EXHIBIT 10.2
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EXECUTION VERSION
TERM LOAN AND GUARANTY AGREEMENT
dated as of March 20, 2007
among
FEDDERS NORTH AMERICA, INC.,
FEDDERS CORPORATION,
as Holdings and a Guarantor,
CERTAIN SUBSIDIARIES OF FEDDERS CORPORATION,
as Guarantors,
VARIOUS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Sole Lead Arranger, Sole Bookrunner and Sole Syndication Agent,
and
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
as Administrative Agent and Collateral Agent,
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$50,000,000 Senior Secured Term Loan Facility
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND INTERPRETATION..........................1
1.1. Definitions......................................................1
1.2. Accounting Terms.................................................24
1.3. Interpretation, etc..............................................24
SECTION 2. TERM LOANS..............................................25
2.1. Term Loan Commitments.............................................25
2.2. Borrowing Mechanics for Term Loans................................25
2.3. Notes.............................................................25
2.4. Pro Rata Shares; Availability of Funds............................25
2.5. Use of Proceeds...................................................26
2.6. Evidence of Debt; Register; Lenders' Books and Records............26
2.7. Interest on Term Loans............................................26
2.8. Conversion/Continuation...........................................28
2.9. Default Interest..................................................28
2.10. Fees..............................................................28
2.11. Scheduled Payments................................................29
2.12. Voluntary Prepayments.............................................29
2.13. Mandatory Prepayments.............................................30
2.14. Call Premium......................................................31
2.15. Application of Prepayments........................................31
2.16. General Provisions Regarding Payments.............................31
2.17. Ratable Sharing...................................................32
2.18. Making or Maintaining Eurodollar Rate Loans.......................33
2.19. Increased Costs; Capital Adequacy.................................34
2.20. Taxes; Withholding, etc...........................................35
2.21. Obligation to Mitigate............................................37
2.22. Removal or Replacement of a Lender................................37
SECTION 3. CONDITIONS PRECEDENT....................................38
3.1. Closing Date........................................................38
SECTION 4. REPRESENTATIONS AND WARRANTIES..........................43
4.1. Organization; Requisite Power and Authority;
Qualification.....................................................43
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TABLE OF CONTENTS
(Continued)
Page
4.2. Capital Stock and Ownership.......................................43
4.3. Due Authorization.................................................43
4.4. No Conflict.......................................................43
4.5. Governmental Consents.............................................44
4.6. Binding Obligation................................................44
4.7. Historical Financial Statements...................................44
4.8. Projections.......................................................44
4.9. No Material Adverse Change........................................44
4.10. No Restricted Junior Payments.....................................45
4.11. Adverse Proceedings, etc..........................................45
4.12. Payment of Taxes..................................................45
4.13. Properties........................................................45
4.14. Environmental Matters.............................................45
4.15. No Defaults.......................................................46
4.16. Material Contracts................................................46
4.17. Governmental Regulation...........................................46
4.18. Margin Stock......................................................46
4.19. Employee Matters..................................................46
4.20. Employee Benefit Plans............................................47
4.21. Certain Fees......................................................48
4.22. Solvency..........................................................48
4.23. Compliance with Statutes, etc.....................................48
4.24. Disclosure........................................................48
4.25. Patriot Act.......................................................48
SECTION 5. AFFIRMATIVE COVENANTS...................................49
5.1. Financial Statements and Other Reports............................49
5.2. Existence.........................................................53
5.3. Payment of Taxes and Claims.......................................53
5.4. Maintenance of Properties.........................................53
5.5. Insurance.........................................................53
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TABLE OF CONTENTS
(Continued)
Page
5.6. Books and Records; Inspections....................................54
5.7. Lenders Meetings..................................................54
5.8. Compliance with Laws..............................................54
5.9. Environmental.....................................................54
5.10. Subsidiaries......................................................56
5.11. Additional Real Estate Assets.....................................56
5.12. Further Assurances................................................56
5.13. Miscellaneous Business Covenants..................................57
5.14. Landlord Waivers..................................................57
5.15. Control Accounts; Approved Deposit Accounts.......................57
5.16. Post-Closing Obligations with respect to Foreign Collateral.......58
SECTION 6. NEGATIVE COVENANTS......................................59
6.1. Indebtedness......................................................59
6.2. Liens.............................................................61
6.3. Equitable Lien....................................................63
6.4. No Further Negative Pledges.......................................63
6.5. Restricted Junior Payments........................................63
6.6. Restrictions on Subsidiary Distributions..........................64
6.7. Investments.......................................................64
6.8. Financial Covenants...............................................65
6.9. Fundamental Changes; Disposition of Assets; Acquisitions..........66
6.10. Disposal of Subsidiary Interests..................................68
6.11. Sales and Lease-Backs.............................................68
6.12. Transactions with Shareholders and Affiliates.....................68
6.13. Conduct of Business...............................................68
6.14. Permitted Activities of Holdings..................................68
6.15. Amendments or Waivers of Organizational Documents
and Senior Notes Documents........................................69
6.16. Fiscal Year.......................................................69
6.17. No Speculative Transactions.......................................69
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TABLE OF CONTENTS
(Continued)
Page
6.18. Margin Regulations................................................69
SECTION 7. GUARANTY................................................69
7.1. Guaranty of the Obligations.......................................69
7.2. Contribution by Guarantors........................................69
7.3. Payment by Guarantors.............................................70
7.4. Liability of Guarantors Absolute..................................70
7.5. Waivers by Guarantors.............................................72
7.6. Guarantors' Rights of Subrogation, Contribution, etc..............72
7.7. Subordination of Other Obligations................................73
7.8. Continuing Guaranty...............................................73
7.9. Authority of Guarantors or Borrower...............................73
7.10. Financial Condition of Borrower...................................73
7.11. Default, Remedies.................................................74
7.12. Bankruptcy, etc...................................................74
7.13. Waiver of Judicial Bond...........................................74
7.14. Discharge of Guaranty Upon Sale of Guarantor......................75
7.15. Indemnity.........................................................75
SECTION 8. EVENTS OF DEFAULT.......................................75
8.1. Events of Default.................................................75
8.2. Borrower's Right to Cure Minimum EBITDA Covenant Default..........78
SECTION 9. AGENTS..................................................78
9.1. Appointment of Agents.............................................78
9.2. Powers and Duties.................................................79
9.3. General Immunity..................................................79
9.4. Agents Entitled to Act as Lender..................................80
9.5. Lenders' Representations, Warranties and Acknowledgment...........81
9.6. Right to Indemnity................................................81
9.7. Successor Administrative Agent and Collateral Agent...............81
9.8. Collateral Documents and Guaranty.................................82
SECTION 10. MISCELLANEOUS...........................................82
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TABLE OF CONTENTS
(Continued)
Page
10.1. Notices..........................................................82
10.2. Expenses.........................................................83
10.3. Indemnity........................................................84
10.4. Set-Off..........................................................84
10.5. Amendments and Waivers...........................................84
10.6. Successors and Assigns; Participations...........................85
10.7. Independence of Covenants........................................88
10.8. Survival of Representations, Warranties and Agreements...........88
10.9. No Waiver; Remedies Cumulative...................................88
10.10. Marshalling; Payments Set Aside..................................89
10.11. Severability.....................................................89
10.12. Obligations Several; Independent Nature of
Lenders' Rights..................................................89
10.13. Headings..........................................................89
10.14. APPLICABLE LAW....................................................89
10.15. CONSENT TO JURISDICTION...........................................89
10.16. WAIVER OF JURY TRIAL..............................................90
10.17. Confidentiality...................................................90
10.18. Usury Savings Clause..............................................91
10.19. Counterparts......................................................92
10.20. Effectiveness.....................................................92
10.21. Patriot Act.......................................................92
10.22. Electronic Execution of Assignments...............................92
10.23. Joint and Several Liability.......................................92
10.24. Judgment Currency.................................................92
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TABLE OF CONTENTS
(Continued)
APPENDICES: A Term Loan Commitments
B Notice Addresses
SCHEDULES: 3.1(h) Closing Date Mortgaged Properties
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.13 Real Estate Assets
4.20 Benefits to Retired or Former Employees
5.18 Certain Other Post-Closing Obligations
6.1 Certain Indebtedness
6.2 Certain Liens
6.6 Certain Restrictions on Subsidiary Distributions
6.7 Certain Investments
6.12 Certain Affiliate Transactions
8.1(k) Environmental Matters
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
B Note
C Compliance Certificate
D-1 Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special counsel
▇-▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇▇▇ counsel
D-3 Opinion of Ballard, Spahr, ▇▇▇▇▇▇▇ & Ingersoll, LLP,
Pennsylvania counsel
▇-▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ counsel
E Assignment and Assumption Agreement
F Certificate Re Non-bank Status
G-1 Closing Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement
I Pledge and Security Agreement
J Mortgage (Fee/Leasehold)
K Landlord Waiver and Consent Agreement
L Intercreditor Agreement
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TERM LOAN AND GUARANTY AGREEMENT
This TERM LOAN AND GUARANTY AGREEMENT, dated as of March 20, 2007, is
entered into by and among FEDDERS NORTH AMERICA, INC., a Delaware corporation
("Borrower"), FEDDERS CORPORATION, as Holdings and a Guarantor, a Delaware
corporation ("Holdings"), CERTAIN SUBSIDIARIES OF FEDDERS CORPORATION, as
Guarantors, Lenders party hereto from time to time, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT
PARTNERS L.P. ("GSCP"), as Sole Lead Arranger, Sole Bookrunner and Sole
Syndication Agent (in such capacity, "Syndication Agent"), GSCP, as
Administrative Agent (together with its permitted successors in such capacity,
"Administrative Agent") and as Collateral Agent (together with its permitted
successor in such capacity, "Collateral Agent").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Lenders have agreed to extend a term loan facility to
Borrower, in an aggregate amount not to exceed $50,000,000, the proceeds of
which will be used to refinance the Refinanced Indebtedness in full (the
"Refinancing"), to pay the Senior Notes Interest Payment, to pay related
transaction costs and expenses and for general corporate purposes;
WHEREAS, Borrower has agreed to secure all of its Obligations by
granting to Collateral Agent, for the benefit of Secured Parties, a First
Priority Lien on the Fixed Asset Collateral and a Second Priority Lien on the
Current Asset Collateral; and
WHEREAS, Guarantors have agreed to guarantee the obligations of
Borrower hereunder and to secure their respective Obligations by granting to
Collateral Agent, for the benefit of the Secured Parties, a First Priority Lien
on the Fixed Asset Collateral and a Second Priority Lien on the Current Asset
Collateral.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1 DEFINITIONS AND INTERPRETATION
1.1. Definitions. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"Account Debtor" as defined in the UCC and includes any Person
obligated in respect of an Account.
"Accounts" as defined in the UCC.
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (and rounding upward to the next whole multiple of
1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%)
equal to the rate determined by Administrative Agent to be the offered rate
which appears on the page of the Telerate Screen which displays an average
British Bankers Association Interest Settlement Rate (such page currently being
page number 3740 or 3750, as applicable) for deposits (for delivery on the first
day of such period) with a term equivalent to such period in Dollars, determined
as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the preceding
clause (a) does not appear on such page or service or if such page or service
shall cease to be available, the rate per annum (rounded to the nearest 1/100 of
1%) equal to the rate determined by Administrative Agent to be the offered rate
on such other page or other service which displays an average British Bankers
Association Interest Settlement Rate for deposits (for delivery on the first day
of such period) with a term equivalent to such period in Dollars, determined as
of approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (c) in the event the rates referenced in the preceding
clauses (a) and (b) are not available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the offered quotation rate to first class banks in
the London interbank market by GSCP for deposits (for delivery on the first day
of the relevant period) in Dollars of amounts in same day funds comparable to
the principal amount of the applicable Term Loan of Administrative Agent, in its
capacity as a Lender, for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such period as of approximately 11:00
a.m. (London, England time) on such Interest Rate Determination Date, by (ii) an
amount equal to (a) one minus (b) the Applicable Reserve Requirement.
"Administrative Agent" as defined in the preamble hereto.
"Adverse Proceeding" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Holdings or any of its Subsidiaries, threatened against or
affecting Holdings or any of its Subsidiaries or any property of Holdings or any
of its Subsidiaries.
"Affected Lender" as defined in Section 2.18(b).
"Affected Term Loans" as defined in Section 2.18(b).
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 5% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.
"Agent" means each of Administrative Agent, Syndication Agent and
Collateral Agent.
"Aggregate Amounts Due" as defined in Section 2.17.
"Aggregate Payments" as defined in Section 7.2.
"Agreement" means this Term Loan and Guaranty Agreement, dated as of
March 20, 2007, as it may be amended, supplemented or otherwise modified from
time to time.
"Applicable Financial Plan" means, for the purposes of agreeing and
determining any financial covenant levels pursuant to Section 6.8, the first
Financial Plan delivered after the Closing Date pursuant to Section 5.1(i).
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"Applicable Reserve Requirement" means, at any time, for any
Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any basic marginal, special,
supplemental, emergency or other reserves) are required to be maintained with
respect thereto against "Eurocurrency liabilities" (as such term is defined in
Regulation D) under regulations issued from time to time by the Board of
Governors or other applicable banking regulator. Without limiting the effect of
the foregoing, the Applicable Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by reference to which the
applicable Adjusted Eurodollar Rate or any other interest rate of a Loan is to
be determined, or (ii) any category of extensions of credit or other assets
which include Eurodollar Rate Loans. A Eurodollar Rate Loan shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender. The
rate of interest on Eurodollar Rate Loans shall be adjusted automatically on and
as of the effective date of any change in the Applicable Reserve Requirement.
"Approved Deposit Account" means a Deposit Account that is the subject
of an effective Deposit Account Control Agreement and that is maintained by any
Credit Party with a Deposit Account Bank. "Approved Deposit Account" includes
all monies on deposit in a Deposit Account and all certificates and instruments,
if any, representing or evidencing such Deposit Account.
"Approved Securities Intermediary" means a "securities intermediary",
"commodity intermediary" or "futures intermediary" (as such terms are defined in
the UCC) selected or approved by Administrative Agent; it being understood and
agreed that the "securities intermediaries", "commodities intermediaries" and
"futures intermediaries" of the Credit Parties on the Closing Date are Approved
Securities Intermediaries.
"Asset Sale" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than
Borrower or any Guarantor Subsidiary), in one transaction or a series of
transactions, of all or any part of Holdings' or any of its Subsidiaries'
businesses, assets or properties of any kind, whether real, personal, or mixed
and whether tangible or intangible, whether now owned or hereafter acquired,
including, without limitation, the Capital Stock of any of Holdings'
Subsidiaries, other than (i) inventory sold or leased in the ordinary course of
business (excluding any such sales by operations or divisions discontinued or to
be discontinued), and (ii) sales of other assets for aggregate consideration of
less than $100,000 with respect to any transaction or series of related
transactions and less than $250,000 in the aggregate during any Fiscal Year.
"Assignment Agreement" means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or modifications as
may be approved by Administrative Agent.
"Assignment Effective Date" as defined in Section 10.6(b).
"Authorized Officer" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer or treasurer.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
3
"Base Rate" means, for any day, a rate per annum equal to the greater
of (i) the Prime Rate in effect on such day and (ii) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"Base Rate Loan" means a Loan bearing interest at a rate determined by
reference to the Base Rate.
"Beneficiary" means each Agent, Lender and Lender Counterparty.
"Blockage Notice" means a notice of "control" (as defined in the UCC)
contemplated to be delivered pursuant to each Deposit Account Control Agreement.
"Board of Governors" means the Board of Governors of the United States
Federal Reserve System, or any successor thereto.
"Borrower" as defined in the preamble hereto.
"Business Day" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, the term "Business Day" shall mean
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in Dollar deposits in the London interbank
market.
"Canadian Subsidiary" means any existing or subsequently acquired or
organized Subsidiary of Holdings organized under the laws of Canada or any
political subdivision thereof including, Fedders Canada.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"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),
including, without limitation, partnership interests, trust units and membership
interests, and any and all warrants, rights or options to purchase or other
arrangements or rights to acquire any of the foregoing.
"Cash" means money, currency or a credit balance in any demand or
Deposit Account.
"Cash Collateral Account" means any Deposit Account or Securities
Account that is (a) established by any Agent from time to time in its sole
discretion to receive cash and Cash Equivalents (or purchase cash or Cash
Equivalents with funds received) from the Credit Parties or Persons acting on
their behalf pursuant to the Credit Documents, (b) with such depositaries and
securities intermediaries as such Agent may determine in its sole discretion,
(c) in the name of Collateral Agent (although such account may also have words
referring to Borrower and the account's purpose), (d) under the control, and
subject to a First Priority perfected Lien, of Collateral Agent and (e) in the
case of a Securities Account, with
4
respect to which Collateral Agent shall be the Entitlement Holder and the only
Person authorized to give Entitlement Orders with respect thereto.
"Cash Equivalents" means, as at any date of determination, (i) any
evidence of Indebtedness with a maturity date of ninety (90) days or less issued
or directly and fully guaranteed or insured by the United States of America or
the Government of Canada or any agency or instrumentality thereof; provided,
that, the full faith and credit of the United States of America or the
Government of Canada, as applicable, is pledged in support thereof; (b)
certificates of deposit or bankers' acceptances with a maturity of ninety (90)
days or less of any financial institution that is a member of the Federal
Reserve System or a bank listed on Schedule I of the Bank Act (Canada) having
combined capital and surplus and undivided profits of not less than
$1,000,000,000; (c) commercial paper (including variable rate demand notes) with
a maturity of ninety (90) days or less issued by a corporation (except an
Affiliate of Borrower or Guarantor) organized under the laws of any State of the
United States of America or the District of Columbia and rated at least A-1 by
S&P or at least P-1 by ▇▇▇▇▇'▇; (d) repurchase obligations with a term of not
more than thirty (30) days for underlying securities of the types described in
clause (a) above entered into with any financial institution having combined
capital and surplus and undivided profits of not less than $1,000,000,000; (e)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States of
America or issued by any governmental agency thereof and backed by the full
faith and credit of the United States of America, in each case maturing within
ninety (90) days or less from the date of acquisition; provided, that, the terms
of such agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985; and (f)
investments in money market funds and mutual funds which invest substantially
all of their assets in securities of the types described in clauses (a) through
(e) above.
"Certificate re Non-Bank Status" means a certificate substantially in
the form of Exhibit F.
"Change of Control" means, at any time, (i) any Person or "group"
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (a) shall
have acquired beneficial ownership of a majority on a fully diluted basis of
the voting and/or economic interest in the Capital Stock of Holdings or (b)
shall have obtained the power (whether or not exercised) to elect a majority
of the members of the board of directors (or similar governing body) of
Holdings, in each case[*]; (ii) the majority of the seats (other than vacant
seats) on the board of directors (or similar governing body) of Holdings cease
to be occupied by Persons who either (a) were members of the board of
directors of Holdings on the Closing Date or (b) were nominated for election
by the board of directors of Holdings, a majority of whom were directors on
the Closing Date or whose election or nomination for election was previously
approved by a majority of such directors; (iii) Holdings shall cease to
beneficially own and control 100% on a fully diluted basis of the economic and
voting interest in the Capital Stock of Borrower, Fedders International, Inc.
or Fedders Investment Corporation, unless as a result of a transaction
expressly permitted under Section 6.9 or Section 6.10; (iv) Borrower shall
cease to beneficially own and control directly or indirectly 100% (or, in the
case of Islandaire and Islandaire Metal Fabricating Inc., (1) prior to
Borrower's purchase of the remaining 20% of the Capital Stock of Islandaire
and Islandaire Metal Fabricating Inc., 80% and (2) after such purchase, 100%)
on a fully diluted basis the economic and voting interest in the Capital Stock
of any Guarantor Subsidiary, unless as a result of a transaction expressly
permitted under Section 6.9 or Section 6.10; or (v) any "change of control" or
similar event under the Revolving Credit Agreement or the Senior Notes
Indenture shall occur.
"Closing Date" means the date on which the Term Loans are made, which
occurred on March 20, 2007.
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* Confidential information has been omitted pursuant to a request to the
Securities and Exchange Commission for confidential treatment. The
information has been separately filed with the Commission.
5
"Closing Date Certificate" means a Closing Date Certificate
substantially in the form of Exhibit G-1.
"Closing Date Mortgaged Property" as defined in Section 3.1(h).
"Collateral" means, collectively, all of the real, personal and mixed
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Agent" as defined in the preamble hereto.
"Collateral Documents" means the Pledge and Security Agreement, the
Mortgages, all executed Deposit Account Control Agreements, Securities Account
Control Agreements and Intellectual Property Security Agreements of Borrower or
the Guarantors, the Landlord Personal Property Collateral Access Agreements, if
any, and all other instruments, documents and agreements delivered by any Credit
Party pursuant to this Agreement or any of the other Credit Documents in order
to grant to Collateral Agent, for the benefit of Secured Parties, a Lien on any
real, personal or mixed property of such Credit Party as security for the
Obligations or to preserve, protect or perfect such Lien.
"Collateral Questionnaire" means a certificate in form satisfactory to
Collateral Agent that provides information with respect to the personal or mixed
property of each Credit Party.
"Commodity Account" has the meaning given such term in the UCC.
"Compliance Certificate" means a Compliance Certificate substantially
in the form of Exhibit C.
"Consolidated Adjusted EBITDA" means, for any period, an amount
determined for Holdings and its Subsidiaries on a consolidated basis equal to
(i) the sum, without duplication, of the amounts for such period of (a)
Consolidated Net Income, (b) Consolidated Interest Expense, (c) provisions for
taxes based on income, (d) total depreciation expense, (e) total amortization
expense, (f) extraordinary and non-recurring charges (including restructuring
charges not exceeding $5,000,000 in any Fiscal Year and $7,500,000 in the
aggregate) and (g) other non-Cash items reducing Consolidated Net Income
(excluding any such non-Cash item to the extent that it represents an accrual or
reserve for potential Cash items in any future period or amortization of a
prepaid Cash item that was paid in a prior period), minus (ii) the sum, without
duplication, for such period of (a) extraordinary and non-recurring income and
gains and (b) other non-Cash items increasing Consolidated Net Income for such
period (excluding any such non-Cash item to the extent it represents the
reversal of an accrual or reserve for potential Cash item in any prior period).
"Consolidated Capital Expenditures" means, for any period, the
aggregate of all expenditures of Holdings and its Subsidiaries during such
period determined on a consolidated basis that, in accordance with GAAP, are or
should be included in "purchase of property and equipment" or similar items
reflected in the consolidated statement of cash flows of Holdings and its
Subsidiaries.
"Consolidated Current Assets" means, as at any date of determination,
the total assets of Holdings and its Subsidiaries on a consolidated basis that
may properly be classified as current assets in conformity with GAAP, excluding
Cash and Cash Equivalents.
6
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Holdings and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, excluding the current portion of long term debt.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to: (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working
Capital Adjustment, minus (ii) the sum, without duplication, of the amounts for
such period of (a) scheduled repayments of Indebtedness for borrowed money
(excluding repayments of Revolving Loans except to the extent the Revolving
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of (y) any related
financings with respect to such expenditures and (z) any sales of assets used to
finance such expenditures), (c) Consolidated Interest Expense, and (d)
provisions for current taxes based on income of Holdings and its Subsidiaries
and payable in cash with respect to such period.
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Holdings and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Holdings and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under Interest Rate
Agreements, but excluding, however, any amount not payable in Cash and any
amounts referred to in Section 2.10 payable on or before the Closing Date.
"Consolidated Net Income" means, for any period, (i) the net income
(or loss) of Holdings and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary of
Holdings) in which any other Person (other than Holdings or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Holdings or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Holdings or is
merged into or consolidated with Holdings or any of its Subsidiaries or that
Person's assets are acquired by Holdings or any of its Subsidiaries, (c) the
income (or loss) of any Subsidiary of Holdings to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (d) any after-tax gains
or losses attributable to Asset Sales or returned surplus assets of any Pension
Plan, and (e) (to the extent not included in clauses (a) through (d) above) any
net extraordinary gains or net extraordinary losses.
"Consolidated Secured Debt" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness (other than the
Senior Notes) of Holdings and its Subsidiaries which is secured by a Lien on any
of their respective assets, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Working Capital" means, as at any date of determination,
the excess of Consolidated Current Assets over Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
7
"Contractual Obligation" means, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Contributing Guarantors" as defined in Section 7.2.
"Control Account" means a Securities Account or Commodity Account that
is the subject of an effective Securities Account Control Agreement and that is
maintained by any Credit Party with an Approved Securities Intermediary.
"Control Account" includes all Financial Assets held in a Securities Account or
a Commodity Account and all certificates and instruments, if any, representing
or evidencing the Financial Assets contained therein.
"Conversion/Continuation Date" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"Conversion/Continuation Notice" means a Conversion/Continuation
Notice substantially in the form of Exhibit A-2.
"Core Credit Parties" means, collectively, (i) the Domestic Credit
Parties, (ii) each Canadian Subsidiary which is a Foreign Guarantor Subsidiary
and (iii) each other Foreign Guarantor Subsidiary that (in the case of this
clause (iii)) (x) guarantees the Obligations in full on terms not materially
less favorable to the Lenders than the guaranty provisions contained in Section
7 and (y) have granted to Collateral Agent a perfected Lien (having the priority
required herein) on substantially all of its assets to secure the guaranty
described in clause (x) above.
"Counterpart Agreement" means a Counterpart Agreement substantially in
the form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.
"Credit Document" means any of this Agreement, the Notes, if any, the
Collateral Documents, the Intercreditor Agreement and all other documents,
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent or any Lender in connection herewith.
"Credit Extension" means the making of a Term Loan.
"Credit Party" means, collectively, Borrower and the Guarantors.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement, each of which is for the purpose of hedging
the foreign currency risk associated with Holdings' and its Subsidiaries'
operations and not for speculative purposes.
"Current Asset Collateral" as defined in the Intercreditor Agreement.
[*]
"Default" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.
-----------------
* Confidential information has been omitted pursuant to a request to the
Securities and Exchange Commission for confidential treatment. The
information has been separately filed with the Commission.
8
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"Deposit Account Bank" means a financial institution selected or
approved by Administrative Agent; it being understood and agreed that the
deposit account banks of the Credit Parties on the Closing Date are Deposit
Account Banks.
"Deposit Account Control Agreement" has the meaning specified in the
Pledge and Security Agreement.
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
"Domestic Credit Party" means each Credit Party other than the Foreign
Guarantor Subsidiaries.
"Domestic Subsidiary" means any Subsidiary organized under the laws of
the United States of America, any State thereof or the District of Columbia.
"Draft Financial Statements" means the draft audited financial
statements of Holdings and its Subsidiaries dated as of March 15, 2007, for
Fiscal Year 2006, consisting of balance sheets and the related consolidated
statements of income, stockholders' equity and cash flows for such Fiscal Year.
"Eligible Assignee" means (i) any Lender, any Affiliate of any Lender
and any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans; provided, no Affiliate of Holdings shall be
an Eligible Assignee.
"Employee Benefit Plan" means (i) in respect of any Credit Party other
than any Canadian Subsidiary, any "employee benefit plan" as defined in Section
3(3) of ERISA which is or was sponsored, maintained or contributed to by, or
required to be contributed by, Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates and (ii) in respect of any Canadian Subsidiary, any
employee benefit plan of any nature or kind that is not a Pension Plan and is
maintained by or contributed to, or required to be maintained by or contributed
to, by any Canadian Subsidiary.
"Entitlement Holder" has the meaning given such term in the UCC.
"Entitlement Order" has the meaning given such term in the UCC.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, orders-in-council, rules, regulations, judgments,
Governmental Authorizations, or any other requirements of Governmental
9
Authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity; (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials; or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Holdings or any of its
Subsidiaries or any Facility.
"Equipment" means, as to each Credit Party, all of such Credit Party's
now owned and hereafter acquired equipment, wherever located, including
machinery, data processing and computer equipment (whether owned or licensed and
including embedded software), vehicles, tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed thereto or used in
connection therewith, and substitutions and replacements thereof, wherever
located.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Holdings or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Holdings or
any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Holdings or such Subsidiary and
with respect to liabilities arising after such period for which Holdings or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to Holdings, any of
its Subsidiaries or any of their respective Affiliates pursuant to Section 4063
or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines,
10
penalties, taxes or related charges under Chapter 43 of the Internal Revenue
Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA
in respect of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"Eurodollar Rate Loan" means a Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"Event of Default" means each of the conditions or events set forth in
Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excluded Foreign Entity" means each Foreign Subsidiary or Joint
Venture that has no revenues and tangible assets of less than $250,000 in the
aggregate.
"Facility" means any real property (including all buildings, fixtures
or other improvements located thereon) now, hereafter or heretofore owned,
leased, operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"Fair Share Contribution Amount" as defined in Section 7.2.
"Fair Share" as defined in Section 7.2.
"Fedders Canada" means Fedders, Inc., a corporation organized under
the laws of the Province of Ontario, Canada.
"Fedders Xinle" means Fedders Xinle Co., Ltd., a People's Republic of
China joint venture company.
"Federal Funds Effective Rate" means for any day, the rate per annum
(expressed, as a decimal, rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, (i) if such day
is not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.
"Financial Officer Certification" means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer of Holdings that such financial statements fairly
present, in all material respects, the financial condition of Holdings and its
11
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.
"Financial Plan" as defined in Section 5.1(i).
"First Priority" means, with respect to any Lien purported to be
created in any Fixed Asset Collateral pursuant to any Collateral Document, that
such Lien is the only Lien to which such Collateral is subject, other than any
Permitted Liens which are junior in priority to Collateral Agent's Lien on such
Collateral, mortgages existing on the Closing Date and set forth on Schedule 6.2
and inchoate Liens arising by operation of law for which amounts are not yet due
and payable.
"Fiscal Month" means a fiscal month of any Fiscal Year.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries
ending on December 31 of each calendar year.
"Fixed Asset Collateral" as defined in the Intercreditor Agreement.
"Flood Hazard Property" means any Real Estate Asset subject to a
mortgage in favor of Collateral Agent, for the benefit of the Secured Parties,
and located in an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards.
"Foreign Guarantor Subsidiary" means (a) each Canadian Subsidiary and
(b) each Foreign Subsidiary at any time having tangible assets of at least
$500,000; provided, that no such Foreign Subsidiary shall be a "Foreign
Guarantor Subsidiary" under this clause (b) if its guarantee of the Obligations
would (i) result in a Credit Party incurring material adverse tax consequences,
(ii) violate (x) applicable law (except to the extent such guarantee may be
limited without violation of applicable law) or (y) any Contractual Obligation
of such Foreign Subsidiary in effect on the Closing Date or entered into with
the consent of Administrative Agent following the Closing Date in connection
with the incurrence of Indebtedness of such Foreign Subsidiary pursuant to
Section 6.1, or (iii) reasonably be expected to prevent Indebtedness of such
Foreign Subsidiaries from being renewed; provided, that Fedders Xinle (so long
as it is a Joint Venture) shall not be a Foreign Guarantor Subsidiary.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary or a Canadian Subsidiary.
"Funding Guarantors" as defined in Section 7.2.
"Funding Notice" means a notice substantially in the form of Exhibit
A-1.
"GAAP" means, subject to the limitations on the application thereof
set forth in ▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ generally accepted accounting principles
in effect as of the date of determination thereof.
"General Intangible" as defined in the UCC.
"Governmental Authority" means any federal, state, provincial,
municipal, national or other government, governmental department, commission,
board, bureau, court, agency, central bank, tribunal or instrumentality or
political subdivision thereof or any entity or officer exercising executive,
12
legislative, judicial, regulatory or administrative functions of or pertaining
to any government or any court, in each case whether associated with a state of
the United States, the United States, or a foreign entity or government.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.
"Grantor" as defined in the Pledge and Security Agreement.
"GSCP" as defined in the preamble hereto.
"Guaranteed Obligations" as defined in Section 7.1.
"Guarantor" means Holdings and each Subsidiary of Holdings (other than
Borrower).
"Guarantor Subsidiary" means each Guarantor other than Holdings.
"Guaranty" means the guaranty of each Guarantor set forth in Section
7.
"Hazardous Materials" means any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any Governmental
Authority or which may or could pose a hazard to the health and safety of the
owners, occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement entered into with a Lender Counterparty in order to satisfy the
requirements of this Agreement or otherwise in the ordinary course of Holdings'
or any of its Subsidiaries' businesses.
"Highest Lawful Rate" means the maximum lawful interest rate, if any,
that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Historical Financial Statements" means as of the Closing Date, (i)
the audited financial statements of Holdings and its Subsidiaries, for Fiscal
Years 2003, 2004, and 2005, consisting of balance sheets and the related
consolidated statements of income, stockholders' equity and cash flows for such
Fiscal Years, and (ii) the unaudited financial statements of Holdings and its
Subsidiaries as at the most recently ended Fiscal Month for which such financial
statements are available, consisting of a balance sheet and the related
consolidated statements of income, stockholders' equity and cash flows for the
period since the beginning of Fiscal Year 2006 ending on such date.
"Holdings" as defined in the preamble hereto.
13
"Holdings Guarantees" as defined in Section 6.1(j).
"Increased-Cost Lenders" as defined in Section 2.22.
"Indebtedness", as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money; (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument; (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person; (vi) the face amount of any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (vii) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the indebtedness obligation of another; (viii) any obligation
of such Person the primary purpose or intent of which is to provide assurance to
an obligee that the indebtedness obligation of the obligor thereof will be paid,
or any agreement relating to such indebtedness obligation will be complied with,
or the holders thereof will be protected (in whole or in part) against loss in
respect thereof; (ix) any liability of such Person for the indebtedness
obligation of another through any agreement (contingent or otherwise) (a) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (b) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (a) or (b) of this clause (ix), the primary purpose
or intent thereof is as described in clause (viii) above; and (x) all
obligations of such Person in respect of any exchange traded or over the counter
derivative transaction, including, without limitation, any Interest Rate
Agreement and Currency Agreement, whether entered into for hedging or
speculative purposes; provided, in no event shall obligations under any Interest
Rate Agreement and any Currency Agreement be deemed "Indebtedness" for any
purpose under Section 6.8.
"Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), actions, judgments, suits,
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Credit Documents or the transactions contemplated hereby or thereby
(including Lenders' agreement to make Credit Extensions or the use or intended
use of the proceeds thereof, or any enforcement of any of the Credit Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranty)); (ii) the statements contained
in the commitment letter delivered by any Lender to Borrower with respect to the
transactions contemplated by
14
this Agreement; or (iii) any Environmental Claim or any Hazardous Materials
Activity relating to or arising from, directly or indirectly, any past or
present activity, operation, land ownership, or practice of Holdings or any of
its Subsidiaries.
"Indemnitee" as defined in Section 10.3.
"Installment" as defined in Section 2.11.
"Interest Coverage Ratio" means the ratio of (i) Consolidated Adjusted
EBITDA for the twelve-Fiscal Month period then ended to (ii) Consolidated
Interest Expense for such twelve-Fiscal Month period.
"Intellectual Property" as defined in the Pledge and Security
Agreement.
"Intellectual Property Security Agreement" as defined in the Pledge
and Security Agreement.
"Intercreditor Agreement" means that certain Intercreditor Agreement,
dated as of the date hereof, among Borrower, Holdings, Administrative Agent,
Collateral Agent, the Revolving Credit Facility Agent in the form attached
hereto as Exhibit L.
"Interest Payment Date" means with respect to (i) any Base Rate Loan,
the first Business Day of each month commencing on April 1, 2007 and the Term
Loan Maturity Date and (ii) any Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Loan and the Term Loan Maturity Date;
provided, in the case of each Interest Period of longer than three months,
"Interest Payment Date" shall also include each date that is three months, or an
integral multiple thereof, after the commencement of such Interest Period; and
upon prepayment, in each case payable in arrears.
"Interest Period" means, in connection with a Eurodollar Rate Loan, an
interest period of one-, two-, three- or six-months, as selected by Borrower in
the applicable Funding Notice or Conversion/Continuation Notice, (i) initially,
commencing on the Closing Date or Conversion/Continuation Date thereof, as the
case may be; and (ii) thereafter, commencing on the day on which the immediately
preceding Interest Period expires; provided, (a) if an Interest Period would
otherwise expire on a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day unless no further Business Day occurs
in such month, in which case such Interest Period shall expire on the
immediately preceding Business Day; (b) any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (c) of this definition, end on the last
Business Day of a calendar month; and (c) no Interest Period with respect to any
portion of Term Loans shall extend beyond the Term Loan Maturity Date.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedging agreement or other similar agreement or arrangement, each of which is
for the purpose of hedging the interest rate exposure associated with Holdings'
and its Subsidiaries' operations and not for speculative purposes.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
15
"Investment" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a Guarantor
Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Holdings from any Person
(other than Holdings or any Guarantor Subsidiary), of any Capital Stock of such
Person; and (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital
contributions by Holdings or any of its Subsidiaries to any other Person (other
than Holdings or any Guarantor Subsidiary), including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, and the outstanding amount thereof, in each case, at any time shall
be calculated net of any principal repayment or return of capital with respect
thereto following the Closing Date (such repayment or return not to be in excess
of the original amount invested).
"Islandaire" means Islandaire, Inc., a New York corporation.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"Judgment Conversion Date" as defined in Section 10.24(a).
"Judgment Currency" as defined in Section 10.24(a).
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property a letter, certificate or other instrument in writing from the lessor
under the related lease, pursuant to which, among other things, the landlord
consents to the granting of a Mortgage on such Leasehold Property by the Credit
Party tenant, such Landlord Consent and Estoppel to be in form and substance
acceptable to Collateral Agent in its reasonable discretion, but in any event
sufficient for Collateral Agent to obtain a Title Policy with respect to such
Mortgage.
"Landlord Personal Property Collateral Access Agreement" means a
Landlord Waiver and Consent Agreement substantially in the form of Exhibit K
with such amendments or modifications as may be approved by Collateral Agent.
"Leasehold Property" means any leasehold interest of any Credit Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Collateral Agent in its sole discretion
as not being required to be included in the Collateral.
"Lender" means each financial institution listed on the signature
pages hereto as a Lender, and any other Person that becomes a party hereto
pursuant to an Assignment Agreement.
"Lender Counterparty" means each Lender or any Affiliate of a Lender
counterparty to a Hedge Agreement (including any Person who is a Lender (and any
Affiliate thereof) as of the Closing Date but subsequently, whether before or
after entering into a Hedge Agreement, ceases to be a Lender) including, without
limitation, each such Affiliate that enters into a joinder agreement with
Collateral Agent.
16
"Lien" means (i) any lien, mortgage, pledge, assignment, security
interest, hypothec, deemed trust, charge or encumbrance of any kind (including
any agreement to give any of the foregoing, any conditional sale or other title
retention agreement, and any lease in the nature thereof) and any option, trust
or other preferential arrangement having the practical effect of any of the
foregoing and (ii) in the case of Securities, any purchase option, call or
similar right of a third party with respect to such Securities.
"Margin Stock" as defined in Regulation U of the Board of Governors as
in effect from time to time.
"Material Adverse Effect" means a material adverse effect on and/or
material adverse developments with respect to (i) the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries taken as a whole; (ii) the ability of any Credit Party to
fully and timely perform its Obligations; (iii) the legality, validity, binding
effect or enforceability against a Credit Party of a Credit Document to which it
is a party; or (iv) the material rights, remedies and benefits available to, or
conferred upon, any Agent and any Lender or any Secured Party under any Credit
Document.
"Material Contract" means (a) any contract or other agreement (other
than the Credit Documents), written or oral, of Borrower or any Guarantor
involving monetary liability of or to any Person in an amount in excess of
$500,000 in any Fiscal Year and (b) any other contract or other arrangement to
which Holdings or any of its Subsidiaries is a party (other than the Credit
Documents) for which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.
"Moody's" means ▇▇▇▇▇'▇ Investor Services, Inc.
"Mortgage" means a Mortgage substantially in the form of Exhibit J, as
it may be amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance Commissioners, and
any successor thereto.
"Narrative Report" means, with respect to the financial statements for
which such narrative report is required, a narrative report describing the
operations of Holdings and its Subsidiaries in the form prepared for
presentation to senior management thereof for the applicable month, Fiscal Month
or Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such period to which such financial statements relate.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale (other
than (except when there are no commitments or Indebtedness outstanding under the
Revolving Credit Agreement) any Asset Sale with respect to Current Asset
Collateral), an amount equal to: (i) Cash payments (including any Cash received
by way of deferred payment pursuant to, or by monetization of, a note receivable
or otherwise, but only as and when so received) received by Holdings or any of
its Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs
incurred in connection with such Asset Sale, including (a) income or gains taxes
payable by the seller as a result of any gain recognized in connection with such
Asset Sale, (b) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Term Loans)
that is secured by a Lien on the stock or assets in
17
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale and (c) a reasonable reserve for any indemnification payments
(fixed or contingent) attributable to seller's indemnities and representations
and warranties to purchaser in respect of such Asset Sale undertaken by Holdings
or any of its Subsidiaries in connection with such Asset Sale.
"Net Insurance/Condemnation Proceeds" means an amount equal to: (i)
any Cash payments or proceeds received by Holdings or any of its Subsidiaries
(a) under any casualty insurance policy in respect of a covered loss thereunder
or (b) as a result of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain, condemnation
or otherwise, or pursuant to a sale of any such assets to a purchaser with such
power under threat of such a taking, minus (ii) (a) any actual and reasonable
costs incurred by Holdings or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of Holdings or such Subsidiary in respect
thereof, and (b) any bona fide direct costs incurred in connection with any sale
of such assets as referred to in clause (i)(b) of this definition, including
income taxes payable as a result of any gain recognized in connection therewith,
in each case other than (except when there are no commitments or Indebtedness
outstanding under the Revolving Credit Agreement) with respect to assets which
are Current Asset Collateral.
"Nonpublic Information" means information which has not been
disseminated in a manner making it available to investors generally, within the
meaning of Regulation FD.
"Non-US Lender" as defined in Section 2.20(c).
"Note" means a promissory note in the form of Exhibit B, as it may be
amended, supplemented or otherwise modified from time to time.
"Notice" means a Funding Notice, or a Conversion/ Continuation Notice.
"Obligation Currency" as defined in Section 10.24(a).
"Obligations" means all obligations of every nature of each Credit
Party, including obligations from time to time owed to Agents (including former
Agents), Lenders or any of them and Lender Counterparties, under any Credit
Document or Hedge Agreement, whether for principal, interest (including interest
which, but for the filing of a petition in bankruptcy with respect to such
Credit Party, would have accrued on any Obligation, whether or not a claim is
allowed against such Credit Party for such interest in the related bankruptcy
proceeding), payments for early termination of Hedge Agreements, fees, expenses,
indemnification or otherwise.
"Obligee Guarantor" as defined in Section 7.7.
"Organizational Documents" means (i) with respect to any corporation,
its certificate or articles of incorporation or organization, as amended, and
its by-laws, as amended, (ii) with respect to any limited partnership, its
certificate or declaration of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
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"Pension Plan" means (i) in respect of any Credit Party other than any
Canadian Subsidiary, any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to Section 412 of the Internal Revenue Code or Section 302 of
ERISA and (ii) in respect of any Canadian Subsidiary, each pension,
supplementary pension, retirement savings or other retirement income plan or
arrangement of any kind, registered or non-registered, established, maintained
or contributed to by any Canadian Subsidiary for its employees or former
employees, but does not include the Canada Pension Plan or the Quebec Pension
Plan that is maintained by the Government of Canada or the Province of Quebec,
respectively.
"Permitted Acquisition" means any acquisition by Borrower or any of
its wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all
or substantially all of the assets of, all of the Capital Stock of, or a
business line or unit or a division of, any Person, in each case made only with
the prior written consent of the Requisite Lenders and Administrative Agent.
"Permitted Liens" means each of the Liens permitted pursuant to
Section 6.2.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, unlimited
liability companies, limited liability partnerships, joint stock companies,
Joint Ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal entities,
and Governmental Authorities.
"Platform" as defined in Section 5.1(p).
"Pledge and Security Agreement" means the Pledge and Security
Agreement to be executed by Borrower and each Guarantor substantially in the
form of Exhibit I, as it may be amended, supplemented or otherwise modified from
time to time.
"Prime Rate" means the rate of interest quoted in The Wall Street
Journal, Money Rates Section as the Prime Rate (currently defined as the base
rate on corporate loans posted by at least 75% of the nation's thirty (30)
largest banks), as in effect from time to time. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Agent or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"Principal Office" means, for each of Administrative Agent, such
Person's "Principal Office" as set forth on Appendix B, or such other office or
office of a third party or sub-agent, as appropriate, as such Person may from
time to time designate in writing to Borrower and each Lender.
"Projections" as defined in Section 4.8.
"Pro Rata Share" means with respect to all payments, computations and
other matters relating to the Term Loan of any Lender, the percentage obtained
by dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term
Loan Exposure of all Lenders.
"Real Estate Asset" means, at any time of determination, any interest
(fee, leasehold or otherwise) then owned by any Credit Party in any real
property.
"Record Document" means, with respect to any Leasehold Property, (i)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (ii)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed
19
and acknowledged by such holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to Collateral Agent.
"Recorded Leasehold Interest" means a Leasehold Property with respect
to which a Record Document has been recorded in all places necessary or
desirable, in Collateral Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrancers of
the affected real property.
"Refinanced Indebtedness" means, collectively, the Indebtedness and
other obligations outstanding under (a) that certain Amended and Restated Loan
and Security Agreement, dated as of January 31, 2006, among Borrower, certain of
its subsidiaries as borrowers and guarantors, the lenders and issuing banks
party thereto and Wachovia Bank, N.A. (formerly Wachovia Bank, National
Association) as administrative agent, as amended prior to the Closing Date (the
"Existing Loan Agreement") and (b) each other loan agreement, credit agreement,
note, guaranty, mortgage or other agreement, document or instrument in
connection with the Existing Loan Agreement.
"Refinancing" as defined in the recitals hereto.
"Register" as defined in Section 2.6(b).
"Regulation D" means Regulation D of the Board of Governors, as in
effect from time to time.
"Regulation FD" means Regulation FD as promulgated by the US
Securities and Exchange Commission under the Securities Act and Exchange Act as
in effect from time to time.
"Related Fund" means, with respect to any Lender that is an investment
fund, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of any Hazardous Material into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Material), including the
movement of any Hazardous Material through the air, soil, surface water or
groundwater.
"Replacement Lender" as defined in Section 2.22.
"Reporting Month" means each Fiscal Month other than any Fiscal Month
ending the same date as any Fiscal Quarter.
"Requisite Lenders" means one or more Lenders having or holding Term
Loan Exposure and representing at least 662/3% of the sum of the aggregate Term
Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Holdings or Borrower now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class; (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Holdings or Borrower now or hereafter outstanding; (iii) any cash payment
made to retire, or to obtain the surrender of, any outstanding warrants,
20
options or other rights to acquire shares of any class of stock of Holdings or
Borrower now or hereafter outstanding, (iv) any loan or advance by Borrower or
its Subsidiaries to Holdings and (v) any payment or prepayment of principal, of
premium, if any, or interest on or redemption, purchase, retirement, defeasance
(including in substance or legal defeasance), sinking fund or similar payment
with respect to the Senior Notes;
"Revolving Commitments" means the revolving commitments made to
Borrower and the other borrowers under and pursuant to the Revolving Credit
Agreement.
"Revolving Credit Agreement" means that certain Revolving Loan and
Security Agreement, dated as of the date hereof, among Borrower and the other
borrowers party thereto, the Guarantors, the Revolving Credit Facility Agent,
GSCP, as sole lead arranger, sole bookrunner and sole syndication agent, and the
other financial institutions party thereto, together with any agreements or
instruments entered into from time to time in connection with any refinancing,
restatement, replacement or refunding, in whole or in part, of the obligations
incurred thereunder.
"Revolving Credit Documents" has the meaning given to the term "Credit
Documents" in the Revolving Credit Agreement.
"Revolving Credit Facility" as defined in the Revolving Credit
Agreement.
"Revolving Credit Facility Agent" means Bank of America, N.A., a
national banking association, in its capacity as administrative agent and
collateral agent under the Revolving Credit Agreement, together with its
permitted successors in such capacity.
"Revolving Credit Facility Secured Parties" has the meaning given to
the term "Secured Parties" in the Revolving Credit Agreement.
"Revolving Loans" means the loans made to Borrower and the other
borrowers under and pursuant to the Revolving Credit Agreement.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Corporation.
"Second Priority" means, with respect to any Lien created in any
Current Asset Collateral pursuant to any Collateral Document, that such Lien is
subordinated solely to the Liens on such Collateral created by the Revolving
Loan Credit Documents and inchoate Liens arising by operation of law for which
amounts are not yet due and payable.
"Secured Leverage Ratio" means the ratio of (i) Consolidated Secured
Debt as of such day to (ii) Consolidated Adjusted EBITDA for the twelve-Fiscal
Month period ending on such date.
"Secured Parties" has the meaning assigned to that term in the Pledge
and Security Agreement.
"Securities" means any stock, shares, partnership interests, trust
units, voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participations
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
21
"Securities Account" has the meaning given to such term in the UCC.
"Securities Account Control Agreement" has the meaning specified in
the Pledge and Security Agreement.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Senior Notes" means the 97/8% Senior Notes due March 1, 2014, issued
by Borrower pursuant to the Senior Notes Indenture in the aggregate principal
amount of $155,000,000, as the same now exists or may hereafter be (as permitted
hereunder) amended, modified, supplemented, extended, renewed, restated or
replaced.
"Senior Notes Documents" means, collectively, the Senior Notes, the
Senior Notes Guaranty, the Senior Notes Indenture and each other agreement or
document in connection therewith.
"Senior Notes Guaranty" means the "Guaranty" of the Senior Notes by
each of the Senior Notes Guarantors under the Senior Notes Indenture.
"Senior Notes Indenture" means, the Indenture, dated as of March 8,
2004, among Borrower, Holdings and certain Subsidiaries of Holdings as
"Guarantors" thereunder and the Senior Notes Trustee, as amended and
supplemented by the First Supplemental Indenture and Waiver, dated as of
September 13, 2005, among Borrower, Holdings and such "Guarantors" and the
Senior Notes Trustee, in effect on the date hereof or as may hereafter be (as
permitted hereby) amended, modified, supplemented, extended, renewed, restated
or replaced.
"Senior Notes Interest Payment" means that certain interest payment
with respect to the Senior Notes due on March 1, 2007, overdue as of the date
hereof.
"Senior Notes Trustee" means U.S. Bank, National Association, as
trustee under the Senior Notes Indenture, and its successors and assigns, and
any replacement trustee permitted pursuant to the terms and conditions of the
Senior Notes Indenture.
"Settlement Confirmation" as defined in Section 10.6(b).
"Settlement Service" as defined in Section 10.6(d).
"Solvency Certificate" means a Solvency Certificate of the chief
financial officer of Holdings substantially in the form of Exhibit G-2.
"Solvent" means, with respect to (x) Borrower (on a consolidated
basis) and (y) the Credit Parties (taken as a whole) that as of the date of
determination, both (i) (a) the respective sums of such Credit Party's and
Credit Parties' debt (including contingent liabilities) do not exceed the
present fair saleable value of such Credit Party's and Credit Parties' present
assets; (b) such Credit Party's and Credit Parties' capital is not unreasonably
small in relation to their respective businesses as contemplated on the Closing
Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person and
Persons have not incurred and do not intend to incur, or believe (nor should
they reasonably believe) that they will incur, debts beyond their abilities to
pay such debts as they become due (whether at maturity or otherwise),
respectively; and (ii) such Person and Persons are "solvent" within the meaning
given that term and similar terms under the Bankruptcy Code and applicable laws
relating to fraudulent transfers and conveyances in the jurisdiction of
22
organization of such Person and Persons and the state in which each such
Person's chief executive office is located, respectively. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No. 5).
"Subject Transaction" as defined in Section 6.8(e).
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
"Syndication Agent" as defined in the preamble hereto.
"Tax" means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, imposed
by a Governmental Authority; provided, "Tax on the overall net income" of a
Person shall be construed as a reference to a tax imposed by the jurisdiction in
which that Person is organized or in which that Person's applicable principal
office (and/or, in the case of a Lender, its lending office) is located or in
which that Person (and/or, in the case of a Lender, its lending office) is
deemed to be doing business on all or part of the net income, profits or gains
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise)
of that Person (and/or, in the case of a Lender, its applicable lending office).
"Term Loan" means a Term Loan made by a Lender to Borrower pursuant to
Section 2.1.
"Term Loan Commitment" means the commitment of a Lender to make or
otherwise fund a Term Loan and "Term Loan Commitments" means such commitments of
all Lenders in the aggregate. The amount of each Lender's Term Loan Commitment
is set forth on Appendix A or in the applicable Assignment Agreement, subject to
any adjustment or reduction pursuant to the terms and conditions hereof. The
aggregate amount of the Term Loan Commitments as of the Closing Date is
$50,000,000.
"Term Loan Exposure" means, with respect to any Lender, as of any date
of determination, the outstanding principal amount of the Term Loans of such
Lender; provided, at any time prior to the making of the Term Loans, the Term
Loan Exposure of any Lender shall be equal to such Lender's Term Loan
Commitment.
"Term Loan Maturity Date" means the earlier of (i) September 20, 2009,
and (ii) the date that all Term Loans shall become due and payable in full
hereunder, whether by acceleration or otherwise.
"Terminated Lender" as defined in Section 2.22.
23
"Title Policy" as defined in Section 3.1(h).
"Transaction Costs" means the fees, costs and expenses payable by
Holdings, Borrower or any of Holdings' Subsidiaries pursuant to Section 10.2 on
or before the Closing Date in connection with the transactions contemplated by
the Credit Documents.
"Type" means, with respect to Term Loans, a Base Rate Loan or a
Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction; provided that where
the perfection, effect of perfection or non-perfection or priority of any Lien
granted under any Collateral Document is governed by the laws as the Province of
Ontario, UCC shall include the Personal Property Security Act (Ontario) as the
context requires.
"Vienna Property" means that certain real property located at Vienna
Industrial Park, Vienna, Georgia, owned by ▇▇▇▇▇▇ Coil Company.
"Walkersville Property" means that certain real property located at
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, owned by Rotorex Company, Inc..
1.2. Accounting Terms. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Holdings to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the Historical Financial Statements.
1.3. Interpretation, etc. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not non-limiting language (such as "without limitation"
or "but not limited to" or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that
fall within the broadest possible scope of such general statement, term or
matter. Unless the prior written consent of the Requisite Lenders is required
hereunder for an amendment, restatement, supplement or other modification to any
such agreement and such consent is not obtained, references in this Agreement to
such agreement shall be to such agreement as so amended, restated, supplemented
or modified. References in this Agreement to any statute shall be to such
statute as amended or modified from time to time and to any successor
legislation thereto, in each case as in effect at the time any such reference is
operative. The terms "Lender," "Administrative Agent," "Collateral Agent,"
"Syndication Agent," and "Agent" include, without limitation, their respective
successors.
24
SECTION 2 TERM LOANS
2.1. Term Loan Commitments. Subject to the terms and conditions hereof,
each Lender severally agrees to make, on the Closing Date, a Term Loan to
Borrower in an amount equal to such Lender's Term Loan Commitment. Borrower may
make only one borrowing under the Term Loan Commitment which shall be on the
Closing Date. Any amount borrowed under this Section 2.1 and subsequently repaid
or prepaid may not be reborrowed. Subject to Sections 2.11 and 2.13, all amounts
owed hereunder with respect to the Term Loans shall be paid in full no later
than the Term Loan Maturity Date. Each Lender's Term Loan Commitment shall
terminate immediately and without further action on the Closing Date after
giving effect to the funding of such Lender's Term Loan Commitment on such date.
2.2. Borrowing Mechanics for Term Loans.
(a) Borrower shall deliver to Administrative Agent a fully executed
Funding Notice no later than (i) in the case of Base Rate Loans, 1 Business Day
and (ii) in the case of Eurodollar Rate Loans, 3 Business Days, in each case,
prior to the Closing Date. Promptly upon receipt by Administrative Agent of such
Funding Notice, Administrative Agent shall notify each Lender of the proposed
borrowing.
(b) Each Lender shall make its Term Loan, as the case may be,
available to Administrative Agent not later than 10:00 p.m. (New York City time)
on the Closing Date, by wire transfer of same day funds in Dollars, at the
Principal Office designated by Administrative Agent. Upon satisfaction or waiver
of the conditions precedent specified herein, Administrative Agent shall make
the proceeds of the Term Loans available to Borrower on the Closing Date by
causing an amount of same day funds in Dollars equal to the proceeds of all such
Term Loans received by Administrative Agent from Lenders to be credited to the
account of Borrower at the Principal Office designated by Administrative Agent
or to such other account as may be designated in writing to Administrative Agent
by Borrower.
2.3. Notes. If so requested by any Lender by written notice to Borrower
(with a copy to Administrative Agent) at least two Business Days prior to the
Closing Date, or at any time thereafter, Borrower shall execute and deliver to
such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to Section 10.6) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Borrower's receipt of such notice) a Note or Notes to evidence such
Lender's Term Loan.
2.4. Pro Rata Shares; Availability of Funds.
(a) Pro Rata Shares. All Term Loans shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any default by any other
Lender in such other Lender's obligation to make a Term Loan requested hereunder
nor shall any Term Loan Commitment of any Lender be increased or decreased as a
result of a default by any other Lender in such other Lender's obligation to
make a Term Loan requested hereunder.
(b) Availability of Funds. Unless Administrative Agent shall have been
notified by any Lender prior to the Closing Date that such Lender does not
intend to make available to Administrative Agent the amount of such Lender's
Term Loan requested on the Closing Date, Administrative Agent may assume that
such Lender has made such amount available to Administrative Agent on the
Closing Date and Administrative Agent may, in its sole discretion, but shall not
be obligated to, make available to Borrower a corresponding amount on the
Closing Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall
25
be entitled to recover such corresponding amount on demand from such Lender
together with interest thereon, for each day from the Closing Date until the
date such amount is paid to Administrative Agent, at the customary rate set by
Administrative Agent for the correction of errors among banks for three Business
Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from the Closing Date until the date such amount
is paid to Administrative Agent, at the rate payable hereunder for Base Rate
Loans. Nothing in this Section 2.4(b) shall be deemed to relieve any Lender from
its obligation to fulfill its Term Loan Commitments hereunder or to prejudice
any rights that Borrower may have against any Lender as a result of any default
by such Lender hereunder.
2.5. Use of Proceeds. The proceeds of the Term Loans made on the Closing
Date shall be applied by Borrower to fund the Refinancing, to pay the Senior
Notes Interest Payment, to pay related transaction costs and expenses and for
general corporate purposes of Holdings and its Subsidiaries. No portion of the
proceeds of any Credit Extension shall be used in any manner that causes or
might cause such Credit Extension or the application of such proceeds to violate
Regulation T, Regulation U or Regulation X of the Board of Governors or any
other regulation thereof or to violate the Exchange Act.
2.6. Evidence of Debt; Register; Lenders' Books and Records.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Obligations of Borrower
to such Lender, including the amounts of the Term Loans made by it and each
repayment and prepayment in respect thereof. Any such recordation shall be
conclusive and binding on Borrower, absent manifest error; provided, that the
failure to make any such recordation, or any error in such recordation, shall
not affect Borrower's Obligations in respect of any applicable Term Loans; and
provided further, in the event of any inconsistency between the Register and any
Lender's records, the recordations in the Register shall govern.
(b) Register. Administrative Agent (or its agent or sub-agent
appointed by it) shall maintain at its Principal Office a register for the
recordation of the names and addresses of Lenders and Term Loans of each Lender
from time to time (the "Register"). The Register shall be available for
inspection by Borrower or any Lender (with respect to any entry relating to such
Lender's Term Loans) at any reasonable time and from time to time upon
reasonable prior notice. Administrative Agent shall record, or shall cause to be
recorded, in the Register the Term Loans in accordance with the provisions of
Section 10.6, and each repayment or prepayment in respect of the principal
amount of the Term Loans, and any such recordation shall be conclusive and
binding on Borrower and each Lender, absent manifest error; provided, failure to
make any such recordation, or any error in such recordation, shall not affect
Borrower's Obligations in respect of any Term Loan. Borrower hereby designates
GSCP to serve as Borrower's agent solely for purposes of maintaining the
Register as provided in this Section 2.6, and Borrower hereby agrees that, to
the extent GSCP serves in such capacity, and its officers, directors, employees,
agents, sub-agents and affiliates shall constitute "Indemnitees."
2.7. Interest on Term Loans.
(a) Except as otherwise set forth herein, each Term Loan shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:
(i) if a Base Rate Loan, at the Base Rate plus 11.00% per annum;
or
26
(ii) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate
plus 12.00% per annum;
provided, that, in each case, each such interest rate shall increase by an
additional 2.00% per annum on and following the second anniversary of the
Closing Date.
(b) The basis for determining the rate of interest with respect to any
Term Loan, and the Interest Period with respect to any Eurodollar Rate Loan,
shall be selected by Borrower and notified to Administrative Agent and Lenders
pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as
the case may be ; provided, until the date that Syndication Agent notifies
Borrower that the primary syndication of the Term Loans has been completed, as
determined by Syndication Agent, the Term Loans shall be maintained as either
(1) Eurodollar Rate Loans having an Interest Period of no longer than one month
or (2) Base Rate Loans. If on any day a Term Loan is outstanding with respect to
which a Funding Notice or a Conversion/Continuation Notice has not been
delivered to Administrative Agent in accordance with the terms hereof specifying
the applicable basis for determining the rate of interest, then for that day
such Term Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no more
than five (5) Interest Periods outstanding at any time. In the event Borrower
fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the
applicable Funding Notice or Conversion/Continuation Notice, such Loan (if
outstanding as a Eurodollar Rate Loan) will be automatically converted into a
Base Rate Loan on the last day of the then-current Interest Period for such Loan
(or if outstanding as a Base Rate Loan will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan). In the event Borrower fails to
specify an Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, Borrower shall be deemed to
have selected an Interest Period of one month. As soon as practicable after
10:00 a.m. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Borrower and
each Lender.
(d) Interest payable pursuant to Section 2.7(a) shall be computed (i)
in the case of Base Rate Loans on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Term Loan, the date of the
making of such Term Loan or the first day of an Interest Period applicable to
such Term Loan or, with respect to a Base Rate Loan being converted from a
Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to
such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Term Loan or the expiration date of an Interest Period
applicable to such Term Loan or, with respect to a Base Rate Loan being
converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate
Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided, if a Term Loan is repaid on the same day on which it is made, one
day's interest shall be paid on that Term Loan.
(e) Except as otherwise set forth herein, interest on each Term Loan
(i) shall accrue on a daily basis and shall be payable in arrears on each
Interest Payment Date with respect to interest accrued on and to each such
payment date; (ii) shall accrue on a daily basis and shall be payable in arrears
upon any prepayment of the Term Loans, whether voluntary or mandatory, to the
extent accrued on the amount being prepaid; and (iii) shall accrue on a daily
basis and shall be payable in arrears at maturity of the Term Loans, including
final maturity of the Term Loans; provided, however, with respect to any
27
voluntary prepayment of a Base Rate Loan, accrued interest shall instead be
payable on the applicable Interest Payment Date.
(f) For purposes of disclosure pursuant to the Interest Act (Canada),
the annual rates of interest or fees to which the rates of interest or fees
provided in this Agreement and the other Credit Documents (and stated herein or
therein, as applicable, to be computed on the basis of a period of time less
than a calendar year) are equivalent are the rates so determined multiplied by
the actual number of days in the applicable calendar year and divided by the
number of days in such period of time.
2.8. Conversion/Continuation.
(a) Subject to Section 2.18 and so long as no Default or Event of
Default shall have occurred and then be continuing, Borrower shall have the
option:
(i) to convert at any time all or any part of any Term Loan equal
to $5,000,000 and integral multiples of $1,000,000 in excess of that amount from
one Type of Term Loan to another Type of Term Loan; provided, a Eurodollar Rate
Loan may only be converted on the expiration of the Interest Period applicable
to such Eurodollar Rate Loan unless Borrower shall pay all amounts due under
Section 2.18 in connection with any such conversion; or
(ii) upon the expiration of any Interest Period applicable to any
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$5,000,000 and integral multiples of $1,000,000 in excess of that amount as a
Eurodollar Rate Loan.
(b) Borrower shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable, and Borrower shall be bound to effect a conversion or continuation
in accordance therewith.
2.9. Default Interest. Upon the occurrence and during the continuance of
any Event of Default, the principal amount of all Term Loans outstanding and, to
the extent permitted by applicable law, any interest payments on the Term Loans
or any fees or other amounts owed hereunder, shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws) payable on demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable hereunder with respect to
the applicable Term Loans (or, in the case of any such fees and other amounts,
at a rate which is 2% per annum in excess of the interest rate otherwise payable
hereunder for Base Rate Loans); provided, in the case of Eurodollar Rate Loans,
upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate otherwise
payable hereunder for Base Rate Loans. Payment or acceptance of the increased
rates of interest provided for in this Section 2.9 is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Administrative
Agent or any Lender.
2.10. Fees. Borrower agrees to pay to Agents fees in the amounts and at the
times separately agreed upon.
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2.11. Scheduled Payments. The principal amounts of the Term Loans shall be
repaid in consecutive quarterly installments (each, an "Installment") in the
aggregate amounts set forth below on the dates set forth below, commencing June
30, 2007:
----------------------------- ----------------------------------------
INSTALLMENT PAYMENT DATE INSTALLMENT AMOUNT
----------------------------- ----------------------------------------
June 30, 2007 $125,000
----------------------------- ----------------------------------------
September 30, 2007 $125,000
----------------------------- ----------------------------------------
December 31, 2007 $125,000
----------------------------- ----------------------------------------
March 31, 2008 $125,000
----------------------------- ----------------------------------------
June 30, 2008 $125,000
----------------------------- ----------------------------------------
September 30, 2008 $125,000
----------------------------- ----------------------------------------
December 31, 2008 $125,000
----------------------------- ----------------------------------------
March 31, 2009 $125,000
----------------------------- ----------------------------------------
June 30, 2009 $125,000
----------------------------- ----------------------------------------
Term Loan Maturity Date $48,875,000
----------------------------- ----------------------------------------
Notwithstanding the foregoing, (x) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Term Loans in
accordance with Sections 2.13, 2.14 and 2.15, as applicable; and (y) the Term
Loans, together with all other amounts owed hereunder with respect thereto,
shall, in any event, be paid in full no later than the Term Loan Maturity Date.
2.12. Voluntary Prepayments.
(a) Any time and from time to time:
(1) with respect to Base Rate Loans, Borrower may prepay any such
Term Loans on any Business Day in whole or in part, in an aggregate minimum
amount of $5,000,000 and integral multiples of $1,000,000 in excess of that
amount; and
(2) with respect to Eurodollar Rate Loans, Borrower may prepay
any such Term Loans on any Business Day in whole or in part in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount;
(b) All such prepayments shall be made:
(1) upon not less than one Business Day's prior written or
telephonic notice in the case of Base Rate Loans; and
(2) upon not less than three Business Days' prior written or
telephonic notice in the case of Eurodollar Rate Loans;
in each case given to Administrative Agent by 12:00 p.m. (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (and Administrative Agent will promptly transmit such
telephonic or original notice for Term Loans by telefacsimile or telephone to
each Lender). Upon the giving of any such notice, the principal amount of the
Term Loans specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary prepayment shall be
applied as specified in Section 2.15.
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2.13. Mandatory Prepayments.
(a) Asset Sales. No later than the third Business Day following
the date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale
Proceeds, Borrower shall prepay the Term Loans as set forth in Section 2.15 in
an aggregate amount equal to such Net Asset Sale Proceeds; provided, (i) no
Default or Event of Default shall have occurred and be continuing, and (ii) to
the extent that aggregate Net Asset Sale Proceeds do not exceed $500,000 per
annum, Borrower shall have the option, directly or through one or more of its
Subsidiaries, to invest Net Asset Sale Proceeds within one hundred eighty days
of receipt thereof in long-term productive assets of the general type used in
the business of Borrower and its Subsidiaries; provided, however, that pending
such investment all such Net Asset Sale Proceeds shall be held in a Cash
Collateral Account.
(b) Insurance/Condemnation Proceeds. No later than the third
Business Day following the date of receipt by Holdings or any of its
Subsidiaries, or Collateral Agent as loss payee, of any Net
Insurance/Condemnation Proceeds with respect to Fixed Asset Collateral, Borrower
shall prepay the Term Loans as set forth in Section 2.15 in an aggregate amount
equal to such Net Insurance/Condemnation Proceeds; provided, (i) no Default or
Event of Default shall have occurred and be continuing, (ii) no Material Adverse
Effect has resulted or could reasonably be expected to result from such loss of
Fixed Asset Collateral, and (iii) to the extent that aggregate Net
Insurance/Condemnation Proceeds with respect to Fixed Asset Collateral from the
Closing Date through the applicable date of determination do not exceed
$500,000, Borrower shall have the option, directly or through one or more of its
Subsidiaries to invest such Net Insurance/Condemnation Proceeds within one
hundred eighty days of receipt thereof in long term productive assets of the
general type used in the business of Holdings and its Subsidiaries, which
investment may include the repair, restoration or replacement of the applicable
assets thereof; provided, however, that pending such investment all such Net
Insurance/Condemnation Proceeds shall be held in a Cash Collateral Account.
(c) Issuance of Equity Securities. On the date of receipt by
Holdings of any Cash proceeds from a capital contribution to, or the issuance of
any Capital Stock of, Holdings or any of its Subsidiaries (other than pursuant
to any employee stock or stock option compensation plan), Borrower shall prepay
the Term Loans as set forth in Section 2.15 in an aggregate amount equal to 50%
of such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses.
(d) Issuance of Debt. On the date of receipt by Holdings or any
of its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness
of Holdings or any of its Subsidiaries (other than with respect to any
Indebtedness permitted to be incurred pursuant to Section 6.1), Borrower shall
prepay the Term Loans as set forth in Section 2.15 in an aggregate amount equal
to 100% of such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including reasonable
legal fees and expenses.
(e) Consolidated Excess Cash Flow. In the event that (commencing
in the Fiscal Year ending December 31, 2008) there shall be Consolidated Excess
Cash Flow for any prior Fiscal Year, Borrower shall, no later than ninety days
after the end of the prior Fiscal Year, prepay the Term Loans as set forth in
Section 2.15 in an aggregate amount equal to (i) 75% of such Consolidated Excess
Cash Flow minus (ii) voluntary repayments of the Term Loans during such prior
Fiscal Year.
(f) Extraordinary Tax Receipts. No later than the third Business
Day following the date of receipt by Holdings or any of its Subsidiaries of any
Cash proceeds from any United States, State, local or foreign tax refund
received outside of the ordinary course of business, Borrower shall prepay the
30
Term Loans as set forth in Section 2.15 in an aggregate amount equal to 100% of
such proceeds, net of reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses.
(g) Prepayment Certificate. Concurrently with any prepayment of
the Term Loans pursuant to Sections 2.13(a) through 2.13(f), Borrower shall
deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the calculation of the amount of the applicable net proceeds or
Consolidated Excess Cash Flow, as the case may be. In the event that Borrower
shall subsequently determine that the actual amount received exceeded the amount
set forth in such certificate, Borrower shall promptly make an additional
prepayment of the Term Loans in an amount equal to such excess, and Borrower
shall concurrently therewith deliver to Administrative Agent a certificate of an
Authorized Officer demonstrating the derivation of such excess.
2.14. Call Premium. In the event all or any portion of the Term Loans are
prepaid voluntarily or pursuant to Section 2.13(c) or (d) prior to the first
anniversary of the Closing Date, such prepayments will be made at 101.0% of the
principal amount repaid.
2.15. Application of Prepayments.
(a) Application of Voluntary Prepayments. Any prepayment of Term Loans
pursuant to (i) Section 2.12 shall be applied among the remaining scheduled
installments thereof as directed by Borrower in the applicable notice of
prepayment and (ii) Section 2.13 shall be applied pro rata to the remaining
scheduled installments thereof.
(b) Application of Prepayments to Base Rate Loans and Eurodollar Rate
Loans. Any prepayment of Term Loans shall be applied first to Base Rate Loans to
the full extent thereof before application to Eurodollar Rate Loans, in each
case in a manner which minimizes the amount of any payments required to be made
by Borrower pursuant to Section 2.18(c).
2.16. General Provisions Regarding Payments.
(a) All payments by Borrower of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 p.m. (New York City time) on the date
due at the Principal Office designated by Administrative Agent for the account
of Lenders; for purposes of computing interest and fees, funds received by
Administrative Agent after that time on such due date shall be deemed to have
been paid by Borrower on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any Term Loan
shall be accompanied by payment of accrued interest on the principal amount
being repaid or prepaid.
(c) Administrative Agent (or its agent or sub-agent appointed by it)
shall promptly distribute to each Lender at such address as such Lender shall
indicate in writing, such Lender's applicable Pro Rata Share of all payments and
prepayments of principal and interest due hereunder, together with all other
amounts due thereto, including, without limitation, all fees payable with
respect thereto, to the extent received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/ Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
31
(e) Whenever any payment to be made hereunder with respect to any Term
Loan shall be stated to be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day.
(f) Borrower hereby authorizes Administrative Agent to charge
Borrower's accounts with Administrative Agent in order to cause timely payment
to be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(g) Administrative Agent shall deem any payment by or on behalf of
Borrower hereunder that is not made in same day funds prior to 12:00 p.m. (New
York City time) to be a non-conforming payment. Any such payment shall (except
for the purpose of Section 8.1(a)) not be deemed to have been received by
Administrative Agent until the later of (i) the time such funds become available
funds, and (ii) the applicable next Business Day. Administrative Agent shall
give prompt telephonic notice to Borrower and each applicable Lender (confirmed
in writing) if any payment is non-conforming. Interest shall continue to accrue
on any principal as to which a non-conforming payment is made until such funds
become available funds (but in no event less than the period from the date of
such payment to the next succeeding applicable Business Day) at the rate
determined pursuant to Section 2.9 from the date such amount was due and payable
until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and be continuing and
not otherwise been waived, and the maturity of the Obligations shall have been
accelerated pursuant to Section 8.1, Borrower agrees that Administrative Agent
may, subject to the provisions of the Intercreditor Agreement, deliver a
Blockage Notice to each Deposit Account Bank for each Approved Deposit Account
and all funds on deposit in any Cash Collateral Account and all other all
payments or proceeds received by Agents hereunder in respect of any of the
Obligations, shall, subject to the provisions of the Intercreditor Agreement, be
applied in accordance with the application arrangements described in Section 7.2
of the Pledge and Security Agreement.
2.17. Ratable Sharing. Lenders hereby agree among themselves that, except
as otherwise provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the Collateral, if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Term Loans made and applied in accordance with the terms hereof),
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, fees and other amounts then due and
owing to such Lender hereunder or under the other Credit Documents
(collectively, the "Aggregate Amounts Due" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (a) notify Administrative Agent and each other Lender of the
receipt of such payment and (b) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided, if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Borrower or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Borrower expressly consents to
the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Borrower to that holder
32
with respect thereto as fully as if that holder were owed the amount of the
participation held by that holder.
2.18. Making or Maintaining Eurodollar Rate Loans.
(a) Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Term Loans on
the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Borrower and each Lender of such
determination, whereupon (i) no Term Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Borrower
and Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Funding Notice or Conversion/Continuation Notice given by Borrower
with respect to the Loans in respect of which such determination was made shall
be deemed to be rescinded by Borrower.
(b) Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrower and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an "Affected Lender" and it shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to Borrower
and Administrative Agent of such determination (which notice Administrative
Agent shall promptly transmit to each other Lender). Thereafter (1) the
obligation of the Affected Lender to make Term Loans as, or to convert Term
Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (2) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, the
Affected Lender shall make such Term Loan as (or continue such Term Loan as or
convert such Term Loan to, as the case may be) a Base Rate Loan, (3) the
Affected Lender's obligation to maintain its outstanding Eurodollar Rate Loans
(the "Affected Term Loans") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Term Loans or when required by law, and (4) the Affected Term Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice,
Borrower shall have the option, subject to the provisions of Section 2.18(c), to
rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders
by giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.18(b)
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Term Loans as, or to convert Term Loans to, Eurodollar Rate Loans in
accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest Periods.
Borrower shall compensate each Lender, upon written request by such Lender
(which request shall set
33
forth the basis for requesting such amounts), for all reasonable losses,
expenses and liabilities (including any interest paid by such Lender to Lenders
of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by such Lender in connection with the liquidation
or re-employment of such funds but excluding loss of anticipated profits) which
such Lender may sustain: (i) if for any reason (other than a default by such
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Funding Notice or a telephonic request for borrowing, or
a conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Conversion/Continuation Notice or a telephonic
request for conversion or continuation; (ii) if any prepayment or other
principal payment of, or any conversion of, any of its Eurodollar Rate Loans
occurs on a date prior to the last day of an Interest Period applicable to that
Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not made
on any date specified in a notice of prepayment given by Borrower.
(d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.18 and under
Section 2.19 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.18 and under
Section 2.19.
2.19. Increased Costs; Capital Adequacy.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.20 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof (in the case of each Lender listed on the signature pages hereof on the
Closing Date) or after the effective date of the Assignment Agreement pursuant
to which such Lender became a Lender (in the case of each other Lender), or
compliance by such Lender with any guideline, request or directive issued or
made after the date hereof (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law): (i) subjects such Lender (or
its applicable lending office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this Agreement or any of the
other Credit Documents or any of its obligations hereunder or thereunder or any
payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder; (ii) imposes, modifies or
holds applicable any reserve (including any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of such
34
Lender (other than any such reserve or other requirements with respect to
Eurodollar Rate Loans that are reflected in the definition of Adjusted
Eurodollar Rate); or (iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable lending office)
or its obligations hereunder or the London interbank market; and the result of
any of the foregoing is to increase the cost to such Lender of agreeing to make,
making or maintaining Term Loans hereunder or to reduce any amount received or
receivable by such Lender (or its applicable lending office) with respect
thereto; then, in any such case, Borrower shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence, such additional
amount or amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such increased
cost or reduction in amounts received or receivable hereunder. Such Lender shall
deliver to Borrower (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Lender under this Section 2.19(a), which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender shall
have determined that the adoption, effectiveness, phase-in or applicability
after the Closing Date of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Term Loans or participations therein or other obligations
hereunder with respect to the Term Loans to a level below that which such Lender
or such controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by Borrower from such Lender of the statement referred to in the
next sentence, Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Borrower (with
a copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to Lender under
this Section 2.19(b), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
2.20. Taxes; Withholding, etc.
(a) Payments to Be Free and Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.
(b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by any Credit Party to Administrative Agent,
Collateral Agent or any Lender under any of the Credit Documents: (i) Borrower
shall notify Administrative Agent of any such requirement or any change in any
such requirement as soon as Borrower becomes aware of it; (ii) Borrower shall
pay any such Tax before the date on which penalties attach thereto, such payment
to be made (if the liability to pay is imposed on any
35
Credit Party) for its own account or (if that liability is imposed on
Administrative Agent, Collateral Agent or such Lender, as the case may be) on
behalf of and in the name of Administrative Agent, Collateral Agent or such
Lender; (iii) the sum payable by such Credit Party in respect of which the
relevant deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction, withholding
or payment, Administrative Agent, Collateral Agent or such Lender, as the case
may be, receives on the due date a net sum equal to what it would have received
had no such deduction, withholding or payment been required or made; and (iv)
within thirty days after paying any sum from which it is required by law to make
any deduction or withholding, and within thirty days after the due date of
payment of any Tax which it is required by clause (ii) above to pay, Borrower
shall deliver to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority; provided, no such additional
amount shall be required to be paid to any Lender under clause (iii) above
except to the extent that any change after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after the
effective date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender.
(c) Evidence of Exemption From U.S. Withholding Tax. Each Lender that
is not a United States Person (as such term is defined in Section 7701(a)(30) of
the Internal Revenue Code) for U.S. federal income tax purposes (a "Non-US
Lender") shall deliver to Administrative Agent for transmission to Borrower, on
or prior to the Closing Date (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or on or prior to the date of the Assignment
Agreement pursuant to which it becomes a Lender (in the case of each other
Lender), and at such other times as may be necessary in the determination of
Borrower or Administrative Agent (each in the reasonable exercise of its
discretion):
(i) two original copies of Internal Revenue Service Form ▇-▇▇▇▇,
▇-▇▇▇▇ or W-8IMY (or any successor forms), properly completed and duly executed
by such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Borrower to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees or other
amounts payable under any of the Credit Documents; or
(ii) if such Lender is claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Internal Revenue Code, (x) a
certificate in the form of Exhibit F to the effect that such Lender is not (A) a
"bank" within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the Borrower within the meaning of section 871(h)(3)(B) of the
Internal Revenue Code, or (C) a "controlled foreign corporation" related to
Borrower as described in section 881(c)(3)(C) of the Internal Revenue Code; (y)
duly completed copies of Internal Revenue Service Form W-8BEN; and (z) and such
other documentation required under the Internal Revenue Code and reasonably
requested by Borrower to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Credit Documents.
Each Lender required to promptly deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding matters
pursuant to this Section 2.20(c) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any material respect,
that such Lender shall promptly deliver to Administrative Agent for
36
transmission to Borrower two new original copies of Internal Revenue Service
Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY, or the Certificate described in clause (ii) above
and two original copies of Internal Revenue Service Form W-8BEN (or any
successor form), as the case may be, properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Borrower to confirm or establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the Credit Documents,
or notify Administrative Agent and Borrower of its inability to deliver any such
forms, certificates or other evidence. Borrower shall not be required to pay any
additional amount to any Non-US Lender under Section 2.20(b)(iii) if such Lender
shall have failed (1) to deliver the forms, certificates or other evidence
referred to in this Section 2. 20(c), or (2) to notify Administrative Agent and
Borrower of its inability to deliver any such forms, certificates or other
evidence, as the case may be; provided, if such Lender shall have satisfied the
requirements of this Section 2.20(c) on the Closing Date or on the date of the
Assignment Agreement pursuant to which it became a Lender, as applicable,
nothing in this last sentence of Section 2.20(c) shall relieve Borrower of its
obligation to pay any additional amounts pursuant this Section 2.20 in the event
that, as a result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in the interpretation, administration
or application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the fact
that such Lender is not subject to withholding as described herein
(d) Treatment of Certain Refunds. If the Administrative Agent or any
Lender in its sole discretion determines that it has received a refund of any
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Agreement, it
shall pay to the Borrower an amount equal to such refund (but only to the extent
of indemnity payments made, or additional amounts paid, by such Borrower under
this Agreement with respect to the Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses of the Administrative Agent or such Lender, as
the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided that the
Borrower, upon the request of the Administrative Agent, or such Lender, agrees
to repay the amount paid over to the Borrower (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 subsection shall not be construed to require the Administrative Agent or
any Lender to apply for any such refund of Taxes or to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.
2.21. Obligation to Mitigate. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Term Loans becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.18, 2.19 or 2.20,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make or maintain its Credit Extensions, including any Affected
Term Loans, through another office of such Lender, or (b) take such other
measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender pursuant to Section 2.18, 2.19 or 2.20 would be materially
reduced and if, as determined by such Lender in its sole discretion, the making
or maintaining of such Term Loans through such other office or in accordance
with such other measures, as the case may be, would not otherwise adversely
affect such Term Loans or the interests of such Lender; provided, such Lender
will not be obligated to utilize such other office pursuant to this Section 2.21
unless Borrower agrees to pay all incremental expenses incurred by such Lender
as a result of utilizing such other office as described above.
37
A certificate as to the amount of any such expenses payable by Borrower pursuant
to this Section 2.21 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender to Borrower (with a copy to
Administrative Agent) shall be conclusive absent manifest error.
2.22. Removal or Replacement of a Lender. Anything contained herein to the
contrary notwithstanding, in the event that: (a) (i) any Lender (an
"Increased-Cost Lender") shall give notice to Borrower that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.18 (other than Section 2.19 or 2.20, (ii) the circumstances which have
caused such Lender to be an Affected Lender or which entitle such Lender to
receive such payments shall remain in effect, and (iii) such Lender shall fail
to withdraw such notice within five Business Days after Borrower's request for
such withdrawal; or (b) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.5(b), the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"Non-Consenting Lender") whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender or Non-Consenting Lender
(each a "Terminated Lender"), Borrower may, by giving written notice to
Administrative Agent and any Terminated Lender of its election to do so, elect
to cause such Terminated Lender (and such Terminated Lender hereby irrevocably
agrees) to assign its outstanding Term Loans in full to one or more Eligible
Assignees (each a "Replacement Lender") in accordance with the provisions of
Section 10.6 and Borrower shall pay the fees, if any, payable thereunder in
connection with any such assignment; provided, (1) on the date of such
assignment, the Replacement Lender shall pay to Terminated Lender an amount
equal to the sum of principal of, and all accrued interest on, all outstanding
Term Loans of the Terminated Lender; (2) on the date of such assignment,
Borrower shall pay any amounts payable to such Terminated Lender pursuant to
Section 2.18(c), 2.19 or 2.20; or otherwise as if it were a prepayment and (3)
in the event such Terminated Lender is a Non-Consenting Lender, each Replacement
Lender shall consent, at the time of such assignment, to each matter in respect
of which such Terminated Lender was a Non-Consenting Lender. Upon the prepayment
of all amounts owing to any Terminated Lender and the termination of such
Terminated Lender's Term Loan Commitments, such Terminated Lender shall no
longer constitute a "Lender" for purposes hereof; provided, any rights of such
Terminated Lender to indemnification hereunder shall survive as to such
Terminated Lender.
Each Lender agrees that, if it becomes a Terminated Lender and its rights and
claims are assigned hereunder to a Replacement Lender pursuant to this Section
2.22, it shall execute and deliver to Administrative Agent an Assignment
Agreement to evidence such assignment, together with any Note (if such Term
Loans are evidenced by a Note) evidencing the Term Loans subject to such
Assignment Agreement; provided, however, that the failure of any Terminated
Lender to execute an Assignment Agreement shall not render such assignment
invalid.
SECTION 3. CONDITIONS PRECEDENT
3.1. Closing Date. The obligation of each Lender to make a Credit Extension
on the Closing Date is subject to the satisfaction, or waiver in accordance with
Section 10.5, of the following conditions on or before the Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender and the Intercreditor Agreement
executed and delivered by each other party thereto.
(b) Organizational Documents; Incumbency. Administrative Agent shall
have received (i) sufficient copies of each Organizational Document executed and
delivered by each Domestic Credit Party and Fedders Canada, as applicable, and,
to the extent applicable, certified as of a recent date
38
by the appropriate governmental official, for each Lender, each dated the
Closing Date or a recent date prior thereto; (ii) signature and incumbency
certificates of the officers of such Person executing the Credit Documents to
which it is a party; (iii) resolutions of the Board of Directors or similar
governing body of each Domestic Credit Party and Fedders Canada approving and
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents to which it is a party or by which it or its assets may
be bound as of the Closing Date, certified as of the Closing Date by its
secretary or an assistant secretary as being in full force and effect without
modification or amendment; (iv) a good standing certificate or equivalent from
the applicable Governmental Authority of the respective jurisdiction of
incorporation, organization or formation of each Domestic Credit Party and
Fedders Canada, and in each jurisdiction in which it is qualified as a foreign
corporation or other entity to do business (to the extent that the failure to
maintain good standing in such jurisdiction could reasonably be expected to have
a Material Adverse Effect), each dated a recent date prior to the Closing Date;
and (v) such other documents as Administrative Agent may reasonably request.
(c) Organizational and Capital Structure. The organizational structure
and capital structure of Holdings and its Subsidiaries, shall be as set forth on
Schedule 4.1.
(d) Revolving Credit Facility. Administrative Agent and Syndication
Agent shall have received reasonably satisfactory evidence that, concurrently
with the occurrence of the Closing Date and the Credit Extensions hereunder, the
"Closing Date" (under and as defined in the Revolving Credit Agreement) shall
have occurred and Administrative Agent shall have received copies of the
executed Revolving Credit Agreement and other Revolving Credit Documents which
shall be in form and substance satisfactory to Administrative Agent and
Syndication Agent.
(e) Refinanced Indebtedness. On the Closing Date, Holdings and its
Subsidiaries shall have (i) completed the Refinancing, (ii) terminated any
commitments to lend or make other extensions of credit thereunder (including
delivery to Administrative Agent of a duly executed pay-off letter in form and
substance satisfactory to it), (iii) delivered to Administrative Agent all
documents or instruments necessary to release all Liens securing Refinanced
Indebtedness or other obligations of Holdings and its Subsidiaries thereunder
being repaid on the Closing Date, (iv) made arrangements satisfactory to
Administrative Agent with respect to the cancellation of any letters of credit
outstanding thereunder or the issuance of Letters of Credit (under as and
defined in the Revolving Credit Agreement) to support the obligations of
Holdings and its Subsidiaries with respect thereto, and (v) paid the Senior
Notes Interest Payment and thereby shall have cured any and all defaults under
the Senior Notes Indenture and Administrative Agent shall be satisfied that such
payment has been received by the Senior Note Trustee.
(f) Transaction Costs. On or prior to the Closing Date, Borrower shall
have delivered to Administrative Agent Borrower's reasonable best estimate of
the Transactions Costs (other than fees payable to any Agent).
(g) Governmental Authorizations and Consents. Each Credit Party shall
have obtained all Governmental Authorizations and all consents of other Persons,
in each case that are necessary or advisable in connection with the transactions
contemplated by the Credit Documents and each of the foregoing shall be in full
force and effect and in form and substance reasonably satisfactory to
Administrative Agent. All applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the transactions
contemplated by the Credit Documents or the financing thereof and no action,
request for stay, petition for review or rehearing, reconsideration, or appeal
with respect to any of the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own motion
shall have expired.
39
(h) Real Estate Assets. In order to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording referred to herein, perfected First Priority security interest
in certain Real Estate Assets, Collateral Agent shall have received from
Borrower and each applicable Guarantor:
(i) fully executed and notarized Mortgages, in proper form for
recording in all appropriate places in all applicable jurisdictions, encumbering
each Real Estate Asset listed in Schedule 3.1(h) (each, a "Closing Date
Mortgaged Property");
(ii) an opinion of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) in each state in which a Closing Date
Mortgaged Property is located with respect to the enforceability of the form(s)
of Mortgages to be recorded in such state and such other matters as Collateral
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to Collateral Agent;
(iii) in the case of each Leasehold Property that is a Closing
Date Mortgaged Property, (1) a Landlord Consent and Estoppel and (2) evidence
that such Leasehold Property is a Recorded Leasehold Interest;
(iv) (a) ALTA mortgagee title insurance policies or unconditional
commitments therefor issued by one or more title companies reasonably
satisfactory to Collateral Agent with respect to each Closing Date Mortgaged
Property (each, a "Title Policy"), in amounts not less than the fair market
value of each Closing Date Mortgaged Property, together with a title report
issued by a title company with respect thereto, dated not more than thirty days
prior to the Closing Date and copies of all recorded documents listed as
exceptions to title or otherwise referred to therein, each in form and substance
reasonably satisfactory to Collateral Agent and (B) evidence satisfactory to
Collateral Agent that such Credit Party has paid to the title company or to the
appropriate governmental authorities all expenses and premiums of the title
company and all other sums required in connection with the issuance of each
Title Policy and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Mortgages for each
Closing Date Mortgaged Property in the appropriate real estate records; and
(v) flood certifications with respect to all Closing Date
Mortgaged Properties and evidence of flood insurance with respect to each Flood
Hazard Property that is located in a community that participates in the National
Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors, in form and substance reasonably
satisfactory to Collateral Agent.
(i) Personal Property Collateral. In order to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid, perfected First
Priority security interest in the Fixed Asset Collateral and a valid, perfected
Second Priority security interest (subject to the Intercreditor Agreement) in
the Current Asset Collateral, Collateral Agent shall have received:
(i) evidence satisfactory to Collateral Agent of the compliance
by each Domestic Credit Party and Canadian Subsidiary of its obligations under
the Pledge and Security Agreement and the other Collateral Documents (including,
without limitation, their obligations to execute and deliver (and, in the case
of the Canadian Subsidiaries, file) UCC financing statements, originals of
securities, instruments and chattel paper and executed and delivered
Intellectual Property Security Agreements as provided herein and therein);
40
(ii) A completed Collateral Questionnaire dated the Closing Date
and executed by an Authorized Officer of each Domestic Credit Party and Canadian
Subsidiary, together with all attachments contemplated thereby;
(iii) opinions of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) with respect to the creation and perfection of
the security interests in favor of Collateral Agent in such Collateral and such
other matters governed by the laws of each jurisdiction in which any Domestic
Credit Party or Canadian Subsidiary or any personal property Collateral is
located as Collateral Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Collateral Agent;
(iv) evidence that each Domestic Credit Party and Canadian
Subsidiary shall have taken or caused to be taken any other action, executed and
delivered or caused to be executed and delivered any other agreement, document
and instrument (including without limitation, (i) a Landlord Personal Property
Collateral Access Agreement executed by the landlord of any Leasehold Property
and by the applicable Domestic Credit Party or Canadian Subsidiary and (ii) any
intercompany notes evidencing Indebtedness permitted to be incurred pursuant to
Section 6.1(b)) and made or caused to be made any other filing and recording
(other than as set forth herein) reasonably required by Collateral Agent; and
(v) (A) copies of recent UCC search reports as of a recent date
listing all effective financing statements (or equivalent filings) that name any
Domestic Credit Party or Canadian Subsidiary as debtor, together with copies of
such financing statements, none of which shall cover the Collateral except for
those that shall be terminated on the Closing Date and those in respect of
Permitted Liens and (B) UCC termination statements (or similar documents) duly
executed or authenticated by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements (or equivalent filings) disclosed in such UCC search reports (other
than any such financing statements in respect of Permitted Liens).
(j) Environmental Reports. Administrative Agent shall have received
reports and other information, in form, scope and substance satisfactory to
Administrative Agent, regarding environmental matters relating to the
Facilities.
(k) Financial Statements; Projections. Administrative Agent shall have
received from Holdings (i) the Historical Financial Statements, (ii) the Draft
Financial Statements, (iii) customary pro forma consolidated and consolidating
balance sheets of Holdings and its Subsidiaries as at the Closing Date, in each
case meeting the requirements of Regulation S-X for Form S-1 registration
statements and reflecting the transactions contemplated by the Credit Documents
to occur on or prior to the Closing Date, and shall otherwise be in form and
substance satisfactory to Administrative Agent, (iv) unaudited financial
statements for any interim period or periods of Holdings and its Subsidiaries
ended after the date of the most recent audited financial statements, up to and
including the month of January 2007; (v) customary additional audited and
unaudited financial statements for all recent, probable or pending acquisitions,
if any, and (vi) the Projections. Such financial statements shall show pro forma
Consolidated Adjusted EBITDA after giving effect to the transactions
contemplated hereby (calculated in accordance with Regulation S-X) for the
twelve-month period ended December 31, 2006, and for the latest twelve-month
period for which financial statements are available, of not less than negative
$16,000,000.
(l) Evidence of Insurance. Collateral Agent shall have received a
certificate from Borrower's insurance broker or other evidence satisfactory to
it that all insurance required to be
41
maintained pursuant to Section 5.5 is in full force and effect, together with
endorsements naming Collateral Agent, for the benefit of Secured Parties, as
additional insured and loss payee thereunder to the extent required under
Section 5.5.
(m) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of (i) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special counsel for Domestic Credit Parties, in the form of Exhibit ▇-▇, (▇▇)
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇▇▇ counsel for certain Domestic Guarantor
Subsidiaries, in the form of Exhibit D-2, (iii) Ballard, Spahr, ▇▇▇▇▇▇▇ &
Ingersoll, LLP, Pennsylvania counsel for certain Domestic Guarantor
Subsidiaries, in the form of Exhibit D-3 and (iv) Fasken ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
Canada counsel for the Canadian Subsidiaries, in the form of Exhibit D-4, in
each case, as to such matters as Administrative Agent may reasonably request,
dated as of the Closing Date and otherwise in form and substance reasonably
satisfactory to Administrative Agent (and each Credit Party hereby instructs
each such counsel to deliver such opinions to Agents and Lenders).
(n) Fees. Borrower shall have paid to Agents the fees payable on the
Closing Date referred to in Section 2.10.
(o) Solvency Certificate. On the Closing, Date Administrative Agent
shall have received a Solvency Certificate from Borrower and in form, scope and
substance satisfactory to Administrative Agent, and demonstrating that after the
Refinancing and any rights of contribution, (i) Borrower (on a consolidated
basis) and (ii) the Credit Parties (taken as a whole), are, and will be Solvent.
(p) Closing Date Certificate. Holdings and Borrower shall have
delivered to Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
(q) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent,
singly or in the aggregate, materially impairs the any of the transactions
contemplated by the Credit Documents or that could have a Material Adverse
Effect.
(r) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto shall be reasonably
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
(s) Fee Letter. The performance of all obligations required as of the
Closing Date pursuant to the Fee Letter dated as of March 6, 2007, by and
between Borrower and GSCP, pursuant to documentation in form and substance
satisfactory to GSCP.
(t) Letter of Direction. Administrative Agent shall have received duly
executed originals of a letter of direction from Borrower addressed to
Administrative Agent, on behalf of itself and Lenders, with respect to the
disbursement on the Closing Date of the proceeds of the Term Loans made on such
date.
(u) Minimum Excess Availability. Administrative Agent shall be
reasonably satisfied that Excess Availability (as defined in the Revolving
Credit Agreement), after giving effect to the Refinancing and the other
transactions contemplated hereby, shall be not less than $30,000,000.
42
(v) Patriot Act Information. Each of the Credit Parties shall have
provided the documentation and other information to Lenders that is required by
regulatory authorities under applicable "know your customer" and
anti-money-laundering rules and regulations, including, without limitation, the
Patriot Act.
(w) Funding Notice. Administrative Agent shall have received a fully
executed and delivered Funding Notice.
(x) Representations and Warranties. The representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all respects on and as of that the Closing Date.
(y) No Event of Default. No event shall have occurred and be
continuing or would result from the consummation of the applicable Credit
Extension that would constitute an Event of Default or a Default, other than an
unmatured event of default pursuant to the Senior Notes Indenture with respect
to Borrower's failure to make the Senior Notes Interest Payment, which shall in
any case be cured immediately upon the borrowing and application of proceeds of
the Term Loans on the Closing Date. No notice to accelerate or otherwise demand
payment of the principal of the Senior Notes shall have been given by the
holders of the Senior Notes under the Senior Notes Indenture (to the extent any
such action is permitted by the terms thereof).
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
each Credit Extension to be made thereby, each Credit Party represents and
warrants to each Lender, on the Closing Date, that the following statements are
true and correct (it being understood and agreed that the representations and
warranties made on the Closing Date are deemed to be made concurrently with the
Refinancing and paying the Senior Notes Interest Payment on the Closing Date as
contemplated hereby):
4.1. Organization; Requisite Power and Authority; Qualification. Each of
Holdings and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1, (b) has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, (in the case of each Credit Party) to enter into the Credit Documents
to which it is a party and to carry out the transactions contemplated thereby,
and (c) is qualified to do business and in good standing in every jurisdiction
where its assets are located and wherever necessary to carry out its business
and operations, except in jurisdictions where the failure to be so qualified or
in good standing has not had, and could not be reasonably expected to have, a
Material Adverse Effect, in each case, to the extent applicable under the laws
of such jurisdiction.
4.2. Capital Stock and Ownership. The Capital Stock of each of Holdings and
its Subsidiaries has been duly authorized and validly issued and is fully paid
and non-assessable. Except as set forth on Schedule 4.2, as of the date hereof,
there is no existing option, warrant, call, right, commitment or other agreement
to which any Subsidiary of Holdings is a party requiring, and there is no
membership interest or other Capital Stock of any Subsidiary of Holdings
outstanding which upon conversion or exchange would require, the issuance by any
Subsidiary of Holdings of any additional membership interests or other Capital
Stock of any Subsidiary of Holdings or other Securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase, a
membership interest or other Capital Stock of Subsidiary of Holdings. Schedule
4.2 correctly sets forth the ownership interests in each Subsidiary of Holdings
and in their respective Subsidiaries as of the Closing Date.
43
4.3. Due Authorization. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Domestic Credit Party that is a party thereto.
4.4. No Conflict. The execution, delivery and performance by Credit Parties
of the Credit Documents to which they are parties and the consummation of the
transactions contemplated by the Credit Documents do not and will not (a)
violate (i) any material provision of any applicable law or any applicable
governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, (ii) any of the Organizational Documents of Holdings or any of its
Subsidiaries, or (iii) any order, judgment or decree of any court or other
agency of government binding on Holdings or any of its Subsidiaries; (b)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any material Contractual Obligation of Holdings or
any of its Subsidiaries; (c) result in or require the creation or imposition of
any Lien upon any of the properties or assets of Holdings or any of its
Subsidiaries (other than any Liens created under any of the Credit Documents in
favor of Collateral Agent, on behalf of Secured Parties or Liens created under
the Revolving Credit Documents); or (d) require any approval of stockholders,
members or partners or any approval or consent of any Person under any
Contractual Obligation of Holdings or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Closing Date and
disclosed in writing to Lenders.
4.5. Governmental Consents. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Collateral Agent for filing and/or recordation, as of the Closing Date. No
Credit Party's accounts or receivables are subject to any of the requirements or
proceedings applicable to assignments of accounts under the Financial
Administration Act (Canada) or any other similar law.
4.6. Binding Obligation. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
4.7. Historical Financial Statements. The Historical Financial Statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position, on a consolidated basis, of the Persons
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows, on a consolidated basis, of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments. As of the Closing Date, neither Holdings nor
any of its Subsidiaries has any contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not reflected
in the Historical Financial Statements or the notes thereto and which in any
such case is material in relation to the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings and any of
its Subsidiaries taken as a whole.
4.8. Projections. On and as of the Closing Date, the projections of
Holdings and its Subsidiaries for the period of Fiscal Year 2007 through and
including Fiscal Year 2010 (the "Projections") are based on good faith estimates
and assumptions made by the management of Holdings; provided, the Projections
are not to be viewed as facts and that actual results during the period or
periods covered by the Projections may differ from such Projections and that the
differences may be material;
44
provided further, as of the Closing Date, management of Holdings believed that
the Projections were reasonable and attainable.
4.9. No Material Adverse Change. Since December 31, 2005, no event,
circumstance or change has occurred that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, other than (i) the
impairment of goodwill and the write-off of deferred tax assets, each as
disclosed in the Fiscal Year 2007 budget delivered to Agents and Lenders prior
to the date hereof, and (ii) adverse changes to earnings which have been
publicly disclosed prior to the date hereof.
4.10. No Restricted Junior Payments. Since December 31, 2005, neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.5.
4.11. Adverse Proceedings, etc. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, orders, injunctions, decrees, rules or regulations of
any court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.12. Payment of Taxes. Except as otherwise permitted under Section 5.3,
all tax returns and reports of Holdings and its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon Holdings and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable. Holdings knows of no proposed tax assessment against
Holdings or any of its Subsidiaries which is not being actively contested by
Holdings or such Subsidiary in good faith and by appropriate proceedings;
provided, such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.
4.13. Properties.
(a) Title. Each of Holdings and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in their
respective Historical Financial Statements referred to in Section 4.7 and in the
most recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.9. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Real Estate Assets, and (ii) all
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Estate Asset of any Credit Party, regardless of whether such Credit
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. Each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Holdings does not have knowledge of any default that has occurred and is
continuing thereunder, and each such agreement constitutes the legally valid and
binding obligation of each applicable Credit Party,
45
enforceable against such Credit Party in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles.
4.14. Environmental Matters. Neither Holdings nor any of its Subsidiaries
nor any of their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with any
Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither Holdings nor
any of its Subsidiaries has received any letter or request for information under
Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss. 9604) or any other comparable law. There are and,
to each of Holdings' and its Subsidiaries' knowledge, have been, no conditions,
occurrences, or Hazardous Materials Activities which could reasonably be
expected to form the basis of an Environmental Claim against Holdings or any of
its Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Neither Holdings nor any of its
Subsidiaries nor, to any Credit Party's knowledge, any predecessor of Holdings
or any of its Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment of Hazardous Materials at any Facility, and
none of Holdings' or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any other equivalent. Compliance
with all current or reasonably foreseeable future requirements pursuant to or
under Environmental Laws could not be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect. No event or condition has
occurred or is occurring with respect to Holdings or any of its Subsidiaries
relating to any Environmental Law, any Release of Hazardous Materials, or any
Hazardous Materials Activity which individually or in the aggregate has had, or
could reasonably be expected to have, a Material Adverse Effect.
4.15. No Defaults. Neither Holdings nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in the Senior Notes Indenture or any of its
other Material Contracts, and no condition exists which, with the giving of
notice or the lapse of time or both, could constitute such a default, except
where the consequences, direct or indirect, of such default or defaults, if any,
could not reasonably be expected to have a Material Adverse Effect.
4.16. Material Contracts. All Material Contracts are in full force and
effect and no defaults currently exist thereunder as of the Closing Date.
4.17. Governmental Regulation. Neither Holdings nor any of its Subsidiaries
is subject to regulation under the Investment Company Act of 1940 or under any
other federal, state or provincial statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. Neither Holdings nor any of its Subsidiaries
is a "registered investment company" or a company "controlled" by a "registered
investment company" or a "principal underwriter" of a "registered investment
company" as such terms are defined in the Investment Company Act of 1940.
4.18. Margin Stock. Neither Holdings nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Term Loans made to such Credit Party will be used to
purchase or carry any such Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock or for any purpose that
violates, or is inconsistent with, the provisions of Regulation T, U or X of the
Board of Governors.
46
4.19. Employee Matters. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Holdings or any of its Subsidiaries, or to the best knowledge of
Holdings and Borrower, threatened against any of them before the National Labor
Relations Board or a labor board of Canada and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement that is
so pending against Holdings or any of its Subsidiaries or to the best knowledge
of Holdings and Borrower, threatened against any of them, (b) no strike or work
stoppage in existence or threatened involving Holdings or any of its
Subsidiaries, and (c) to the best knowledge of Holdings and Borrower, no union
representation question existing with respect to the employees of Holdings or
any of its Subsidiaries and, to the best knowledge of Holdings and Borrower, no
union organization activity that is taking place, except (with respect to any
matter specified in clause (a), (b) or (c) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
All payments due from any Canadian Subsidiary for employee health and welfare
insurance have been paid or accrued as a liability on the books of such Canadian
Subsidiary and such Canadian Subsidiary has withheld and remitted all employee
withholdings to be withheld or remitted by it and has made all employer
contributions to be made by it, in each case, pursuant to applicable law on
account of the Canada Pension Plan and Quebec Pension Plan maintained by the
Government of Canada and the Province of Quebec, respectively, employment
insurance and employee income taxes.
4.20. Employee Benefit Plans.
(a) ERISA. Holdings, each of its Subsidiaries and each of their
respective ERISA Affiliates are in compliance with all applicable provisions and
requirements of ERISA and the Internal Revenue Code and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan. Each
Employee Benefit Plan which is intended to qualify under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service indicating that such Employee Benefit Plan is so
qualified and nothing has occurred subsequent to the issuance of such
determination letter which would cause such Employee Benefit Plan to lose its
qualified status. No liability to the PBGC (other than required premium
payments), the Internal Revenue Service, any Employee Benefit Plan or any trust
established under Title IV of ERISA has been or is expected to be incurred by
Holdings, any of its Subsidiaries or any of their ERISA Affiliates. No ERISA
Event has occurred or is reasonably expected to occur. Except to the extent
required under Section 4980B of the Internal Revenue Code or similar state laws
or as set forth on Schedule 4.20, no Employee Benefit Plan provides health or
welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates. The present value of the aggregate benefit
liabilities under each Pension Plan sponsored, maintained or contributed to by
Holdings, any of its Subsidiaries or any of their ERISA Affiliates (determined
as of the end of the most recent plan year on the basis of the actuarial
assumptions specified for funding purposes in the most recent actuarial
valuation for such Pension Plan), did not exceed the aggregate current value of
the assets of such Pension Plan. As of the most recent valuation date for each
Multiemployer Plan for which the actuarial report is available, the potential
liability of Holdings, its Subsidiaries and their respective ERISA Affiliates
for a complete withdrawal from such Multiemployer Plan (within the meaning of
Section 4203 of ERISA), when aggregated with such potential liability for a
complete withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA is zero. Holdings, each of its Subsidiaries
and each of their ERISA Affiliates have complied with the requirements of
Section 515 of ERISA with respect to each Multiemployer Plan and are not in
material "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan.
47
(b) Canadian Pension Plans. In respect of each Canadian Subsidiary,
the Pension Plans are duly registered under all applicable laws which require
registration (including the Income Tax Act (Canada) in respect of registered
Pension Plans) and no event has occurred which is reasonably likely to cause the
loss of such registered status. All material obligations of each Canadian
Subsidiary (including fiduciary, contribution, funding, investment and
administration obligations) required to be performed in connection with the
Employee Benefit Plans, the Pension Plans and any funding agreements therefor
under the terms thereof and applicable statutory and regulatory requirements,
have been performed in a timely and proper fashion. There have been no improper
withdrawals or applications of the assets of the Pension Plans or the Employee
Benefit Plans of a material nature. There are no outstanding disputes of a
material nature concerning the assets or liabilities of the Pension Plans or the
Employee Benefit Plans. There is no Pension Plan in respect of which an event
has occurred that could require immediate or accelerated funding in respect of
material unfunded liabilities or other material deficit amounts.
4.21. Certain Fees. No broker's or finder's fee or commission will be
payable with respect to the transactions contemplated hereby, except as payable
to (a) The Blackstone Group ("Blackstone") pursuant to that certain letter
agreement dated as of January 17, 2007, between Blackstone and Holdings, and (b)
Agents and Lenders.
4.22. Solvency. (a) Borrower (on a consolidated basis) and (b) the Credit
Parties (taken as a whole), are and, upon the incurrence of any Obligation by
any Credit Party on any date on which this representation and warranty is made,
will be, Solvent.
4.23. Compliance with Statutes, etc. Each of Holdings and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any permits
issued under such Environmental Laws with respect to any such Real Estate Asset
or the operations of Holdings or any of its Subsidiaries), except such
non-compliance that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
4.24. Disclosure. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to any Agent or Lender by or on behalf of Holdings
or any of its Subsidiaries for use in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact (known to Holdings or Borrower, in the case of any
document not furnished by either of them) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Holdings or Borrower to be reasonable at
the time made, it being recognized by Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to Holdings or Borrower (other than matters of a general
economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have not been disclosed
herein or in such other documents, certificates and statements furnished to
Lenders for use in connection with the transactions contemplated hereby.
4.25. Patriot Act. To the extent applicable, each Credit Party is in
compliance, in all material respects, with the (i) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the Untied
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and
48
any other enabling legislation or executive order relating thereto, (ii) Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001). (iii) Part II.1 of the
Criminal Code (Canada), (iv) the United Nations Suppression of Terrorism
Regulations (Canada) and (v) United Nations Al-Qaida and Taliban Regulations
(Canada). No part of the proceeds of the Term Loans will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that, until payment in full of
all Obligations, each Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1. Financial Statements and Other Reports. Holdings will deliver to
Administrative Agent for distribution to Lenders within the time periods set
forth below:
(a) Monthly Reports. As soon as available, and in any event not later
than March 16, 2007 with respect to January 2007, March 30, 2007 with respect to
February 2007 and within 30 days after the end of each Reporting Month ending
after the Closing Date, the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such Reporting Month and the related consolidated
statements of income, stockholders' equity and cash flows of Holdings and its
Subsidiaries for such Reporting Month and for the period from the beginning of
the then current Fiscal Year to the end of such Reporting Month, setting forth
in each case in comparative form the corresponding figures for the corresponding
Reporting Months of the previous Fiscal Year and the corresponding figures from
the Financial Plan for the current Fiscal Year, to the extent prepared on a
monthly basis, all in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto;
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the end of each Fiscal Quarter of each Fiscal Year
other than the last Fiscal Quarter of such Fiscal Year, commencing with the
Fiscal Quarter in which the Closing Date occurs, the consolidated and
consolidating balance sheets of Holdings and its Subsidiaries as at the end of
such Fiscal Quarter and the related consolidated (and with respect to statements
of income, consolidating) statements of income, stockholders' equity and cash
flows of Holdings and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year, all
in reasonable detail, together with a Financial Officer Certification and a
Narrative Report with respect thereto;
(c) Annual Financial Statements. As soon as available, and in any
event within 90 days after the end of each Fiscal Year, commencing with Fiscal
Year 2006, (i) the consolidated and consolidating balance sheets of Holdings and
its Subsidiaries as at the end of such Fiscal Year and the related consolidated
(and with respect to statements of income, consolidating) statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for such
Fiscal Year (which, in the case of Fiscal Year 2006, shall be substantially
similar in all material respects to the Draft Financial Statements provided to
Administrative Agent on the Closing Date), setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, in reasonable detail, together with a Financial
Officer Certification and a Narrative Report with respect thereto; and (ii) with
49
respect to such consolidated financial statements a report thereon of UHY, LLP
or other independent certified public accountants of recognized national
standing selected by Holdings, and reasonably satisfactory to Administrative
Agent and Syndication Agent (which report shall be unqualified as to scope of
audit, and shall state that such consolidated financial statements fairly
present, in all material respects, the consolidated financial position of
Holdings and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards) together with a
written statement by such independent certified public accountants stating (1)
that their audit examination has included a review of the terms of the Credit
Documents, (2) whether, in connection therewith, any condition or event that
constitutes a Default or an Event of Default has come to their attention and, if
such a condition or event has come to their attention, specifying the nature and
period of existence thereof, and (3) that nothing has come to their attention
that causes them to believe that the information contained in any Compliance
Certificate is not correct or that the matters set forth in such Compliance
Certificate are not stated in accordance with the terms hereof;
(d) Compliance Certificate, Cash Flow Forecast. Together with each delivery of
financial statements of Holdings and its Subsidiaries pursuant to Sections
5.1(a), 5.1(b) and 5.1(c), a duly executed and completed Compliance
Certificate and a 13-week rolling cash flow forecast;
(e) Statements of Reconciliation after Change in Accounting Principles. If, as
a result of any change in accounting principles and policies from those used
in the preparation of the Historical Financial Statements, the consolidated
financial statements of Holdings and its Subsidiaries delivered pursuant to
Section 5.1(a), 5.1(b) or 5.1(c) will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant to
such subdivisions had no such change in accounting principles and policies
been made, then, together with the first delivery of such financial statements
after such change, one or more statements of reconciliation for all such prior
financial statements in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent;
(f) Notice of Default. Promptly upon any officer of Holdings or Borrower
obtaining knowledge (i) of any condition or event that constitutes a Default
or an Event of Default or that notice has been given to Holdings or Borrower
with respect thereto; (ii) that any Person has given any notice to Holdings or
any of its Subsidiaries or taken any other action with respect to any event or
condition set forth in Section 8.1(b); or (iii) of the occurrence of any event
or change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, a certificate of its Authorized Officer
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given and action taken by any such Person and
the nature of such claimed Event of Default, Default, default, event or
condition, and what action Borrower has taken, is taking and proposes to take
with respect thereto;
(g) Notice of Litigation. Promptly upon any officer of Holdings or Borrower
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
Adverse Proceeding not previously disclosed in writing by Borrower to Lenders,
or (ii) any material development in any Adverse Proceeding that, in the case
of either clause (i) or (ii), if adversely determined could be reasonably
expected to have a Material Adverse Effect, or seeks to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated hereby, written notice thereof
together with such other information as may be reasonably available to
Holdings or Borrower to enable Lenders and their counsel to evaluate such
matters;
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(h) ERISA and Canadian Pension Plans. (i) Promptly upon becoming aware
of the occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto; (ii) with reasonable promptness, copies of (1) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed
by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan; (2) all
notices received by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event;
and (3) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Administrative Agent or Syndication
Agent shall reasonably request and (iii) in respect of any Canadian Subsidiary,
(1) copies of each annual and other return, report or valuation with respect to
each registered Pension Plan as filed with any applicable Governmental
Authority; (2) promptly after receipt thereof, a copy of any direction, order,
notice, ruling or opinion that any Canadian Subsidiary may receive from any
applicable Governmental Authority with respect to any registered Pension Plan;
and (3) notification within 30 days of any increases having a cost to any
Canadian Subsidiary in excess of $100,000 per annum in the aggregate, in the
benefits of any existing Pension Plan or Employee Benefit Plan, or the
establishment of any new Pension Plan or Employee Benefit Plan, or the
commencement of contributions to any such plan to which no Canadian Subsidiary
was previously contributing;
(i) Financial Plan. As soon as practicable and in any event no later
than thirty days prior to the beginning of each Fiscal Year, a consolidated plan
and financial forecast for such Fiscal Year and each Fiscal Year (or portion
thereof) through the final maturity date of the Term Loans (a "Financial Plan"),
including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of Holdings and its
Subsidiaries for each such Fiscal Year, together with pro forma Compliance
Certificates for each such Fiscal Year and an explanation of the assumptions on
which such forecasts are based and (ii) forecasted consolidated statements of
income and cash flows and a balance sheet of Holdings and its Subsidiaries for
each month of each such Fiscal Year;
(j) Insurance Report.
(i) As soon as practicable and in any event by the last day of
each Fiscal Year, a certificate from Borrower's insurance broker(s) in form and
substance satisfactory to Administrative Agent and Syndication Agent outlining
all material insurance coverage maintained as of the date of such certificate by
Holdings and its Subsidiaries and all material insurance coverage planned to be
maintained by Holdings and its Subsidiaries in the immediately succeeding Fiscal
Year;
(ii) Promptly, and in any event within ten Business
Days thereof, written notice (in reasonable detail) in the event that
any of Holdings or any of its Subsidiaries has been refused insurance
for any material coverage for which it had applied or has had any
policy of insurance terminated (other than at its request);
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Holdings or Borrower;
(l) Notice Regarding Material Contracts. Promptly, and in any event
within ten Business Days (i) after any Material Contract (which satisfies the
criteria in clause (b) of the definition thereof) of Holdings or any of its
Subsidiaries is terminated or amended in a manner that is materially adverse to
Holdings or such Subsidiary, as the case may be, or (ii) any new Material
Contract (which
51
satisfies the criteria in clause (b) of the definition thereof) is entered into,
a written statement describing such event, and upon request by Administrative
Agent or Syndication Agent, copies of such material amendments or new contracts,
delivered to Administrative Agent (to the extent such delivery is permitted by
the terms of any such Material Contract, provided, no such prohibition on
delivery shall be effective if it were bargained for by Holdings or its
applicable Subsidiary with the intent of avoiding compliance with this Section
5.1(l)), and an explanation of any actions being taken with respect thereto;
(m) Information Regarding Collateral. (a) Borrower will furnish to
Collateral Agent prompt written notice of any change (i) in any Credit Party's
name, (ii) in any Credit Party's identity or structure, (iii) in any Credit
Party's jurisdiction of organization, (iv) in any Canadian Subsidiary's place of
business or chief executive office or (v) in any Credit Party's Federal Taxpayer
Identification Number or state organizational identification number. Borrower
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the UCC or otherwise that are required
in order for Collateral Agent to continue at all times following such change to
have a valid, legal and perfected security interest in all the Collateral as
contemplated in the Collateral Documents. Borrower also agrees promptly to
notify Collateral Agent if any material portion of the Collateral is damaged or
destroyed. The Borrower also agrees to promptly notify Collateral Agent if any
portion of any Real Estate Asset of any Credit Party or any of its Subsidiaries
is located in a special flood hazard area as designated by any federal
Governmental Authority.
(n) Annual Collateral Verification. Each year, at the time of delivery
of annual financial statements with respect to the preceding Fiscal Year
pursuant to Section 5.1(c), Borrower shall deliver to Collateral Agent a
certificate of its Authorized Officer (i) either confirming that there has been
no change in such information since the date of the Collateral Questionnaire
delivered on the Closing Date or the date of the most recent certificate
delivered pursuant to this Section and/or identifying such changes and (ii)
certifying that all UCC financing statements (including fixtures filings, as
applicable) or other appropriate filings, recordings or registrations, have been
filed of record in each governmental, municipal or other appropriate office in
each jurisdiction identified pursuant to clause (i) above to the extent
necessary to protect and perfect the security interests under the Collateral
Documents for a period of not less than 18 months after the date of such
certificate (except as noted therein with respect to any continuation statements
to be filed within such period);
(o) Other Information. (i) Promptly upon their becoming available,
copies of (A) all financial statements, reports, notices and proxy statements
sent or made available generally by Holdings to its security holders acting in
such capacity or by any Subsidiary of Holdings to its security holders other
than Holdings or another Subsidiary of Holdings, (B) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Holdings or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, (C) all press releases and other statements made available generally
by Holdings or any of its Subsidiaries to the public concerning material
developments in the business of Holdings or any of its Subsidiaries, and (D) to
the extent not otherwise delivered to Administrative Agent or Lenders pursuant
to this Agreement or the other Credit Documents, copies of all financial
statements, reports and notices (other than borrowing base certificates)
delivered to the Revolving Credit Facility Agent, the Revolving Credit Facility
Agent or any other Revolving Credit Facility Secured Party pursuant to the
Revolving Credit Documents, or to the holders of the Senior Notes or the Senior
Notes Trustee pursuant to the Senior Notes Indenture and (ii) such other
information and data with respect to Holdings or any of its Subsidiaries as from
time to time may be reasonably requested by Administrative Agent or Syndication
Agent or any Lender;
(p) Certification of Public Information. Concurrently with the
delivery of any document or notice required to be delivered pursuant to this
Section 5.1, Holdings shall indicate in
52
writing whether such document or notice contains Nonpublic Information. Holdings
and each Lender acknowledge that certain of Lenders may be "public-side" Lenders
(Lenders that do not wish to receive material non-public information with
respect to Holdings, its Subsidiaries or their securities) and, if documents or
notices required to be delivered pursuant to this Section 5.1 or otherwise are
being distributed through IntraLinks/IntraAgency or another relevant website
(the "Platform"), any document or notice that Holdings has indicated contains
Nonpublic Information shall not be posted on that portion of the Platform
designated for such public-side Lenders. If Holdings has not indicated whether a
document or notice delivered pursuant to this Section 5.1 contains Nonpublic
Information, Administrative Agent reserves the right to post such document or
notice solely on that portion of the Platform designated for Lenders who wish to
receive material nonpublic information with respect to Holdings, its
Subsidiaries and their securities;
(q) Fixed Asset Collateral Appraisal. Within 60 days following the
Closing Date, an appraisal with respect to the domestic real property of the
Domestic Credit Parties, in form and substance, and prepared by an appraiser,
acceptable to Administrative Agent and Syndication Agent; and
(r) Environmental Reports. The Credit Parties shall, upon the
reasonable request of Administrative Agent and Syndication Agent, promptly
obtain (and authorize Administrative Agent and Syndication Agent to obtain)
environmental reports (including Phase I reports and Phase II reports) with
respect to any Real Estate Asset currently owned, operated or occupied by the
Credit Parties or their Subsidiaries; provided, that, so long as no Event of
Default has occurred and is continuing Administrative Agent and Syndication
Agent shall not require more than one environmental report per location of Real
Esate per year. Such environmental reports shall be prepared by third parties
approved by Administrative Agent and Syndication Agent at the expense of
Borrower.
5.2. Existence. Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided, no Credit
Party (other than Borrower with respect to existence) or any of its Subsidiaries
shall be required to preserve any such existence, right or franchise, licenses
and permits if such Person's board of directors (or similar governing body)
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of such Person, and that the loss thereof is not
disadvantageous in any material respect to such Person or to Lenders.
5.3. Payment of Taxes and Claims. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor, and (b) in the case of a Tax or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Tax or claim. No
Credit Party will, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
(other than Holdings or any of its Subsidiaries).
5.4. Maintenance of Properties. Each Credit Party will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Holdings and its
53
Subsidiaries and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof.
5.5. Insurance. Holdings will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Holdings and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Such policies of insurance shall be reasonably satisfactory to
Collateral Agent as to form, amount and insurer. Without limiting the generality
of the foregoing, Holdings will maintain or cause to be maintained (a) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (b) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses. Each such policy of insurance shall
(i) name Collateral Agent, on behalf of Secured Parties as an additional insured
thereunder as its interests may appear and (ii) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to Collateral Agent, that names Collateral Agent, on behalf
of Lenders as the loss payee thereunder and provides for at least thirty days'
prior written notice to Collateral Agent of any modification or cancellation of
such policy. Borrower and the Guarantors shall furnish certificates, policies or
endorsements to Agent as Agent shall reasonably require as proof of such
insurance, and, if Borrower or any Guarantor fails to do so, Collateral Agent is
authorized, but not required, to obtain such insurance at the expense of
Borrower.
5.6. Books and Records; Inspections. Each Credit Party will, and will cause
each of its Subsidiaries to, keep proper books of record and accounts in which
full, true and correct entries in conformity in all material respects with GAAP
shall be made of all dealings and transactions in relation to its business and
activities; no Credit Party shall maintain or keep such books, records or
accounts within the Province of Quebec unless a duplicate set thereof is
maintained and kept outside of the Province of Quebec. Each Credit Party will,
and will cause each of its Subsidiaries to, permit any authorized
representatives designated by any Lender to visit and inspect any of the
properties of any Credit Party and any of its respective Subsidiaries, to
inspect, copy and take extracts from its and their financial and accounting
records, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants, all upon reasonable
notice and at such reasonable times during normal business hours and as often as
may reasonably be requested.
5.7. Lenders Meetings. Holdings and Borrower will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Quarter or as otherwise
requested by Administrative Agent to be held at Borrower's corporate offices (or
at such other location as may be agreed to by Borrower and Administrative Agent)
at such time as may be agreed to by Borrower and Administrative Agent.
5.8. Compliance with Laws. Each Credit Party will comply, and shall cause
each of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws, ERISA and tax laws), noncompliance with which could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
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5.9. Environmental.
(a) Environmental Disclosure. Holdings will deliver to Administrative
Agent and Lenders:
(i) as soon as practicable following receipt thereof, copies of
all environmental audits, investigations, analyses and reports of any kind or
character, whether prepared by personnel of Holdings or any of its Subsidiaries
or by independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or with
respect to any Environmental Claims;
(ii) promptly upon the occurrence thereof, written notice
describing in reasonable detail (1) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any applicable
Environmental Laws, (2) any remedial action taken by Holdings or any other
Person in response to (A) any Hazardous Materials Activities the existence of
which has a reasonable possibility of resulting in one or more Environmental
Claims having, individually or in the aggregate, a Material Adverse Effect, or
(B) any Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect, and (3)
Holdings or Borrower's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could cause such
Facility or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any Environmental
Laws;
(iii) as soon as practicable following the sending or receipt
thereof by Holdings or any of its Subsidiaries, a copy of any and all written
communications with respect to (1) any Environmental Claims that, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, (2) any Release required to be reported to any federal, state or local
governmental or regulatory agency, and (3) any request for information from any
governmental agency that suggests such agency is investigating whether Holdings
or any of its Subsidiaries may be potentially responsible for any Hazardous
Materials Activity;
(iv) prompt written notice describing in reasonable detail (1)
any proposed acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to (A) expose Holdings or any of
its Subsidiaries to, or result in, Environmental Claims that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
(B) affect the ability of Holdings or any of its Subsidiaries to maintain in
full force and effect all material Governmental Authorizations required under
any Environmental Laws for their respective operations and (2) any proposed
action to be taken by Holdings or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject Holdings or
any of its Subsidiaries to any additional material obligations or requirements
under any Environmental Laws; and
(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by Administrative
Agent or Syndication Agent in relation to any matters disclosed pursuant to this
Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party shall
promptly take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of applicable Environmental
Laws by such Credit Party or its Subsidiaries that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, and (ii)
make an appropriate response to any Environmental Claim against such Credit
Party or any of its Subsidiaries and discharge
55
any obligations it may have to any Person thereunder where failure to do so
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
Each Canadian Subsidiary hereby acknowledges and agrees that no Agent,
Lender or other Secured Party or any of their respective officers, directors,
employees, attorneys, agents and representatives (i) is now, or has ever been,
in control of any Facility or any Canadian Subsidiary's affairs, and (ii) has
the capacity or the authority through the provisions of the Credit Documents or
otherwise to direct or influence any (A) Canadian Subsidiary's conduct with
respect to the ownership, operation or management of any Facility, (B)
undertaking, work or task performed by any employee, agent or contractor of any
Canadian Subsidiary or the manner in which such undertaking, work or task may be
carried out or performed, or (C) compliance with Environmental Laws.
5.10. Subsidiaries.
(a) Domestic Subsidiaries and Canadian Subsidiaries. In the event that
any Person becomes a Domestic Subsidiary or a Canadian Subsidiary of Holdings,
Holdings shall (i) promptly, and in any event within ten Business Days, cause
such Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge
and Security Agreement by executing and delivering to Administrative Agent and
Collateral Agent a Counterpart Agreement and (ii) take all such actions and
execute and deliver, or cause to be executed and delivered, all such documents,
instruments, agreements, and certificates as are similar to those described in
Sections 3.1(b), 3.1(h), 3.1(i), 3.1(j) and 3.1(m).
(b) Foreign Subsidiaries. (i) In the event that any Person becomes a
Foreign Subsidiary of Holdings (other than an Excluded Foreign Entity), if the
ownership interests of such Foreign Subsidiary are owned directly by any Credit
Party, Holdings shall, or shall cause such Foreign Subsidiary to within 30 days
thereof (or such longer time as Administrative Agent and Syndication Agent shall
allow), deliver or cause to be delivered, all such documents, instruments,
agreements, legal opinions and certificates similar to those described in
Sections 3.1(b) and 5.16(a) and take all of the other actions described therein,
and (ii) in the event such Foreign Subsidiary becomes a Foreign Guarantor
Subsidiary, Holdings shall, or shall cause such Foreign Guarantor Subsidiary to
within 30 days thereof (or such longer time as Administrative Agent and
Syndication Agent shall allow), deliver or cause to be delivered, all such
documents, instruments, agreements, legal opinions and certificates similar to
those described in Section 5.16(b) and take all of the other actions described
therein.
(c) Notice of Subsidiaries. With respect to each newly created or
acquired Subsidiary, Borrower shall promptly send to Administrative Agent
written notice setting forth with respect to such Person (i) the date on which
such Person became a Subsidiary of Borrower, and (ii) all of the data required
to be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of
Borrower; provided, such written notice shall be deemed to supplement Schedule
4.1 and 4.2 for all purposes hereof.
5.11. Additional Real Estate Assets. In the event that any Credit Party
acquires a Real Estate Asset (other than any Leasehold Property which is not
used for manufacturing and is otherwise determined by Administrative Agent and
Syndication Agent to be non-material to the business of Holdings and its
Subsidiaries) after the Closing Date, then such Credit Party shall promptly take
all such actions and execute and deliver, or cause to be executed and delivered,
all such mortgages, documents, instruments, agreements, opinions and
certificates similar to those described in Sections 3.1(h), 3.1(i) and 3.1(j)
and 5.16 (as applicable) with respect to each such Real Estate Asset that
Collateral Agent shall reasonably request to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording referred to herein, perfected First Priority security interest
in such Real Estate Assets subject to the Intercreditor Agreement. In addition
to the foregoing, Borrower shall, at the request of Collateral Agent, deliver,
from time to time, to Collateral Agent such appraisals as are
56
required by law or regulation of Real Estate Assets with respect to which
Collateral Agent has been granted a Lien.
5.12. Further Assurances. At any time or from time to time upon the request
of Administrative Agent or Syndication Agent, each Credit Party will, at its
expense, promptly execute, acknowledge and deliver such further documents and do
such other acts and things as Administrative Agent, Syndication Agent or
Collateral Agent may reasonably request in order to effect fully the purposes of
the Credit Documents. In furtherance and not in limitation of the foregoing,
each Credit Party shall take such actions as Administrative Agent, Syndication
Agent or Collateral Agent may reasonably request from time to time to ensure
that the Obligations are guarantied by the Guarantors and are secured by
substantially all of the assets of Holdings, and its Subsidiaries and all of the
outstanding Capital Stock of Holdings and its Subsidiaries (subject to
limitations contained in the Credit Documents with respect to Foreign
Subsidiaries).
5.13. Miscellaneous Business Covenants.
(a) Cash Management Systems. Holdings and its Subsidiaries shall
establish and maintain cash management systems with a Lender reasonably
acceptable to Agents.
(b) Revolving Credit Facility. The Borrower and the other Credit
Parties shall maintain in effect at all times the Revolving Credit Facility (or
any replacement thereof on terms acceptable to Administrative Agent and
Syndication Agent) with commitments thereunder of at least $20,000,000.
5.14. Landlord Waivers.
(a) Each Credit Party shall use commercially reasonable efforts
to deliver Landlord Personal Property Collateral Access Agreements with respect
to each premises of a third party at which any Collateral is located as of the
Closing Date.
(b) With respect to any premises of a third party at which any
Collateral is located that was not used or leased by any Credit Party on the
Closing Date, each Credit Party shall use commercially reasonable efforts to
deliver, within 30 days after the acquisition of such Leasehold Property or
other third party location (or such later date as shall be acceptable to
Administrative Agent and Syndication Agent in their sole discretion), Landlord
Personal Property Collateral Access Agreements with respect to each such
premises.
5.15. Control Accounts; Approved Deposit Accounts.
(a) Each Credit Party shall (i) deposit in an Approved Deposit Account
all cash it receives, (ii) not establish or maintain any Securities Account that
is not a Control Account and (iii) not establish or maintain any Deposit Account
other than an Approved Deposit Account; provided, however, that this clause (a)
shall not apply to (x) payroll, withholding tax and other fiduciary accounts and
(y) other accounts as long as the aggregate balance for all such Credit Parties
in all such other accounts does not exceed $25,000 at any time.
(b) Each Credit Party shall (i) instruct each Account Debtor or other
Person obligated to make a payment to any of them under any Account or General
Intangible to make payment, or to continue to make payment, to an Approved
Deposit Account and (ii) deposit in an Approved Deposit Account immediately upon
receipt all proceeds of such Accounts and General Intangibles received by
Holdings, Borrower or any of their Subsidiaries from any other Person.
57
(c) In the event (i) any Credit Party or any Deposit Account Bank
shall, after the date hereof, terminate an agreement with respect to the
maintenance of an Approved Deposit Account for any reason, (ii) any Agent shall
demand such termination as a result of the failure of a Deposit Account Bank to
comply with the terms of the applicable Deposit Account Control Agreement or
(iii) any Agent determines in its discretion, exercised in a commercially
reasonable manner, that the financial condition of a Deposit Account Bank has
materially deteriorated, each Credit Party shall notify all of its respective
obligors that were making payments to such terminated Approved Deposit Account
to make all future payments to another Approved Deposit Account.
(d) In the event (i) any Credit Party or any Approved Securities
Intermediary shall, after the date hereof, terminate an agreement with respect
to the maintenance of a Control Account for any reason, (ii) any Agent shall
demand such termination as a result of the failure of an Approved Securities
Intermediary to comply with the terms of the applicable Securities Account
Control Agreement or (iii) any Agent determines in its discretion, exercised in
a commercially reasonable manner, that the financial condition of an Approved
Securities Intermediary has materially deteriorated, each Credit Party shall
notify all of its obligors that were making payments to such terminated Control
Account to make all future payments to another Control Account.
(e) (i) Each Agent may establish one or more Cash Collateral Accounts
with such depositaries and Securities Intermediaries as it in its sole
discretion shall determine; provided, however, that no Cash Collateral Account
shall be established with respect to the assets of any Foreign Subsidiary. Each
Credit Party agrees that each such Cash Collateral Account shall meet the
requirements set forth in the definition of "Cash Collateral Account".
(ii) Without limiting the foregoing, funds on deposit in any Cash
Collateral Account may be invested (but the Agents shall be under no obligation
to make any such investment) in Cash Equivalents at the direction of
Administrative Agent and, except during the continuance of an Event of Default,
the Agents agree with the Credit Parties to issue Entitlement Orders for such
investments in Cash Equivalents as requested by Borrower; provided, however,
that the Agents shall not have any responsibility for, or bear any risk of loss
of, any such investment or income thereon. None of Holdings, Borrower or any
other Credit Party or Person claiming on behalf of or through Holdings, Borrower
or any other Credit Party shall have any right to demand payment of any funds
held in any Cash Collateral Account at any time prior to the payment in full of
all then outstanding and payable monetary Obligations. The Agents shall apply
all funds on deposit in a Cash Collateral Account as provided in Section
2.16(h).
5.16. Post-Closing Obligations with respect to Foreign Collateral. Within
45 days of the Closing Date (or such later date as Administrative Agent and
Syndication Agent may agree), Holdings (a) (i) shall, to the extent practicable
under applicable law, cause Collateral Agent to have a perfected security
interest in 66% (or 100% if no material adverse tax consequences shall result to
Borrower) of the voting Capital Stock (and 100% of the non-voting Capital Stock)
of each direct Foreign Subsidiary of Holdings and any Joint Venture in which
Holdings or its Subsidiaries has at least a 50% interest (other than any
Excluded Foreign Entity), Borrower and each Domestic Guarantor Subsidiary, in
each case, pursuant to appropriate security agreements in the applicable
jurisdiction for each such Foreign Subsidiary, in form and substance reasonably
satisfactory to Administrative Agent and Syndication Agent; and (ii) shall
deliver related written opinions (in form and substance reasonably satisfactory
to Administrative Agent and Syndication Agent) of counsel (acceptable to
Administrative Agent and Syndication Agent) to such Foreign Subsidiaries in
connection therewith as to such matters as Administrative Agent or Syndication
Agent may reasonably request, and Collateral Agent (or its bailee) shall have
received all pledged stock certificates and all possessory collateral for each
Foreign Subsidiary or Joint Venture referred to in this clause (a) (if any),
together with stock powers or other appropriate
58
instruments of transfer for such certificates executed in blank (subject, to the
extent applicable, to obtaining any required consents referred to in clause (c)
below); (b) (i) cause Collateral Agent to have a perfected security interest in
substantially all the assets of each Foreign Guarantor Subsidiary in each case
pursuant to appropriate security agreements in the applicable jurisdiction of
formation for each such Foreign Guarantor Subsidiary, in form and substance
reasonably satisfactory to Administrative Agent and Syndication Agent, in each
case to the extent permitted by applicable law, and (ii) deliver related written
opinions (in form and substance reasonably satisfactory to Administrative Agent
and Syndication Agent) of counsel (acceptable to Administrative Agent and
Syndication Agent) to such Foreign Guarantor Subsidiaries in connection
therewith as to such matters as Administrative Agent or Syndication Agent may
reasonably request, together with all documents and agreements required in
connection with such perfected security interests, except (in each case pursuant
to Section 5.16) to the extent Administrative Agent and Syndication Agent may
otherwise agree; and (c) with respect to Universal Comfort Products Private
Ltd., an India joint venture company, and Fedders Xinle, shall use or shall
cause the applicable Credit Party to use commercially reasonable efforts to
obtain consents (in form and substance reasonably satisfactory to Collateral
Agent) from its applicable joint venture partner to permit the pledge and
transfer of such Credit Party's interest in such joint venture companies under
the Credit Documents; provided, however, that to the extent that any such
consent is not obtained the Credit Parties shall, and shall cause their
applicable Subsidiaries to, take such other action as Administrative Agent and
Syndication Agent may reasonably request to achieve an indirect security
interest in the Capital Stock of the applicable Joint Venture (which may include
requiring the transfer of such Capital Stock to a special purpose Subsidiary of
Holdings in accordance with the provisions of the applicable joint venture
agreement). Notwithstanding the foregoing, Administrative Agent and Collateral
Agent may agree in their discretion to waive certain requirements of this
Section 5.16 if, in their opinions, the expense or effort involved in such
requirements will outweigh the benefits.
5.17. Post-Closing Obligations with respect to Real Estate Assets.
(a) Within 30 days of the Closing Date (or such later date as
Administrative Agent and Syndication Agent may agree), Borrower and each
applicable Guarantor shall have caused to be delivered to Collateral Agent an
ALTA Survey (in form and substance reasonably satisfactory to Administrative
Agent and Syndication Agent) with respect to each Closing Date Mortgaged
Property, and in connection therewith, Administrative Agent or Syndication Agent
may require an updated Title Policy.
(b) Within 30 days of the Closing Date (or such later date as
Administrative Agent and Syndication Agent may agree), Borrower and each
applicable Guarantor shall have caused to be delivered to Collateral Agent
updated appraisals (in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent) with respect to each Closing Date
Mortgaged Property and such updated appraisals shall reflect the current
estimated market value for such Closing Date Mortgaged Property, and in
connection therewith, Administrative Agent or Syndication Agent may require an
updated or new Title Policy to be generated reflecting the current estimated
market value of such Closing Date Mortgaged Property.
(c) Within 5 Business Days of the Closing Date (or such later date as
the Administrative Agent may agree), Borrower shall, with respect to the
Mortgage encumbering that certain Real Estate Asset owned by it and located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ County, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Illinois
Property"), (i) deliver to the Collateral Agent evidence satisfactory to
Collateral Agent that Borrower has recorded in all appropriate places in all
applicable jurisdictions the Mortgage and paid to the title company or to the
appropriate governmental authorities all expenses and premiums of the title
company and all other sums required in connection with the issuance of each
Title Policy and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Mortgage for the
Illinois Property in the appropriate real estate records; and (ii) on or
59
prior to taking the actiuons in clause (i) (1) obtain from the applicable office
of the State of Illinois a written consent to permit Collateral Agent's Mortgage
to encumber the Illinois Property in form and substance reasonably acceptable to
Collateral Agent or (2) discharge the indebtedness and mortgage in favor of the
State of Illinois on the Illinois Property in form and substance reasonably
satisfactory to Collateral Agent.
5.18. Certain Other Post-Closing Obligations. Borrower and each applicable
Guarantor shall have complied or caused compliance with the terms and conditions
set forth on Schedule 5.18 within the time periods specified therein (or such
longer periods as Administrative Agent and Syndication Agent may agree).
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, until payment in full of
all Obligations, such Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1. Indebtedness. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, or
permit to exist, any Indebtedness, or guarantee, assume, endorse, or otherwise
become responsible for directly or indirectly, such Indebtedness of any other
Person except:
(a) the Obligations;
(b) Indebtedness of (x) among the Core Credit Parties, provided that
no such Indebtedness may be advanced to Holdings to the extent that the amount
of such Indebtedness could not be made as a Restricted Junior Payment permitted
by Section 6.5 or (y) any Subsidiary of Holdings owed to Holdings or any of its
other Subsidiaries to the extent permitted as an Investment pursuant to Section
6.7(f); provided, (i) all such Indebtedness shall be unsecured and (as
applicable) subordinated in right of payment to the payment in full of the
Obligations on terms and conditions satisfactory to Administrative Agent and
Syndication Agent, (ii) any payment by any such Core Credit Party which is a
Guarantor Subsidiary under any guaranty of the Obligations shall result in a pro
tanto reduction of the amount of any Indebtedness owed by such Subsidiary to
Borrower or to any of its Subsidiaries for whose benefit such payment is made,
(iii) Borrower and any Subsidiary shall not be permitted to make any payments to
Holdings in respect of any such Indebtedness owing to Holdings (or any
Subsidiary of Holdings which is not a Subsidiary of Borrower) unless such
payments would be expressly permitted to be made, if made by way of a dividend
or other Restricted Junior Payment, pursuant to Section 6.5 and (iv) such
Indebtedness, if owed to a Core Credit Party, shall be evidenced by a promissory
note in form and substance satisfactory to Administrative Agent and Syndication
Agent and which shall have been delivered to, and be subject to a First Priority
perfected Lien of, Collateral Agent;
(c) Indebtedness incurred by Holdings or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guaranties or letters of credit, surety
bonds or performance bonds securing the performance of Borrower or any such
Subsidiary pursuant to such agreements, in connection with Permitted
Acquisitions or permitted dispositions of any business, assets or Subsidiary of
Holdings or any of its Subsidiaries;
(d) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business;
60
(e) Indebtedness in respect of netting services, overdraft protections
and otherwise in connection with deposit accounts;
(f) guaranties in the ordinary course of business of the obligations
of suppliers, customers, franchisees and licensees of Holdings and its
Subsidiaries;
(g) guaranties by Borrower of Indebtedness of a Guarantor Subsidiary
or guaranties by a Subsidiary of Borrower of Indebtedness of Borrower or a
Guarantor Subsidiary with respect, in each case, to Indebtedness otherwise
permitted to be incurred pursuant to this Section 6.1; provided, that if the
Indebtedness that is being guarantied is unsecured and/or subordinated to the
Obligations, the guaranty shall also be unsecured and/or subordinated to the
Obligations;
(h) Indebtedness described in Schedule 6.1, but not any extensions,
renewals or replacements of such Indebtedness except (i) renewals and extensions
expressly provided for in the agreements evidencing any such Indebtedness as the
same are in effect on the date of this Agreement and (ii) refinancings and
extensions of any such Indebtedness if the terms and conditions thereof are not
less favorable to the obligor thereon or to Lenders than the Indebtedness being
refinanced or extended, and the average life to maturity thereof is greater than
or equal to that of the Indebtedness being refinanced or extended; provided,
such Indebtedness permitted under the immediately preceding clause (i) or (ii)
above shall not (A) include Indebtedness of an obligor that was not an obligor
with respect to the Indebtedness being extended, renewed or refinanced, (B)
exceed in a principal amount the Indebtedness being renewed, extended or
refinanced or (C) be incurred, created or assumed if any Default or Event of
Default has occurred and is continuing or would result therefrom;
(i) purchase money Indebtedness (including Capital Leases) in an
aggregate amount not to exceed at any time (together with those outstanding on
the Closing Date) $2,000,000; provided, any such Indebtedness (i) shall be
secured only by the asset acquired in connection with the incurrence of such
Indebtedness, and (ii) shall constitute not less than 90% of the aggregate
consideration paid with respect to such asset;
(j) unsecured Indebtedness of any Credit Party arising after the date
hereof to any third person (but not to any other Credit Party), provided, that,
each of the following conditions is satisfied as determined by Administrative
Agent and Syndication Agent: (i) such Indebtedness shall be on terms and
conditions acceptable to Administrative Agent and Syndication Agent and shall be
subject and subordinate in right of payment to the right of Administrative Agent
and Lenders to receive the prior indefeasible payment and satisfaction in full
payment of all of the Obligations pursuant to the terms of an intercreditor
agreement between Administrative Agent and such third party, in form and
substance satisfactory to Administrative Agent and Syndication Agent, (ii)
Administrative Agent shall have received not less than ten (10) days prior
written notice of the intention of such Credit Party to incur such Indebtedness,
which notice shall set forth in reasonable detail satisfactory to Administrative
Agent and Syndication Agent the amount of such Indebtedness, the person or
persons to whom such Indebtedness will be owed, the interest rate, the schedule
of repayments and maturity date with respect thereto and such other information
as Administrative Agent or Syndication Agent may request with respect thereto,
(iii) Administrative Agent shall have received true, correct and complete copies
of all agreements, documents and instruments evidencing or otherwise related to
such Indebtedness, (iv) except as Administrative Agent and Syndication Agent may
otherwise agree in writing, all of the proceeds of the loans or other
accommodations giving rise to such Indebtedness shall be paid to Administrative
Agent for application to the Obligations in such order and manner as
Administrative Agent may determine or at Administrative Agent's option, to be
held as cash collateral for the Obligations, (v) in no event shall the aggregate
principal amount of such Indebtedness incurred during the term of this Agreement
which consists of unsecured guarantees by Holdings of obligations owing by its
Subsidiaries to inventory vendors of such
61
Subsidiaries ("Holdings Guarantees") exceed $10,000,000 and in no event shall
the aggregate principal amount of any such Indebtedness, other than Holdings
Guarantees, incurred during the term of this Agreement exceed $1,000,000, (vi)
as of the date of incurring such Indebtedness and after giving effect thereto,
no Default or Event of Default shall exist or have occurred, and (vii) such
Credit Party shall furnish to Administrative Agent all notices or demands in
connection with such Indebtedness either received by such Credit Party or on its
behalf promptly after the receipt thereof, or sent by such Credit Party or on
its behalf concurrently with the sending thereof, as the case may be;
(k) Indebtedness under the Revolving Credit Agreement (subject to the
Intercreditor Agreement) and any renewals, refinancings and extensions of any
such Indebtedness which are permitted pursuant to the Intercreditor Agreement;
provided, such Indebtedness shall not (A) include Indebtedness of an obligor
that was not an obligor or required to become an obligor with respect to the
Indebtedness being extended, renewed or refinanced or (B) exceed in principal
amount the Indebtedness being renewed, extended or refinanced, except by an
amount equal to a premium on interest accrued on or other amount paid and fees
and expenses reasonably incurred in connection with such renewal, extension or
refinancing and by an amount equal to any commitments unutilized thereunder;
(l) Indebtedness under the Senior Notes and other Senior Documents, in
an aggregate principal amount not to exceed $155,000,000 at any time following
the Closing Date, and any (i) renewals and extensions expressly provided for in
the Senior Notes or other Senior Notes Documents evidencing any such
Indebtedness as the same are in effect on the date of this Agreement and (ii)
refinancings and extensions of any such Indebtedness if the terms and conditions
thereof are not less favorable to the obligor thereon or to Lenders than the
Indebtedness being refinanced or extended, and the average life to maturity
thereof is greater than or equal to that of the Indebtedness being refinanced or
extended; provided, such Indebtedness permitted under the immediately preceding
clause (i) or (ii) above shall not (A) include Indebtedness of an obligor that
was not an obligor with respect to the Indebtedness being extended, renewed or
refinanced, (B) exceed in a principal amount the Indebtedness being renewed,
extended or refinanced or (C) be incurred, created or assumed if any Default or
Event of Default has occurred and is continuing or would result therefrom; and
(m) Indebtedness, in an aggregate amount not to exceed $17,500,000 at
any time outstanding of any Foreign Subsidiary from any Person other than
Holdings and its Subsidiaries.
6.2. Liens. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Collateral Agent for the benefit of Secured
Parties granted pursuant to any Credit Document;
(b) Liens for Taxes if obligations with respect to such Taxes are
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted;
(c) statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law (other than any such Lien imposed pursuant to Section 401
(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each case
incurred in the ordinary course of business (i) for amounts not yet overdue or
(ii) for
62
amounts that are overdue and that (in the case of any such amounts overdue for a
period in excess of five days) are being contested in good faith by appropriate
proceedings, so long as such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such contested
amounts;
(d) Liens incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Holdings or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any lease of
real estate not prohibited hereunder;
(g) Liens solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made by Holdings
or any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(k) Licenses of patents, trademarks and other intellectual property
rights granted by Holdings or any of its Subsidiaries in the ordinary course of
business and not interfering in any respect with the ordinary conduct of the
business of Borrower or such Subsidiary;
(l) Liens described in Schedule 6.2 or, solely with respect to
fee-owned Real Estate Assets on a title report, in form and substance reasonably
satisfactory to Collateral Agent, delivered in connection with any Real Estate
Asset subject to a Mortgage;
(m) Liens securing Indebtedness permitted pursuant to Section 6.1(i);
provided, any such Lien shall encumber only the asset acquired with the proceeds
of such Indebtedness;
(n) Liens securing Indebtedness permitted pursuant to Section 6.1(k);
provided, any such Lien is subject to the Intercreditor Agreement;
(o) Liens securing Indebtedness of Foreign Subsidiaries permitted by
Section 6.1(m); provided, any such Lien shall encumber only the assets of such
Foreign Subsidiary which assets are not Collateral unless such Lien shall have
been subordinated to the Liens of Collateral Agent on such Collateral on terms
and conditions satisfactory to Collateral Agent;
63
(p) Liens on the Capital Stock of Fedders International, Inc., a
Delaware corporation, securing Indebtedness pursuant to the Senior Notes;
provided, any such Lien is subordinate in priority to all Liens of Collateral
Agent, on behalf of the Secured Parties, pursuant to the Credit Documents, on
terms and conditions satisfactory to Collateral Agent; and
(q) any rights of first refusal of joint venture partners existing on
the Closing Date and set forth on Schedule 6.2.
Provided, however, that no reference herein to Liens permitted hereunder
(including Permitted Liens), including any statement or provision as to the
acceptability of any Liens (including Permitted Liens), shall in any way
constitute or be construed as to provide for a subordination of any rights of
the Agents or the Lenders hereunder or arising under any of the other Credit
Documents in favor of such Liens.
6.3. Equitable Lien. If any Credit Party shall create or assume any Lien
upon any of its properties or assets, whether now owned or hereafter acquired,
other than Permitted Liens, it shall make or cause to be made effective
provisions whereby the Obligations will be secured by such Lien having the
priority required hereby and by the other Credit Documents to any and all other
Indebtedness secured thereby as long as any such Indebtedness shall be so
secured; provided, notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not otherwise permitted hereby.
6.4. No Further Negative Pledges. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale, (b)
restrictions by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business (provided that such
restrictions are limited to the property or assets secured by such Liens or the
property or assets subject to such leases, licenses or similar agreements, as
the case may be) and (c) restrictions under the Senior Notes Documents in effect
on the Closing Date no Credit Party nor any of its Subsidiaries shall enter into
any agreement (other that the Revolving Credit Documents, subject to the
Intercreditor Agreement) prohibiting the creation or assumption of any Lien upon
any of its properties or assets, whether now owned or hereafter acquired, to
secure the Obligations.
6.5. Restricted Junior Payments. No Credit Party shall, nor shall it permit
any of its Subsidiaries or Affiliates through any manner or means or through any
other Person to, directly or indirectly, declare, order, pay, make or set apart,
or agree to declare, order, pay, make or set apart, any sum for any Restricted
Junior Payment except that (a) Borrower may make regularly scheduled payments of
interest in respect of the Senior Notes in accordance with the terms of, and
only to the extent required by the Senior Notes Indenture or the applicable
agreements governing such other Indebtedness; (b) Borrower may make Restricted
Junior Payments to Holdings (i) in an aggregate amount not to exceed $15,000,000
in any Fiscal Year, to the extent necessary to permit Holdings to pay general
administrative costs and expenses and not for any other purpose; provided, that
any such payments to Holdings in respect of salaries, bonuses or fees paid to
employees (other than such payments to retired or former employees as set forth
on Schedule 4.20) shall not exceed $8,500,000 in the aggregate in any Fiscal
Year unless Administrative Agent otherwise consents and (ii) to the extent
necessary to permit Holdings to discharge the consolidated tax liabilities of
Holdings and its Subsidiaries, in each case so long as Holdings applies the
amount of any such Restricted Junior Payment for such purpose; (c)[*] and
(d) Credit Parties may repurchase Capital Stock consisting of common stock
held by employees pursuant to any employee stock ownership plan thereof upon the
termination, retirement or death of any such employee in accordance with the
provisions of such plan, provided, that, as to any such repurchase, each of the
following conditions are satisfied: (i) as of the date of the payment for such
repurchase and after giving effect thereto, no Default or Event of Default shall
exist or have occurred and be continuing,
-----------------
* Confidential information has been omitted pursuant to a request to the
Securities and Exchange Commission for confidential treatment. The
information has been separately filed with the Commission.
64
(ii) such repurchase shall be paid with funds legally available therefor, (iii)
such repurchase shall not violate any law or regulation or the terms of any
indenture, agreement or undertaking to which such Credit Party is a party or by
which such Credit Party or its or their property are bound, and (iv) the
aggregate amount of all payments for such repurchases in any calendar year shall
not exceed $100,000.
6.6. Restrictions on Subsidiary Distributions. Except as provided herein,
no Credit Party shall, nor shall it permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Borrower to (a) pay dividends or make any other distributions on any of such
Subsidiary's Capital Stock owned by Borrower or any other Subsidiary of
Borrower, (b) repay or prepay any Indebtedness owed by such Subsidiary to
Borrower or any other Subsidiary of Borrower, (c) make loans or advances to
Borrower or any other Subsidiary of Borrower, or (d) transfer any of its
property or assets to Borrower or any other Subsidiary of Borrower other than
restrictions (i) in the Revolving Credit Documents, (ii) in the Senior Note
Documents, (iii) in agreements evidencing Indebtedness permitted by Section
6.1(i) that impose restrictions on the property so acquired, (iv) by reason of
customary provisions restricting assignments, subletting or other transfers
contained in leases, licenses, joint venture agreements and similar agreements
entered into in the ordinary course of business, (v) that are or were created by
virtue of any transfer of, agreement to transfer or option or right with respect
to any property, assets or Capital Stock not otherwise prohibited under this
Agreement or (vi) described on Schedule 6.6.
6.7. Investments. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) equity Investments owned as of the Closing Date in any Subsidiary
and other Investments made after the Closing Date in Borrower and any Core
Credit Party (other than Holdings);
(c) Investments (i) in any Securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors and (ii)
deposits, prepayments and other credits to suppliers made in the ordinary course
of business consistent with the past practices of Holdings and its Subsidiaries;
(d) Consolidated Capital Expenditures with respect to Borrower and the
Guarantors permitted by Section 6.8(e);
(e) loans and advances to employees of Holdings and its Subsidiaries
made in the ordinary course of business in an aggregate principal amount not to
exceed $50,000 in the aggregate in any Fiscal Year;
(f) Investments by Credit Parties in Subsidiaries of Holdings which
are not Guarantors and Joint Ventures at any time in an aggregate outstanding
amount not to exceed $300,000;
(g) Investments existing on the Closing Date described in Schedule
6.7;
(h) obligations of Account Debtors to any Credit Party arising from
accounts which are past due evidenced by a promissory note made by such account
debtor payable to such Credit Party; provided, that, promptly upon the receipt
of the original of any such promissory note by such Credit Party, such
promissory note shall be endorsed to the order of Collateral Agent, or (if
required by the Intercreditor Agreement) the Revolving Collateral Agent, by such
Credit Party and promptly delivered to
65
Collateral Agent, or (if required by the Intercreditor Agreement) the Revolving
Collateral Agent, as so endorsed;
(i) Investments by Subsidiaries that are not (and are not required within
the applicable grace period under this Agreement to become) Credit Parties in
other Subsidiaries that are not (and are not required within the applicable
grace period under this Agreement to become) Credit Parties; and
(j) Investments to the extent required to purchase the minority Capital
Stock of Islandaire pursuant to that certain Stock Purchase Agreement dated as
of March 2, 2005, by and among Borrower, Islandaire and Island Metal
Fabricating, Inc., a New York corporation, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., as sole
stockholder of Islandaire, as in existence on the Closing Date with such
subsequent amendments, waivers and other modifications satisfactory to
Administrative Agent and Syndication Agent; provided, that (i) no Default or
Event of Default has occurred and is continuing or would result therefrom, (ii)
Holdings is in pro forma compliance with the financial covenants set forth in
Section 6.8 taking into account all Investments described in this clause (j) and
(iii) such Investments to the extent made with Cash or other property (other
than Capital Stock of Holdings) in Islandaire shall not exceed $3,000,000 in the
aggregate and shall not be paid prior to March 2, 2008.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
payment not otherwise permitted under the terms of Section 6.5.
6.8. Financial Covenants.
(a) Interest Coverage Ratio. Holdings shall not permit the Interest
Coverage Ratio as of the last day of any Fiscal Month (commencing with January
31, 2008) to be less than a certain ratio with respect to such Fiscal Month as
shall be negotiated in good faith by Borrower with Administrative Agent and
Syndication Agent based on the Applicable Financial Plan (to the extent
substantially consistent (subject to adjustments reasonably acceptable to
Administrative Agent as a result of events occurring following the Closing Date
including with respect to weather and general economic conditions) with the
projected levels for the applicable periods as disclosed to Administrative Agent
on or prior to the date hereof) provided, that if such financial covenant levels
are not agreed to pursuant to this Section 6.8(a) within fifteen (15) days of
delivery of the Applicable Financial Plan then such financial covenant levels
shall be determined in the reasonable discretion of Administrative Agent and
Syndication Agent; provided, however, that this Section 6.8(a) may be adjusted
to be tested at the last day of each Fiscal Quarter in accordance with such
ratios as agreed to, upon Administrative Agent's delivery, in its sole
discretion, to Holdings of a notice electing the same. All financial covenant
levels determined pursuant to this Section shall become effective pursuant to a
notice to Borrower setting forth such levels which is executed by Administrative
Agent and Syndication Agent and delivered to Holdings.
(b) Secured Leverage Ratio. Holdings shall not permit the Secured Leverage
Ratio as of the last day of any Fiscal Month (commencing with January 31, 2008)
to be more than a certain ratio with respect to such Fiscal Month as shall be
negotiated in good faith by Borrower with Administrative Agent and Syndication
Agent based on the Applicable Financial Plan (to the extent substantially
consistent (subject to adjustments reasonably acceptable to Administrative Agent
as a result of events occurring following the Closing Date including with
respect to weather and general economic conditions) with the projected levels
for the applicable periods as disclosed to Administrative Agent on or prior to
the date hereof); provided, that if such financial covenant levels are not
agreed to pursuant to this Section 6.8(b) within fifteen (15) days of delivery
of the Applicable Financial Plan then such financial covenant levels shall be
determined in the reasonable discretion of Administrative Agent and Syndication
Agent;
66
provided, however, that this Section 6.8(b) may be adjusted to be tested at the
last day of each Fiscal Quarter in accordance with such ratios as agreed to,
upon Administrative Agent's delivery, in its sole discretion, to Holdings of a
notice electing the same. All financial covenant levels determined pursuant to
this Section shall become effective pursuant to a notice to Borrower setting
forth such levels which is executed by Administrative Agent and Syndication
Agent and delivered to Holdings.
(c) Consolidated Adjusted EBITDA. Holdings shall not permit Consolidated
Adjusted EBITDA as at the end of any Fiscal Month (on a cumulative monthly basis
following the Closing Date until March 31, 2007 and thereafter on a trailing 12
month basis) to be less than (i) for the Fiscal Months ended April 30, 2007
through December 31, 2008, the correlative amount indicated below:
=================================== =========================
Fiscal Month Consolidated Adjusted
EBITDA
----------------------------------- -------------------------
[*] [*]
----------------------------------- -------------------------
[*] [*]
----------------------------------- -------------------------
[*] [*]
----------------------------------- -------------------------
[*] [*]
----------------------------------- -------------------------
[*] [*]
----------------------------------- -------------------------
[*] [*]
----------------------------------- -------------------------
[*] [*]
----------------------------------- -------------------------
[*] [*]
----------------------------------- -------------------------
[*] [*]
=================================== =========================
-----------------
* Confidential information has been omitted pursuant to a request to the
Securities and Exchange Commission for confidential treatment. The
information has been separately filed with the Commission.
and (ii) for the Fiscal Months ended January 31, 2008 through June 30, 2008,
Consolidated Adjusted EBITDA levels set at a 15% cushion from the correlative
levels set forth in the Applicable Financial Plan and (iii) and for the Fiscal
Months ended July 31, 2008 and thereafter, Consolidated Adjusted EBITDA levels
set at a 17(1)/2% cushion from the correlative levels set forth in the
Applicable Financial Plan; provided, however, that if Administrative Agent and
Syndication reasonably determine in the case of clauses (ii) and (iii) above
that such levels in the Applicable Financial Plan are not substantially
consistent (subject to adjustments reasonably acceptable to Administrative Agent
as a result of events occurring following the Closing Date including with
respect to weather and general economic conditions) with the projected levels
for the applicable periods as disclosed to Administrative Agent on or prior to
the date hereof, then such financial covenant levels shall be negotiated in good
faith by Borrower with Administrative Agent and Syndication Agent and if such
financial covenant levels are not agreed to pursuant to this Section 6.8(c)
within fifteen (15) days of delivery of the Applicable Financial Plan then such
financial covenant levels shall be determined in the reasonable discretion of
Administrative Agent and Syndication Agent; provided, further, that this Section
6.8(c) may be adjusted (x) to be tested at the last day of each Fiscal Quarter
in accordance with the above upon Administrative Agent's delivery, in its sole
discretion, to Holdings of a notice electing the same and (y) in accordance with
the procedures set forth in Section 8.2. All financial covenant levels
determined pursuant to this Section shall become effective pursuant to a notice
to Borrower setting forth such levels which is executed by Administrative Agent
and Syndication Agent and delivered to Holdings.
(d) Maximum Consolidated Capital Expenditures. Holdings shall not, and
shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures following the Closing Date, in any Fiscal Quarter indicated below,
in an aggregate amount for Holdings and its Subsidiaries in excess of (i)
cumulative amounts set forth below opposite such Fiscal Quarter:
67
=================================== ==========================
Fiscal Quarter Consolidated Capital
Expenditures
----------------------------------- --------------------------
June 30, 2007 [*]
----------------------------------- --------------------------
September 30, 2007 [*]
----------------------------------- --------------------------
December 31, 2007 [*]
=================================== ==========================
and (ii) thereafter, Consolidated Capital Expenditures shall not exceed [*] in
aggregate per Fiscal Year, with not more than [*] to be incurred in any Fiscal
Quarter in each such Fiscal Year.
(e) Certain Calculations. With respect to any period during which a
Permitted Acquisition or an Asset Sale has occurred (each, a "Subject
Transaction"), for purposes of determining compliance with the financial
covenants set forth in this Section 6.8, Consolidated Adjusted EBITDA shall be
calculated with respect to such period on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission, which would include cost
savings resulting from head count reduction, closure of facilities and similar
restructuring charges, which pro forma adjustments shall be certified by the
chief financial officer of Holdings) using the historical financial statements
of any business so acquired or to be acquired or sold or to be sold and the
consolidated financial statements of Holdings and its Subsidiaries which shall
be reformulated as if such Subject Transaction, and any Indebtedness incurred or
repaid in connection therewith, had been consummated or incurred or repaid at
the beginning of such period (and assuming that such Indebtedness bears interest
during any portion of the applicable measurement period prior to the relevant
acquisition at the weighted average of the interest rates applicable to
outstanding Term Loans incurred during such period).
6.9. Fundamental Changes; Disposition of Assets; Acquisitions. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger, amalgamation or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of
its business, assets or property of any kind whatsoever, whether real, personal
or mixed and whether tangible or intangible, whether now owned or hereafter
acquired, or acquire by purchase or otherwise (other than purchases or other
acquisitions of inventory, materials and equipment and Capital Expenditures in
the ordinary course of business) the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business or other business unit of any Person, except:
(a) any Subsidiary of Borrower may be merged with or into Borrower or
any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all or any
part of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to Borrower or any Guarantor Subsidiary; provided, in the case of
such a merger, Borrower or such Guarantor Subsidiary, as applicable shall be the
continuing or surviving Person;
(b) sales or other dispositions of assets that do not constitute Asset
Sales;
(c) Asset Sales, the proceeds of which (valued at the principal amount
thereof in the case of non-Cash proceeds consisting of notes or other debt
Securities and valued at fair market value in the case of other non-Cash
proceeds) (i) are less than $250,000 with respect to any single Asset Sale or
series of related Asset Sales and (ii) when aggregated with the proceeds of all
other Asset Sales made
-----------------
* Confidential information has been omitted pursuant to a request to the
Securities and Exchange Commission for confidential treatment. The
information has been separately filed with the Commission.
68
within the same Fiscal Year, are less than $500,000; provided (1) the
consideration received for such assets shall be in an amount at least equal to
the fair market value thereof (determined in good faith by the board of
directors of Borrower (or similar governing body)), (2) no less than 75% thereof
shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof shall be
applied as required by Section 2.13(a);
(d) the sale or other disposition of Equipment (including worn-out or
obsolete Equipment or Equipment no longer used or useful in the business of any
Credit Party) so long as such sales or other dispositions do not involve
Equipment having an aggregate fair market value in excess of $500,000 for all
such Equipment disposed of in any Fiscal Year or as Administrative Agent and
Syndication Agent may otherwise agree, and all proceeds thereof shall be applied
in accordance with Section 2.13(a);
(e) any Subsidiary which is not a Guarantor (or required pursuant to
this Agreement to become a Guarantor) may be merged into, consolidated with, or
otherwise dispose of assets to any other Subsidiary;
(f) Investments made in accordance with Section 6.7;
(g) sale of the interests in Universal Comfort Products Private, Ltd.,
a joint venture company organized under the laws of India, on terms and
conditions acceptable to Administrative Agent and Syndication Agent from not
less than 75% Cash (or other consideration immediately converted to Cash), the
Net Asset Sale Proceeds of which shall be no less than fair market value and
shall be immediately applied in prepayment of the Term Loans under Section
2.13(a);
(h) sale of the Walkersville Property, on terms and conditions
acceptable to Administrative Agent and Syndication Agent, the Net Asset Sale
Proceeds of which shall be no less than $4,200,000 and shall be immediately
applied in prepayment of the Term Loans under Section 2.13(a);
(i) sale of the Vienna Property, on terms and conditions acceptable to
Administrative Agent and Syndication Agent, the Net Asset Sale Proceeds of which
shall be no less than $450,000 and shall be immediately applied in prepayment of
the Term Loans under Section 2.13(a); and
(j) Asset Sales approved by Administrative Agent pursuant to the
exercise of the Cure Right pursuant to Section 8.2
6.10. Disposal of Subsidiary Interests. Except for any sale of all of its
interests in the Capital Stock of any of its Subsidiaries in compliance with the
provisions of Section 6.9, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, (a) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
qualify directors if required by applicable law; or (b) permit any of its
Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, in each
case, (i) except to another Credit Party (subject to the restrictions on such
disposition otherwise imposed hereunder), or to qualify directors if required by
applicable law; and (ii), except for pledges of such Capital Stock (1) to
Collateral Agent, (2) subject to the Intercreditor Agreement, the Revolving
Credit Facility Agent and (3) subject to the Senior Notes Indenture, the Senior
Notes Trustee to the extent such pledge is permitted by Section 6.2(p).
6.11. Sales and Lease-Backs. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to sell or
to transfer to any other Person (other
69
than Holdings or any of its Subsidiaries), or (b) intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by such Credit Party to any Person (other than Holdings or
any of its Subsidiaries) in connection with such lease.
6.12. Transactions with Shareholders and Affiliates. No Credit Party shall,
nor shall it permit any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
Holdings on terms that are less favorable to Holdings or that Subsidiary, as the
case may be, than those that might be obtained at the time from a Person who is
not such a shareholder or Affiliate; provided, the foregoing restriction shall
not apply to (a) any transaction among Core Credit Parties (to the extent not
prohibited by any other provision hereof); (b) reasonable and customary fees
paid to members of the board of directors (or similar governing body) of
Holdings and its Subsidiaries; (c) compensation arrangements for officers and
other employees of Holdings and its Subsidiaries entered into in the ordinary
course of business; and (d) transactions described in Schedule 6.12.
6.13. Conduct of Business. From and after the Closing Date, no Credit Party
shall, nor shall it permit any of its Subsidiaries to, engage in any business
other than (i) the businesses engaged in by such Credit Party on the Closing
Date and similar or related businesses and (ii) such other lines of business as
may be consented to by Requisite Lenders.
6.14. Permitted Activities of Holdings. Holdings shall not (a) incur,
directly or indirectly, any Indebtedness or any other obligation or liability
whatsoever other than the Indebtedness and obligations under this Agreement, the
other Credit Documents, the Revolving Credit Documents and the Senior Notes
Documents; (b) create or suffer to exist any Lien upon any property or assets
now owned or hereafter acquired by it other than the Liens created under the
Collateral Documents and the Revolving Credit Documents to which it is a party
or permitted pursuant to Section 6.2; (c) engage in any business or activity or
own any assets other than (i) holding 100% of the Capital Stock of Borrower and
Fedders International, Inc., a Delaware corporation, (ii) performing its
obligations and activities incidental thereto under the Credit Documents and the
Revolving Credit Documents, and to the extent not inconsistent therewith, the
Senior Notes Documents; and (iii) making Restricted Junior Payments and
Investments to the extent permitted by this Agreement; (d) consolidate with or
merge with or into, or convey, transfer or lease all or substantially all its
assets to, any Person; (e) sell or otherwise dispose of any Capital Stock of any
of its Subsidiaries; (f) create or acquire any Subsidiary or make or own any
Investment in any Person other than Borrower; or (g) fail to hold itself out to
the public as a legal entity separate and distinct from all other Persons.
6.15. Amendments or Waivers of Organizational Documents and Senior Notes
Documents. No Credit Party shall nor shall it permit any of its Subsidiaries
to, agree to any amendment, restatement, supplement or other modification to,
or waiver of, any of the Senior Notes Documents or its Organizational
Documents which in each case is materially adverse to the interests of Lenders
(it being understood that any such modification solely to the extent necessary
to permit a [*] shall not, of itself, be materially adverse to the interests
of Lenders) or any [*] of its material rights under any after the Closing Date
without in each case obtaining the prior written consent of Requisite Lenders
to such amendment, restatement, supplement or other modification or waiver.
6.16. Fiscal Year. No Credit Party shall, nor shall it permit any of its
Subsidiaries to change its Fiscal Year-end from December 31.
6.17. No Speculative Transactions. Neither Holdings nor Borrower shall, nor
shall they permit any Subsidiary to, engage in any speculative transaction or in
any transaction involving Interest Rate
-----------------
* Confidential information has been omitted pursuant to a request to the
Securities and Exchange Commission for confidential treatment. The
information has been separately filed with the Commission.
70
Agreements or Currency Agreements except for the sole purpose of hedging in the
normal course of business and consistent with industry practices.
6.18. Margin Regulations. The Borrower shall not, and shall not permit
Holdings or any Subsidiary to, use all or any portion of the proceeds of any
credit extended hereunder to purchase or carry Margin Stock in contravention of
Regulation U of the Board of Governors.
SECTION 7. GUARANTY
7.1. Guaranty of the Obligations. Subject to the provisions of Section 7.2,
Guarantors jointly and severally hereby irrevocably and unconditionally guaranty
to Administrative Agent for the ratable benefit of the Beneficiaries the due and
punctual payment in full of all Obligations when the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a) or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect) (collectively, the "Guaranteed
Obligations").
7.2. Contribution by Guarantors. All Guarantors desire to allocate among
themselves (collectively, the "Contributing Guarantors"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"Funding Guarantor") under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor's Aggregate Payments to equal
its Fair Share as of such date. "Fair Share" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "Fair
Share Contribution Amount" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; provided, solely for purposes of calculating the "Fair
Share Contribution Amount" with respect to any Contributing Guarantor for
purposes of this Section 7.2, any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder shall
not be considered as assets or liabilities of such Contributing Guarantor.
"Aggregate Payments" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (1) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty (including, without limitation, in respect
of this Section 7.2), minus (2) the aggregate amount of all payments received on
or before such date by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this Section 7.2. The amounts payable as
contributions hereunder shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. The
allocation among Contributing Guarantors of their obligations as set forth in
this Section 7.2 shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder. Each Guarantor is a third party beneficiary to
the contribution agreement set forth in this Section 7.2.
7.3. Payment by Guarantors. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any
71
Beneficiary may have at law or in equity against any Guarantor by virtue hereof,
that upon the failure of Borrower to pay any of the Guaranteed Obligations when
and as the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a) or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect),
Guarantors will upon demand pay, or cause to be paid, in Cash, to Administrative
Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guaranteed Obligations then due as aforesaid,
accrued and unpaid interest on such Guaranteed Obligations (including interest
which, but for Borrower's becoming the subject of a case under the Bankruptcy
Code, would have accrued on such Guaranteed Obligations, whether or not a claim
is allowed against Borrower for such interest in the related bankruptcy case)
and all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.
7.4. Liability of Guarantors Absolute. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) Administrative Agent may enforce this Guaranty upon the occurrence
and during the existence of an Event of Default notwithstanding the existence of
any dispute between Borrower and any Beneficiary with respect to the existence
of such Event of Default;
(c) the obligations of each Guarantor hereunder are independent of the
obligations of Borrower and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Borrower, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against Borrower or any of such other guarantors and whether
or not Borrower is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if any
Beneficiary is awarded a judgment in any suit brought to enforce any Guarantor's
covenant to pay a portion of the Guaranteed Obligations, such judgment shall not
be deemed to release such Guarantor from its covenant to pay the portion of the
Guaranteed Obligations that is not the subject of such suit, and such judgment
shall not, except to the extent satisfied by such Guarantor, limit, affect,
modify or abridge any other Guarantor's liability hereunder in respect of the
Guaranteed Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration,
72
any security for payment of the Guaranteed Obligations, any other guaranties of
the Guaranteed Obligations, or any other obligation of any Person (including any
other Guarantor) with respect to the Guaranteed Obligations; (v) enforce and
apply any security now or hereafter held by or for the benefit of such
Beneficiary in respect hereof or the Guaranteed Obligations and direct the order
or manner of sale thereof, or exercise any other right or remedy that such
Beneficiary may have against any such security, in each case as such Beneficiary
in its discretion may determine consistent herewith or the applicable Hedge
Agreement and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against Borrower or any
security for the Guaranteed Obligations; and (vi) exercise any other rights
available to it under the Credit Documents or any Hedge Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Guaranteed Obligations), including the occurrence of any of the
following, whether or not any Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy (whether arising under the Credit
Documents or any Hedge Agreements, at law, in equity or otherwise) with respect
to the Guaranteed Obligations or any agreement relating thereto, or with respect
to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions
relating to Events of Default) hereof, any of the other Credit Documents, any of
the Hedge Agreements or any agreement or instrument executed pursuant thereto,
or of any other guaranty or security for the Guaranteed Obligations, in each
case whether or not in accordance with the terms hereof or such Credit Document,
such Hedge Agreement or any agreement relating to such other guaranty or
security; (iii) the Guaranteed Obligations, or any agreement relating thereto,
at any time being found to be illegal, invalid or unenforceable in any respect;
(iv) the application of payments received from any source (other than payments
received pursuant to the other Credit Documents or any of the Hedge Agreements
or from the proceeds of any security for the Guaranteed Obligations, except to
the extent such security also serves as collateral for Indebtedness other than
the Guaranteed Obligations) to the payment of Indebtedness other than the
Guaranteed Obligations, even though any Beneficiary might have elected to apply
such payment to any part or all of the Guaranteed Obligations; (v) any
Beneficiary's consent to the change, reorganization or termination of the
corporate structure or existence of Holdings or any of its Subsidiaries and to
any corresponding restructuring of the Guaranteed Obligations; (vi) any failure
to perfect or continue perfection of a security interest in any collateral which
secures any of the Guaranteed Obligations; (vii) any defenses, set-offs or
counterclaims which Borrower may allege or assert against any Beneficiary in
respect of the Guaranteed Obligations, including failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of any Guarantor as an obligor in respect of the Guaranteed
Obligations.
7.5. Waivers by Guarantors. Each Guarantor hereby waives, for the benefit
of Beneficiaries: (a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against Borrower, any
other guarantor (including any other Guarantor) of the Guaranteed Obligations or
any other Person, (ii) proceed against or exhaust any security held from
Borrower, any such other guarantor or any other Person, (iii) proceed against or
have resort to any balance of any Deposit Account or credit on the books of any
Beneficiary in favor of Borrower or any other Person, or (iv) pursue any other
remedy in the power of any Beneficiary whatsoever; (b) any
73
defense arising by reason of the incapacity, lack of authority or any disability
or other defense of Borrower or any other Guarantor including any defense based
on or arising out of the lack of validity or the unenforceability of the
Guaranteed Obligations or any agreement or instrument relating thereto or by
reason of the cessation of the liability of Borrower or any other Guarantor from
any cause other than payment in full of the Guaranteed Obligations; (c) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal; (d) any defense based upon any
Beneficiary's errors or omissions in the administration of the Guaranteed
Obligations, except behavior which amounts to bad faith; (e) (i) any principles
or provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof and any legal or equitable discharge of such Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations affecting
such Guarantor's liability hereunder or the enforcement hereof, (iii) any rights
to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and
any requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the other Credit Documents, the Hedge Agreements or any agreement or
instrument related thereto, notices of any renewal, extension or modification of
the Guaranteed Obligations or any agreement related thereto, notices of any
extension of credit to Borrower and notices of any of the matters referred to in
Section 7.4 and any right to consent to any thereof; and (g) any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the terms
hereof.
7.6. Guarantors' Rights of Subrogation, Contribution, etc. Until the
Guaranteed Obligations shall have been indefeasibly paid in full, each Guarantor
hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Borrower or any other Guarantor
or any of its assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Borrower with respect to the Guaranteed Obligations, (b) any right
to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against Borrower, and (c) any benefit
of, and any right to participate in, any collateral or security now or hereafter
held by any Beneficiary. In addition, until the Guaranteed Obligations shall
have been indefeasibly paid in full, each Guarantor shall withhold exercise of
any right of contribution such Guarantor may have against any other guarantor
(including any other Guarantor) of the Guaranteed Obligations, including,
without limitation, any such right of contribution as contemplated by Section
7.2. Each Guarantor further agrees that, to the extent the waiver or agreement
to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Borrower or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Borrower, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly
paid in full, such amount shall be held in trust for Administrative Agent on
behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent
for the benefit of Beneficiaries to be credited and applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.
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7.7. Subordination of Other Obligations. Any Indebtedness of Borrower or
any Guarantor now or hereafter held by any Guarantor (the "Obligee Guarantor")
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such Indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8. Continuing Guaranty. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been paid in
full. Each Guarantor hereby irrevocably waives any right to revoke this Guaranty
as to future transactions entered into in connection with this Agreement giving
rise to any Guaranteed Obligations.
7.9. Authority of Guarantors or Borrower. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Borrower
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. Financial Condition of Borrower. Any Credit Extension may be made to
Borrower or continued from time to time, and any Hedge Agreements may be entered
into from time to time, in each case without notice to or authorization from any
Guarantor regardless of the financial or other condition of Borrower at the time
of any such grant or continuation or at the time such Hedge Agreement is entered
into, as the case may be. No Beneficiary shall have any obligation to disclose
or discuss with any Guarantor its assessment, or any Guarantor's assessment, of
the financial condition of Borrower. Each Guarantor has adequate means to obtain
information from Borrower on a continuing basis concerning the financial
condition of Borrower and its ability to perform its obligations under the
Credit Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Borrower and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Borrower now known or hereafter known
by any Beneficiary.
7.11. Default, Remedies. The Guaranteed Obligations of each Guarantor
hereunder are independent of and separate from the Obligations of such
Guarantor. If any Obligation of Borrower is not paid when due, or upon and
during the continuation of any Event of Default hereunder or upon any default by
Borrower as provided in any other Credit Document or Hedge Agreement,
Administrative Agent may, at its sole election, proceed directly and at once,
without notice, against any Guarantor to collect and recover the full amount or
any portion of the Obligations of Borrower then due, without first proceeding
against Borrower or any other guarantor (including Guarantors) of the Guaranteed
Obligations, or against any Collateral under the Credit Documents or joining
Borrower or any other guarantor (including Guarantors) in any proceeding against
any Guarantor. At any time after maturity of the Guaranteed Obligations,
Administrative Agent may (unless the Guaranteed Obligations have been paid in
full), without notice to any Guarantor and regardless of the acceptance of any
Collateral for the payment hereof, appropriate and apply toward the payment of
the Guaranteed Obligations (a) any indebtedness due or to become due from any
Beneficiary to such Guarantor and (b) any moneys, credits or other property
belonging to such Guarantor at any time held by or coming into the possession of
any Beneficiary or any of its respective Affiliates.
7.12. Bankruptcy, etc. (a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any
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bankruptcy, reorganization or insolvency case or proceeding of or against
Borrower or any other Guarantor. The obligations of Guarantors hereunder shall
not be reduced, limited, impaired, discharged, deferred, suspended or terminated
by any case or proceeding, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of Borrower
or any other Guarantor or by any defense which Borrower or any other Guarantor
may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should
be determined without regard to any rule of law or order which may relieve
Borrower of any portion of such Guaranteed Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar Person to pay Administrative Agent, or allow the
claim of Administrative Agent in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed Obligations
are paid by Borrower, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guaranteed Obligations for all purposes hereunder.
7.13. Waiver of Judicial Bond. To the fullest extent permitted by
applicable law, each Guarantor waives the requirement to post any bond that
otherwise may be required of any Beneficiary in connection with any judicial
proceeding to enforce such Beneficiary's rights to payment hereunder, security
interest in or other rights to the Collateral or in connection with any other
legal or equitable action or proceeding arising out of, in connection with, or
related to this Guaranty and the Credit Documents or Hedge Agreements to which
it is a party.
7.14. Discharge of Guaranty Upon Sale of Guarantor. If all of the Capital
Stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale.
7.15. Indemnity. In addition to the guarantee specified in this Section 7,
the Guarantors agree to indemnify and save the Beneficiaries harmless from and
against all costs, losses, expenses and damages it may suffer as a result or
consequence of any inability by the Beneficiaries to recover the ultimate
balance due or remaining unpaid to the Beneficiaries on account of the
Guaranteed Obligations, including, without limitation, legal fees incurred by or
on behalf of the Beneficiaries which result from any action instituted on the
basis of this Agreement.
SECTION 8. EVENTS OF DEFAULT
8.1. Events of Default. If any one or more of the following conditions or
events shall occur:
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(a) Failure to Make Payments When Due. Failure by Borrower to pay when
due (i) any installment of principal of any Term Loan, whether at stated
maturity, by acceleration, by notice of voluntary prepayment, by mandatory
prepayment or otherwise or (ii) any interest on any Term Loan or any fee or any
other amount due hereunder; or
(b) Default in Other Agreements. (i) Failure of any Credit Party or
any of their respective Subsidiaries to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) under the
Revolving Credit Agreement, the Senior Notes Indenture or any other Indebtedness
in an individual principal amount with respect to such other Indebtedness of
$250,000 or more, in each case beyond the grace period, if any, provided
therefor; or (ii) breach or default by any Credit Party with respect to any
other material term of (1) one or more items of Indebtedness in the individual
amount referred to in clause (i) above or (2) the Revolving Credit Documents,
the Senior Notes Documents or any other loan agreement, mortgage, indenture or
other agreement relating to such item(s) of Indebtedness, in each case beyond
the grace period, if any, provided therefor, if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness (or
a trustee on behalf of such holder or holders), to cause, that Indebtedness to
become or be declared due and payable (or redeemable) prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; or
(c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.5, Sections
5.1(a), 5.1(b), 5.1(c), 5.1(d) and 5.1(f), Section 5.2, Section 5.13, Section
5.15, Section 5.16, Section 5.17, Section 5.18 or Section 6; or
(d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein or
any of the other Credit Documents, other than any such term referred to in any
other Section of this Section 8.1, and such default shall not have been remedied
or waived within fifteen days after the earlier of (i) an officer of such Credit
Party becoming aware of such default or (ii) receipt by Borrower of notice from
Administrative Agent or any Lender of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court
of competent jurisdiction shall enter a decree or order for relief in respect of
Holdings or any of its Subsidiaries in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its Subsidiaries
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings or any of its Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, receiver-manager, trustee or
other custodian of Holdings or any of its Subsidiaries for all or a substantial
part of its property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of Holdings
or any of its Subsidiaries, and any such event described in this clause (ii)
shall continue for thirty days without having been dismissed, bonded or
discharged; or
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(g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Holdings
or any of its Subsidiaries shall have an order for relief entered with respect
to it or shall commence a voluntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, interim receiver, receiver-manager, trustee or other custodian for all
or a substantial part of its property; or Holdings or any of its Subsidiaries
shall make any assignment for the benefit of creditors; or (ii) Holdings or any
of its Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the board
of directors (or similar governing body) of Holdings or any of its Subsidiaries
(or any committee thereof) shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to herein or in Section 8.1(f); or
(h) Judgments and Attachments. Any money judgment, writ or warrant of
attachment or similar process involving (i) in any individual case an amount in
excess of $150,000 or (ii) in the aggregate at any time an amount in excess of
$250,000 (in either case to the extent not adequately covered by insurance as to
which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against Holdings or any of its Subsidiaries or any of
their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of thirty days (or in any event later than five days prior
to the date of any proposed sale thereunder); or
(i) Dissolution. Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution, winding up, arrangement or
split up of such Credit Party and such order shall remain undischarged or
unstayed for a period in excess of thirty days; or
(j) Employee Benefit Plans. (i) There shall occur one or more ERISA
Events which individually or in the aggregate results in or might reasonably be
expected to result in liability of Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates in excess of $150,000 during the term hereof;
or (ii) there exists any fact or circumstance that reasonably could be expected
to result in the imposition of a Lien or security interest under Section 412(n)
of the Internal Revenue Code or under ERISA.
(k) Environmental Matters. Other than as set forth on Schedule 8.1(k),
one or more of Holdings and any of its Subsidiaries shall have entered into one
or more consent or settlement decrees or agreements or similar arrangements with
a Governmental Authority or one or more judgments, orders, decrees or similar
actions shall have been entered against one or more of Holdings and its
Subsidiaries based on or arising from the violation of or pursuant to any
Environmental Law, or the generation, storage, transportation, treatment,
disposal or Release of any Hazardous Materials and, in connection with all the
foregoing, Holdings or any of its Subsidiaries has incurred liabilities, costs
and expenses in excess of $250,000 in the aggregate (in each case, to the extent
not adequately covered by either an enforceable indemnity, to the extent that
Holdings or the applicable Subsidiary shall have made a claim for
indemnification and the applicable indemnifying party shall not have disputed
such claim) that were not reflected in the financial statements delivered
pursuant to Section 3.1(k) prior to the date hereof; or
(l) Change of Control. A Change of Control shall occur; or
(m) Guaranties, Collateral Documents and other Credit Documents. At
any time after the execution and delivery thereof, (i) the Guaranty for any
reason, other than the satisfaction in full of all Obligations, shall cease to
be in full force and effect (other than in accordance with its terms) or shall
be declared to be null and void or any Guarantor shall repudiate its obligations
thereunder, (ii) this Agreement or any Collateral Document ceases to be in full
force and effect (other than by reason of a
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release of Collateral in accordance with the terms hereof or thereof or the
satisfaction in full of the Obligations in accordance with the terms hereof) or
shall be declared null and void, or Collateral Agent shall not have or shall
cease to have a valid and perfected Lien in any material portion of the
Collateral purported to be covered by the Collateral Documents with the priority
required by the relevant Collateral Document, in each case for any reason other
than the failure of Collateral Agent or any Secured Party to take any action
within its control, or (iii) any Credit Party shall contest the validity or
enforceability of any Credit Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Credit Document to which it is a party or shall contest the validity
or perfection of any Lien in any Collateral purported to be covered by the
Collateral Documents; or
(n) Indictment by Governmental Authority. The indictment by any
Governmental Authority, or as Administrative Agent and Syndication Agent may
reasonably and in good faith determine, the threatened indictment by any
Governmental Authority of any Credit Party of which any Credit Party receives
notice, in either case, as to which there is a reasonable possibility of an
adverse determination, in the good faith determination of Administrative Agent
and Syndication Agent, under any criminal statute, or commencement or threatened
commencement of criminal or civil proceedings against such Credit Party pursuant
to which statute or proceedings the penalties or remedies sought or available
include forfeiture of (i) any of the Collateral having a value in excess of
$150,000 or (ii) any other property of any Credit Party which is necessary or
material to the conduct of its business; or
(o) Material Adverse Change. Any event or events shall occur following
the Closing Date which individually or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect.
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) during the continuance of any other
Event of Default, at the request of (or with the consent of) Requisite Lenders,
upon notice to Borrower by Administrative Agent, (A) each of the following shall
immediately become due and payable, in each case without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by each Credit Party: (I) the unpaid principal amount of and accrued
interest on the Term Loans and (II) all other Obligations; and (B)
Administrative Agent may cause Collateral Agent to enforce any and all Liens,
security interests and remedies created pursuant to Collateral Documents.
8.2. Borrower's Right to Cure Minimum EBITDA Covenant Default.
Notwithstanding anything to the contrary contained in Section 8.1, in the event
that Borrower fails to comply with the requirements of Section 6.8(c) as of
March 31, 2008, or any time thereafter, the Credit Parties shall have a one-time
right, during the period of 120 days after the date on which any Credit Party
first knows that Borrower will fail to comply with the requirements of Section
6.8(c) as of March 31, 2008, or any time thereafter (the "Cure Period"), to
consummate one or more Asset Sales of Fixed Asset Collateral or issuances by
Holdings of its Capital Stock, the Net Cash Proceeds of which shall be applied
immediately following receipt in prepayment of the Term Loans to $25,000,000,
(the "Cure Right"), whereupon, the parties hereto agree, such Event of Default
shall be deemed cured. Borrower shall give Administrative Agent promptly
following commencement of the Cure Period, written notice (a "Cure Notice") of
its intent to exercise the Cure Right. A Cure Notice shall be accompanied by a
detailed plan with respect to the proposed Asset Sale and/or issuance of Capital
Stock which shall be in form and substance satisfactory to Administrative Agent
and Syndication Agent. Borrower shall inform Administrative Agent on a weekly
basis with respect to the progress, and promptly of all developments with
respect to, the implementation of such plan. If such plan contemplates an Asset
Sale, Borrower shall within 21 days of the delivery of the Cure Notice to
Administrative Agent engage and retain an investment bank or other advisor
acceptable to Administrative Agent and Syndication Agent in connection
therewith. In the event
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that Administrative Agent has received a Cure Notice as described above, then
(i) so long as the Cure Period is continuing, the Term Loans may not be
accelerated and Lenders and Agents shall not foreclose on any Collateral, in
each case solely by reason of the breach of Section 6.8(c) with respect to which
such Cure Notice has been delivered, provided, however, that (x) the foregoing
shall not limit any rights or remedies of Lenders or Agents which may exist as a
result of the occurrence of any other Default or Event of Default and (y)
following the expiration of the Cure Period (in the event that the Term Loans
shall not have been prepaid to $25,000,000 or less) the Term Loans may be
accelerated and Agents and Lenders may exercise all other rights pursuant to
this Agreement and the other Credit Documents; and (ii) Borrower and
Administrative Agent shall negotiate in good faith to adjust the covenant levels
set forth in Section 6.8(c) with respect to all subsequent periods; provided,
that in the event that Borrower and Administrative Agent do not promptly reach
agreement with respect to such covenant levels, Administrative Agent may
determine such levels in its reasonable discretion having due regard to any
updated Projections. Any such adjustment to the covenant levels in Section
6.8(c) shall become effective upon, as applicable (x) Borrower and
Administrative Agent executing a supplement to this Agreement or (y)
Administrative Agent delivering a written notice to Borrower, in each case
containing such adjusted covenant levels, upon which Section 6.8(c) shall be
deemed amended and modified by the terms of such supplement or notice, as the
case may be. Notwithstanding the foregoing, the Cure Period may be terminated at
any time by Administrative Agent if it determines that Borrower is not using
good faith efforts to exercise the Cure Right (or otherwise could not reasonably
be expected to be successful) in consummating an Asset Sale or equity issuance
pursuant to the exercise of the Cure Right.
SECTION 9. AGENTS
9.1. Appointment of Agents. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes GSCP to act as Syndication Agent in
accordance with the terms hereof and the other Credit Documents. GSCP is hereby
appointed Administrative Agent and Collateral Agent hereunder and under the
other Credit Documents and each Lender hereby authorizes GSCP to act as
Administrative Agent and Collateral Agent in accordance with the terms hereof
and the other Credit Documents. Each Agent hereby agrees to act in its capacity
as such upon the express conditions contained herein and the other Credit
Documents, as applicable. The provisions of this Section 9 are solely for the
benefit of Agents and Lenders and no Credit Party shall have any rights as a
third party beneficiary of any of the provisions thereof. In performing its
functions and duties hereunder, each Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Holdings or
any of its Subsidiaries. The Syndication Agent, without consent of or notice to
any party hereto, may assign any and all of its rights or obligations hereunder
to any of its Affiliates. As of the Closing Date, GSCP, in its capacity as
Syndication Agent shall not have any obligations but shall be entitled to all
benefits of this Section 9.
9.2. Powers and Duties. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
9.3. General Immunity.
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(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any
Credit Party, and Lender or any person providing the Settlement Service to any
Agent or any Lender in connection with the Credit Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any
Credit Party or any other Person liable for the payment of any Obligations, nor
shall any Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Credit Documents or as to the use of the proceeds of the
Term Loans or as to the existence or possible existence of any Event of Default
or Default or to make any disclosures with respect to the foregoing. Anything
contained herein to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding Term
Loans.
(b) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, including any
Settlement Confirmation or other communication issues by any Settlement Service,
and shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Holdings and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting hereunder
or any of the other Credit Documents in accordance with the instructions of
Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 10.5).
(c) Delegation of Duties. Administrative Agent may perform any and all
of its duties and exercise its rights and powers under this Agreement or under
any other Credit Document by or through any one or more sub-agents appointed by
Administrative Agent. Administrative Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through their
respective Affiliates. The exculpatory, indemnification and other provisions of
this Section 9.3 and of Section 9.6 shall apply to any the Affiliates of
Administrative 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. All of the rights, benefits, and
privileges (including the exculpatory and indemnification provisions) of this
Section 9.3 and of Section 9.6 shall apply to any such sub-agent and to the
Affiliates of any such sub-agent, and shall apply to their respective activities
as sub-agent as if such sub-agent and Affiliates were named herein.
Notwithstanding anything herein to the contrary, with respect to each sub-agent
appointed by Administrative Agent, (i) such sub-agent shall be a third party
beneficiary under this Agreement with respect to all such rights, benefits and
privileges (including exculpatory rights and rights to indemnification) and
shall have all of the rights and benefits of a third party beneficiary,
including an independent right of action to enforce such rights, benefits and
privileges (including exculpatory rights and rights to indemnification)
directly, without the consent or joinder of any other Person, against any or all
of the Credit Parties and Lenders, (ii) such rights, benefits and privileges
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(including exculpatory rights and rights to indemnification) shall not be
modified or amended without the consent of such sub-agent, and (iii) such
sub-agent shall only have obligations to Administrative Agent and not to any
Credit Party, Lender or any other Person and no Credit Party, Lender or any
other Person shall have any rights, directly or indirectly, as a third party
beneficiary or otherwise, against such sub-agent.
9.4. Agents Entitled to Act as Lender. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
Each Agent shall have the same rights and powers hereunder as any other Lender
and may exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with Holdings or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Borrower for services in connection herewith and otherwise
without having to account for the same to Lenders.
9.5. Lenders' Representations, Warranties and Acknowledgment.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Holdings and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Term Loans or at any time or times thereafter, and no
Agent shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this Agreement or
an Assignment and funding Term Loan on the Closing Date shall be deemed to have
acknowledged receipt of, and consented to and approved, each Credit Document and
each other document required to be approved by any Agent, Requisite Lenders or
Lenders, as applicable on the Closing Date.
9.6. Right to Indemnity. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent, to the extent that such Agent shall
not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Credit Documents; provided, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct. If any indemnity furnished to any Agent
for any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided further, this sentence shall
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not be deemed to require any Lender to indemnify any Agent against any
liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement described in the proviso in the immediately preceding
sentence.
9.7. Successor Administrative Agent and Collateral Agent. Administrative
Agent may resign at any time by giving thirty days' prior written notice thereof
to Lenders and Borrower, and Administrative Agent may be removed at any time
with or without cause by an instrument or concurrent instruments in writing
delivered to Borrower and Administrative Agent and signed by Requisite Lenders.
Upon any such notice of resignation or any such removal, Requisite Lenders shall
have the right, upon five Business Days' notice to Borrower, to appoint a
successor Administrative Agent. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, that
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed
Administrative Agent and the retiring or removed Administrative Agent shall
promptly (i) transfer to such successor Administrative Agent all sums,
Securities and other items of Collateral held under the Collateral Documents,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent under the Credit Documents, and (ii) execute and deliver to such successor
Administrative Agent such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Administrative Agent of the security interests
created under the Collateral Documents, whereupon such retiring or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent hereunder. Any resignation or removal of GSCP
as Administrative Agent pursuant to this Section shall also constitute the
resignation or removal of GSCP or its successor as Collateral Agent, and any
successor Administrative Agent appointed pursuant to this Section shall, upon
its acceptance of such appointment, become the successor Collateral Agent for
all purposes hereunder.
9.8. Collateral Documents and Guaranty.
(a) Agents under Collateral Documents and Guaranty. Each Lender hereby
further authorizes Administrative Agent or Collateral Agent, as applicable, on
behalf of and for the benefit of Secured Parties, to be the agent for and
representative of Lenders with respect to the Guaranty, the Collateral and the
Collateral Documents. Subject to Section 10.5, without further written consent
or authorization from Lenders, Administrative Agent or Collateral Agent, as
applicable may execute any documents or instruments necessary to (i) in
connection with a sale or disposition of assets permitted by this Agreement,
release any Lien encumbering any item of Collateral that is the subject of such
sale or other disposition of assets or to which Requisite Lenders (or such other
Lenders as may be required to give such consent under Section 10.5) have
otherwise consented or (ii) release any Guarantor from the Guaranty pursuant to
Section 7.12 or with respect to which Requisite Lenders (or such other Lenders
as may be required to give such consent under Section 10.5) have otherwise
consented.
(b) Right to Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Credit Documents to the contrary notwithstanding,
Borrower, Administrative Agent, Collateral Agent and each Lender hereby agree
that (i) no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent, on behalf of Lenders in accordance with the terms hereof and all powers,
rights and remedies under the Collateral Documents may be exercised solely by
Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on
any of the Collateral pursuant to a public or private sale, Collateral Agent or
any Lender may be the purchaser of any or all of such Collateral at any such
sale and Collateral Agent, as agent for and representative of
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Secured Parties (but not any Lender or Lenders in its or their respective
individual capacities unless Requisite Lenders shall otherwise agree in writing)
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply any of the Obligations as a credit on account of
the purchase price for any collateral payable by Collateral Agent at such sale.
(c) Agents' Authority to Satisfy Prior Liens and Indebtedness. Each of
the parties hereto hereby consent to and expressly authorize Administrative
Agent and Collateral Agent to take such action following the occurrence and
during the continuance of an Event of Default to discharge any prior Lien or
Indebtedness which Administrative Agent and Collateral Agent determine would be
desirable to better enable the exercise of remedies pursuant to the Collateral
Documents with respect to any Collateral subject to such Lien. Any amounts so
expended by Administrative Agent or Collateral Agent pursuant to this paragraph
(c) shall be an expense Obligation of Borrower upon demand.
SECTION 10. MISCELLANEOUS
10.1. Notices.
(a) Notices Generally. Any notice or other communication herein
required or permitted to be given to a Credit Party, Syndication Agent,
Collateral Agent or Administrative Agent shall be sent to such Person's address
as set forth on Appendix B or in the other relevant Credit Document, and in the
case of any Lender, the address as indicated on Appendix B or otherwise
indicated to Administrative Agent in writing. Except as otherwise set forth in
paragraph (b) below, each notice hereunder shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service and signed for against receipt thereof, upon receipt of
telefacsimile or telex, or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed; provided, no notice to
any Agent shall be effective until received by such Agent; provided further, any
such notice or other communication shall at the request of Administrative Agent
be provided to any sub-agent appointed pursuant to Section 9.3(c) hereto as
designated by Administrative Agent from time to time.
(b) Electronic Communications. Notices and other communications to
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by Administrative Agent, provided that the foregoing shall not apply to
notices to any Lender pursuant to Section 2 if such Lender, has notified
Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. Administrative Agent or Borrower 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. Unless Administrative Agent otherwise prescribes, (i) notices
and other communications 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 such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
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 (i) of notification that such notice or communication is
available and identifying the website address therefor.
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10.2. Expenses. Whether or not the transactions contemplated hereby shall
be consummated, Borrower agrees to pay promptly (a) all the actual and
reasonable costs and expenses of preparation of the Credit Documents and any
consents, amendments, waivers or other modifications thereto; (b) all the costs
of furnishing all opinions by counsel for Borrower and the other Credit Parties;
(c) the reasonable and documented fees, expenses and disbursements of counsel to
Agents (in each case including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by Borrower;
(d) all the actual costs and reasonable expenses of creating and perfecting
Liens in favor of Collateral Agent, for the benefit of Lenders pursuant hereto,
including filing and recording fees, expenses and taxes, stamp or documentary
taxes, search fees, title insurance premiums and reasonable fees, expenses and
disbursements of counsel to each Agent and of counsel providing any opinions
that any Agent or Requisite Lenders may request in respect of the Collateral or
the Liens created pursuant to the Collateral Documents; (e) all the actual costs
and reasonable fees, expenses and disbursements of any auditors, accountants,
consultants or appraisers; (f) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Collateral Agent and
its counsel) in connection with the custody or preservation of any of the
Collateral; (g) all other actual and reasonable costs and expenses incurred by
each Agent in connection with the syndication of the Term Loans and Term Loan
Commitments and the negotiation, preparation and execution of the Credit
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; and (h) after the occurrence and
during the continuance of a Default or an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by any Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from any Credit
Party hereunder or under the other Credit Documents by reason of such Default or
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the Guaranty)
or in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy cases or proceedings.
10.3. Indemnity.
(a) In addition to the payment of expenses pursuant to Section 10.2,
whether or not the transactions contemplated hereby shall be consummated, each
Credit Party agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless, each Agent and Lender and the officers,
partners, members, directors, trustees, advisors, employees, agents, sub-agents
and Affiliates of each Agent and each Lender (each, an "Indemnitee"), from and
against any and all Indemnified Liabilities; provided, no Credit Party shall
have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee. To the extent that the
undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 10.3 may be unenforceable in whole or in part because they are violative
of any law or public policy, the applicable Credit Party shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by
Indemnitees or any of them.
(b) To the extent permitted by applicable law, no Credit Party shall
assert, and each Credit Party hereby waives, any claim against each Lender, each
Agent and their respective Affiliates, directors, employees, attorneys, agents
or sub-agents, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby or referred to herein
or therein,
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the transactions contemplated hereby or thereby, any Term Loan or the use of the
proceeds thereof or any act or omission or event occurring in connection
therewith, and Holdings and Borrower hereby waives, releases and agrees not to
▇▇▇ upon any such claim or any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor.
10.4. Set-Off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default each Lender is
hereby authorized by each Credit Party at any time or from time to time subject
to the consent of Administrative Agent (such consent not to be unreasonably
withheld or delayed), without notice to any Credit Party or to any other Person
(other than Administrative Agent), any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, including Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by such Lender to or for the credit or
the account of any Credit Party against and on account of the obligations and
liabilities of any Credit Party to such Lender hereunder, including all claims
of any nature or description arising out of or connected hereto, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Term Loans or any other amounts due
hereunder shall have become due and payable pursuant to Section 2 and although
such obligations and liabilities, or any of them, may be contingent or
unmatured.
10.5. Amendments and Waivers.
(a) Requisite Lenders' Consent. Except as expressly provided otherwise
in the Intercreditor Agreement and subject to Sections 10.5(b) and 10.5(c), no
amendment, modification, termination or waiver of any provision of the Credit
Documents, or consent to any departure by any Credit Party therefrom, shall in
any event be effective without the written concurrence of the Requisite Lenders
provided, that Administrative Agent may, with the consent of Borrower only,
amend, modify or supplement this Agreement to cure any ambiguity, omission,
defect or inconsistency, so long as such amendment, modification or supplement
does not adversely affect the rights of any Lender.
(b) Affected Lenders' Consent. Without the written consent of each
Lender that would be affected thereby, no amendment, modification, termination,
or consent shall be effective if the effect thereof would:
(i) extend the scheduled final maturity of any Term Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment (but not
prepayment);
(iii) reduce the rate of interest on any Term Loan (other than
any waiver of any increase in the interest rate applicable to any Term Loan
pursuant to Section 2.9) or any fee or any premium payable hereunder;
(iv) extend the time for payment of any such interest or fees;
(v) reduce the principal amount of any Term Loan;
(vi) amend, modify, terminate or waive any provision of Section
2.17, this Section 10.5(b), Section 10.5(c) or any other provision of this
Agreement that expressly provides that the consent of all Lenders is required;
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(vii) amend the definition of "Requisite Lenders" or "Pro Rata
Share"; provided, with the consent of Requisite Lenders, additional extensions
of credit pursuant hereto may be included in the determination of "Requisite
Lenders" or "Pro Rata Share" on substantially the same basis as the Term Loan
Commitments and the Term Loans are included on the Closing Date;
(viii) release all or substantially all of the Collateral or all
or substantially all of the Guarantors from the Guaranty except as expressly
provided in the Credit Documents; or
(ix) consent to the assignment or transfer by any Credit Party of
any of its rights and obligations under any Credit Document.
(c) Agent Consents. No amendment, modification, termination or waiver
of any provision of the Credit Documents, or consent to any departure by any
Credit Party therefrom shall amend, modify, terminate or waive any provision of
Section 9 as the same applies to any Agent, or any other provision hereof as the
same applies to any Agent, in each case without the consent of such Agent.
(d) Execution of Amendments, etc. Administrative Agent may, but shall
have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.5 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by a
Credit Party, on such Credit Party.
10.6. Successors and Assigns; Participations.
(a) Generally. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of Lenders. No Credit Party's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by any Credit Party without the prior written consent of all Lenders.
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 and, to the extent expressly contemplated hereby,
Affiliates of each of Agents and Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b) Register. Borrower, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Term Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or Term
Loan shall be effective, in each case, unless and until recorded in the Register
following receipt of (x) a written or electronic confirmation of an assignment
issued by a Settlement Service pursuant to Section 10.6(d) (a "Settlement
Confirmation") or (y) an Assignment Agreement effecting the assignment or
transfer thereof, in each case, as provided in Section 10.6(d). Each assignment
shall be recorded in the Register on the Business Day the Settlement
Confirmation or Assignment Agreement is received by Administrative Agent, if
received by 12:00 noon New York City time, and on the following Business Day if
received after such time, prompt notice thereof shall be provided to Borrower
and a copy of such Assignment Agreement or Settlement Confirmation shall be
maintained, as applicable. The date of such recordation of a transfer shall be
referred to herein as the "Assignment Effective Date." Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be
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conclusive and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Term Loans.
(c) Right to Assign. Each Lender shall have the right at any time to
sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of its
Commitment or Term Loans owing to it or other Obligations (provided, however,
that each such assignment shall be of a uniform, and not varying, percentage of
all rights and obligations under and in respect of any Term Loan and any related
Commitments):
(i) to any Person meeting the criteria of clause (i) of the
definition of the term of "Eligible Assignee" upon the giving of notice to
Borrower and Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of "Eligible Assignee" upon giving of notice to Borrower
and Administrative Agent, provided, that each such assignment pursuant to this
Section 10.6(c)(ii) shall be in an aggregate amount of not less than $1,000,000
(or such lesser amount as may be agreed to by Borrower and Administrative Agent
or as shall constitute the aggregate amount of the Term Loan of the assigning
Lender) with respect to the assignment of Term Loans.
(d) Mechanics. Assignments of Term Loans by Lenders may be made via an
electronic settlement system acceptable to Administrative Agent as designated in
writing from time to time to Lenders by Administrative Agent (the "Settlement
Service"). Each such assignment shall be effected by the assigning Lender and
proposed assignee pursuant to the procedures then in effect under the Settlement
Service, which procedures shall be consistent with the other provisions of this
Section 10.6. Each assignor Lender and proposed assignee shall comply with the
requirements of the Settlement Service in connection with effecting any transfer
of Term Loans pursuant to the Settlement Service. Administrative Agent's and
Borrower's consent shall be deemed to have been granted pursuant to Section
10.6(c)(ii) with respect to any transfer effected through the Settlement
Service. Subject to the other requirements of this Section 10.6, assignments and
assumptions of Term Loans may also be effected by manual execution and delivery
to Administrative Agent of an Assignment Agreement. Initially, assignments and
assumptions of Term Loans shall be effected by such manual execution until
Administrative Agent notifies Lenders to the contrary. Assignments made pursuant
to the foregoing provision shall be effective as of the Assignment Effective
Date. In connection with all assignments there shall be delivered to
Administrative Agent such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver pursuant to Section
2.20(c). Notwithstanding anything herein or in any Assignment Agreement to the
contrary and (i) unless notice to the contrary is delivered to Lenders from
Administrative Agent or (ii) so long as no Default or Event of Default has
occurred and is continuing, payment to the assignor by the assignee in respect
of the settlement of an assignment of any Term Loan shall include such
compensation to the assignor as may be agreed upon by the assignor and the
assignee with respect to all unpaid interest which has accrued on such Term Loan
to but excluding the Assignment Effective Date. On and after the applicable
Assignment Effective Date, the applicable assignee shall be entitled to receive
all interest paid or payable with respect to the assigned Term Loan, whether
such interest accrued before or after the applicable Assignment Effective Date.
(e) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon succeeding to an interest in Term Loans,
as the case may be, represents and warrants as of the Closing Date or as of the
Assignment Effective Date that (i) it is an Eligible Assignee; (ii) it has
experience and expertise in the making of or investing in loans such as the
applicable Term Loans; and (iii) it will make or invest in Term Loans for its
own account in the ordinary course and without a view to distribution of such
Term Loans within the meaning of the Securities Act or the
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Exchange Act or other federal securities laws (it being understood that, subject
to the provisions of this Section 10.6, the disposition of such Term Loans or
any interests therein shall at all times remain within its exclusive control).
(f) Effect of Assignment. Subject to the terms and conditions of this
Section 10.6, as of the "Assignment Effective Date" (i) the assignee thereunder
shall have the rights and obligations of a "Lender" hereunder to the extent of
its interest in the Term Loans as reflected in the Register and shall thereafter
be a party hereto and a "Lender" for all purposes hereof; (ii) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned to the assignee, relinquish its rights (other than any rights
which survive the termination hereof under Section 10.8) and be released from
its obligations hereunder (and, in the case of an assignment covering all or the
remaining portion of an assigning Lender's rights and obligations hereunder,
such Lender shall cease to be a party hereto on the Assignment Effective Date;
provided, anything contained in any of the Credit Documents to the contrary
notwithstanding, such assigning Lender shall continue to be entitled to the
benefit of all indemnities hereunder as specified herein with respect to matters
arising out of the prior involvement of such assigning Lender as a Lender
hereunder); and (iii) if any such assignment occurs after the issuance of any
Note hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its applicable
Notes to Administrative Agent for cancellation, and thereupon Borrower shall
issue and deliver new Notes, if so requested by the assignee and/or assigning
Lender, to such assignee and/or to such assigning Lender, with appropriate
insertions, to reflect the outstanding Term Loans of the assignee and/or the
assigning Lender.
(g) Participations. Each Lender shall have the right at any time to
sell one or more participations to any Person (other than Holdings, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Commitments,
Term Loans or in any other Obligation. The holder of any such participation,
other than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or waiver that would (i)
extend the final scheduled maturity of any Term Loan or Note in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or fees thereon (except in connection with a waiver of applicability
of any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default shall not constitute a change in the terms of such
participation, and that an increase in any Term Loan shall be permitted without
the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under this Agreement or
(iii) release all or substantially all of the Collateral under the Collateral
Documents (except as expressly provided in the Credit Documents) supporting the
Term Loans hereunder in which such participant is participating. Borrower agrees
that each participant shall be entitled to the benefits of Sections 2.18(c),
2.19 and 2.20 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (c) of this Section; provided, (i)
a participant shall not be entitled to receive any greater payment under Section
2.19 or 2.20 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 Borrower's prior written consent
and (ii) a participant that would be a Non-US Lender if it were a Lender shall
not be entitled to the benefits of Section 2.20 unless Borrower is notified of
the participation sold to such participant and such participant agrees, for the
benefit of Borrower, to comply with Section 2.20 as though it were a Lender. To
the extent permitted by law, each participant also shall be entitled to the
benefits of Section 10.4 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.17 as though it were a Lender.
(h) Certain Other Assignments. In addition to any other assignment
permitted pursuant to this Section 10.6, any Lender may assign and/or pledge all
or any portion of its Term Loans,
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the other Obligations owed by or to such Lender, and its Notes, if any, to
secure obligations of such Lender including, without limitation, any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors and any operating circular issued by such Federal Reserve Bank;
provided, no Lender, as between Borrower and such Lender, shall be relieved of
any of its obligations hereunder as a result of any such assignment and pledge,
and provided further, in no event shall the applicable Federal Reserve Bank,
pledgee or trustee be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
10.7. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8. Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17, 9.3(b)
and 9.6 shall survive the payment of the Term Loans and the termination hereof.
10.9. No Waiver; Remedies Cumulative. No failure or delay on the part of
any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Credit Documents or any of the Hedge Agreements. Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
10.10. Marshalling; Payments Set Aside. Neither any Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Credit Party
or any other Person or against or in payment of any or all of the Obligations.
To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or any Agent or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
10.11. Severability. In case any provision in or obligation hereunder or
under any other Credit Document shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
10.12. Obligations Several; Independent Nature of Lenders' Rights. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of
90
any other Lender hereunder. Nothing contained herein or in any other Credit
Document, and no action taken by Lenders pursuant hereto or thereto, shall be
deemed to constitute Lenders as a partnership, an association, a joint venture
or any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and each Lender shall be
entitled to protect and enforce its rights arising out hereof and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.13. Headings. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT, UNLESS THE CONTEXT
REQUIRES OTHERWISE, REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT,
OR ANY OF THE OBLIGATIONS, SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE
WITH SECTION 10.1; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES THAT AGENTS AND LENDERS RETAIN
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
91
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17. Confidentiality. Each Lender shall hold all non-public information
regarding Borrower and its Subsidiaries and their businesses identified as such
by Borrower and obtained by such Lender pursuant to the requirements hereof in
accordance with such Lender's customary procedures for handling confidential
information of such nature, it being understood and agreed by Borrower that, in
any event, a Lender may make (i) disclosures of such information to Affiliates
of such Lender and to their agents and advisors (and to other persons authorized
by a Lender or Agent to organize, present or disseminate such information in
connection with disclosures otherwise made in accordance with this Section
10.17), (ii) disclosures of such information reasonably required by any bona
fide or potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation by such Lender of any Term
Loans or any participations therein or by any direct or indirect contractual
counterparties (or the professional advisors thereto) in Hedge Agreements
(provided, such counterparties and advisors are advised of and agree to be bound
by the provisions of this Section 10.17), (iii) disclosure to any rating agency
when required by it, provided that, prior to any disclosure, such rating agency
shall undertake in writing to preserve the confidentiality of any confidential
information relating to the Credit Parties received by it from any of Agents or
any Lender, and (iv) disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal or judicial
process; provided, unless specifically prohibited by applicable law or court
order, each Lender shall make reasonable efforts to notify Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition or
other routine examination of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information. Notwithstanding anything to the contrary set forth herein, each
party (and each of their respective employees, representatives or other agents)
may disclose to any and all persons, without limitations of any kind, the tax
treatment and tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions and other tax analyses) that
are provided to any such party relating to such tax treatment and tax structure.
However, any information relating to the tax treatment or tax structure shall
remain subject to the confidentiality provisions hereof (and the foregoing
sentence shall not apply) to the extent reasonably necessary to enable the
parties hereto, their respective Affiliates, and their and their respective
Affiliates' directors and employees to comply with applicable securities laws.
For this purpose, "tax structure" means any facts relevant to the federal income
tax treatment of the transactions contemplated by this Agreement but does not
include information relating to the identity of any of the parties hereto or any
of their respective Affiliates.
10.18. Usury Savings Clause.
(a) Credit Parties (Other than Canadian Subsidiaries). Notwithstanding
any other provision herein, in respect of each Credit Party other than a
Canadian Subsidiary, the aggregate interest rate charged with respect to any of
the Obligations, including all charges or fees in connection therewith deemed in
the nature of interest under applicable law shall not exceed the Highest Lawful
Rate. If the
92
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Term Loans made hereunder shall bear interest at the Highest
Lawful Rate until the total amount of interest due hereunder equals the amount
of interest which would have been due hereunder if the stated rates of interest
set forth in this Agreement had at all times been in effect. In addition, if
when the Term Loans made hereunder are repaid in full the total interest due
hereunder (taking into account the increase provided for above) is less than the
total amount of interest which would have been due hereunder if the stated rates
of interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, Borrower shall pay to Administrative Agent an
amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and Borrower to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Term Loans made
hereunder or be refunded to Borrower.
(b) Canadian Subsidiaries. If any provision of this Agreement or of
any of the other Credit Documents would obligate any Canadian Subsidiary to make
any payment of interest or other amount payable to any Agent or any Lender in an
amount or calculated at a rate which would be prohibited by law or would result
in a receipt by such Agent or such Lender of interest at a criminal rate (as
such terms are construed under the Criminal Code (Canada)) then, notwithstanding
such provisions, such amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or so result in a receipt by such Agent
or such Lender of interest at a criminal rate, such adjustment to be effected,
to the extent necessary, as follows: (1) firstly, by reducing the amount or rate
of interest required to be paid to such Agent or such Lender under Section 2.7,
and (2) thereafter, by reducing any fees, commissions, premiums and other
amounts required to be paid to such Agent or such Lender which would constitute
"interest" for purposes of Section 347 of the Criminal Code (Canada).
Notwithstanding the foregoing, and after giving effect to all adjustments
contemplated thereby, if an Agent or Lender shall have received an amount in
excess of the maximum permitted by that section of the Criminal Code (Canada),
such Canadian Subsidiary shall be entitled, by notice in writing to such Agent
or such Lender, to obtain reimbursement from such Agent or such Lender in an
amount equal to such excess and, pending such reimbursement, such amount shall
be deemed to be an amount payable by such Agent or such Lender such Canadian
Subsidiary. Any amount or rate of interest referred to in this Section 10.18
shall be determined in accordance with GAAP as an effective annual rate of
interest over the term that the applicable Loan remains outstanding on the
assumption that any charges, fees or expenses that fall within the meaning of
"interest" (as defined in the Criminal Code (Canada)) shall, if they relate to a
specific period of time, be pro-rated over that period of time and otherwise be
pro-rated over the period from the Closing Date to the Term Loan Maturity Date
and, in the event of a dispute, a certificate of a actuary appointed by
Administrative Agent shall be conclusive for the purposes of such determination.
10.19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
10.20. Effectiveness. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrower and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
10.21. Patriot Act. Each Lender and Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies Borrower that pursuant to the
requirements of the Patriot Act or other applicable
93
laws relating to money laundering and/or terrorist financing, it is required to
obtain, verify and record information that identifies Borrower, which
information includes the name and address of Borrower and other information that
will allow such Lender or Administrative Agent, as applicable, to identify
Borrower in accordance with the Patriot Act or other applicable laws relating to
money laundering and/or terrorist financing.
10.22. Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment Agreement
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
10.23. Joint and Several Liability. Notwithstanding any other provision
contained herein or in any other Credit Document, if a "secured creditor" (as
that term is defined under the Bankruptcy and Insolvency Act (Canada)) is
determined by a court of competent jurisdiction not to include a Person to whom
obligations are owed on a joint or joint and several basis, then any Canadian
Subsidiary's Obligations (and the Obligations of each other Credit Party with
respect thereto), to the extent such Obligations are secured, only shall be
several obligations and not joint or joint and several obligations.
10.24. Judgment Currency.
(a) If, for the purpose of obtaining or enforcing judgment against any
Credit Party in any court in any jurisdiction, it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section
10.24 referred to as the "Judgment Currency") an amount due under any Credit
Document in any currency (the "Obligation Currency") other than the Judgment
Currency, the conversion shall be made at the rate of exchange prevailing on the
Business Day immediately preceding the date of actual payment of the amount due,
in the case of any proceeding in the courts of any jurisdiction that will give
effect to such conversion being made on such date, or the date on which the
judgment is given, in the case of any proceeding in the courts of any other
jurisdiction (the applicable date as of which such conversion is made pursuant
to this Section 10.24 being hereinafter in this Section 10.24 referred to as the
"Judgment Conversion Date").
(b) If, in the case of any proceeding in the court of any jurisdiction
referred to in Section 10.24(a), there is a change in the rate of exchange
prevailing between the Judgment Conversion Date and the date of actual receipt
for value of the amount due, the applicable Credit Party or Parties shall pay
such additional amount (if any, but in any event not a lesser amount) as may be
necessary to ensure that the amount actually received in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of the Judgment Currency stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date. Any
amount due from any Credit Party under this Section 10.24(b) shall be due as a
separate debt and shall not be affected by judgment being obtained for any other
amounts due under or in respect of any of the Credit Documents.
(c) The term "rate of exchange" in this Section 10.24 means the rate
of exchange at which Administrative Agent, on the relevant date at or about
12:00 noon (New York time), would be prepared to sell, in accordance with
Administrative Agent's normal course foreign currency exchange practices, the
Obligation Currency against the Judgment Currency.
94
10.25. Limitations Act, 2002. Each of the parties hereto agree that any and
all limitation periods provided for in the Limitations Act, 2002 (Ontario), as
amended from time to time, shall be excluded from application to the Obligations
and any undertaking, covenant, indemnity or other agreement of any Credit Party
provided for in any Credit Document to which it is a party in respect thereof,
in each case to fullest extent permitted by such Act.
[Remainder of page intentionally left blank]
95
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
FEDDERS NORTH AMERICA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
FEDDERS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
▇▇▇▇▇▇▇ QUIET KOOL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
▇▇▇▇▇▇ COIL COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
COLUMBIA SPECIALTIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
ROTOREX COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
[SIGNATURE PAGE TO TERM LOAN AND GUARANTY AGREEMENT]
FEDDERS ADDISON COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
FEDDERS ISLANDAIRE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
ISLAND METAL FABRICATING INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
TRION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
ENVIRCO CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
FEDDERS INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
[SIGNATURE PAGE TO TERM LOAN AND GUARANTY AGREEMENT]
FEDDERS INVESTMENT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
FEDDERS HOLDING COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
HERRMIDIFIER COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
FEDDERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
[SIGNATURE PAGE TO TERM LOAN AND GUARANTY AGREEMENT]
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Administrative Agent, Collateral Agent Syndication
Agent and a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
[SIGNATURE PAGE TO TERM LOAN AND GUARANTY AGREEMENT]
APPENDIX A
TO TERM LOAN AND GUARANTY AGREEMENT
Term Loan Commitments
================================== =========================== =================
Lender Term Loan Commitment Pro
Rata Share
================================== =========================== =================
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. $50,000,000.00 100%
---------------------------------- --------------------------- -----------------
Total $50,000,000.00 100%
================================== =========================== =================
APPENDIX A
APPENDIX B
TO TERM LOAN AND GUARANTY AGREEMENT
Notice Addresses
FEDDERS NORTH AMERICA, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
FEDDERS CORPORATION
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ QUIET KOOL CORPORATION
▇▇▇▇▇▇ COIL COMPANY
COLUMBIA SPECIALTIES, INC.
ROTOREX COMPANY, INC.
FEDDERS ADDISON COMPANY, INC.
FEDDERS ISLANDAIRE, INC.
ISLAND METAL FABRICATING INC.
TRION, INC.
ENVIRCO CORPORATION
FEDDERS INTERNATIONAL, INC.
FEDDERS INVESTMENT CORPORATION
FEDDERS HOLDING COMPANY, INC.
HERRMIDIFIER COMPANY, INC.
FEDDERS, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
APPENDIX B-2
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
Administrative Agent's and Collateral Agent's Principal Office and as Lender:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: SBD Operations
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Email and for delivery of final financial statements
for posting: ▇▇▇.▇▇▇▇@▇▇.▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
APPENDIX B-3