changes necessitated by the Specified
Adjustments; and
40
(d) (i) as soon as available, but in any event not later than 30 days
after the beginning of each fiscal year of the Company, a copy of the plan and
forecast (including a projected consolidated and consolidating balance sheet,
income statement and funds flow statement) of the Company for each month of the
upcoming fiscal year (the "Projections") in form reasonably satisfactory to the
Administrative Agent and (ii) as soon as available, any material revision to any
such Projections.
All such financial statements (other than the Projections) shall be
complete and correct in all material respects (subject, in the case of interim
statements, to normal year-end audit adjustments) and shall be prepared in
reasonable detail and (except in the case of the statements referred to in
paragraph (d) of this Section) in accordance with GAAP. The Projections
contained in the materials referenced above shall be based upon good faith
estimates and assumptions believed by management of the Company 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.
SECTION 5.02. Certificates; Other Information. Furnish to the
Administrative Agent (with sufficient copies for each Lender which the
Administrative Agent shall promptly deliver to each Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in Section 5.01(a), a letter from the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary to express their opinion on such financial
statements no knowledge was obtained of any Default or Event of Default under or
in respect of Sections 2.06, 6.01, 6.03, 6.07 and 6.08, except as specified in
such letter;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.01(a) and (b), a certificate of the chief financial
officer of the Company (i) stating that, to the best of such officer's
knowledge, each of the Company and its Subsidiaries has observed or performed
all of its respective covenants and other agreements, and satisfied every
material condition, contained in this Agreement, any promissory note evidencing
Loans and the other Credit Documents to be observed, performed or satisfied by
it, and that such officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate, (ii) showing in detail as of
the end of the related fiscal period the figures and calculations supporting
such statement in respect of Sections 6.07 and 6.08 and any other calculations
reasonably requested by the Administrative Agent with respect to the
quantitative aspects of the other covenants contained herein and (iii) if not
specified in the financial statements delivered pursuant to Section 5.01,
specifying the aggregate amount of interest paid or accrued by the Company and
its Subsidiaries, and the aggregate amount of depreciation, depletion and
amortization charged on the books of the Company and its Subsidiaries, during
such accounting period;
(c) promptly upon receipt thereof, copies of all final reports
submitted to the Company or to any of its Subsidiaries by independent certified
public accountants in connection with each annual, interim or special audit of
the books of the Company or any of its Subsidiaries made by such accountants,
including, without limitation, any final comment letter submitted by such
accountants to management in connection with their annual audit;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available to
holders of any Existing Notes and the public generally by Holdings, the Company
or any of its Subsidiaries, if any, and all regular and periodic reports and all
final registration statements and final prospectuses, if any, filed by the
Company or any of
41
its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any Governmental Authority succeeding to any of its
functions;
(e) concurrently with the delivery of the financial statements
referred to in Sections 5.01(a) and (b), a management summary describing and
analyzing the performance of the Company and its Subsidiaries during the periods
covered by such financial statements;
(f) within 45 days after the end of each fiscal quarter, a summary of
all Restricted Asset Sales during such fiscal quarter;
(g) at the same time as they are delivered to the administrative agent
and the lenders under the Existing Credit Agreement, copies of all Borrowing
Base Certificates (as such term is defined in the Existing Credit Agreement)
delivered under the Existing Credit Agreement;
(h) promptly after such event, details of any change in senior
management of Holdings or the Company; and
(i) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
SECTION 5.03. Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations and liabilities of whatever nature including tax
liabilities, except (a) when the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Company or
any of its Subsidiaries, as the case may be, (b) for delinquent obligations
which do not have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole, and (c) for trade and other accounts payable in
the ordinary course of business.
SECTION 5.04. Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now conducted by it
and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all material rights, material
privileges, franchises, copyrights, trademarks and trade names necessary or
desirable in the normal conduct of its business except for rights, privileges,
franchises, copyrights, trademarks and tradenames the loss of which would not in
the aggregate have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole, and except as otherwise permitted by Sections
6.04 and 6.05; and comply with all applicable Requirements of Law and
Contractual Obligations except to the extent that the failure to comply
therewith would not, in the aggregate, have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole.
SECTION 5.05. Maintenance of Property; Insurance. (a) Keep all
property useful and necessary in its business in good working order and
condition (ordinary wear and tear excepted); and
(b) Maintain with financially sound and reputable insurance companies
(x) insurance on all its property in at least such amounts and with only such
deductibles as are usually maintained by, and against at least such risks (but
including, in any event, public liability insurance) as are usually insured
against in the same general area, by companies engaged in the same or a similar
business and (y) flood insurance, if required, and furnish to each Lender, (i)
annually, a schedule disclosing all insurance against products liability risk
maintained by the Company and its Subsidiaries pursuant to this Section
42
5.05(b) or otherwise and (ii) upon written request of any Lender, full
information as to the insurance carried; provided that the Company may implement
programs of self insurance in the ordinary course of business and in accordance
with industry standards for a company of similar size so long as reserves are
maintained in accordance with GAAP for the liabilities associated therewith.
SECTION 5.06. Books and Records; Inspection Rights. Keep proper books
of record and account in which full, complete and correct entries in conformity
with all material Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and permit
representatives of any Lender (including, without limitation, appraisers) upon
reasonable notice (but, with respect to all Lenders, no more frequently than
quarterly unless a Default or Event of Default shall have occurred and be
continuing) during normal business hours and with a Responsible Officer of the
Company present to visit and inspect any of its properties, conduct examinations
of and monitor the Collateral and examine and, to the extent reasonable, make
abstracts from any of its books and records, and to discuss the business,
operations, properties and financial and other condition of the Company and its
Subsidiaries with officers and employees of the Company and its Subsidiaries and
(in coordination with such officers and employees) with its independent
certified public accountants, for the purpose of verifying the accuracy of the
various reports delivered by the Company or the Guarantors to the Administrative
Agent or the Lenders pursuant to this Agreement or for otherwise ascertaining
compliance with this Agreement.
The Credit Parties acknowledge that the Administrative Agent, after
exercising its rights of inspection, may prepare and distribute to the Lenders
certain Reports pertaining to the Credit Parties' assets for internal use by the
Administrative Agent and the Lenders.
SECTION 5.07. Notices. Promptly give notice to the Administrative
Agent and each Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default (other than the Specified
Defaults) under any instrument or other agreement, guarantee or collateral
document of the Company or any of its Subsidiaries which default or event of
default has not been waived and would have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole, or any other default or event
of default (other than the Specified Defaults) under any such instrument,
agreement, guarantee or other collateral document which, assuming for the
purposes of this Section 5.07(b) only that the threshold amount contained in the
proviso to clause (e) of Article VII were $5,000,000, would have constituted a
Default or Event of Default under this Agreement, or (ii) litigation,
investigation or proceeding which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority, or receipt of any notice
of any environmental claim or assessment against the Company or any of its
Subsidiaries by any Governmental Authority, which in any such case would have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole;
(c) of any litigation or proceeding (i) against the Company or any of
its Subsidiaries (A) in which more than $2,000,000 of the amount claimed is not
covered by insurance or (B) in which injunctive or similar relief is sought
which if obtained would have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole, or (ii) in connection with any of the
Existing Notes;
(d) of the following events, as soon as practicable after, and in any
event within 30 days after, the Company knows or has reason to know thereof: (i)
the occurrence of any Reportable
43
Event with respect to any Plan which Reportable Event could reasonably result in
material liability to the Company and its Subsidiaries taken as a whole or (ii)
the institution of proceedings or the taking of any other action by PBGC, the
Company or any Commonly Controlled Entity to terminate, withdraw or partially
withdraw from any Plan and, with respect to a Multiemployer Plan, the
Reorganization or Insolvency of the Plan, in each of the foregoing cases which
could reasonably result in material liability to the Company and its
Subsidiaries taken as a whole, and in addition to such notice, deliver to the
Administrative Agent and each Lender whichever of the following may be
applicable: (A) a certificate of a Responsible Officer of the Company setting
forth details as to such Reportable Event and the action that the Company or
such Commonly Controlled Entity proposes to take with respect thereto, together
with a copy of any notice of such Reportable Event that may be required to be
filed with PBGC or (B) any notice delivered by PBGC evidencing its intent to
institute such proceedings or any notice to PBGC that such Plan is to be
terminated, as the case may be;
(e) of any loss, damage, or destruction to, or of any Lien (other than
Permitted Liens) or claim (including any action or proceeding for the taking of
any material portion of the Collateral or interest therein under power of
eminent domain or by condemnation or similar proceeding) made or asserted
against, the Collateral in an amount of $5,000,000 or more, whether or not
covered by insurance;
(f) of any and all default notices received under or with respect to
any leased location or public warehouse where Collateral with an aggregate value
of $1,000,000 is located (which shall be delivered within ten days after receipt
thereof); and
(g) of a material adverse change known to the Company or its
Subsidiaries in the business, assets, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
Each notice pursuant to this Section 5.07 shall be accompanied by a statement of
a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and (in the cases of clauses (a) through (d)) stating what
action the Company proposes to take with respect thereto.
SECTION 5.08. Environmental Laws. (a) Comply with, and use reasonable
efforts to insure compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and
require that all tenants and subtenants obtain and comply with and maintain, all
licenses, approvals, registrations or permits required by Environmental Laws,
except to the extent that failure to do so would not be reasonably likely to
have a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, or on the validity or enforceability of any of the Credit Documents or
the rights and remedies of the Administrative Agent or the Lenders thereunder;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions, lawfully required under
applicable Environmental Laws, and promptly comply with all lawful orders and
directives of all Governmental Authorities respecting Environmental Laws, except
to the extent that the same are being contested in good faith by appropriate
proceedings; and
(c) In regard to this Agreement or in any way relating to the Company
or its Subsidiaries or their current or former operations, defend, indemnify and
hold harmless the Administrative Agent and the Lenders, and their respective
employees, agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to Hazardous Material or Environmental Laws,
including, without limitation, any orders,
44
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney's and consultant's fees, investigation
and laboratory fees, remediation costs, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross negligence
or willful misconduct of the party seeking indemnification therefor. The
agreements in this Section 5.08(c) shall survive repayment of the Loans and all
other amounts payable hereunder.
SECTION 5.09. Additional Collateral, etc. (a) With respect to any
property acquired after the Closing Date by Holdings, the Company or any
Subsidiary (other than (v) real property, (w) immaterial property, (x) any
property described in paragraph (b) or (c) below, (y) property acquired by any
Foreign Subsidiary and (z) assets acquired pursuant to Section 6.06(j) that are
not equity interests in, or assets held by, a Subsidiary Guarantor) that is
intended to be subject to the security interests created by any of the Security
Documents but which is not so subject thereto, promptly (i) execute and deliver
to the Administrative Agent such amendments to the Guarantee and Collateral
Agreement or such other documents as the Administrative Agent reasonably deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a security interest in such property and (ii) take all actions
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in such property,
including the filing of UCC financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
reasonably requested by the Administrative Agent.
(b) With respect to any new Subsidiary (other than a Foreign
Subsidiary) created or acquired after the Closing Date by Holdings, the Company
or any Subsidiary, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement as the Administrative
Agent reasonably deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary that is owned by Holdings,
the Company or any Subsidiary, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant owner, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement, (B) to take such actions necessary to cause
the Lien created by the Guarantee and Collateral Agreement to be duly perfected
to the extent required by such agreement in accordance with all applicable
Requirements of Law with respect to such new Subsidiary, including the filing of
UCC financing statements in such jurisdictions as may be reasonably required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit G-3, with
appropriate insertions and attachments, and (iv) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Foreign Subsidiary created or acquired
after the Closing Date by Holdings, the Company or any Subsidiary (other than by
any Foreign Subsidiary), promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent reasonably deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
Holdings, the Company or any Subsidiary (provided that in no event shall more
than 65% of the total outstanding voting Capital Stock of any such new
Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
the relevant owner, and take such other action as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable to perfect the
Administrative Agent's security interest therein, and (iii) if reasonably
requested by the Administrative Agent, deliver to the
45
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) Upon the request of the Administrative Agent, the Company will,
and will cause its Domestic Subsidiaries (other than a Domestic Subsidiary that
is a Subsidiary, directly or indirectly, of a Foreign Subsidiary) to, promptly
grant to the Administrative Agent, within 60 days of such request, security
interests and mortgages in such owned real property of the Company and such
Domestic Subsidiaries as are acquired after the Closing Date by the Company or
such Subsidiary and that, together with any improvements thereon, individually
has a value in excess of $2,500,000, as additional security for the obligations
of the Credit Parties under any Credit Document (unless the subject property is
already mortgaged to a third party to the extent permitted by Section 6.02 or
has been owned by the Company or such Subsidiary for less than three months and
shall be sold pursuant to a sale and lease back transaction permitted by Section
6.05(a) within three months of the date of acquisition by the Company or such
Subsidiary). Such mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent and
shall constitute valid and enforceable perfected Liens subject only to Permitted
Liens and such other Liens reasonably acceptable to the Administrative Agent.
The mortgages or instruments related thereto shall be duly recorded or filed in
such manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens in favor of the Administrative Agent required to
be granted pursuant to the mortgages and all taxes, fees and other charges
payable in connection therewith shall be paid in full. If requested by the
Administrative Agent or the Required Lenders, the Company shall provide a
lender's title policy with respect to each such mortgage paid for by the
Company, issued by a nationally recognized title insurance company, together
with such endorsements, coinsurance and reinsurance as may be reasonably
requested by the Administrative Agent, in form and substance reasonably
acceptable to the Administrative Agent, insuring each mortgage as a first lien
on the relevant mortgaged property and subject only to Liens expressly agreed to
by the Administrative Agent.
SECTION 5.10. Post-Closing Items.(a) Within 30 days of the Closing
Date, the Company shall comply with Section 5.09(d) with respect to the grant of
a Mortgage over the property located at ▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, provided
that the Administrative Agent may extend such 30 day period by an additional 60
days.
(b) Within 30 days of the Closing Date, the Company shall deliver
Collection Deposit Agreements for each Deposit Account or Collection Deposit
Account set forth on Schedule 6 to the Guarantee and Collateral Agreement in
respect of which the Administrative Agent has requested that a Collection
Deposit Agreement be delivered, in each case duly executed by the financial
institution holding such Deposit Account or Collection Deposit Account, provided
that the Administrative Agent may extend such 30 day period by an additional 90
days, and provided further, that the Administrative Agent agrees that it shall
not request Collection Deposit Agreements for more than 90% of the Deposit
Accounts or Collection Deposit Accounts set forth on Schedule 6 to the Guarantee
and Collateral Agreement.
ARTICLE VI
NEGATIVE COVENANTS
The Company hereby agrees that (subject to Section 9.17) it shall not,
and the Company shall not permit any of its Subsidiaries to, directly or
indirectly so long as the Commitments remain in effect or any Loan or Note
remains outstanding and unpaid, or any other amount is owing to any Lender or
the Administrative Agent hereunder or under any other Credit Document (it being
understood that each
46
of the permitted exceptions to each of the covenants in this Article VI is in
addition to, and not overlapping with, any other of such permitted exceptions
except to the extent expressly provided):
SECTION 6.01. Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) the Indebtedness outstanding on the Closing Date and reflected on
Schedule 6.01(a), including the refinancing of any such Indebtedness on terms
and conditions taken as a whole no less favorable to the Company and its
Subsidiaries or the Lenders;
(b) Indebtedness (i) consisting of the Loans under this Agreement, and
(ii) under the Existing Credit Agreement in an amount not to exceed the lesser
of (A) $325,000,000 or (B) the Borrowing Base (as such term is defined in the
Existing Credit Agreement as in effect on the date hereof);
(c) Indebtedness (i) of the Company to any Subsidiary and (ii) of any
Subsidiary Guarantor to the Company or any other Subsidiary;
(d) Indebtedness consisting of the Senior Subordinated Debt
outstanding on the Closing Date and Indebtedness of the Company in respect of
any Senior Subordinated Debt the net proceeds of which are used to prepay,
redeem, retire or repurchase the outstanding principal amount of the then
outstanding Existing Notes (if any) or the Loans hereunder (including any
accrued and unpaid interest and any premiums, fees and expenses, in each case,
in connection therewith);
(e) Indebtedness consisting of the Senior Unsecured Debt outstanding
on the Closing Date and Indebtedness of the Company in respect of any Senior
Unsecured Debt the net proceeds of which are used to prepay, redeem, retire or
repurchase the outstanding principal amount of the then outstanding Exchangeable
Notes (if any) or the Loans hereunder (including any accrued and unpaid interest
and any premiums, fees and expenses, in each case, in connection therewith);
(f) (i) Indebtedness of the Company and its Subsidiaries for (A)
industrial revenue bonds or other similar governmental and municipal bonds and
(B) the deferred purchase price of newly acquired property of the Company and
its Subsidiaries (pursuant to purchase money mortgages or otherwise, whether
owed to the seller or otherwise) used in the ordinary course of business of the
Company and its Subsidiaries (provided such financing is entered into within 270
days of the acquisition of such property) in an amount (based on the remaining
balance of the obligations therefor on the books of the Company and its
Subsidiaries) which in the case of preceding clauses (A) and (B) shall not
exceed $25,000,000 in the aggregate at any one time outstanding and (ii)
Indebtedness of the Company and its Subsidiaries in respect of Financing Leases
to the extent Section 6.07 would not be contravened;
(g) Indebtedness of the Company and its Subsidiaries in an aggregate
principal amount not to exceed at any one time outstanding $50,000,000;
(h) Indebtedness in respect of letters of credit or surety bonds in
aggregate principal amount not to exceed at any one time outstanding
$30,000,000;
(i) (i) Indebtedness assumed in connection with acquisitions permitted
by Section 6.06(h) (so long as such Indebtedness was not incurred in
anticipation of such acquisitions), (ii) Indebtedness of newly acquired
Subsidiaries acquired in such acquisitions (so long as such Indebtedness was not
incurred in anticipation of such acquisition) and (iii) Indebtedness owed to the
seller in any acquisition permitted by Section 6.06(h) constituting part of the
purchase price thereof, all of which
47
Indebtedness permitted by this Section 6.01(i) shall not exceed an aggregate
principal amount at any one time outstanding of $25,000,000;
(j) Indebtedness in connection with workers' compensation obligations
and general liability exposure of the Company and its Subsidiaries;
(k) subordinated Indebtedness, which subordinated Indebtedness (i) is
subordinated to the Indebtedness hereunder on terms not less favorable to the
Lenders than the subordination provisions of the Senior Subordinated Debt and
(ii) has a final maturity date after the Maturity Date; and
(l) other unsecured Indebtedness; provided that, immediately prior to
and after giving pro forma effect to any incurrence of such Indebtedness, no
Default or Event of Default has occurred and is continuing or would result
therefrom and (i) such Indebtedness is permitted under Section 6.01(l) of the
Existing Credit Agreement as in effect on the Closing Date and (ii) the
aggregate principal amount of all Indebtedness incurred in accordance with this
clause (l) during the term of this Agreement does not exceed $75,000,000 at any
one time outstanding.
SECTION 6.02. Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets, income or profits, whether now owned or
hereafter acquired, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:
(a) Liens for taxes, assessments or other governmental charges not yet
delinquent or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Company or such Subsidiary, as the case may be, in accordance with
GAAP;
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business in
respect of obligations which are not yet due or which are bonded or which are
being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the Company or such
Subsidiary, as the case may be, in accordance with GAAP;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements (including, without limitation, reciprocal easement
agreements), rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments, changes, and
other similar encumbrances or title defects incurred, or leases or subleases
granted to others, in the ordinary course of business, which do not in the
aggregate materially detract from the aggregate (i) value of the properties of
the Company and its Subsidiaries, taken as a whole or (ii) materially interfere
with or adversely affect in any material respect the ordinary conduct of the
business of the Company and its Subsidiaries taken as a whole;
(f) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Credit Documents and bankers' liens arising by operation of law
and Liens in favor of the administrative agent
48
and the lenders under the Existing Credit Agreement and which are subject to the
terms of the Intercreditor Agreement;
(g) Liens of a collecting bank arising in the ordinary course of
business under Section 4-208 of the UCC in effect in the relevant jurisdiction
covering only the items being collected upon;
(h) Liens on property of the Company or any of its Subsidiaries
created solely for the purpose of securing Indebtedness permitted by Section
6.01(f) or 6.01(i)(i) or (ii) (so long as such Lien was not incurred in
anticipation of the related acquisition), representing or incurred to finance,
refinance or refund the purchase price of property, provided that no such Lien
shall extend to or cover other property of the Company or such Subsidiary other
than the respective property so acquired, and the principal amount of
Indebtedness secured by any such Lien shall at no time exceed the original
purchase price of such property plus any interest on such Indebtedness that is
payable in-kind or accretes to the principal of such Indebtedness;
(i) Liens existing on the Closing Date and described in Schedule 6.02
(including the extension of any Liens listed on such Schedule relating to any
Indebtedness permitted under Section 6.01(a) in connection with any refinancing
of such Indebtedness permitted by such Section), provided that no such Lien
shall extend to or cover other property of the Company or the respective
Subsidiary other than the respective property so encumbered, and the principal
amount of Indebtedness secured by any such Lien shall at no time exceed the
original principal amount of the Indebtedness so secured;
(j) Liens on documents of title and the property covered thereby (and
proceeds (as defined in the UCC) thereof) securing Indebtedness or reimbursement
obligations in respect of letters of credit permitted under this Agreement;
(k) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by any
developer, landlord or other third party on property over which the Company or
any Subsidiary of the Company has easement rights or on any Leased Property and
subordination or similar agreements relating thereto and (ii) any condemnation
or eminent domain proceedings affecting any real property;
(l) Liens in connection with workers' compensation obligations and
general liability exposure of the Company and its Subsidiaries;
(m) Liens on Fee Properties and/or Leased Properties consisting of (i)
any conditions that may be shown by a current, accurate survey or physical
inspection of such Fee Property or Leased Property, (ii) as to Leased Property,
the terms and provisions of the respective lease therefor and any matters
affecting the fee title and any estate superior to the leasehold estate related
thereto, and (iii) title defects, or leases or subleases granted to others,
which are not material to the Fee Properties or Leased Properties, as the case
may be, taken as a whole; and
(n) at any time after the 2005 Filings have been made, Liens in
connection with Bank Drafts, provided that an intercreditor agreement in form
and substance reasonably acceptable to the Administrative Agent has been
executed by the holder of such Liens and the administrative agent under the
Existing Credit Agreement;
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Credit Party's (1) Accounts, other
than those permitted under paragraphs (a) and (f) above
49
and (2) Inventory, other than those permitted under paragraphs (a), (b), (f) and
(j) above, and to the extent contemplated therein, under paragraph (n) above.
SECTION 6.03. Limitation on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligation except:
(a) the Guarantee and Collateral Agreement and the Guarantee and
Collateral Agreement, as defined in the Existing Credit Agreement;
(b) other guarantees by the Company incurred in the ordinary course of
business for an aggregate amount not to exceed $30,000,000 at any one time;
(c) guarantees by the Company or any Subsidiary of obligations of the
Company or any Subsidiary;
(d) Contingent Obligations existing on the Closing Date and described
in Schedule 6.03(d);
(e) guarantees of obligations to third parties in connection with
relocation of employees of the Company or any of its Subsidiaries, in an amount
which, together with all loans and advances made pursuant to Section 6.06(f),
shall not exceed $4,000,000 at any time outstanding;
(f) Contingent Obligations in connection with workers' compensation
obligations and general liability exposure of the Company and its Subsidiaries;
(g) guarantees of the Senior Unsecured Debt issued by Subsidiaries of
the Company which are also parties to the Guarantee and Collateral Agreement;
(h) subordinated guarantees of the Senior Subordinated Debt issued by
Subsidiaries of the Company which are also parties to the Guarantee and
Collateral Agreement; provided such subordinated guarantees are subordinated to
the Guarantee and Collateral Agreement on the same basis as the Senior
Subordinated Debt is subordinated to the Loans;
(i) guarantees by the Company of loans to employees of the Company and
its Subsidiaries, the proceeds of which are used to purchase stock of Holdings,
in an aggregate amount not to exceed, when added to the amount of loans made by
the Company to employees pursuant to Section 6.06(g), at any one time
outstanding, $8,000,000;
(j) guarantees by the Company of loans to employees of the Company and
its Subsidiaries, the proceeds of which are used for travel and other ordinary
expenses for which advances to employees are generally made, in an aggregate
amount not to exceed, when added to the amount of loans made by the Company to
employees pursuant to subsection 6.06(i), at any one time outstanding,
$1,000,000;
(k) at any time after the 2005 Filings have been made, Contingent
Obligations in connection with Bank Drafts; and
(l) other unsecured Contingent Obligations; provided that, immediately
prior to and after giving pro forma effect to any incurrence of such Contingent
Obligations, no Default or Event of Default has occurred and is continuing or
would result therefrom and(i) such Contingent Obligations are permitted under
Section 6.03(k) of the Existing Credit Agreement as in effect on the Closing
Date and(ii)
50
the aggregate principal amount of all Contingent Obligations incurred in
accordance with this clause (l) during the term of this Agreement does not
exceed $75,000,000 at any one time outstanding.
SECTION 6.04. Prohibition of Fundamental Changes. Enter into any
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or engage in any type of
business other than of the same general type now conducted by it, except (a) for
the transactions otherwise permitted pursuant to Section 6.05(b) and Section
6.06(h), (b) any Subsidiary of the Company may be merged with and into the
Company or a Subsidiary of the Company, (c) any Subsidiary may be dissolved,
provided, however, that prior to the dissolution of any Subsidiary whose book
value exceeds $100,000, the assets of such Subsidiary are transferred to the
Company or a Wholly-Owned Domestic Subsidiary of the Company subject to the
conditions set forth in Section 6.05(b) and (d) the Company may be
reincorporated under the laws of Delaware, provided that the Administrative
Agent, in its sole reasonable discretion, determines that such reincorporation
will not alter the obligations of any Credit Party under any Credit Document or
cause a material impairment of the value of the Collateral taken as a whole,
after giving effect to such reincorporation.
SECTION 6.05. Prohibition on Sale of Assets. Convey, sell, lease
(other than a sublease of real property), assign, transfer or otherwise dispose
of (including through a transaction of merger or consolidation of any Subsidiary
of the Company) any of its property, business or assets (including, without
limitation, tax benefits and receivables but excluding leasehold interests),
whether now owned or hereafter acquired, except:
(a) for (i) sales or other dispositions of inventory made in the
ordinary course of business, (ii) sales or other dispositions of uneconomic,
obsolete or worn-out property in the ordinary course of business and (iii) any
sale of a store and/or fixtures to a third party pursuant to a sale-leaseback
transaction;
(b) that any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to, or merge with and into, the Company or a Wholly-Owned Subsidiary
of the Company and any Subsidiary of the Company may sell or otherwise dispose
of, or part with control of any or all of, the stock of any Subsidiary to a
Wholly-Owned Subsidiary of the Company, provided that no such transaction may be
effected if it would result in the transfer of any assets of, or any stock of, a
Subsidiary to, or the merger with and into, another Subsidiary all of the
Capital Stock of which owned by the Company or any Subsidiary has not been
pledged to the Administrative Agent and which has not guaranteed the obligations
of the Company under the Notes and this Agreement, and granted liens or security
interests in favor of the Administrative Agent, for the benefit of the Lenders,
on substantially all of its assets to secure such guarantee, pursuant to a
guarantee, security agreement and other documentation reasonably satisfactory to
the Administrative Agent;
(c) leases of Fee Properties and other real property owned in fee and
subleases of Leased Properties;
(d) any condemnation or eminent domain proceedings affecting any real
property, provided that the proceeds thereof, or compensation received in
connection therewith, is applied to repay the Loans in accordance with, and to
the extent required by, Section 2.06 (but without Reinvestment);
(e) substantially like-kind exchanges of real property;
(f) for the sale or other disposition of any property the aggregate
amount of the Net Cash Proceeds received in respect of which (i) does not exceed
$10,000, or (ii) is between $10,000 and
51
$100,000 and when aggregated with all other such sales or dispositions, shall
not exceed $2,000,000 prior to the Maturity Date;
(g) for the sale or other disposition of any property the aggregate
amount of the net proceeds received in respect of which shall not exceed
$10,000,000 prior to the Maturity Date and provided that the Net Cash Proceeds
of such sales or dispositions are applied to prepay the Loans in accordance
with, and to the extent required by, Section 2.06;
(h) for conveyances and transfers specifically permitted under Section
6.06(j) to joint ventures;
(i) any sale or other disposition of any minority interests in a joint
venture or other Person;
(j) any sales at fair market value for cash of Investment Grade
Securities; and
(k) the disposition of Capital Stock of Holdings to the holders of the
Exchangeable Notes pursuant to the terms of either Exchangeable Note Indenture
and any other disposition of Capital Stock of Holdings acquired by the Company
pursuant to the Call Agreement and any disposition of its rights under the Call
Agreement or any Swap Agreement in connection with any termination thereof if
the Company determines that it is in its best interest to do so as a result of
the consummation of the Refinancing.
SECTION 6.06. Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of, or make any other
investment in (including, without limitation, any acquisition of all or any
substantial portion of the assets, and any acquisition of a business or a
product line, of other companies, other than the acquisition of inventory in the
ordinary course of business) (each, an "Investment"), any Person, except:
(a) (i) the Company may make loans or advances to any Subsidiary, and
any Subsidiary may make loans or advances to the Company or any other
Subsidiary, to the extent in each case the Indebtedness created thereby is
permitted by Section 6.01(c) and (ii) the Company may make loans or advances to
Holdings to allow Holdings to consummate the Refinancing;
(b) (i) any Subsidiary may make Investments in the Company (by way of
capital contribution or otherwise) and (ii) the Company and any Subsidiary may
make Investments in, or create, any Wholly-Owned Domestic Subsidiary (by way of
capital contribution or otherwise) or make Investments permitted by Section
6.05(b), provided that, in any such case, (x) if stock is issued or otherwise
acquired in connection with such Investment, or if the stock of such Subsidiary
was not previously pledged to the Administrative Agent, such stock is pledged to
the Administrative Agent for the benefit of the Lenders so that 100% of the
Capital Stock of such Subsidiary is pledged to the Administrative Agent and (y)
such Subsidiary guarantees the obligations of the Company under the Notes and
this Agreement, and grants liens or security interests in favor of the
Administrative Agent, for the benefit of the Lenders, on substantially all of
its assets to secure such guarantee, pursuant to a guarantee, a security
agreement and other documentation reasonably satisfactory to the Administrative
Agent;
(c) the Company and its Subsidiaries may make Investments in, acquire
and hold Cash Equivalents and Investment Grade Securities;
52
(d) the Company or any of its Subsidiaries may make payroll advances
in the ordinary course of business;
(e) the Company or any of its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms
(provided that nothing in this clause (e) shall prevent the Company or any
Subsidiary from offering such concessionary trade terms, or from receiving such
Investments in connection with the bankruptcy or reorganization of their
respective suppliers or customers or the settlement of disputes with such
customers or suppliers arising in the ordinary course of business, as management
deems reasonable in the circumstances);
(f) the Company or any of its Subsidiaries may make relocation and
other loans to officers and employees of the Company or any such Subsidiary (or
to Holdings so that it will make such loans), provided that the aggregate
principal amount of all such loans and advances outstanding at any one time,
together with the guarantees of such loans and advances made pursuant to Section
6.03(e), shall not exceed $4,000,000 at any one time outstanding;
(g) the Company may make loans to employees of the Company and its
Subsidiaries (or to Holdings so that it will make such Loans) the proceeds of
which are used by such employees to purchase stock of Holdings, provided that
the aggregate principal amount of all such loans shall not exceed, together with
any guarantees of loans made pursuant to Section 6.03(i), at any one time
outstanding $8,000,000;
(h) the Company and its Subsidiaries may make additional Investments;
provided that, immediately prior to and after giving pro forma effect to any
such acquisition and the financing thereof, no Default or Event of Default has
occurred and is continuing or would result therefrom and the aggregate amount of
all Investments made in accordance with this clause during the term of this
Agreement does not exceed $75,000,000;
(i) the Company may make loans to employees of the Company and its
Subsidiaries (or to Holdings so that it will make such Loans), the proceeds of
which are used by such employees for travel and other ordinary expenses for
which advances to employees are generally made in an aggregate principal amount
not to exceed, when added to the amount of guarantees made by the Company
pursuant to Section 6.03(j), at any one time outstanding $1,000,000;
(j) the Company or any of its Subsidiaries may make Investments in, or
loans or Investments to, joint ventures or other Persons engaged primarily in
one or more businesses in which the Company and its Subsidiaries are engaged or
directly related thereto in an aggregate amount not to exceed $5,000,000 plus
the sum of (A) any cash amounts dividended or distributed to the Company or any
Subsidiary of the Company after the date hereof by such joint venture or other
Person and (B) any amounts from sales or distributions permitted in Section
6.05(i); and
(k) the Company may acquire Capital Stock of Holdings pursuant to the
Call Agreement or from Holdings for the purpose of delivering such Capital Stock
to the holders of the Exchangeable Notes pursuant to the terms of the
Exchangeable Note Indenture and may make any payment required in connection with
a termination of the Call Agreement, the Warrant Agreement or any Swap Agreement
if the Company determines that it is in its best interest to do so as a result
of the consummation of the Refinancing..
53
SECTION 6.07. Financial Covenants. (a) As of the end of any fiscal
quarter of the Company ending during the periods set forth below, permit the
Fixed Charge Coverage Ratio to be less than the ratio set forth opposite such
period below:
PERIOD FIXED CHARGE COVERAGE RATIO
------ ---------------------------
June 30, 2006 - December 31, 2006 1.35:1.00
January 31, 2007 - December 31, 2008 1.40:1.00
January 31, 2009 - Maturity Date 1.45:1.00
(b) As of the end of any fiscal quarter of the Company ending during
the periods set forth below, permit the Leverage Ratio to be greater than the
ratio set forth opposite such period below:
PERIOD LEVERAGE RATIO
------ --------------
June 30, 2006 - December 31, 2006 4.00:1.00
January 31, 2007 - December 31, 2007 3.75:1.00
January 31, 2008 - December 31, 2008 3.50:1.00
January 31, 2009 - December 31, 2009 3.25:1.00
January 31, 2010 - Maturity Date 3.00:1.00
SECTION 6.08. Limitation on Dividends. Declare any dividends on any
shares of any class of stock of the Company or Holdings, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement or other acquisition of any shares of any class
of stock of the Company or Holdings, or any warrants or options to purchase such
stock, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of the Company or any of its Subsidiaries; except that:
(a) Subsidiaries may pay dividends to the Company or to Subsidiaries
which are directly or indirectly wholly owned by the Company;
(b) the Company may pay or make dividends or distributions to any
holder of its Capital Stock in the form of additional shares of Capital Stock of
the same class and type; provided such shares of Capital Stock are pledged to
the Administrative Agent for the benefit of the Lenders;
(c) the Company may pay dividends or make other distributions:
(i) to Holdings in amounts equal to amounts required for Holdings
to pay franchise taxes and other fees required to maintain its corporate
existence and provide for other operating costs;
(ii) to Holdings in amounts equal to amounts required for
Holdings to pay Federal, state and local income taxes to the extent such
income taxes are attributable to the income of the Company and its
Subsidiaries;
(iii) to Holdings in amounts equal to amounts expended by
Holdings to repurchase Capital Stock of Holdings owned by former employees
of the Company or its Subsidiaries or their assigns, estates and heirs,
provided that the aggregate amount paid, loaned or advanced to Holdings
pursuant to this clause (iii) shall not, in the aggregate, exceed the sum
of $2,500,000 plus any amounts contributed by Holdings to the Company as a
result of resales of such repurchased shares of Capital Stock;
54
(iv) to Holdings to allow Holdings to make loans in the nature of
those permitted under Sections 6.06(f), (g) and (i);
(v) to allow Holdings to consummate the Refinancing; and
(vi) at any time after the 2005 Filings have been made, to
Holdings to allow Holdings to repurchase or redeem Capital Stock of
Holdings with an aggregate value of up to $25,000,000 on or after the
Closing Date so long as immediately prior to and after giving effect to
Holdings' delivering notice of such repurchase or redemption (which notice
shall be no earlier than 30 days prior to such repurchase or redemption) of
Capital Stock of Holdings to the holders thereof, no Default or Event of
Default shall have occurred and be continuing; and
(d) the Company may perform its obligations under the Call Agreement,
including the payment of the premium in respect of the call option granted
thereunder; or may make any payment, or pay dividends or make other
distributions to Holdings to enable it to make any payment, required in
connection with a termination of the Call Agreement or the Warrant Agreement if
the Company determines that it is in its best interests to do so as a result of
the consummation of the Refinancing;
provided that the Company will not, and will not permit any of its Subsidiaries
to enter into or be party to, or make any payment under, any Synthetic Purchase
Agreement (other than the Call Agreement).
SECTION 6.09. Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate except
for transactions which are otherwise permitted under this Agreement and which
are in the ordinary course of the Company's or a Subsidiary's business and which
are upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than it would obtain in a hypothetical comparable arm's length
transaction with a Person not an Affiliate; provided, however, that nothing in
this Section 6.09 shall prohibit the Company or any of its Subsidiaries from
engaging in the following transactions: (i) the performance of the Company's or
such Subsidiary's obligations under any employment contract, collective
bargaining agreement, employee benefit plan, related trust agreement or any
other similar arrangement heretofore or hereafter entered into in the ordinary
course, (ii) payment of compensation to employees, officers, directors or
consultants in the ordinary course of business, (iii) maintenance of benefit
programs or arrangements for employees, officers or directors, including,
without limitation, vacation plans, health and life insurance plans, deferred
compensation plans, and retirement or savings plans and similar plans and (iv)
the provision of services and the performance of obligations contemplated to be
provided and performed by the Company under the PartsAmerica Services Agreement.
SECTION 6.10. Prepayment and Amendments of Material Indebtedness. (a)
Optionally prepay, optionally retire, optionally redeem, optionally purchase,
optionally defease or optionally exchange any Existing Notes (other than the
Refinancing of the Existing Notes pursuant to the terms of this Agreement or
Existing Notes remaining outstanding after giving effect to the Refinancing, in
an aggregate amount not to exceed $15,000,000) or pay any interest on the Senior
Subordinated Debt or on the Senior Unsecured Debt in cash if such interest may
be paid by the issuance of additional Senior Subordinated Debt or additional
Senior Unsecured Debt, or (b) amend, supplement or otherwise modify any
documentation governing any Senior Subordinated Debt or any Senior Unsecured
Debt in a manner adverse to the Lenders (other than (i) amendments, supplements
or modifications to such Senior Subordinated Debt or the Senior Unsecured Debt
which reduce the interest rate or extend the maturity thereof, (ii) waivers of
compliance by the Company with any of the terms or conditions of such Senior
Subordinated Debt or the Senior Unsecured Debt (except those terms or conditions
which by their terms
55
are for the benefit of the Lenders), or (iii) amendments, supplements or
modifications made in connection with the cure or waiver of the Specified
Defaults).
SECTION 6.11. Changes in Fiscal Year. Permit the fiscal year of the
Company to end on a day other than the Sunday closest to January 31.
SECTION 6.12. Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Company is engaged on the Closing Date or which are directly
related thereto, including the Pay 'n Save business.
SECTION 6.13. Limitation on Swap Agreements. Enter into, create,
incur, assume or suffer to exist any Swap Agreements or obligations in respect
thereof except for (a) the Call Agreement and (b) in the ordinary course of
business for non-speculative purposes, including a Swap Agreement with respect
to all or a part of the Loans.
SECTION 6.14. Existing Notes. If any of the Existing Notes are
accelerated or declared due at any time, fail to repay, using proceeds of Loans
hereunder, cash on hand or proceeds of Indebtedness otherwise permitted to be
incurred hereunder, such Existing Notes in full within 5 Business Days of such
acceleration or declaration.
ARTICLE VII
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
events:
(a) The Company shall fail to (i) pay any principal of any Loan or
Note when due in accordance with the terms hereof or thereof or (ii) pay any
interest on any Loan or Note or any other amount payable hereunder within five
days after any such interest or other amount becomes due in accordance with the
terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Credit
Party in any Credit Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) (i) The Company shall default in the observance or performance of
any agreement contained in Section 5.07(a) or Article VI of this Agreement, or
Sections 6.9 and 6.11 of the Guarantee and Collateral Agreement; (ii) Holdings
shall default in the observance or performance of any agreement contained in
Section 6.11 of the Guarantee and Collateral Agreement or (iii) any Subsidiary
shall default in the observance or performance of corresponding provisions of
the Guarantee and Collateral Agreement; or
(d) Any Credit Party shall default in the observance or performance of
any other agreement contained in any Credit Document and such default shall
continue unremedied for a period of (i) three days if such breach relates to
terms or provisions of Section 5.02 or (ii) 30 days, with respect to any other
Section of this Agreement; or
(e) Except for the Specified Defaults with respect to the Exchangeable
Note Indentures and the Senior Subordinated Note Indenture, Holdings, the
Company or any of its Subsidiaries shall (i) default in any payment of principal
of or interest on or other amounts in respect of any Indebtedness (other than
the Loans and the other Obligations hereunder and any inter-company debt) or
Swap Agreement or in the payment of any Contingent Obligation, beyond the period
of grace, if any,
56
provided in the instrument or agreement under which such Indebtedness, Swap
Agreement or Contingent Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness, Swap Agreement or Contingent Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Contingent Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, such Indebtedness to become due prior to its stated
maturity, any applicable grace period having expired, or such Contingent
Obligation to become payable, any applicable grace period having expired (it
being understood that a grace period that begins upon the giving of notice shall
be considered an applicable grace period and shall not be considered expired
until the notice has been given and the grace period has run); in each case,
provided that the aggregate principal amount of all such Indebtedness, Swap
Agreements and Contingent Obligations under which a payment default exists as in
(a) above or which would then become due or payable equals or exceeds
$10,000,000; or
(f) (i) The Company or any of its Subsidiaries or Holdings shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or the
Company or any of its Subsidiaries or Holdings shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Company or any of its Subsidiaries or Holdings any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Company or any of its Subsidiaries or
Holdings any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Company or any
of its Subsidiaries or Holdings shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Company or any of its
Subsidiaries or Holdings shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan
which is not otherwise exempted, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is
likely to result in the termination of such Single Employer Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, or (v) the Company or any Commonly Controlled Entity shall
incur any material liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan; and in each case in
clauses (i) through (v) above, such event or condition, together with all other
such events or conditions relating to a Plan, if any, would be reasonably likely
to subject the Company or any of its Subsidiaries to any tax, penalty or other
liabilities in the aggregate material in relation to the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole; or
57
(h) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability (not
paid or reserved for or covered by insurance or indemnities to the extent the
Company, in its reasonable good faith judgment, believes that such judgment or
decree will be paid when due by the parties providing such indemnities) of
$10,000,000 or more and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within the time required by
the terms of such judgment; or
(i) Any Credit Document shall cease, for any reason, to be in full
force and effect or any Credit Party or any of its Subsidiaries shall so assert
in writing, or any Security Document shall cease to be effective to grant a
perfected Lien on the Collateral described therein with the priority purported
to be created thereby (other than as a result of any action or inaction on the
part of the Administrative Agent or the Lenders), subject to such exceptions as
may be permitted therein, and such condition shall continue unremedied for 30
days after notice thereof to the Company by the Administrative Agent or any
Lender; or
(j) There shall have occurred (1) a Change of Control, (2) a "change
of control" under the Senior Subordinated Note Indenture or (3) a "fundamental
change" under either Exchangeable Note Indenture; or
(k) Holdings shall engage in any business or activity other than (i)
owning the Capital Stock of the Company and activities reasonably incidental
thereto, (ii) incurring indebtedness and guarantees, (iii) making loans to
employees of the Company and its Subsidiaries of the nature of those permitted
by Sections 6.06(f), (g) and (i) or (iv) entering into and performing its
obligations in respect of, or arranging for a termination of, the Warrant
Agreement and/or the Call Agreement; or
(l) (i) There shall have occurred any amendment, supplement or other
modification of any of the Senior Subordinated Debt or the Senior Unsecured
Debt, or the documents governing such Senior Subordinated Debt or Senior
Unsecured Debt, which in any such case shall not have been consented to in
advance in writing by the Administrative Agent and the Required Lenders, except
(A) as otherwise expressly permitted by Section 6.10 or (B) to the extent such
amendment, supplement or modification gives effect to any prepayment, retirement
or redemption of Senior Subordinated Debt or Senior Unsecured Debt expressly
permitted by this Agreement or (ii) the subordination provisions of any document
governing any Senior Subordinated Debt shall cease, for any reason, to be valid
or any Credit Party or any of its Subsidiaries shall so assert in writing; or
(m) The 2005 Filings when made contain adjustments that are materially
inconsistent with the Specified Adjustments set forth in the Press Releases;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Company,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement, the Notes and the other Credit Documents shall immediately become due
and payable, and (b) if such event is any other Event of Default, so long as any
such Event of Default shall be continuing, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Company, declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice of default to the Company, declare all or a portion of the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable. Except as expressly provided
58
above in this Article VII, presentment, demand, protest and all other notices of
any kind are hereby expressly waived.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf, including execution of the other Credit Documents, and to
exercise such powers as are delegated to the Administrative Agent by the terms
of the Credit Documents, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Credit Parties or any Subsidiary of a Credit
Party or other Affiliate thereof as if it were not the Administrative Agent
hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Credit Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Credit Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Credit Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Credit Party or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Company or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any
Credit Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection with any Credit Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Credit Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Credit Document or any other agreement,
instrument or document, (v) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral, or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere in any Credit Document, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Company),
59
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Company. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Company, to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 9 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a commercial bank or an Affiliate
of any such commercial bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent. Upon its resignation, the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Company to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Company and
such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Agent or Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Agent or Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Credit Document or related agreement or any document
furnished hereunder or thereunder.
Each Lender hereby agrees that (a) it has requested a copy of each
Report prepared by or on behalf of the Administrative Agent; (b) the
Administrative Agent (i) makes no representation or warranty, express or
implied, as to the completeness or accuracy of any Report or any of the
information contained therein or any inaccuracy or omission contained in or
relating to a Report and (ii) shall not be liable for any information contained
in any Report; (c) the Reports are not comprehensive audits or examinations, and
that any Person performing any field examination will inspect only specific
information regarding the Credit Parties and will rely significantly upon the
Credit Parties' books and records, as well as on representations of the Credit
Parties' personnel and that the Administrative Agent undertakes no obligation to
update, correct or supplement the Reports; (d) it will keep all Reports
confidential and strictly for its internal use, not share the Report with any
Credit Party or any other Person except as otherwise permitted pursuant to this
Agreement; and (e) without limiting the generality of any other indemnification
provision contained in this Agreement, it will pay and protect, and indemnify,
defend, and hold the Administrative Agent and any such other Person preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including
60
reasonable attorney fees) incurred by as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:
(i) if to any Credit Party, to the Company at:
CSK Auto, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A.
at:
JPMorgan Chase Bank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Director
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
JPMorgan Chase Bank, N.A.
Loan and Agency Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Account Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to any other Lender, to it at its address or facsimile
number set forth in its Administrative Questionnaire.
61
All such notices and other communications (i) sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received or (ii) sent by facsimile shall be
deemed to have been given when sent, provided that if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications (including e-mail and
internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Company (on behalf of the
Credit Parties) may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. All such notices and other
communications (i) sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if not given during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient, and (ii) posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (b)(i) of notification that such notice or
communication is available and identifying the website address therefor.
(c) Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, or any Lender in exercising any right or power hereunder
or under any other Credit Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent and the Lenders hereunder and under any
other Credit Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any
Credit Document or consent to any departure by any Credit Party therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent or any
Lender may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Credit Document nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Company and the Required Lenders or, (ii) in the case of any
other Credit Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Credit Party or Credit Parties that are
parties thereto, with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce or forgive the principal amount of any Loan
or reduce the rate of interest thereon, or reduce or forgive any interest or
fees payable hereunder, without the written consent of each Lender directly
affected thereby, (iii) postpone any scheduled date of payment of the principal
amount of any Loan, or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender directly
62
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would
alter the manner in which payments are shared, without the written consent of
each Lender, (v) change any of the provisions of this Section or the definition
of "Required Lenders" or any other provision of any Credit Document specifying
the number or percentage of Lenders required to waive, amend or modify any
rights thereunder or make any determination or grant any consent thereunder,
without the written consent of each Lender, (vi) release any Guarantor from its
obligation under the Guarantee and Collateral Agreement (except as otherwise
permitted herein or in the other Credit Documents), without the written consent
of each Lender, or (vii) except as provided in clause (c) of this Section or in
any Security Document, release all or substantially all of the Collateral,
without the written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent. The Administrative Agent may also amend the Commitment
Schedule to reflect assignments entered into pursuant to Section 9.04.
(c) The Lenders hereby irrevocably authorize the Administrative Agent,
at its option and in its sole discretion, to release any Liens granted to the
Administrative Agent by the Credit Parties on any Collateral (i) upon the
termination of the Commitments and payment and satisfaction in full in cash of
all Obligations, (ii) constituting property being sold or disposed of if the
Credit Party disposing of such property certifies to the Administrative Agent
that the sale or disposition is made in compliance with the terms of this
Agreement (and the Administrative Agent may rely conclusively on any such
certificate, without further inquiry), (iii) constituting property leased to a
Credit Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement, or (iv) as required to effect any sale or other
disposition of such Collateral in connection with any exercise of remedies of
the Administrative Agent and the Lenders pursuant to Article VII. Except as
provided in the preceding sentence, the Administrative Agent will not release
any Liens on Collateral without the prior written authorization of the Required
Lenders; provided that, the Administrative Agent may in its discretion, release
its Liens on Collateral valued in the aggregate not in excess of $1,000,000
during any calendar year without the prior written authorization of the Required
Lenders. Any such release shall not in any manner discharge, affect, or impair
the Obligations or any Liens (other than those expressly being released) upon
(or obligations of the Credit Parties in respect of) all interests retained by
the Credit Parties, including the proceeds of any sale, all of which shall
continue to constitute part of the Collateral.
(d) If, in connection with any proposed amendment, waiver or consent
requiring the consent of "each Lender" or "each Lender affected thereby," the
consent of the Required Lenders is obtained, but the consent of other necessary
Lenders is not obtained (any such Lender whose consent is necessary but not
obtained being referred to herein as a "Non-Consenting Lender"), then the
Company may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Company and the
Administrative Agent shall agree, as of such date, to purchase for cash the
Loans and other Obligations due to the Non-Consenting Lender pursuant to an
Assignment and Assumption and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be
terminated as of such date and to comply with the requirements of clause (b) of
Section 9.04, and (ii) the Company shall pay to such Non-Consenting Lender in
same day funds on the day of such replacement (1) all interest, fees and other
amounts then accrued but unpaid to such Non-Consenting Lender by the Company
hereunder to and including the date of termination, including without limitation
payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2)
an amount, if any, equal to the payment which would have been due to such Lender
on the day of such replacement under Section 2.16 had the Loans of such
Non-Consenting Lender been prepaid on such date rather than sold to the
replacement Lender.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) Except as
otherwise provided herein, the Company shall pay (i) all reasonable
out-of-pocket expenses incurred by the
63
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication and distribution (including, without limitation, via the
internet or through a service such as Intralinks) of the credit facilities
provided for herein, the preparation and administration of the Credit Documents
or any amendments, modifications or waivers of the provisions of the Credit
Documents (whether or not the transactions contemplated hereby or thereby shall
be consummated), (ii) all out-of-pocket expenses incurred by the Administrative
Agent or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent or any Lender, in connection with the
enforcement, collection or protection of its rights in connection with the
Credit Documents, including its rights under this Section, or in connection with
the Loans made hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans.
Except as otherwise provided herein, expenses being reimbursed by the Company
under this Section include, without limiting the generality of the foregoing,
costs and expenses incurred in connection with:
(A) lien and title searches and title insurance;
(B) taxes, fees and other charges for recording the
Mortgages, filing financing statements and
continuations, and other actions to perfect, protect,
and continue the Administrative Agent's Liens;
(C) sums paid or incurred to take any action required of
any Credit Party under the Credit Documents that such
Credit Party fails to pay or take; and
(D) forwarding loan proceeds, collecting checks and other
items of payment, and establishing and maintaining the
accounts and lock boxes, and costs and expenses of
preserving and protecting the Collateral.
Notwithstanding anything to the contrary, the Company shall not be
required to reimburse under this Section the fees and expenses of more than one
firm of legal counsel in each jurisdiction.
(b) The Company shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, penalties, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of the Credit
Documents or any agreement or instrument contemplated thereby, the performance
by the parties hereto of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Company or any of its Subsidiaries, or any Environmental
Liability related in any way to the Company or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, penalties, liabilities or related expenses
(i) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of any Indemnitee or (ii) relate to disputes between the Lead
Arranger, the Administrative Agent and/or the Lenders and/or their respective
affiliates.
64
(c) To the extent that the Company fails to pay any amount required to
be paid by it to the Administrative Agent, each Lender severally agrees to pay
to the Administrative Agent such Lender's Applicable Percentage (determined as
of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, penalty, liability or related expense, as the
case may be, was incurred by or asserted against the Administrative Agent in its
capacity as such.
(d) To the extent permitted by applicable law, no Credit Party shall
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Refinancing, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that (i)
the Company may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Company without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of the Administrative Agent.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment
or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment
(determined as of the date the Assignment and
Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than
$1,000,000 unless the Administrative Agent otherwise
consents;
(B) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement;
(C) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and
Assumption, together with a processing and recordation
fee of $3,500; and
65
(D) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative
Questionnaire.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.15,
2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section
9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Company, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive, and the Company, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already
be a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Assumption and record the information contained
therein in the Register; provided that if either the assigning Lender or
the assignee shall have failed to make any payment required to be made by
it pursuant to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c),
the Administrative Agent shall have no obligation to accept such Assignment
and Assumption and record the information therein in the Register unless
and until such payment shall have been made in full, together with all
accrued interest thereon. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(c) (i) Any Lender may, without the consent of the Company or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (A) such Lender's obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Company, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant,
66
agree to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of
this Section, the Company agrees that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Company's prior written consent. A Participant that would be
a Foreign Lender if it were a Lender shall not be entitled to the benefits
of Section 2.17 unless the Company is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the
Company, to comply with Section 2.17(e) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Credit Parties in the Credit Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Credit Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Credit Documents and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.15,
2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Credit Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.
67
SECTION 9.07. Severability. Any provision of any Credit Document held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Company against any of and all the Obligations held by such Lender, irrespective
of whether or not such Lender shall have made any demand under the Credit
Documents and although such obligations may be unmatured. The applicable Lender
shall notify the Company and the Administrative Agent of such set-off or
application, provided that any failure to give or any delay in giving such
notice shall not affect the validity of any such set-off or application under
this Section. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) The Credit Documents (other than those containing a contrary
express choice of law provision) shall be governed by and construed in
accordance with the laws of the State of New York, but giving effect to federal
laws applicable to national banks.
(b) Each Credit Party hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any United
States of America Federal or New York State court sitting in New York, New York
in any action or proceeding arising out of or relating to any Credit Documents,
or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Credit Document shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Credit Document against any Credit Party or its
properties in the courts of any jurisdiction.
(c) Each Credit Party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Credit
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Credit Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
68
THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
Requirement of Law or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or any
other Credit Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to the Credit Parties and their
obligations, (g) with the consent of the Company or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Company. For the
purposes of this Section, "Information" means all information received from the
Company relating to the Company or its business, other than any such information
that is available to the Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by the Company; provided that, in the case of
information received from the Company after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law. The
respective obligations of the Lenders hereunder are several and not joint and
the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. Each Lender hereby represents that it is not relying on or looking to
any margin stock for the repayment of the Borrowings provided for herein.
Anything contained in this Agreement to the contrary notwithstanding, no Lender
shall be obligated to extend credit to the Company in violation of any
Requirement of Law.
SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act") hereby notifies the Company that pursuant to
the requirements of the Act, it is required to obtain, verify and record
information that identifies the Company, which information includes the name and
address of the
69
Company and other information that will allow such Lender to identify the
Company in accordance with the Act.
SECTION 9.15. Disclosure. Each Credit Party and each Lender hereby
acknowledges and agrees that the Administrative Agent and/or its Affiliates from
time to time may hold investments in, make other loans to or have other
financial or advisory relationships with any of the Credit Parties and their
respective Affiliates.
SECTION 9.16. Appointment for Perfection. Each Lender hereby appoints
each other Lender as its agent for the purpose of perfecting Liens, for the
benefit of the Administrative Agent and the Lenders, in assets which, in
accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession. Should any Lender (other than the Administrative
Agent) obtain possession of any such Collateral, such Lender shall notify the
Administrative Agent thereof, and, promptly upon the Administrative Agent's
request therefor shall deliver such Collateral to the Administrative Agent or
otherwise deal with such Collateral in accordance with the Administrative
Agent's instructions.
SECTION 9.17. Call Agreement and Exchangeable Note Indentures.
Notwithstanding anything in any Credit Document to the contrary, the
transactions contemplated by the Call Agreement and the Exchangeable Note
Indentures and any termination of the Call Agreement, the Warrant Agreement
and/or any Swap Agreement shall be permitted if the Company determines that it
is in its best interests to do so as a result of the consummation of the
Refinancing.
SECTION 9.18. Co-Syndication Agents. Neither Co-Syndication Agent
shall have any duties or responsibilities hereunder in its capacity as such.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
CSK AUTO, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
JPMORGAN CHASE BANK, N.A., individually,
as Administrative Agent and Lender
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agent and as Lender
By /s/ L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Co-Syndication Agent and as Lender
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory