EXHIBIT 10.1
FORM OF AMENDED AND RESTATED CREDIT AGREEMENT, AS AMENDED,
DATED AS OF OCTOBER 26, 2001
AMONG
PETCO ANIMAL SUPPLIES, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
AS JOINT LEAD ARRANGER, JOINT BOOK-RUNNER AND SOLE SYNDICATION AGENT
AND
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, AS
JOINT LEAD ARRANGER, JOINT BOOK-RUNNER AND SOLE
ADMINISTRATIVE AGENT
DOCUMENTATION AGENT:
GENERAL ELECTRIC CAPITAL CORPORATION
PETCO ANIMAL SUPPLIES, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS....................................................................2
1.1 Certain Defined Terms..........................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.....................................................................31
1.3 Other Definitional Provisions and Rules of Construction.......................31
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS....................................32
2.1 Commitments; Making of Loans; the Register; Optional Notes....................32
2.2 Interest on the Loans.........................................................39
2.3 Fees..........................................................................43
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of Proceeds of
Collateral and Payments Under Guaranties......................................44
2.5 Use of Proceeds...............................................................53
2.6 Special Provisions Governing Eurodollar Rate Loans............................53
2.7 Increased Costs; Taxes; Capital Adequacy......................................55
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.........................59
2.9 Substitute Lenders............................................................60
SECTION 3. LETTERS OF CREDIT.............................................................60
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.......................................................................60
3.2 Letter of Credit Fees.........................................................63
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit............64
3.4 Obligations Absolute..........................................................66
3.5 Indemnification; Nature of Issuing Lenders' Duties............................67
3.6 Increased Costs and Taxes Relating to Letters of Credit.......................68
3.7 Confirmation of Letters of Credit Issued Under Existing Credit Agreement......69
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SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT AND EFFECTIVENESS OF AGREEMENT......69
4.1 Conditions to Term Loans and Initial Revolving Loans and Swing Line Loans
under Existing Credit Agreement...............................................69
4.2 Conditions to Effectiveness of the Agreement..................................76
4.3 Conditions to All Loans.......................................................78
4.4 Conditions to Letters of Credit...............................................78
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES......................................79
5.1 Organization, Powers, Qualification, Good Standing, Business, Sponsors
and Subsidiaries..............................................................79
5.2 Authorization of Borrowing, etc...............................................80
5.3 Financial Condition...........................................................81
5.4 No Material Adverse Change; No Restricted Junior Payments.....................82
5.5 Title to Properties...........................................................82
5.6 Litigation; Adverse Facts.....................................................82
5.7 Payment of Taxes..............................................................83
5.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.....................................................................83
5.9 Governmental Regulation.......................................................83
5.10 Securities Activities.........................................................83
5.11 Employee Benefit Plans........................................................83
5.12 Certain Fees..................................................................84
5.13 Environmental Protection......................................................84
5.14 Employee Matters..............................................................85
5.15 Solvency......................................................................85
5.16 Matters Relating to Collateral................................................85
5.17 Related Agreements............................................................86
5.18 Disclosure....................................................................86
5.19 Intellectual Property.........................................................87
SECTION 6. AFFIRMATIVE COVENANTS OF COMPANY..............................................87
6.1 Financial Statements and Other Reports........................................87
6.2 Corporate Existence, etc......................................................92
6.3 Payment of Taxes and Claims; Tax Consolidation................................92
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6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds...............................................93
6.5 Inspection Rights.............................................................94
6.6 Compliance with Laws, etc.....................................................95
6.7 Environmental Disclosure......................................................95
6.8 Execution of Guaranty and Personal Property Collateral Documents by
Certain Subsidiaries and Future Subsidiaries..................................96
6.9 Matters Relating to Real Property Collateral..................................97
6.10 [Intentionally Omitted.]......................................................97
6.11 Distribution Centers Collateral Access Agreements.............................97
6.12 Cash Management System........................................................98
SECTION 7. NEGATIVE COVENANTS OF COMPANY.................................................98
7.1 Indebtedness..................................................................98
7.2 Liens and Related Matters....................................................100
7.3 Investments; Joint Ventures..................................................101
7.4 Contingent Obligations.......................................................103
7.5 Restricted Junior Payments...................................................104
7.6 Financial Covenants..........................................................104
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.............107
7.8 Consolidated Capital Expenditures............................................108
7.9 Sales and Lease-Backs........................................................109
7.10 Sale or Discount of Receivables..............................................109
7.11 Transactions with Sponsors and Affiliates....................................109
7.12 Conduct of Business..........................................................110
7.13 Amendments or Waivers of Related Agreements; Amendments of Documents
Relating to Certain Indebtedness; Limitation on Restrictions on
Amendments or Waivers of Loan Documents......................................110
7.14 Fiscal Year..................................................................111
SECTION 8. EVENTS OF DEFAULT............................................................111
8.1 Failure to Make Payments When Due............................................111
8.2 Default in Other Agreements..................................................111
8.3 Breach of Certain Covenants..................................................112
8.4 Breach of Warranty...........................................................112
8.5 Other Defaults Under Loan Documents..........................................112
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8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.........................112
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc...........................112
8.8 Judgments and Attachments....................................................113
8.9 Dissolution..................................................................113
8.10 Employee Benefit Plans.......................................................113
8.11 Change in Control............................................................113
8.12 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of
Obligations..................................................................114
8.13 Failure to Consummate Acquisition............................................114
8.14 Action Relating to Subordinated Indebtedness.................................114
SECTION 9. ADMINISTRATIVE AGENT.........................................................115
9.1 Appointment..................................................................115
9.2 Powers and Duties; General Immunity..........................................117
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.............................................................118
9.4 Right to Indemnity...........................................................118
9.5 Successor Agent and Swing Line Lender........................................119
9.6 Collateral Documents and Guaranties..........................................120
9.7 Co-Agents....................................................................120
SECTION 10. MISCELLANEOUS................................................................121
10.1 Assignments and Participations in Loans and Letters of Credit................121
10.2 Expenses.....................................................................123
10.3 Indemnity....................................................................124
10.4 Set-Off......................................................................125
10.5 Ratable Sharing..............................................................125
10.6 Amendments and Waivers.......................................................126
10.7 Independence of Covenants....................................................127
10.8 Notices......................................................................128
10.9 Survival of Representations, Warranties and Agreements.......................128
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative........................128
10.11 Marshalling; Payments Set Aside..............................................128
10.12 Severability.................................................................129
10.13 Obligations Several; Independent Nature of Lenders' Rights...................129
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10.14 Headings.....................................................................129
10.15 Applicable Law...............................................................129
10.16 Successors and Assigns.......................................................129
10.17 Consent to Jurisdiction and Service of Process...............................130
10.18 Waiver of Jury Trial.........................................................130
10.19 Confidentiality..............................................................131
10.20 Maximum Amount...............................................................131
10.21 Counterparts; Effectiveness; Effect if Agreement Does Not Become Effective...132
v
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TRANCHE B TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII-A FORM OF CLOSING DATE OPINION OF COMPANY COUNSEL
VIII-B FORM OF RESTATEMENT EFFECTIVE DATE OPINION OF COMPANY COUNSEL
IX-A FORM OF CLOSING DATE OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
IX-B FORM OF RESTATEMENT EFFECTIVE DATE OPINION OF O'MELVENY & ▇▇▇▇▇, LLP
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF CERTIFICATE RE NON-BANK STATUS
XII FORM OF CLOSING DATE COMPLIANCE CERTIFICATE
XIII FORM OF SUBSIDIARY GUARANTY
XIV FORM OF PLEDGE AND SECURITY AGREEMENT
XV FORM OF HOLDINGS PLEDGE AGREEMENT
XVI FORM OF MASTER CONFIRMATION
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SCHEDULES
1.1A NON-RECURRING COSTS
2.1 LENDERS' TRANCHE B TERM LOANS, REVOLVING COMMITMENTS AND PRO RATA SHARES
4.1E CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP
5.1A SUBSIDIARIES OF COMPANY
5.1E OPTIONS AND OTHER RIGHTS
5.2B CONFLICTS
5.6 LITIGATION
5.7 TAXES NOT FILED
5.8B MATERIAL CONTRACTS
5.11C CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
5.19A INTELLECTUAL PROPERTY
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
vii
PETCO ANIMAL SUPPLIES, INC.
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED
CREDIT AGREEMENT is dated as of
October 26, 2001, and entered into by and among PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation ("COMPANY"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "LENDER" and
collectively as "LENDERS"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as joint lead
arranger, joint book-runner and sole syndication agent (in such capacity,
"SYNDICATION AGENT") and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ("▇▇▇▇▇ FARGO"),
as joint lead arranger, joint book-runner and sole administrative agent for
Lenders (in such capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, pursuant to that certain
Credit Agreement dated as of
October 2, 2000, by and among Company, Lenders, Syndication Agent and
Administrative Agent (the "EXISTING
CREDIT AGREEMENT"), Lenders extended the
credit facilities set forth in the Existing
Credit Agreement to Company which
were used for the purposes of providing funds for (i) the Acquisition Financing
Requirements and (ii) working capital and other general purposes of Company and
its Subsidiaries, and issuing Letters of Credit for the purposes set forth
therein;
WHEREAS, the parties to the Existing
Credit Agreement desire
to amend and restate the Existing Credit Agreement in order to (i) provide for
the repayment in full of the Tranche A Term Loans under the Existing Credit
Agreement, (ii) reduce the principal amount of Tranche B Term Loans to
$195,000,000 and apply the principal amount so prepaid to the final installment
of principal payable on the Tranche B Term Loans, (iii) reduce the Revolving
Loan Commitments from $80,000,000 to $75,000,000 and (iv) provide for certain
other amendments as specified herein;
WHEREAS, it is the intention of Company, Syndication Agent and
Administrative Agent and each of the Lenders that this amendment and restatement
of the Existing Credit Agreement shall not constitute a refinancing of the Loans
outstanding on the Restatement Effective Date and that all Obligations hereunder
and under the other Loan Documents, shall continue to be secured by the grant to
Administrative Agent, on behalf of Lenders, of a First Priority Lien on the
Collateral and that the Subsidiary Guaranty previously executed by each
Subsidiary of the Company shall continue in full force in effect and that each
Subsidiary shall continue to secure all of the Obligations under the Subsidiary
Guaranty by reaffirming the grant to Administrative Agent, on behalf of Lenders,
of a First Priority Lien on the Collateral, and Company and the other Loan
Parties shall execute and deliver a Master Confirmation evidencing such
intention.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Lenders,
Syndication Agent and Administrative Agent agree as follows:
CREDIT AGREEMENT
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACQUISITION FINANCING REQUIREMENTS" means the aggregate of
all amounts necessary (i) to pay the Merger Consideration, (ii) to finance the
Retirement of Debt and (iii) to pay Transaction Costs.
"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 (rounded upwards, if necessary, to the nearest 1/100 of
1%) obtained by DIVIDING (i) the rate of interest equal to (a) the interest rate
per annum for deposits in Dollars in an amount approximately equal to the amount
of ▇▇▇▇▇ Fargo's Eurodollar Rate Loan and for a period approximately equal to
such Interest Period which appears on page 3750 of the Dow ▇▇▇▇▇ Telerate Screen
as of 11:00 A.M. (London time) two Business Days prior to the beginning of such
Interest Period for delivery on the first day of such Interest Period, or (b) if
such a rate does not appear on page 3750 of the Dow ▇▇▇▇▇ Telerate Screen, the
average (rounded upwards, if necessary, to the nearest 1/100 of 1%) of the rates
per annum at which Dollar deposits in immediately available funds are offered to
▇▇▇▇▇ Fargo in the London interbank market at or about 9:00 A.M. (Los Angeles
time) two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of ▇▇▇▇▇ Fargo's Eurodollar Rate Loan and for
a period approximately equal to such Interest Period BY (ii) a percentage equal
to 100% MINUS the stated maximum rate (expressed as a decimal) of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"ADMINISTRATIVE AGENT'S OFFICE" means (i) the office of
Administrative Agent and Swing Line Lender located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or (ii) such other office of
Administrative Agent and Swing Line Lender as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent and
Swing Line Lender to Company and each Lender.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means 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,
2
AMENDED AND RESTATED CREDIT AGREEMENT
means the possession, directly or indirectly, of the power 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.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term
in subsection 10.5.
"AGREEMENT" means this Amended and Restated Credit Agreement
dated as of October 26, 2001.
"ANNUALIZED" means (i) with respect to the Fiscal Quarter of
Company ending November 3, 2001, the applicable amount for such Fiscal Quarter
multiplied by four, (ii) with respect to the Fiscal Quarter of Company ending
February 2, 2002, the applicable amount for such Fiscal Quarter and the
immediately preceding Fiscal Quarter multiplied by two, and (iii) with respect
to the Fiscal Quarter of Company ending May 4, 2002 the applicable amount for
such Fiscal Quarter and the immediately preceding two Fiscal Quarters multiplied
by one and one-third.
"APPLICABLE BASE RATE MARGIN" means, as at any date of
determination, the percentage per annum set forth below opposite the applicable
Consolidated Total Leverage Ratio:
APPLICABLE BASE
CONSOLIDATED TOTAL LEVERAGE RATIO RATE MARGIN
--------------------------------- -----------
greater than or equal to 3.75:1.00 2.25 %
less than 3.75:1.00 2.00 %
but greater than or equal to 3.25:1.00
less than 3.25:1.00 1.75 %
but greater than or equal to 2.75:1.00
less than 2.75:1.00 1.50 %
but greater than or equal to 2.25:1.00
less than 2.25:1.00 1.00 %
; PROVIDED that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1 (xviii) for the
Fiscal Year ending February 2, 2002, the Applicable Base Rate Margin for
Revolving Loans that are Base Rate Loans shall be 2.00% per annum.
"APPLICABLE EURODOLLAR RATE MARGIN" means, as at any date of
determination, the percentage per annum set forth below opposite the applicable
Consolidated Total Leverage Ratio:
3
CONSOLIDATED TOTAL LEVERAGE APPLICABLE EURODOLLAR
RATIO RATE MARGIN
----- -----------
greater than or equal to 3.75:1.00 3.25 %
less than 3.75:1.00 3.00 %
but greater than or equal to 3.25:1.00
less than 3.25:1.00 2.75 %
but greater than or equal to 2.75:1.00
less than 2.75:1.00 2.50 %
but greater than or equal to 2.25:1.00
less than 2.25:1.00 2.00 %
; PROVIDED that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1(xviii) for the
Fiscal Year ending February 2, 2002, the Applicable Eurodollar Rate Margin for
Revolving Loans that are Eurodollar Rate Loans shall be 3.00% per annum.
"APPLIED AMOUNT" has the meaning assigned to that term in
subsection 2.4B(iv)(b).
"ASSET SALE" means the sale by Company or any of its
Subsidiaries to any Person other than Company or any wholly-owned Subsidiary of
(i) any of the outstanding Capital Stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of Company
or any of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries (other than (a) Inventory or
other assets sold in the ordinary course of business, (b) in connection with an
exchange of equipment or Inventory for like equipment or Inventory of
substantially equivalent value, (c) obsolete, worn out or surplus property sold
in the ordinary course of business, (d) the license of intellectual property in
the ordinary course of business, and (e) any other assets to the extent that the
aggregate value of such assets sold in any single transaction or related series
of transactions is equal to $1,000,000 or less during any Fiscal Year).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of EXHIBIT X annexed hereto.
"ASSUMED INDEBTEDNESS" means Indebtedness of a Person which
(i) is in existence at the time such Person becomes a Subsidiary of Company, or
(ii) is assumed in connection with an Investment in or acquisition of such
Person or of the assets of such Person, and has not been incurred or created by
such Person in connection with, or in anticipation or contemplation of, such
Person becoming a Subsidiary of Company or such Investment or acquisition.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
4
"BASE RATE" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of California or
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, any day that is a
Business Day described in clause (i) above and that is also a day for trading by
and between banks in Dollar deposits in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distribution of assets of, the issuing Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States or any state
thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's.
5
"CASUALTY INSURANCE" means insurance that protects the insured
against property loss or damage.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XI annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"CLASS" means, as applied to Lenders, each of the following
two classes of Lenders: (i) Lenders having Revolving Loan Exposure and (ii)
Lenders having Tranche B Term Loan Exposure.
"CLOSING DATE" means the date on which the initial Loans (as
that term is defined in the Existing Credit Agreement) were made and on which
the Existing Credit Agreement was executed and delivered, which date was October
2, 2000.
"CLOSING DATE COMPLIANCE CERTIFICATE" means a certificate
substantially in the form of EXHIBIT XII annexed hereto delivered to
Administrative Agent by Company on the Closing Date.
"COLLATERAL" means, collectively, all of the Company's and/or
its Subsidiaries' right, title and interest in and to the real, personal and
mixed (if any) property (including Capital Stock) in which Liens are purported
to be granted pursuant to the Collateral Documents as security for the
Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver,
mortgagee waiver, bailee letter or any similar acknowledgement or agreement of
any landlord or mortgagee in respect of any real property leased by any Loan
Party where any Collateral is located or any warehouseman or processor in
possession of any Inventory of any Loan Party, reasonably satisfactory to
Administrative Agent.
"COLLATERAL DOCUMENTS" means the Pledge and Security
Agreement, the Holdings Pledge Agreement, the Mortgages (if any) and all other
instruments or documents delivered by any Loan Party pursuant to the Existing
Credit Agreement, this Agreement or any of the other Loan Documents in order to
grant to Administrative Agent, on behalf of Lenders, a Lien on any real (if
any), personal or mixed (if any) property of that Loan Party as security for the
Obligations.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services by
Company or any of its Subsidiaries in the ordinary course of business of Company
or such Subsidiary.
"COMMITMENTS" means the commitments of Lenders to make Loans
as set forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
6
"COMPANY COMMON STOCK" means the common stock of Company, par
value $0.0001 per share.
"COMPANY PREFERRED STOCK" means the "12% Series B Junior
Redeemable Cumulative Preferred Stock" of the Company, par value $.01, and the
"14% Series A Senior Redeemable Exchangeable Cumulative Preferred Stock" of the
Company, par value $.01.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT VII annexed hereto delivered to Administrative Agent and to
Syndication Agent by Company pursuant to subsection 6.1(iv).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Company and its Subsidiaries)
by Company and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to fixed assets" reflected in the statements of
cash flows of Company and its Subsidiaries; PROVIDED, HOWEVER, that Consolidated
Capital Expenditures shall not include any Excluded Expenditures.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, EXCLUDING Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, EXCLUDING the current portion of Consolidated Total Funded
Debt.
"CONSOLIDATED EBITDA" means, for any period, the sum of the
amounts for such period, without duplication, of (i) Consolidated Net Income,
(ii) Consolidated Interest Expense plus any Excluded Non-Cash Accruals, (iii)
provisions for taxes based on income, (iv) total depreciation expense, (v) total
amortization expense, (vi) annual management fees paid to the Sponsors or their
Affiliates in accordance with the Management Agreement to the extent permitted
by this Agreement under clause (iii) of subsection 7.11, (vii) non-recurring
costs as set forth in SCHEDULE 1.1A annexed hereto, (viii) non-cash charges
relating to the exercise of options, (ix) Transaction Costs; (x) non-cash
write-downs taken for Petopia in an aggregate amount not to exceed the value of
such investment appearing on the Company's balance sheet as of the Closing Date;
(xi) losses (or minus gains) from foreign currency translation, (xii) customary
fees and professional expenses incurred as of the consummation of a Permitted
Acquisition, (xiii) non-cash dividends on Company Preferred Stock, (xiv)
settlements of certain shareholder lawsuits described in the proxy statement for
the Merger in an aggregate amount not exceeding $4,000,000, (xv) any historical
extraordinary non-recurring costs or expenses or other verifiable costs or
expenses incurred in connection with Permitted Acquisitions that will not
continue after the integration of the business acquired not to exceed $4,000,000
for such period; and (xvi) other extraordinary or non-recurring non-cash items
that do not require an accrual or reserve for future cash expenses to the extent
such items do not relate to items increasing Consolidated Net Income for any
prior period (in the case of clauses (ii) through (xvi) above, to the extent
subtracted in calculating Consolidated Net Income) LESS (y) other non-cash items
increasing Consolidated Net
7
Income and (z) net extraordinary gains increasing Consolidated Net Income, all
of the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"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 EBITDA and (b) the Consolidated Working
Capital Adjustment MINUS (ii) the sum, without duplication, of the amounts for
such period of (a) voluntary and scheduled repayments of Consolidated Total
Funded Debt (excluding repayments of Revolving Loans except to the extent the
Revolving Loan Commitments are permanently reduced in connection with such
repayments), (b) Consolidated Capital Expenditures (net of any proceeds of any
related financings with respect to such expenditures), (c) Consolidated Interest
Expense, (d) the provision for current taxes based on income of Company and its
Subsidiaries and payable in cash with respect to such period, (e) the aggregate
amount of permanent principal repayments of Indebtedness (other than Loans) of
Company and its Subsidiaries during such period, (f) repayments of the principal
component of Capital Leases during such period, (g) the aggregate amount of
Permitted Acquisitions made during such period by Company and its Subsidiaries,
less the amount of the proceeds of any financing incurred or assumed in
connection therewith, (h) expenditures made in connection with Company's
investment in Petcetera to the extent permitted by subsection 7.3(ii), and (i)
the aggregate amount of common stock of Company purchased by the Company during
such period to the extent permitted under this Agreement.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, as of the
last day of any Fiscal Quarter, the ratio of (i)(a) Consolidated EBITDA for the
four-Fiscal Quarter period ending on such date MINUS (b) Consolidated Capital
Expenditures for such four-Fiscal Quarter period to (ii) the sum of (a)
Consolidated Interest Expense for such four-Fiscal Quarter period, PLUS (b)
scheduled repayments of principal under all Indebtedness (including that portion
attributable to Capital Leases in accordance with GAAP but excluding payments of
principal made for such period under the Company's existing credit agreement
referred to in subsection 4.1I(i) hereof and payments of principal made for such
period on Tranche A Term Loans under the Existing Credit Agreement) of Company
or any of its Subsidiaries for such four-Fiscal Quarter period, all of the
foregoing as determined on a consolidated basis for Company and its Subsidiaries
in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP) of Company and its Subsidiaries on a consolidated basis
with respect to all outstanding Indebtedness of Company and its Subsidiaries,
including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Agreements (and MINUS net amounts received under Interest
Rate Agreements), but EXCLUDING, HOWEVER, any Excluded Non-Cash Accruals.
"CONSOLIDATED INTEREST EXPENSE COVERAGE RATIO" means, as of
the last day of any Fiscal Quarter, the ratio of (i) Consolidated EBITDA for the
four-Fiscal Quarter period ending on such date to (ii) Consolidated Interest
Expense for such period.
"CONSOLIDATED NET INCOME" means, for any period, the net
earnings (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single
8
accounting period determined in conformity with GAAP and before any reduction in
respect of preferred stock dividends paid through the issuance of additional
preferred stock (to the extent decreasing Consolidated Net Income); PROVIDED
that there shall be excluded (i) the earnings (or loss) of any Person (other
than a Subsidiary of Company) in which any other Person (other than Company or
any of its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to Company or any of
its Subsidiaries by such Person during such period, (ii) the earnings (or loss)
of any Person accrued prior to the date it becomes a Subsidiary of Company or is
merged into or consolidated with Company or any of its Subsidiaries or that
Person's assets are acquired by Company or any of its Subsidiaries, (iii) the
earnings of any Subsidiary of Company 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 or instrument applicable to that Subsidiary and (iv) any after-tax
gains or losses attributable to asset sales or returned surplus assets of any
Pension Plan.
"CONSOLIDATED PRO FORMA EBITDA" means, for any consecutive
four Fiscal Quarter period, (a) Consolidated EBITDA for such four Fiscal Quarter
period plus (b) for any business acquired during such four Fiscal Quarter
period, (i) Consolidated EBITDA of such acquired business determined as though
such business or operations were acquired as of the first day of such period by
Company and its Subsidiaries, plus (ii) any historical extraordinary
non-recurring costs or expenses or other verifiable costs or expenses that will
not continue after the integration and other expenses and cost reductions
reflected on a basis consistent with Regulation S-X promulgated by the
Securities and Exchange Commission minus (c) Consolidated EBITDA of all business
or operations divested during such four Fiscal Quarter period as though such
business were divested as of the first day of such period by Company and its
Subsidiaries.
"CONSOLIDATED PRO FORMA SENIOR LEVERAGE RATIO" means, as at
any date of determination, the ratio of (i) Consolidated Senior Debt as at such
date to (ii) Consolidated Pro Forma EBITDA for the most recently ended
four-Fiscal Quarter period; PROVIDED, HOWEVER, that for purposes of calculating
the Consolidated Pro Forma Senior Leverage Ratio, Consolidated Senior Debt with
respect to Revolving Loans shall be deemed to be the daily average amount of
Revolving Loans outstanding during the most recently ended Fiscal Quarter plus,
without duplication in such averaging, Revolving Loans outstanding on the last
day of such Fiscal Quarter incurred to make Permitted Acquisitions during that
Fiscal Quarter.
"CONSOLIDATED PRO FORMA TOTAL LEVERAGE RATIO" means, as at any
date of determination, the ratio of (i) Consolidated Total Funded Debt as at
such date to (ii) Consolidated Pro Forma EBITDA for the most recently ended four
Fiscal-Quarter period; PROVIDED, HOWEVER, that for purposes of calculating the
Consolidated Pro Forma Total Leverage Ratio, Consolidated Total Funded Debt with
respect to Revolving Loans shall be deemed to be the daily average amount of
Revolving Loans outstanding during the most recently ended Fiscal Quarter plus,
without duplication in such averaging, Revolving Loans outstanding on the last
day of such Fiscal Quarter incurred to make Permitted Acquisitions during that
Fiscal Quarter.
"CONSOLIDATED SENIOR DEBT" means, as at any date of
determination, the principal amount of all Indebtedness of Company and its
Subsidiaries, determined on a
9
consolidated basis in accordance with GAAP, except (i) the principal amount of
Subordinated Indebtedness and (ii) the amount of Contingent Obligations of
Company and its Subsidiaries described in clause (ii) of the definition of
Contingent Obligations.
"CONSOLIDATED TOTAL FUNDED DEBT" means, as at any date of
determination, the sum of (i) the aggregate stated balance sheet amount of all
Indebtedness of Company and its Subsidiaries (including that portion
attributable to Capital Leases in accordance with GAAP) and (ii) the aggregate
amount of Contingent Obligations of Company and its Subsidiaries described in
clause (ii) of the definition of Contingent Obligations contained herein, all as
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL LEVERAGE RATIO" means, as at any date of
determination, the ratio of (i) Consolidated Total Funded Debt as at such date
to (ii) Consolidated EBITDA for the most recently ended four-Fiscal Quarter
period; PROVIDED, HOWEVER, that for purposes of calculating the Consolidated
Total Leverage Ratio, Consolidated Total Funded Debt with respect to Revolving
Loans shall be deemed to be the daily average amount of Revolving Loans
outstanding during the most recently ended Fiscal Quarter.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess (or deficit) 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
Consolidated Working Capital as of the end of such period.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) 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 obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (1) 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 (2) 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 (1) or (2) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the lower of (x) an amount equal to the
stated or determinable principal amount of the primary obligation in respect of
which such Contingent Obligation is made and (y) the maximum
10
amount for which such Person incurring the Contingent Obligation may be liable
pursuant to the terms of the instrument embodying such Contingent Obligation,
unless such primary obligation and the maximum amount for which the Person
incurring such Contingent Obligation may be liable are not stated or
determinable, in which case the amount of such Contingent Obligation shall be
such Person's maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of Company who (i) was a member of such
Board of Directors immediately after consummation of the Merger or (ii) was
nominated for election or elected to such Board of Directors with the approval,
recommendation or endorsement of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or election.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material 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 other than those entered into
pursuant to the Existing Credit Agreement, this Agreement or the Loan Documents.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement.
"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.
"DOLLARS" and the sign "$" mean the lawful money of the United
States.
"DOMESTIC SUBSIDIARY" means a direct or indirect Subsidiary of
Company that is incorporated or organized under the laws of a state of the
United States of America.
"EARN-OUT OBLIGATIONS" means any unsecured contingent
liability of Company or any of its Subsidiaries owed to any seller in connection
with a Permitted Acquisition that (a) constitutes a portion of the purchase
price for such Permitted Acquisition but is not an amount certain on the date of
incurrence thereof and is not subject to any right of acceleration by such
seller and (b) is only payable upon the achievement of performance standards by
the Person or other property acquired in such Permitted Acquisition and in an
amount based upon such achievement provided that the maximum aggregate amount of
such liability shall be fixed at a specified amount or percentage on the date of
such Permitted Acquisition.
"ELIGIBLE ASSIGNEE" means (i) (a) a commercial bank organized
under the laws of the United States or any state thereof having a combined
capital and surplus of at least $100,000,000; (b) a savings and loan association
or savings bank organized under the laws of the United States or any state
thereof having a combined capital and surplus of at least $100,000,000; (c) a
commercial bank organized under the laws of any other country or a political
subdivision thereof having a combined capital and surplus of at least
$100,000,000; PROVIDED
11
that (1) such bank is acting through a branch or agency located in the United
States or (2) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; and (d) except with respect to an
assignment of Revolving Loans or Revolving Loan Commitments, any other Person
which is an "accredited investor" (as defined in Regulation D under the
Securities Act) which extends credit or buys loans as one of its businesses,
including insurance companies, mutual funds and lease financing companies; and
(ii) any Lender and any Affiliate of any Lender or, with respect to any Lender
that is a fund that invests in bank loans (except with respect to the assignment
of Revolving Loans or Revolving Loan Commitments), any other fund that invests
in bank loans and is advised or managed by the same investment advisor as such
Lender or by an Affiliate of such Lender; PROVIDED that no Affiliate of Company
shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"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 or (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity.
"ENVIRONMENTAL LAWS" means any and all current statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other requirements of governmental authorities relating to (i)
environmental matters, including those relating to any Hazardous Materials
Activity, or (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, applicable to Company or any of its Subsidiaries or any
Facility, including the Comprehensive Environmental Response, Compensation, and
Liability Act (42 ▇.▇.▇.▇▇. 9601 ET SEQ.), the Hazardous Materials
Transportation Act (49 ▇.▇.▇.▇▇. 1801 ET SEQ.), the Resource Conservation and
Recovery Act (42 ▇.▇.▇.▇▇. 6901 ET SEQ.), the Federal Water Pollution Control
Act (33 ▇.▇.▇.▇▇. 1251 ET SEQ.), the Clean Air Act (42 ▇.▇.▇.▇▇. 7401 ET SEQ.),
the Toxic Substances Control Act (15 ▇.▇.▇.▇▇. 2601 ET SEQ.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C.ss.136 ET SEQ.), the Oil
Pollution Act (33 ▇.▇.▇.▇▇. 2701 ET SEQ.) and the Emergency Planning and
Community Right-to-Know Act (42 ▇.▇.▇.▇▇. 11001 ET SEQ.), each as amended or
supplemented, any applicable analogous state or local statutes or laws.
"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 Company or any of
its Subsidiaries shall continue to be considered an ERISA
12
Affiliate of Company or such Subsidiary within the meaning of this definition
with respect to the period such entity was an ERISA Affiliate of Company or such
Subsidiary with respect to liabilities arising after such period for which
Company 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 or administrative procedure);
(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 Pension Plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, 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 material liability to Company, any of its
Subsidiaries or any of their respective ERISA 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
would constitute grounds under ERISA for the PBGC's termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Company, 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 Company, 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 material liability to Company,
any of its Subsidiaries or any of their respective ERISA Affiliates therefor, or
the receipt by Company, 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
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
material fines, 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; or (ix) 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 on the assets
of Company or any of its Subsidiaries.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
13
"EXCHANGE ASSETS" has the meaning assigned to that term in
subsection 2.4B(iii)(a).
"EXCHANGE RATE" means, on any date when an amount expressed in
a currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of the applicable Issuing Lender in the
New
York foreign exchange market for the purchase by such Issuing Lender (by cable
transfer) of such currency in exchange for Dollars at 12:00 Noon (
New York time)
one Business Day prior to such date, expressed as a number of units of such
currency per one Dollar.
"EXCLUDED EXPENDITURES" means, (i) expenditures to the extent
they are made with the proceeds of the issuance of Capital Stock of any Loan
Party or of any capital contribution to any Loan Party after the Closing Date or
with Net Casualty/Condemnation Proceeds, (ii) expenditures used for Permitted
Acquisitions and (iii) expenditures made in connection with Company's investment
in Petcetera and ▇▇▇▇▇ ▇▇▇▇▇ to the extent permitted by subsection 7.3(ii).
"EXCLUDED NON-CASH ACCRUALS" means (i) accruals for any
non-recurring financing costs related to the Merger, the related financings and
other transactions contemplated by the Loan Documents and the Related Agreements
and any amortization thereof during such period and (ii) any interest expense
not required to be paid currently in cash, except to the extent actually paid in
cash.
"EXISTING CREDIT AGREEMENT" has the meaning assigned to that
term in the Recitals.
"EXISTING SENIOR SUBORDINATED NOTES" means Company's
$120,000,000 in aggregate principal amount of Senior Subordinated Notes due
2010.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Company or any of its Subsidiaries
or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of
New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances and Liens permitted pursuant to subsections 7.2(iii) and 7.2(iv))
and (ii) such Lien is the only Lien (other than Permitted
14
Encumbrances and Liens permitted pursuant to subsections 6.9 and 7.2) to which
such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on the Fiscal Year End.
"FISCAL YEAR END" means, for any Fiscal Year, the Saturday
closest to January 31 of the following calendar year.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in
an area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means a direct or indirect Subsidiary of
Company which is incorporated or organized under the laws of any government or
sovereignty other than any state of the United States of America.
"FUNDING DATE" means the date of the funding of a Loan (but
not a date on which only continuations or conversions of existing Loans occur).
"FUNDING OFFICE" means (i) the office of The Chase Manhattan
Bank located at ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, or (ii) such other office
in the State of
New York as may from time to time hereafter be designated as
such in a written notice delivered by Company to Administrative Agent and Swing
Line Lender.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, in each case as the
same are applicable to the circumstances as of the date of determination.
"GSCP" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
"GOVERNMENT ACTS" has the meaning assigned to that term in
subsection 3.5A.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity,
15
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
"EP toxicity" or words of similar import under any applicable Environmental
Laws); (ii) any oil, petroleum, petroleum fraction or petroleum derived
substance; (iii) any drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil, natural
gas or geothermal resources; (iv) any radioactive materials; (v) any
asbestos-containing materials; (vi) urea formaldehyde foam insulation; (vii)
electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; and (viii) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority.
"HAZARDOUS MATERIALS ACTIVITY" means any past or current
activity, event or occurrence involving any Hazardous Materials, including the
use, manufacture, possession, storage, Release, threatened Release, discharge,
generation, transportation, processing, treatment, abatement, removal,
remediation, disposal 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 designed to hedge against fluctuations in interest rates or
currency values, respectively.
"HOLDINGS" means BD Recapitalization Holdings LLC, a Delaware
limited liability company.
"HOLDINGS MEMBERSHIP INTERESTS" means the membership interests
of Holdings.
"HOLDINGS PLEDGE AGREEMENT" means the Holdings Pledge
Agreement executed and delivered by Holdings on the Closing Date, substantially
in the form of EXHIBIT XV annexed hereto, as such Holdings Pledge Agreement may
thereafter be amended, supplemented or otherwise modified from time to time.
"INCREASED AMOUNT DATE" has the meaning assigned to that term
in subsection 2.1(A)(ii)(A).
"INDEBTEDNESS", as applied to any Person, means (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, and (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 to the extent such indebtedness is included as a liability
on the balance sheet of such Person in accordance with GAAP. Obligations under
Interest Rate Agreements and Currency Agreements constitute (1) in the case of
Hedge Agreements, Contingent Obligations, and (2) in all other cases,
Investments, and in neither case constitute Indebtedness.
16
"INDEMNIFIED LIABILITIES" has the meaning assigned to that
term in subsection 10.3.
"INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.
"INSURANCE EXCHANGE ASSETS" has the meaning assigned to that
term in subsection 2.4B(iii)(b).
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, the last Business Day of each of March, June, September and December
of each year, commencing on the first such date to occur after the first full
calendar quarter following the Closing Date, and (ii) with respect to any
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan; PROVIDED that in the case of each Interest Period of six months, "Interest
Payment Date" shall also include the date that is three months after the
commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVENTORY" means, with respect to any Person as of any date
of determination, all goods, merchandise and other personal property which are
then held by such Person for sale or lease, including raw materials and work in
process used in the production of goods held for sale or lease.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(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 contribution by
Company or any of its Subsidiaries to any other Person, 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, or (iv) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements. The amount of any Investment shall be the
original cost of such Investment PLUS the cost of all additions thereto,
17
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment MINUS any return of
capital with respect to such Investment.
"ISSUING LENDER" means, with respect to any Letter of Credit,
the Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
PROVIDED that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include Swing Line Lender unless the context otherwise requires;
PROVIDED that the term "Lenders", when used in the context of a particular
Commitment, shall mean Lenders having that Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lenders for the account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding PLUS (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B). For purposes of this definition, any amount
described in clause (i) or (ii) of the preceding sentence which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
"LGP INVESTORS" means Green Equity Investors III, L.P., a
Delaware limited partnership.
"LIEN" means any lien, mortgage, deed of trust, pledge,
assignment, security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any option, trust
or other preferential arrangement having the practical effect of any of the
foregoing.
"LOAN" or "LOANS" means one or more of the Tranche B Term
Loans, Revolving Loans or Swing Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Subsidiary Guaranty and the Collateral
Documents, each as may be amended from time to time.
18
"LOAN PARTY" means each of Company and any of its Subsidiaries
from time to time executing a Loan Document, and "LOAN PARTIES" means all such
Persons, collectively.
"MANAGEMENT AGREEMENT" means the Management Services
Agreement, dated as of October 2, 2000 by and among Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Partners, L.P., a Delaware limited partnership and TPG GenPar III, L.P.
"MARGIN DETERMINATION CERTIFICATE" means a Margin
Determination Certificate of Company delivered pursuant to 6.1(xvii) setting
forth in reasonable detail the calculation of the Consolidated Total Leverage
Ratio for the four-Fiscal Quarter period ending as of the last day of the Fiscal
Quarter immediately preceding the Fiscal Quarter in which such certificate is
delivered.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MASTER CONFIRMATION" means the Master Confirmation to be
delivered by Company and the other Loan Parties on the Restatement Effective
Date, substantially in the form of EXHIBIT XVI annexed hereto as it may be
amended, supplemented or otherwise modified from time to time.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to Company,
any event, circumstance, change, condition, development or occurrence either
individually or in the aggregate with all other events, circumstances, changes,
conditions, developments or occurrences, resulting in or reasonably likely to
result in a material adverse effect on (i) the business, results of operations,
financial condition, or prospects of Company and its Subsidiaries, taken as a
whole or (ii) the ability of the Loan Parties to perform, or the ability of
Administrative Agent or Lenders to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.
"MATERIAL SUBSIDIARY" means each Subsidiary of Company now
existing or hereafter acquired or formed by Company which, on a consolidated
basis for such Subsidiary and its Subsidiaries, (i) for the most recent Fiscal
Year accounted for more than 5% of the consolidated revenues of Company and its
Subsidiaries or (ii) as at the end of such Fiscal Year, was the owner of more
than 5% of the consolidated assets of Company and its Subsidiaries.
"MAXIMUM AMOUNT" has the meaning assigned to that term in
subsection 10.20A.
"MAXIMUM EXPENDITURE AMOUNT" has the meaning assigned to that
term in subsection 7.8.
"MAXIMUM FOREIGN INVESTMENT AMOUNT" has the meaning assigned
to that term in subsection 7.3(ii).
19
"MAXIMUM MANAGEMENT FEES" has the meaning assigned to that
term in subsection 7.11.
"MERGER" means the merger of MergerSub with and into the
Company pursuant to the Merger Agreement, with Company as the surviving
corporation.
"MERGER AGREEMENT" means the Agreement and Plan of Merger
dated as of May 17, 2000 by and among Company and MergerSub, as such agreement
may be amended from time to time to the extent permitted under this Agreement.
"MERGER CONSIDERATION" means the payment of $22.00 for each
share of Company Stock acquired in the Merger for an aggregate payment of
approximately $488.1 million (net of proceeds from exercise of options).
"MERGERSUB" means BD Recapitalization Corp., a Delaware
corporation and wholly owned subsidiary of Holdings.
"MORTGAGE" means a security instrument (whether designated as
a deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, in such form as may be approved by Administrative Agent in its
reasonable discretion, in each case with such changes thereto as may be
appropriate based on local laws or customary local mortgage or deed of trust
practices.
"MORTGAGED PROPERTY" has the meaning assigned to that term in
subsection 6.9.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, 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 from such Asset Sale, net of any bona fide direct
costs incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset
Sale, (ii) payment of the outstanding principal amount of, premium or penalty,
if any, and interest on any Indebtedness (other than the Loans) that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale, and (iii) reasonable
amounts to be provided as a reserve, in accordance with GAAP, against any
liabilities associated with such Asset Sale.
"NET DEBT SECURITIES PROCEEDS" has the meaning assigned to
that term in subsection 2.4B(iii)(c).
"NET EQUITY SECURITIES PROCEEDS" has the meaning assigned to
that term in subsection 2.4B(iii)(d).
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by Company or any of its Subsidiaries and not payable to
any third party
20
(other than Administrative Agent as loss payee) pursuant to any Contractual
Obligation (i) under any business interruption or Casualty Insurance policy in
respect of a covered loss thereunder or (ii) as a result of the taking of any
assets of Company 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, in each
case net of any actual and reasonable documented costs incurred by Company or
any of its Subsidiaries in connection with the adjustment or settlement of any
claims of Company or such Subsidiary in respect thereof.
"NET PROCEEDS AMOUNT" has the meaning assigned to that term in
subsection 2.4B(iii)(f).
"NEW SENIOR SUBORDINATED NOTE INDENTURE" means that certain
Indenture dated as of October 23, 2001 among Company, the guarantors party
thereto and ▇▇▇▇▇▇▇ Sachs & Co., as Initial Purchaser, pursuant to which the
Senior Subordinated Notes are issued, as such Senior Subordinated Note Indenture
may be amended from time to time to the extent permitted under subsection 7.13B.
"NEW SENIOR SUBORDINATED NOTES" means the $200,000,000 in
aggregate principal amount of 10.75% Senior Subordinated Notes Due 2011 of
Company issued pursuant to the Senior Subordinated Note Indenture and any
exchange notes issued in replacement therefor.
"NEW TRANCHE B TERM LOAN COMMITMENTS" has the meaning assigned
to that term in subsection 2.1(A)(ii).
"NEW TRANCHE B TERM LOAN LENDER" has the meaning assigned to
that term in subsection 2.1(A)(ii)(B).
"NEW TRANCHE B TERM LOANS" has the meaning assigned to that
term in subsection 2.1(A)(ii)(A).
"NON-US LENDER" has the meaning assigned to that term in
subsection 2.7B(iii).
"NOTES" means one or more of the Tranche B Term Notes,
Revolving Notes or Swing Line Note or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form
of EXHIBIT I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of EXHIBIT II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of EXHIBIT III annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 3.1B(i).
21
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Administrative Agent, Lenders or any of
them under the Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification or
otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by one of its chief
executive officer, chief financial officer, president, treasurer, secretary,
controller or its vice president-finance; PROVIDED that every Officer's
Certificate with respect to the compliance with a condition precedent to the
making of any Loans hereunder shall include (i) a statement that the officer
making or giving such Officer's Certificate has read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signer, such signer has made or has
caused to be made such examination or investigation as is necessary to enable
such signer to express an informed opinion as to whether or not such condition
has been complied with, and (iii) a statement as to whether, in the opinion of
the signer, such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
under which such Person is lessee or sublessee (including leases that may be
terminated by the lessee at any time) of any property (whether real, personal or
mixed) that is not a Capital Lease.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation and its bylaws, (ii)
with respect to any limited partnership, its certificate of limited partnership
and its partnership agreement, (iii) with respect to any general partnership,
its partnership agreement, (iv) with respect to any limited liability company,
its articles or certificate of organization and its operating agreement and (v)
with respect to any other entity, its equivalent organizational, governing
documents.
"PAYMENT OFFICE" means (i) the office of Citibank, N.A.
located in
New York,
New York, for the account of ▇▇▇▇▇ Fargo Bank, N.A., as
Administrative Agent or (ii) such other office in the State of
New York of
Administrative Agent and Swing Line Lender as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent and
Swing Line Lender to Company and each Lender.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means 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.
"PERMITTED ACQUISITION" means the acquisition of a business
(whether through the purchase of assets or of shares of Capital Stock) by
Company or any of its wholly-owned Subsidiaries which is in a line of business
similar or related to the lines of business of Company and its Subsidiaries;
PROVIDED that (i) (a) the aggregate total consideration (including cash purchase
price, deferred or financed purchase price and the assumption of Indebtedness,
including Assumed Indebtedness, and other liabilities) for Permitted
Acquisitions funded with the proceeds of equity contributions from the Sponsors
shall not exceed $15,000,000 for each Fiscal Year, and (b) the aggregate total
consideration (including cash purchase price, deferred or
22
financed purchase price and the assumption of Indebtedness, including Assumed
Indebtedness, and other liabilities) for Permitted Acquisitions made after the
date of this Agreement shall not exceed $13,000,000 for each Fiscal Year
(excluding Permitted Acquisitions covered by clause (a) above and excluding the
acquisition of Petcetera to the extent Company's Investment therein is permitted
by subsection 7.3(ii)) plus up to an additional amount (the "EXCESS ACQUISITION
AMOUNT") not exceeding $10,000,000 for such Fiscal Year; PROVIDED that the
Excess Acquisition Amount shall reduce the Maximum Expenditure Amount for such
Fiscal Year by an equal amount; (ii) reasonably promptly following the
consummation of such Permitted Acquisition, Company shall have complied with the
provisions of subsections 6.8 and 6.9 with respect thereto to the extent
applicable, (iii) immediately prior to, and after giving effect thereto, no
Event of Default shall have occurred and be continuing or would result
therefrom, (iv) all transactions in connection therewith shall be consummated,
in all material respects, in accordance with all applicable laws and in
conformity with all applicable Governmental Authorizations, (v) in the case of
the acquisition of capital stock, at least 85% of the Capital Stock (except for
any such Securities in the nature of director's qualifying shares required
pursuant to applicable law) acquired or otherwise issued by such Person or any
newly formed Subsidiary of Company in connection with such acquisition shall be
owned by Company or a Subsidiary Guarantor thereof, and (vi) any Person or
assets so acquired shall be located exclusively in the United States or Canada.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim):
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory or contractual Liens of landlords,
statutory Liens of banks and rights of set-off, statutory Liens of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the ordinary
course of business (a) for amounts not yet overdue or (b) for amounts
that are overdue and that (in the case of any such amounts overdue for
a period in excess of 5 days) are being contested in good faith by
appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have
been made for any such contested amounts, and (2) in the case of a Lien
with respect to any material portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iii) Liens incurred or deposits made 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), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any material portion of the Collateral on account thereof;
23
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral Documents and
not interfering in any material respect with the ordinary conduct of
the business of Company or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(vi) 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 Company or any of its
Subsidiaries or result in a material diminution in the value of any
Collateral;
(vii) any (a) interest or title of a lessor or sublessor
under any lease not prohibited by this Agreement, (b) Lien or
restriction that the interest or title of such lessor or sublessor may
be subject to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any Lien or restriction referred to in
the preceding clause (b);
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) 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;
(x) any zoning, land use 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;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries;
(xii) licenses of patents, trademarks and other
intellectual property rights granted by Company or any of its
Subsidiaries in the ordinary course of business and not interfering in
any material respect with the ordinary conduct of the business of
Company or such Subsidiary;
(xiii) Liens securing Assumed Indebtedness:
(xiv) Liens in favor of a banking institution arising as a
matter of law encumbering deposits (including the right of set-off)
held by such banking institutions incurred in the ordinary course of
business and which are within the general parameters customary in the
banking industry; and
24
(xv) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for sale of goods
entered into by the Company or any of its Subsidiaries in the ordinary
course of business.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited 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 governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PETCETERA" means Canadian Petcetera Limited Partnership, a
Canadian limited partnership and its successors.
"PETOPIA" means ▇▇▇▇▇▇▇.▇▇▇ or any successor E-commerce
business.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement executed and delivered by Company on the Closing Date granting a
security interest in substantially all Company's tangible and intangible assets
and pledging 100% of the shares in its Domestic Subsidiaries and 66% of the
shares of its first-tier Foreign Subsidiaries (limited to 60% in the case of
Canadian Subsidiaries) or any Pledge and Security Agreement to be executed and
delivered by any Subsidiary Guarantor from time to time thereafter in accordance
with subsection 6.8, in each case substantially in the form of EXHIBIT XIV
annexed hereto, as such Pledge and Security Agreement may be amended,
supplemented or otherwise modified from time to time.
"PLEDGED COLLATERAL" means, collectively, the "Pledged
Collateral" as defined in the Pledge and Security Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate most recently announced by ▇▇▇▇▇
Fargo at its principal office in San Francisco from time to time as its "Prime
Rate." The Prime Rate is one of ▇▇▇▇▇ Fargo's base rates and serves as the basis
upon which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as ▇▇▇▇▇ Fargo may
designate. ▇▇▇▇▇ Fargo or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate. Any change in the
interest rate resulting from a change in such Prime Rate shall become effective
as of 12:01 A.M. (San Francisco time) of the Business Day on which each change
in Prime Rate is announced by ▇▇▇▇▇ Fargo.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or 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,
(ii) with respect to all payments, computations and other matters relating to
the Revolving Loan Commitment or the Revolving Loans of any Lender or any
Letters of Credit issued or participations therein purchased by any Lender or
any participations in
25
any Swing Line Loans purchased by any Lender, the percentage obtained by
dividing (a) the Revolving Loan Exposure of that Lender by (b) the aggregate
Revolving Loan Exposure of all Lenders, and (iii) for all other purposes with
respect to each Lender, the percentage obtained by dividing (a) the sum of the
Term Loan Exposure of that Lender plus the Revolving Loan Exposure of that
Lender by (b) the sum of the aggregate Term Loan Exposure of all Lenders plus
the aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The initial Pro Rata Share of each Lender for purposes of each
of clauses (i), (ii) and (iii) of the preceding sentence is set forth opposite
the name of that Lender in Schedule 2.1 annexed hereto.
"PROCEEDINGS" has the meaning assigned to that term in
subsection 6.1(x).
"REFINANCINGS" means, with respect to any Indebtedness, any
Indebtedness of Company or any of its Subsidiaries issued in exchange for, or
the net proceeds of which are used to refinance, other Indebtedness of any such
Persons; PROVIDED, HOWEVER, that the principal amount of such Refinancings does
not exceed the principal amount, plus accrued interest (if any), of the
Indebtedness so refinanced (plus the amount of reasonable fees and expenses
incurred in connection therewith).
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in subsection 2.1A(iv).
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means, collectively the Merger Agreement,
the New Senior Subordinated Note Indenture and the New Senior Subordinated
Notes.
"RELATED PARTY" with respect to any Sponsor means (i) any
controlling stockholder of such Sponsor, any Subsidiary of such Sponsor or any
general partner of such Sponsor, and (ii) any Affiliate of such Sponsor and any
investment fund or investment partnership managed by any Person that is, or is
an Affiliate of, such Sponsor.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUISITE CLASS LENDERS" means, at any time of determination,
(i) for the Class of Lenders having Tranche B Term Loan Exposure, Lenders having
or holding more than 50% of the sum of aggregate Tranche B Term Loan Exposure of
all Lenders and (ii) for the Class of
26
Lenders having Revolving Loan Exposure, Lenders having or holding more than 50%
of the sum of the aggregate Revolving Loan Exposure of all Lenders.
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the sum of the aggregate Tranche B Term Loan Exposure of all Lenders and
Revolving Loan Exposure of all Lenders.
"RESTATEMENT EFFECTIVE DATE" means the date on or before
October 26, 2001 on which the conditions to effectiveness set forth in
subsection 4.2 are satisfied.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares 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 Company now or hereafter
outstanding, except any such payment payable solely in shares of stock, (iii)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock of
Company now or hereafter outstanding, and (iv) 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, any Subordinated Indebtedness, except
any such payment payable solely in shares of stock or pay-in-kind securities.
For the avoidance of doubt, payments under the Management Agreement shall not
constitute Restricted Junior Payments.
"RETIREMENT OF DEBT" means the repayment on the Closing Date
of all existing Indebtedness of Company and its Subsidiaries other than
approximately $20,000,000 of Capital Leases and other obligations.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make Revolving Loans to Company pursuant to subsection 2.1A(iii), and
"REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means October 2,
2006.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender PLUS (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage
in respect of all Letters of Credit issued by that Lender (in each case net of
any participations purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) PLUS (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit PLUS (d) in the case of
Swing Line Lender, the aggregate outstanding principal amount of all Swing Line
Loans (net of any participations therein purchased by other Lenders) PLUS (e)
the aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans.
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"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(iii).
"REVOLVING NOTES" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Revolving Loans of any Lenders,
substantially in the form of EXHIBIT V annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"SECURITIES" means any stock, shares, partnership interests,
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.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (i) (a) the then fair saleable value of the property
of such Person is (1) greater than the total amount of liabilities of such
Person (including its expected obligations in respect of contingent liabilities)
and (2) not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become absolute and
matured considering all financing alternatives, potential asset sales and rights
against co-obligors available to such Person; (b) such Person's capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (c) such Person does not intend to incur, or believe that it
will incur, debts beyond its ability to pay such debts as they become due; and
(ii) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
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.
"SPONSOR" means either the LGP Investors or Affiliates of TPG
Partners III, L.P., and "SPONSORS" means both such groups, collectively.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument; PROVIDED that Standby Letters of Credit may be issued for
any purpose other than to support trade payables.
"SUBORDINATED INDEBTEDNESS" means the Indebtedness evidenced
by the New Senior Subordinated Notes and any other Indebtedness of Company or
its Subsidiaries subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in form
and substance reasonably satisfactory to Administrative Agent.
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"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association 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.
"SUBSIDIARY GUARANTOR" means any Domestic Subsidiary of
Company that executes and delivers a counterpart of the Subsidiary Guaranty on
the Closing Date or from time to time after the Closing Date pursuant to
subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty to be
executed and delivered by Domestic Subsidiaries of Company on the Closing Date
or from time to time after the Closing Date in accordance with subsection 6.8,
substantially in the form of EXHIBIT XIII annexed hereto, as such Subsidiary
Guaranty may hereafter be amended, supplemented or otherwise modified from time
to time.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to
that term in subsection 9.1B.
"SWING LINE LENDER" means ▇▇▇▇▇ Fargo, or any Person serving
as a successor Administrative Agent hereunder, in its capacity as Swing Line
Lender hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing
Line Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iv).
"SWING LINE LOANS" means the Loans made by Swing Line Lender
to Company pursuant to subsection 2.1A(iv).
"SWING LINE NOTE" means any promissory note of Company issued
pursuant to subsection 2.1E to evidence the Swing Line Loans of Swing Line
Lenders, substantially in the form of EXHIBIT VI annexed hereto, as it may be
amended, supplemented or otherwise modified from time to time.
"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholdings of any nature imposed,
levied, collected, withheld or assessed in respect of any payment hereunder or
under the Notes by any Governmental Authority; PROVIDED that "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
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
29
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 lending office).
"TCW PARTIES" means those investment companies managed by TCW
or its Affiliates.
"TERM LOAN EXPOSURE" means the Tranche B Term Loan Exposure.
"TERM LOANS" means the Tranche B Term Loans.
"TITLE COMPANY" means one or more title insurance companies
reasonably satisfactory to Administrative Agent.
"TPG INVESTORS" means TPG Partners III, L.P., TPG Parallel
III, L.P., TPG Dutch Parallel, C.V., TPG Investors III, L.P., FOF Partners III,
L.P., FOF Partners III-B, L.P.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing the applicable Issuing
Lender for any amount drawn under any Letter of Credit but not yet so applied)
PLUS (ii) the aggregate principal amount of all outstanding Swing Line Loans
PLUS (iii) the Letter of Credit Usage.
"TRANCHE A TERM LOANS" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(i) of the Existing Credit Agreement.
"TRANCHE A TERM NOTES" means any promissory notes of Company
issued pursuant to subsection 2.1E of the Existing Credit Agreement to evidence
the Tranche A Term Loans of any Lenders.
"TRANCHE B TERM LOAN EXPOSURE" means the outstanding principal
amount of the Tranche B Term Loan of that Lender.
"TRANCHE B TERM LOANS" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(ii) of the Existing Credit Agreement and
continued hereunder and any New Tranche B Term Loans.
"TRANCHE B TERM NOTES" means any promissory notes of Company
issued pursuant to subsection 2.1E to evidence the Tranche B Term Loans of any
Lenders, substantially in the form of EXHIBIT IV annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"TRANSACTION COSTS" means the fees, costs and expenses
payable or reimbursable by Company or any of its Subsidiaries in connection
with the transactions contemplated by the Loan Documents and the Related
Agreements and the refinancing of the Existing Senior Subordinated Notes and
the transactions contemplated by the Limited Waiver, Consent and Amendment
Regarding Initial Public Offering dated as of February 1, 2002.
30
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"WAIVABLE MANDATORY PREPAYMENT" has the meaning assigned to
that term in subsection 2.4B(iv)(c).
"WAIVABLE VOLUNTARY PREPAYMENT" has the meaning assigned to
that term in subsection 2.4B(iv)(a).
"▇▇▇▇▇ FARGO" has the meaning assigned to that term in the
introduction to this Agreement.
"YUKON" means 17187 Yukon Inc., a Yukon (Canada) corporation.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, 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 Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 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 subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
C. The use in any of the Loan Documents 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 nonlimiting 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.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; OPTIONAL NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, each Lender
31
hereby severally agrees to make or maintain the Loans described in subsections
2.1A(ii) and 2.1A(iii) and Swing Line Lender hereby agrees to make the Loans
described in subsection 2.1A(iv).
(i) TRANCHE A TERM LOANS. Each Lender, which had a
"Tranche A Term Loan Commitment" under the Existing Credit Agreement,
loaned its ratable share of $70,000,000 on the Closing Date. All
Tranche A Term Loans made under the Existing Credit Agreement shall be
repaid in full on the Restatement Effective Date.
(ii) TRANCHE B TERM LOANS. Each Lender, which had a
Tranche B Term Loan Commitment under the Existing Credit Agreement on
the Closing Date, loaned to Company its Pro Rata Share of $200,000,000
in Tranche B Loans under the Existing Credit Agreement. Tranche B Term
Loans shall be paid on the Restatement Effective date to the extent
necessary to reduce the aggregate principal amount thereof to
$195,000,000 and shall thereafter continue to be maintained under and
governed by this Agreement. The amount of each Lender's Tranche B Term
Loans to be outstanding on the Restatement Effective Date is set forth
opposite its name on Schedule 2.1 annexed hereto.
Company may by written notice to Administrative Agent elect to
request an increase to the existing Tranche B Term Loan Commitments
("NEW TRANCHE B TERM LOAN COMMITMENTS") by an amount not in excess of
$30,000,000 in the aggregate. Each such notice shall specify (A) the
date (each, an "INCREASED AMOUNT DATE") on which Company proposes that
the New Tranche B Term Loan Commitments shall be effective and that
Loans made pursuant to the New Tranche B Term Loan Commitments ("NEW
TRANCHE B TERM LOANS") be issued, which shall be a date not less than
10 Business Days after the date on which such notice is delivered to
Administrative Agent and (B) the identity of each Lender or other
Person (each, a "NEW TRANCHE B TERM LOAN LENDER") to whom Company
proposes any portion of such New Tranche B Term Loan Commitments shall
be allocated and the amounts of such allocations; PROVIDED that such
New Tranche B Term Loan Commitments shall not be made available to
Company until after the Agents shall have declared that the syndication
of the Commitments has been successfully completed and unless Requisite
Lenders shall have consented to the making of the New Tranche B Term
Loans; PROVIDED FURTHER that any Lender or other Person approached to
provide all or a portion of the New Tranche B Term Loan Commitments may
elect or decline, in its sole discretion, to provide a New Tranche B
Term Loan Commitment. Company hereby appoints Syndication Agent and
Administrative Agent as sole agents with respect to the syndication of
the New Tranche B Term Loans. Such New Tranche B Term Loan Commitments
shall be come effective and any such New Tranche B Term Loans shall be
made as of such Increased Amount Date; PROVIDED that (1) no Event of
Default or Potential Event of Default shall exist on such Increased
Amount Date before or after giving effect to such New Tranche B Term
Loan Commitments; (2) both before and after giving effect to the making
of any New Tranche B Term Loans each of the conditions set forth in
Section 4.3 shall be satisfied; (3) each increase in the New Tranche B
Term Loan Commitments shall be effected pursuant to one or more joinder
agreements in form and substance satisfactory to Agents, executed and
delivered to Administrative Agent, and each shall be recorded in the
32
Register; (4) Company shall make any payments of fees required by the
New Tranche B Term Loan Lenders in connection with the New Tranche B
Term Loan Commitments; and (5) Company shall deliver or cause to be
delivered any legal opinions or other documents reasonably requested by
Administrative Agent in connection with any such transaction. On any
Increased Amount Date on which any New Tranche B Term Loan Commitments
are effective, subject to the satisfaction of the foregoing terms and
conditions, each New Tranche B Term Loan Lender shall make a New
Tranche B Term Loan to Company in an amount equal to its New Tranche B
Term Loan Commitment. Administrative Agent shall notify the Lenders
promptly upon receipt of Company's notice of each Increased Amount Date
and in respect thereof the New Tranche B Term Loan Commitments. The
terms and provisions of the New Tranche B Term Loans and New Tranche B
Term Loan Commitments shall be identical to the Tranche B Term Loans
and shall be deemed Tranche B Term Loans for all purposes of this
Agreement.
(iii) REVOLVING LOANS. Each Lender severally agrees,
subject to the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time to
time, to lend to Company from time to time during the period from the
Closing Date to but excluding the Revolving Loan Commitment Termination
Date an aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Revolving Loan Commitments to be used for the
purposes identified in subsection 2.5B. The original amount of the
Revolving Loan Commitments under the Existing Credit Agreement was
$80,000,000 and on the Restatement Effective Date the aggregate amount
of the Revolving Loan Commitments shall be reduced to $75,000,000 and
each Lender's Revolving Loan Commitment as of the Restatement Effective
Date is set forth opposite its name on SCHEDULE 2.1 annexed hereto;
PROVIDED that the Revolving Loan Commitments of Lenders shall be
adjusted to give effect to any assignments of the Revolving Loan
Commitments pursuant to subsection 10.1B; and PROVIDED FURTHER that the
amount of the Revolving Loan Commitments shall be reduced from time to
time by the amount of any reductions thereto made pursuant to
subsections 2.4B(ii) and 2.4B(iii). Each Lender's Revolving Loan
Commitment shall expire on the Revolving Loan Commitment Termination
Date and all Revolving Loans and all other amounts owed hereunder with
respect to the Revolving Loans and the Revolving Loan Commitments shall
be paid in full no later than that date. Amounts borrowed under this
subsection 2.1A(iii) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date. For the avoidance of doubt,
all Revolving Loans made and Letters of Credit issued under the
Existing Credit Agreement and outstanding as of the Restatement
Effective Date shall continue to be maintained under and governed by
this Agreement.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loan and the Revolving Loan Commitments
shall be subject to the limitation that in no event shall the Total
Utilization of Revolving Loan Commitments at any time exceed the
Revolving Loan Commitments then in effect.
(iv) SWING LINE LOANS. Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the maximum
amount of Swing Line Loans permitted to be outstanding from time to
time, to make a portion of the Revolving Loan
33
Commitments available to Company from time to time during the period
from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date by making Swing Line Loans to Company in an aggregate
amount not exceeding the amount of the Swing Line Loan Commitment to be
used for the purposes identified in subsection 2.5B, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata
Share of the Letter of Credit Usage then in effect, may exceed Swing
Line Lender's Revolving Loan Commitment. The aggregate amount of the
Swing Line Loan Commitment as of the Restatement Effective Date is
$10,000,000; PROVIDED that any reduction of the Revolving Loan
Commitments made pursuant to subsection 2.4B(ii) or 2.4B(iii) which
reduces the aggregate Revolving Loan Commitments to an amount less than
the then current amount of the Swing Line Loan Commitment shall result
in an automatic corresponding reduction of the Swing Line Loan
Commitment to the amount of the Revolving Loan Commitments, as so
reduced, without any further action on the part of Company,
Administrative Agent or Swing Line Lender. The Swing Line Loan
Commitment shall expire on the Revolving Loan Commitment Termination
Date and all Swing Line Loans and all other amounts owed hereunder with
respect to the Swing Line Loans shall be paid in full no later than
that date. Amounts borrowed under this subsection 2.1A(iv) may be
repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan
Commitment shall be subject to the limitation that in no event shall
the Total Utilization of Revolving Loan Commitments at any time exceed
the Revolving Loan Commitments then in effect.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing
Line Lender may deliver to Administrative Agent (with a copy to
Company), no later than 1:00 P.M. (
New York time) on any day that is at
least five Business Days after the making of such Swing Line Loan a
notice (which shall be deemed to be a Notice of Borrowing given by
Company) requesting Lenders to make Revolving Loans that are Base Rate
Loans on such Funding Date in an amount equal to the amount of such
Swing Line Loans (the "REFUNDED SWING LINE LOANS") outstanding on the
date such notice is given which Swing Line Lender requests Lenders to
prepay; PROVIDED HOWEVER, that in the event that Swing Line Loans are
outstanding in an aggregate principal amount equal to or in excess of
$1,000,000 as of the close of business on any Thursday, Swing Line
Lender shall deliver to Administrative Agent (with a copy to Company),
no later than 1:00 P.M. (
New York time) on the following Business Day
the notice described above requesting Lenders to make Revolving Loans
in accordance with the procedures set forth above in an amount equal to
the amount of such Swing Line Loans (which shall constitute Refunded
Swing Line Loans) outstanding as of the close of business on such
Thursday. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans made by
Lenders other than Swing Line Lender shall be immediately delivered by
Administrative Agent to Swing Line Lender (and not to Company) and
applied to repay a corresponding portion of the Refunded Swing Line
Loans and (ii) on the day such Revolving Loans are made, Swing Line
Lender's Pro Rata Share of the Refunded Swing
34
Line Loans shall be deemed to be paid with the proceeds of a Revolving
Loan made by Swing Line Lender, and such portion of the Swing Line
Loans deemed to be so paid shall no longer be outstanding as Swing Line
Loans and shall no longer be due under the Swing Line Note, if any, of
Swing Line Lender but shall instead constitute part of Swing Line
Lender's outstanding Revolving Loans and shall be due under the
Revolving Note, if any, of Swing Line Lender. Company hereby authorizes
Administrative Agent and Swing Line Lender to charge Company's accounts
with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line
Lender the amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not
sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to Swing Line
Lender should be recovered by or on behalf of Company from Swing Line
Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all Lenders in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the
request of Swing Line Lender as provided in the immediately preceding
paragraph in an amount sufficient to repay any amounts owed to Swing
Line Lender in respect of any outstanding Swing Line Loans or (b) the
Revolving Loan Commitments are terminated at a time when any Swing Line
Loans are outstanding, each Lender shall be deemed to, and hereby
agrees to, have purchased a participation in such outstanding Swing
Line Loans in an amount equal to its Pro Rata Share (calculated, in the
case of the foregoing clause (b), immediately prior to such termination
of the Revolving Loan Commitments) of the unpaid amount of such Swing
Line Loans together with accrued interest thereon. Upon one Business
Day's notice from Swing Line Lender, each Lender shall deliver to Swing
Line Lender an amount equal to its respective participation in same day
funds at the Administrative Agent's Office. In order to further
evidence such participation (and without prejudice to the effectiveness
of the participation provisions set forth above), each Lender agrees to
enter into a separate participation agreement at the request of Swing
Line Lender in form and substance reasonably satisfactory to Swing Line
Lender. In the event any Lender fails to make available to Swing Line
Lender the amount of such Lender's participation as provided in this
paragraph, Swing Line Lender shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate. In
the event Swing Line Lender receives a payment of any amount in which
other Lenders have purchased participations as provided in this
paragraph, Swing Line Lender shall promptly distribute to each such
other Lender its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding,
each Lender's obligation to make Revolving Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to the second preceding
paragraph and each Lender's obligation to purchase a participation in
any unpaid Swing Line Loans pursuant to the immediately preceding
paragraph shall be absolute and unconditional and shall not be affected
by any circumstance, including (a) any set-off, counterclaim,
recoupment, defense or other right
35
which such Lender may have against Swing Line Lender, Company or any
other Person for any reason whatsoever; (b) the occurrence or
continuation of an Event of Default or a Potential Event of Default;
(c) the occurrence or existence of any Material Adverse Effect; (d) any
breach of this Agreement or any other Loan Document by any party
thereto; or (e) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; PROVIDED that such
obligations of each Lender are subject to the condition that (1) Swing
Line Lender believed in good faith that all conditions under Section 4
to the making of the applicable Refunded Swing Line Loans or other
unpaid Swing Line Loans, as the case may be, were satisfied at the time
such Refunded Swing Line Loans or unpaid Swing Line Loans were made or
(2) the satisfaction of any such condition not satisfied had been
waived in accordance with subsection 10.6 prior to or at the time such
Refunded Swing Line Loans or other unpaid Swing Line Loans were made.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date
(other than Revolving Loans made pursuant to a request by Swing Line Lender
pursuant to subsection 2.1A(iv) for the purpose of repaying any Refunded Swing
Line Loans or Revolving Loans made pursuant to subsection 3.3B for the purpose
of reimbursing any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it) and Term Loans made on any Funding Date shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount; PROVIDED that Revolving Loans made on any Funding Date as
Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $500,000 in excess of
that amount. Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $100,000 and integral multiples of $25,000 in excess of that
amount.
Whenever Company desires that Lenders make Revolving Loans it
shall deliver to Administrative Agent a Notice of Borrowing no later than 1:30
P.M. (New York time) at least three Business Days in advance of the proposed
Funding Date (in the case of a Eurodollar Rate Loan) or at least one Business
Day in advance of the proposed Funding Date (in the case of a Base Rate Loan).
Whenever Company desires that Swing Line Lender make a Swing Line Loan, it shall
deliver to Administrative Agent a Notice of Borrowing no later than 3:00 P.M.
(New York time) on the proposed Funding Date. The Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount and type of Loans requested, (iii) in the case of Swing Line Loans that
such Loans shall be Base Rate Loans, (iv) whether such Loans shall be Base Rate
Loans or Eurodollar Rate Loans, and (v) in the case of any Loans requested to be
made as Eurodollar Rate Loans, the initial Interest Period requested therefor.
Term Loans and Revolving Loans may be continued as or converted into Base Rate
Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; PROVIDED that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow
36
on behalf of Company or for otherwise acting in good faith under this subsection
2.1B, and upon funding of Loans by Lenders in accordance with this Agreement
pursuant to any such telephonic notice Company shall have effected Loans
hereunder.
Company shall notify Administrative Agent prior to the funding
of any Loans in the event that any of the matters to which Company is required
to certify in the applicable Notice of Borrowing is no longer true and correct
as of the applicable Funding Date, and the acceptance by Company of the proceeds
of any Loans shall constitute a re-certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. DISBURSEMENT OF FUNDS. All Loans under this Agreement 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 that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant
to subsection 2.1B (or telephonic notice in lieu thereof), Administrative Agent
shall notify each Lender or Swing Line Lender, as the case may be, of the
proposed borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 3:30 P.M. (New York time) on the applicable
Funding Date, and Swing Line Lender shall make the amount of its Swing Line Loan
available to Administrative Agent not later than 3:30 P.M. (New York time) on
the applicable Funding Date, in each case in same day funds in Dollars, at the
Administrative Agent's Office. Except as provided in subsection 2.1A(iv) or
subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing
Line Loans or to reimburse any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsections 4.1 (in the case of the Loans, including the
Tranche A Term Loans, that were made on the Closing Date) and 4.3 (in the case
of all Loans), Administrative Agent shall make the proceeds of such Loans
available to Company by 4:00 P.M. on the applicable Funding Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such Loans
received by Administrative Agent from Lenders or Swing Line Lender, as the case
may be, to be transferred to the account of Company at the Funding Office.
Unless Administrative Agent shall have been notified by any
Lender prior to the Funding Date for any Loans that such Lender does not intend
to make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
37
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding 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 Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement applicable to such Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 10.8, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by Company or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Revolving Loan Commitment and the Tranche B Term Loan and Revolving
Loans from time to time of each Lender, the Swing Line Loan Commitment
and the Swing Line Loans from time to time of Swing Line Lender, and
each repayment or prepayment in respect of the principal amount of the
Tranche B Term Loan or Revolving Loans of each Lender or the Swing Line
Loans of Swing Line Lender. Any such recordation shall be conclusive
and binding on Company and each Lender, absent manifest error; PROVIDED
that failure to make any such recordation, or any error in
such recordation, shall not affect any Lender's Commitments or
Company's Obligations in respect of any applicable Loans.
(iii) Each Lender shall record on its internal records
(including the Notes, if any, held by such Lender) the amount of the
Tranche B Term Loan and each Revolving Loan made by it and each payment
in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; PROVIDED that failure to
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of
any applicable Loans; and PROVIDED, FURTHER that in the event of any
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(iv) Company, 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 Loans listed therein
for all purposes hereof, and no assignment or transfer of any such
Commitment or Loan shall be effective, in each case unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall
have been accepted by Administrative Agent and recorded in the Register
as provided in subsection 10.1B(ii). Prior to such recordation, all
amounts owed with respect to the applicable Commitment or Loan shall be
owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making
38
such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitments or
Loans.
(v) Company hereby affirms its designation of ▇▇▇▇▇ Fargo
to serve as Company's agent solely for purposes of maintaining the
Register as provided in this subsection 2.1D, and Company hereby agrees
that, to the extent ▇▇▇▇▇ Fargo serves in such capacity, ▇▇▇▇▇ Fargo
and its officers, directors, employees, agents and affiliates shall
constitute Indemnitees for all purposes under subsection 10.3.
E. NOTES. Company executed and delivered promissory notes on the
Closing Date to evidence Loans made by the Lenders under the Existing Credit
Agreement. On the Restatement Effective Date, Company will execute and deliver
(i) a Tranche B Term Note substantially in the form of EXHIBIT IV annexed hereto
to evidence that Lender's Tranche B Term Loans, with appropriate insertions,
(ii) a Revolving Note substantially in the form of EXHIBIT V annexed hereto to
evidence that Lender's Revolving Loans, with appropriate insertions and (iii) a
Swing Line Note substantially in the form of EXHIBIT VI annexed hereto, with
appropriate insertions. If requested by any Lender by written notice to Company
(with a copy to Administrative Agent), Company 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 subsection 10.1) promptly after
Company's receipt of such notice a promissory note or promissory notes to
evidence such Lender's Tranche B Term Loan, Revolving Loans or Swing Line Loans,
substantially in the form of EXHIBIT IV, EXHIBIT V or EXHIBIT VI annexed hereto,
respectively, with appropriate insertions.
Administrative Agent may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been accepted
by Administrative Agent as provided in subsection 10.1B(ii). Any request,
authority or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, assignee or transferee of that
Note or of any Note or Notes issued in exchange therefor.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6
and 2.7, each Term Loan and each Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable basis for determining
the rate of interest with respect to any Term Loan or any Revolving Loan shall
be selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B, and the basis for determining
the interest rate with respect to any Term Loan or any Revolving Loan may be
changed from time to time pursuant to subsection 2.2D. If on any day a Term Loan
or Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable
39
basis for determining the rate of interest, then for that day that Loan shall
bear interest determined by reference to the Base Rate.
From Closing Date through the Restatement Effective Date (i)
the Tranche A Term Loans and the Revolving Loans bore interest and shall bear
interest, (y) if a Base Rate Loan, then at the sum of the Base Rate plus 2.25%
and (z) if a Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar
Rate plus 3.25% per annum, and (ii) the Tranche B Term Loans bore interest and
shall bear interest (y) if a Base Rate Loan, then at the sum of the Base Rate
plus 3.00% per annum and (2) if a Eurodollar Rate Loans, then at the sum of the
Adjusted Eurodollar Rate plus 4.00% per annum.
(i) Subject to the provisions of subsections 2.2E and
2.7, the Revolving Loans shall bear interest on and after the
Restatement Effective Date through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the
Base Rate PLUS the Applicable Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum
of the Adjusted Eurodollar Rate PLUS the Applicable Eurodollar
Rate Margin.
(ii) Subject to the provisions of subsections 2.2E and
2.7, the Tranche B Term Loans shall bear interest on and after the
Restatement Effective Date through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the
Base Rate PLUS 2.50%; or
(b) if a Eurodollar Rate Loan, then at the sum
of the Adjusted Eurodollar Rate PLUS 3.50%.
(iii) Subject to the provisions of subsections 2.2E and
2.7, the Swing Line Loans shall bear interest through maturity at
the sum of the Base Rate MINUS 0.50% PLUS the Applicable Base Rate
Margin for Revolving Loans.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; PROVIDED
that:
(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in the
case of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of
40
Conversion/Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) 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; PROVIDED that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) 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 (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Tranche B Term Loans shall extend beyond October 2, 2008, and no
Interest Period with respect to any portion of the Revolving Loans
shall extend beyond October 2, 2006;
(vi) no Interest Period with respect to any portion of the
Tranche B Term Loans shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the Tranche B Term
Loans unless the sum of (a) the aggregate principal amount of Tranche B
Term Loans that are Base Rate Loans PLUS (b) the aggregate principal
amount of Tranche B Term Loans that are Eurodollar Rate Loans with
Interest Periods expiring on or before such date equals or exceeds the
principal amount required to be paid on the Tranche B Term Loans on
such date;
(vii) there shall be no more than twelve Interest Periods
outstanding at any time;
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be deemed
to have selected an Interest Period of one month; and
(ix) until the earlier of (x) the completion to the
satisfaction of Agents of the primary syndication of the Loans and
Commitments or (y) the day that is 90 days after the Restatement
Effective Date, no Interest Period for any Eurodollar Rate Loan may
extend beyond one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); PROVIDED that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
41
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Tranche B Term Loans or Revolving Loans equal to
$1,000,000 and integral multiples of $500,000 in excess of that amount from Base
Rate Loans to Eurodollar Rate Loans, (ii) to convert at any time all or any part
of its outstanding Tranche B Term Loans or Revolving Loans equal to $1,000,000
and integral multiple of $100,000 in excess of that amount from Eurodollar Rate
Loans to Base Rate Loans or (iii) upon the expiration of any Interest Period
applicable to a Eurodollar Rate Loan, to continue all or any portion of such
Loan equal to $1,000,000 and integral multiples of $500,000 in excess of that
amount as a Eurodollar Rate Loan; PROVIDED, HOWEVER, that a Eurodollar Rate Loan
may only be converted into a Base Rate Loan on the expiration date of an
Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 1:30 P.M. (New York 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). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; PROVIDED that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of,
a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default under subsection 8.1 or, upon demand by Administrative
Agent at the request of
42
Requisite Lenders, upon the occurrence and during the continuation of any other
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable 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 under this Agreement for Base Rate
Loans); PROVIDED that, 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 under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E 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.
F. COMPUTATION OF INTEREST. Interest on the Loans 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; PROVIDED, HOWEVER, that for each
day that the Base Rate is calculated by reference to the Federal Funds Effective
Rate, interest on Base Rate Loans shall be computed on the basis of a 360-day
year and the actual number of days elapsed. In computing interest on any Loan,
the date of the making of such Loan or the first day of an Interest Period
applicable to such 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 Loan or the expiration date of an Interest Period applicable to
such 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 that if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Administrative
Agent, for distribution to each Lender in proportion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans (but not any
outstanding Swing Line Loans) PLUS (ii) the Letter of Credit Usage MULTIPLIED by
0.50% per annum. Such commitment fees to be calculated on the basis of a 365-day
year or 366-day year, as the case may be, and the actual number of days elapsed
and to be payable quarterly in arrears on the last Business Day of each of
March, June, September and December of each year, commencing on the first such
date to occur after the Closing Date, and on the Revolving Loan Commitment
Termination Date.
43
B. OTHER FEES. Company agrees to pay to Administrative Agent such
other fees in the amounts and at the times separately agreed upon between
Company and Administrative Agent.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
COLLATERAL AND PAYMENTS UNDER GUARANTIES.
A. SCHEDULED PAYMENTS OF TERM LOANS.
(i) PAYMENT OF TRANCHE A TERM LOANS. Company shall pay in
full all Tranche A Term Loans as of the Restatement Effective Date.
(ii) SCHEDULED PAYMENTS OF TRANCHE B TERM LOANS. Company
shall make principal payments on the Tranche B Term Loans in
installments on the dates and in the amounts set forth below:
Scheduled Repayment
of Tranche B Term Loans
(Percentage of Amount
Outstanding on the
DATE closing date)
---- ---------------
December 31, 2000 0.25%
March 31, 2001 0.25%
June 30, 2001 0.25%
September 30, 2001 0.25%
December 31, 2001 0.25%
March 31, 2002 0.25%
June 30, 2002 0.25%
September 30, 2002 0.25%
December 31, 2002 0.25%
March 31, 2003 0.25%
June 30, 2003 0.25%
September 30, 2003 0.25%
December 31, 2003 0.25%
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 0.25%
December 31, 2004 0.25%
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
44
December 31, 2005 0.25%
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 11.75%
March 31, 2007 11.75%
June 30, 2007 11.75%
September 30, 2007 11.75%
December 31, 2007 11.75%
March 31, 2008 11.75%
June 30, 2008 11.75%
October 2, 2008 11.75%
------
TOTAL 100%
PROVIDED that the installment due on October 2, 2008 shall be reduced
to the extent of the principal payment made on the Restatement
Effective Date pursuant to subsection 2.1A(ii) and the scheduled
installments of principal of the Tranche B Term Loans set forth above
shall be reduced in connection with any other voluntary or mandatory
prepayments of the Tranche B Term Loans in accordance with subsection
2.4B(iv); and PROVIDED, FURTHER that the Tranche B Term Loans
(including any New Tranche B Term Loans) and all other amounts owed
hereunder with respect to the Tranche B Term Loans (including any New
Tranche B Term Loans) shall be paid in full no later than October 2,
2008, and the final installment payable by Company in respect of the
Tranche B Term Loans (including any New Tranche B Term Loans) on such
date shall be in an amount, if such amount is different from that
specified above, sufficient to repay all amounts owing by Company under
this Agreement with respect to the Tranche B Term Loans.
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING LOAN
COMMITMENTS.
(i) VOLUNTARY PREPAYMENTS. Company may, upon written or
telephonic notice to Administrative Agent on or prior to 1:30 P.M. (New
York time) on the date of prepayment, which notice, if telephonic,
shall be promptly confirmed in writing, at any time and from time to
time prepay any Swing Line Loan on any Business Day in whole or in
part. Company may, upon not less than one Business Day's prior written
or telephonic notice, in the case of Base Rate Loans, and three
Business Days' prior written or telephonic notice, in the case of
Eurodollar Rate Loans, in each case given to Administrative Agent by
1:30 P.M. (New York time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay any Tranche B Term Loans or Revolving
Loans on any Business Day in whole or in part in an aggregate minimum
amount of $1,000,000 and integral multiples of $100,000 in excess of
that amount in the case of Base Rate Loans and in an aggregate minimum
amount of $1,000,000 and integral multiples of $500,000 in excess of
that amount in the case of
45
Eurodollar Rate Loans. Notice of prepayment having been given as
aforesaid, the principal amount of the 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
subsection 2.4B(iv).
(ii) VOLUNTARY REDUCTIONS OF REVOLVING LOAN COMMITMENTS.
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time terminate in whole or permanently reduce in
part, without premium or penalty, the Revolving Loan Commitments in an
amount up to the amount by which the Revolving Loan Commitments exceed
the Total Utilization of Revolving Loan Commitments at the time of such
proposed termination or reduction; PROVIDED that any such partial
reduction of the Revolving Loan Commitments shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $1,000,000 in
excess of that amount. Company's notice to Administrative Agent shall
designate the date (which shall be a Business Day) of such termination
or reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Loan Commitments shall be
effective on the date specified in Company's notice and shall reduce
the Revolving Loan Commitment of each Lender proportionately to its Pro
Rata Share. A notice of termination of the Revolving Loan Commitments
delivered by the Company may state that such notice is conditioned upon
the effectiveness of other credit facilities, in which case such notice
may be revoked by the Company by notice to the Administrative Agent on
or prior to the specified date if such condition is not satisfied.
(iii) MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF
REVOLVING LOAN COMMITMENTS. The Loans shall be prepaid and/or the
Revolving Loan Commitments shall be permanently reduced in the amounts
and under the circumstances set forth below, all such prepayments
and/or reductions to be applied as set forth below or as more
specifically provided in subsection 2.4B(iv):
(a) PREPAYMENTS AND REDUCTIONS FROM NET ASSET
SALE PROCEEDS. No later than the fifteenth Business Day
following the date of receipt by Company or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale, Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to such Net Asset Sale Proceeds;
PROVIDED, HOWEVER, that in the event Company notifies
Administrative Agent in writing on or before the date of
receipt of such Net Asset Sale Proceeds that Company or such
Subsidiary intends to replace any assets sold ("EXCHANGE
ASSETS") with assets which are to be used in a business
engaged in by Company and its Subsidiaries at the time of any
such replacement or any business or activity substantially
similar or related thereto, Company shall prepay the Loans
and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to the excess of (1) the
aggregate amount of such Net Asset Sale Proceeds over (2) an
amount equal to the amount of cash expected to be expended by
Company and its Subsidiaries to acquire such Exchange Assets
during the 270-day period following the date of receipt by
Company or any of its
46
Subsidiaries of such Net Asset Sale Proceeds. Any amounts not
expended by Company and its Subsidiaries within such 270-day
period shall be applied pursuant to clause (f) below. Nothing
contained in this clause (a) shall be construed to permit any
sale of assets prohibited by subsection 7.7.
(b) PREPAYMENTS AND REDUCTIONS FROM NET
INSURANCE/CONDEMNATION PROCEEDS. No later than the third
Business Day following the date of receipt by Administrative
Agent or by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be
applied pursuant to the provisions of subsection 6.4C, Company
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to
the amount of such Net Insurance/Condemnation Proceeds;
PROVIDED, HOWEVER, that in the event Company intends to
replace any assets in respect of which such Net
Insurance/Condemnation Proceeds were received ("INSURANCE
EXCHANGE ASSETS") with assets which are to be used in a
business engaged in by the Company and its Subsidiaries at the
time of any such replacement or any business or activity
substantially similar or related thereto, Company shall prepay
the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to the excess
of (1) such Net Insurance/Condemnation Proceeds over (2) an
amount equal to the amount of cash expected to be expended by
the Company and its Subsidiaries to acquire such Insurance
Exchange Assets during the 270-day period following the date
of receipt by Company or any of its Subsidiaries of such Net
Insurance/Condemnation Proceeds. Any amounts not expended by
Company and its Subsidiaries within such 270-day period shall
be prepaid pursuant to clause (f) below.
(c) PREPAYMENTS AND REDUCTIONS DUE TO ISSUANCE
OF DEBT SECURITIES. One day following receipt by Company or
any of its Subsidiaries of the Cash proceeds (any such
proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses, being "NET DEBT
SECURITIES PROCEEDS") from the issuance of any debt Securities
of Company or any of its Subsidiaries (other than any
Indebtedness permitted by subsection 7.1), Company shall
prepay the Loans and/or the Revolving Loan Commitments shall
be permanently reduced in an aggregate amount equal to such
Net Debt Securities Proceeds.
(d) PREPAYMENTS AND REDUCTIONS DUE TO ISSUANCE
OF EQUITY SECURITIES. One day following receipt by Company or
any of its Subsidiaries of the Cash proceeds (any such
proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses, being "NET
EQUITY SECURITIES PROCEEDS") from the issuance of any equity
Securities of Company or any of its Subsidiaries (other than
equity Securities of Company or any of its Subsidiaries issued
to their respective directors, officers and employees or to
their stockholders existing as of the Closing Date) or the
receipt of any equity contribution (other than from their
Stockholders existing as of the Closing Date), Company shall
prepay the Loans
47
and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 75% of such Net Equity
Securities Proceeds; PROVIDED, that such percentage shall be
reduced to 50% if the Consolidated Total Leverage Ratio as at
the last day of the most recently ended four-Fiscal Quarters
(giving pro forma effect to the application of Net Equity
Securities Proceeds to pay Indebtedness) is less than 3.0:1.0.
(e) PREPAYMENTS AND REDUCTIONS FROM CONSOLIDATED
EXCESS CASH FLOW. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing
with the Fiscal Year ending on the Fiscal Year End in 2002),
Company shall, no later than 100 days after such Fiscal Year
End, prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to
75% of such Consolidated Excess Cash Flow; PROVIDED, that such
percentage shall be reduced to 50% if the Consolidated Total
Leverage Ratio (giving pro forma effect to the application of
Consolidated Excess Cash Flow to pay Indebtedness) as at such
Fiscal Year End is less than 3.0:1.0.
(f) CALCULATIONS OF NET PROCEEDS AMOUNTS;
ADDITIONAL PREPAYMENTS AND REDUCTIONS BASED ON SUBSEQUENT
CALCULATIONS. Concurrently with any prepayment of the Loans
and/or reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e), Company shall deliver to
Administrative Agent an Officer's Certificate demonstrating
the calculation of the amount (the "NET PROCEEDS AMOUNT") of
the applicable Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds, Net Debt Securities Proceeds,
Net Equity Securities Proceeds or Consolidated Excess Cash
Flow, as the case may be, that gave rise to such prepayment
and/or reduction. In the event that Company shall subsequently
determine that the actual Net Proceeds Amount was greater than
the amount set forth in such Officer's Certificate, Company
shall promptly make an additional prepayment of the Loans
(and/or, if applicable, the Revolving Loan Commitments shall
be permanently reduced) in an amount equal to the amount of
such excess to the extent required hereunder, and Company
shall concurrently therewith deliver to Administrative Agent
an Officer's Certificate demonstrating the derivation of the
additional Net Proceeds Amount resulting in such excess.
(g) PREPAYMENTS DUE TO REDUCTIONS OR RESTRICTIONS OF
REVOLVING LOAN COMMITMENTS. Company shall from time to time
prepay FIRST the Swing Line Loans and SECOND the Revolving
Loans to the extent necessary so that the Total Utilization of
Revolving Loan Commitments shall not at any time exceed the
Revolving Loan Commitments then in effect.
(iv) APPLICATION OF PREPAYMENTS.
(a) APPLICATION OF VOLUNTARY PREPAYMENTS BY TYPE
OF LOANS AND ORDER OF MATURITY. Any voluntary prepayments
pursuant to subsection 2.4B(i) shall be applied as specified
by Company in the applicable notice of prepayment; PROVIDED
that in the event Company fails to specify the Loans to which
any such prepayment shall be applied, such prepayment shall be
applied FIRST to repay outstanding Swing Line Loans to the
full extent thereof, SECOND to repay
48
outstanding Revolving Loans to the full extent thereof, and
THIRD to repay outstanding Term Loans to the full extent
thereof. Unless otherwise specified by Company in the
applicable notice of prepayment, any voluntary prepayments of
the Term Loans pursuant to subsection 2.4B(i) shall be applied
to prepay the Tranche B Term Loans on a pro rata basis (in
accordance with the outstanding principal amounts thereof) and
shall be applied on a pro rata basis (in accordance with the
outstanding principal amounts thereof) to each scheduled
installment of principal of the Tranche B Term Loans set forth
in subsection 2.4A(ii) that is unpaid at the time of such
prepayment. Notwithstanding anything under this subsection
2.4B(iv)(a) to the contrary, Tranche B Term Lenders shall have
the option to waive their rights to receive any voluntary
prepayment pursuant to subsection 2.4B(i) (a "WAIVABLE
VOLUNTARY PREPAYMENT"). In the event any such Tranche B Term
Lender desires to waive such Lender's right to receive such
Waivable Voluntary Prepayment, (1) such Tranche B Term Lender
shall so advise Administrative Agent in writing no later than
the close of business on the Business Day following the date
it receives notice of the prepayment from Administrative Agent
and (2) upon receipt of such written advice from such Tranche
B Term Lender, Administrative Agent shall apply the amount so
waived by such Tranche B Term Lender to prepay Tranche B Term
Loans held by Lenders which did not waive their right to such
prepayment (pro rata in accordance with the outstanding
principal amounts thereof) and then to the Revolving Loans
(without any corresponding reduction in Revolving Loan
Commitments); PROVIDED that in the event that prepayment of
Tranche B Term Loans held by Lenders not waiving their right
to prepayment and of Revolving Loans does not exhaust the
amount specified by Company in the applicable notice of
prepayment, Administrative Agent shall apply any remaining
amount to repay all other Tranche B Term Loans on a pro rata
basis (in accordance with the outstanding principal amounts
thereof). Company shall use its best efforts to notify
Administrative Agent (which shall promptly notify the Tranche
B Term Lenders) of any Waivable Voluntary Prepayment at least
three Business Days prior to the payment to Administrative
Agent of such Waivable Voluntary Prepayment.
(b) APPLICATION OF MANDATORY PREPAYMENTS BY TYPE
OF LOANS. Any amount (the "APPLIED AMOUNT") required to be
applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e) shall be applied FIRST to prepay
the Term Loans to the full extent thereof, SECOND, to the
extent of any remaining portion of the Applied Amount, to
prepay the Swing Line Loans to the full extent thereof and to
permanently reduce the Revolving Loan Commitments by the
amount of such prepayment, THIRD, to the extent of any
remaining portion of the Applied Amount, to prepay the
Revolving Loans to the full extent thereof and (unless such
prepayment is a Waivable Mandatory Prepayment) to further
permanently reduce the Revolving Loan Commitments by the
amount of such prepayment, FOURTH, to the extent of any
remaining portion of the Applied Amount, to cash collateralize
the Letters of Credit to the full extent thereof and (unless
such prepayment is a Waivable Mandatory Prepayment) to further
permanently reduce the Revolving
49
Loan Commitments by the amount of such prepayment, and FIFTH,
to the extent of any remaining portion of the Applied Amount,
to further permanently reduce the Revolving Loan Commitments
to the full extent thereof.
(c) APPLICATION OF MANDATORY PREPAYMENTS OF TERM
LOANS TO TRANCHE B TERM LOANS AND THE SCHEDULED INSTALLMENTS
OF PRINCIPAL THEREOF. Any mandatory prepayments of the Term
Loans pursuant to subsection 2.4B(iii) shall be applied to
prepay the Tranche B Term Loans on a pro rata basis (in
accordance with the outstanding principal amounts thereof) and
shall be applied on a pro rata basis (in accordance with the
outstanding principal amounts thereof) to each scheduled
installment of principal of the Tranche B Term Loans set forth
in subsection 2.4A(ii) that is unpaid at the time of such
prepayment; PROVIDED, HOWEVER, that Tranche B Term Lenders
shall have the option to waive their rights to receive any
such prepayment (a "WAIVABLE MANDATORY PREPAYMENT"). In the
event any such Tranche B Term Lender desires to waive such
Lender's right to receive such Waivable Mandatory Prepayment,
(1) such Tranche B Term Lender shall so advise Administrative
Agent in writing no later than the close of business on the
Business Day following the date it receives notice of the
prepayment from Administrative Agent and (2) upon receipt of
such written advice from such Tranche B Term Lender,
Administrative Agent shall apply the amount so waived by such
Tranche B Term Lender to prepay Tranche B Term Loans held by
Lenders which did not waive their right to such prepayment
(pro rata in accordance with the outstanding principal amounts
thereof) and then to the Revolving Loans (without any
corresponding reduction in the Revolving Loan Commitments).
Company shall use its best efforts to notify Administrative
Agent (which shall promptly notify the Tranche B Term Lenders)
of any Waivable Mandatory Prepayment at least three Business
Days prior to the payment to Administrative Agent of such
Waivable Mandatory Prepayment.
(d) APPLICATION OF PREPAYMENTS TO BASE RATE
LOANS AND EURODOLLAR RATE LOANS. Considering Tranche B Term
Loans and Revolving Loans being prepaid separately, any
prepayment thereof 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 Company pursuant
to subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) MANNER AND TIME OF PAYMENT. All payments by Company
of principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to the account of Administrative Agent not later than 2:00
P.M. (New York time) on the date due at the Payment Office for the
account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Company on
the next succeeding Business Day. Company hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent
in order to cause timely payment to be made to Administrative Agent of
all principal,
50
interest, fees and expenses due hereunder (subject to sufficient funds
being available in its accounts for that purpose).
(ii) APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST.
Except as provided in subsection 2.2C, all payments
in respect of the principal amount of any Loan shall include payment of
accrued interest on the principal amount being repaid or prepaid, and
all such payments (and, in any event, any payments in respect of any
Loan on a date when interest is due and payable with respect to such
Loan) shall be applied to the payment of interest before application to
principal.
(iii) APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall be
apportioned among all outstanding Loans to which such payments relate,
in each case proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each Lender, at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request, its
Pro Rata Share of all such payments received by Administrative Agent
and the commitment fees of such Lender when received by Administrative
Agent pursuant to subsection 2.3. Notwithstanding the foregoing
provisions of this subsection 2.4C(iii), if, pursuant to the provisions
of subsection 2.6C, any Notice of Conversion/Continuation 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.
(iv) PAYMENTS ON BUSINESS DAYS. Whenever any payment to be
made hereunder 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 and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) NOTATION OF PAYMENT. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; PROVIDED that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
SUBSIDIARY GUARANTY.
(i) APPLICATION OF PROCEEDS OF COLLATERAL. Except as
provided in subsection 2.4B(iii)(a) with respect to prepayments from
Net Asset Sale Proceeds, all proceeds received by Administrative Agent
in respect of any sale of, collection from, or other realization upon
all or any part of the Collateral under any Collateral Document may, in
the discretion of Administrative Agent, be held by Administrative Agent
as Collateral for, and/or (then or at any time thereafter) applied in
full or in part by Administrative Agent
51
against, the applicable Secured Obligations (as defined in such
Collateral Document) in the following order of priority:
(a) To the payment of all costs and expenses of
such sale, collection or other realization, including
reasonable compensation to Administrative Agent and its agents
and counsel, and all other expenses, liabilities and advances
made or incurred by Administrative Agent in connection
therewith, and all amounts for which Administrative Agent is
entitled to indemnification under such Collateral Document and
all advances made by Administrative Agent thereunder for the
account of the applicable Loan Party, and to the payment of
all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy
under such Collateral Document, all in accordance with the
terms of this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess of
such proceeds, to the payment of all other such Secured
Obligations for the ratable benefit of the holders thereof;
and
(c) thereafter, to the extent of any excess of
such proceeds, to the payment to or upon the order of such
Loan Party or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may
direct.
(ii) APPLICATION OF PAYMENTS UNDER SUBSIDIARY GUARANTY.
All payments received by Administrative Agent under the Subsidiary
Guaranty shall be applied promptly from time to time by Administrative
Agent in the following order of priority:
(a) To the payment of the costs and expenses of
any collection or other realization under the Subsidiary
Guaranty, including reasonable compensation to Administrative
Agent and its agents and counsel, and all expenses,
liabilities and advances made or incurred by Administrative
Agent in connection therewith, all in accordance with the
terms of this Agreement and the Subsidiary Guaranty;
(b) thereafter, to the extent of any excess of
such payments, to the payment of all other Guarantied
Obligations (as defined in the Subsidiary Guaranty) for the
ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess of
such payments, to the payment to the applicable Subsidiary
Guarantor or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. TRANCHE A TERM LOANS, TRANCHE B TERM LOANS AND INITIAL
REVOLVING LOANS. The proceeds of the Tranche A Term Loans and the Tranche B Term
Loans, together with up to $20 million of Revolving Loans and the proceeds of
the debt and equity capitalization of
52
Company described in subsection 4.1D(i), were applied on the Closing Date to
fund the Acquisition Financing Requirements.
B. REVOLVING LOANS; SWING LINE LOANS; NEW TRANCHE B TERM LOANS.
After the Closing Date and prior to the Restatement Effective Date, the proceeds
of Revolving Loans were applied by Company for working capital and general
corporate purposes. After the Restatement Effective Date, the proceeds of
Revolving Loans and any Swing Line Loans and New Tranche B Term Loans shall be
applied by Company for working capital and general corporate purposes.
C. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 9:00 A.M. (LOS ANGELES 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 Company and each Lender.
B. 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 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 Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be a request to make
such Loans as (or convert such Loan to, as the case may be) Base Rate Loans.
C. 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 Company 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,
53
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, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement 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 Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected 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 Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation 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 subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written request by that
Lender for all reasonable losses, expenses and liabilities (including any
interest paid by that Lender to lenders of funds borrowed by it to make or carry
its Eurodollar Rate Loans and any loss, expense or liability (exclusive of any
expected profit on such Loans) sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender may sustain: (i)
if for any reason (other than a default by that Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Borrowing 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 Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment 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, (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 Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement. Such Lender shall deliver
54
to Company (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 subsection 2.6D, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
E. 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 that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that 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 that Lender to a domestic office of that Lender in the United States
of America; PROVIDED HOWEVER, that 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
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of
and during the continuation of an Event of Default, (i) Company may not elect to
have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan
after the expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by Company with respect to a requested
borrowing or conversion/continuation that has not yet occurred shall be deemed
to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine 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, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof 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) not covered by subsection 2.7B with respect to
this Agreement or any of its obligations hereunder or any payments to
such Lender (or its applicable lending office) of principal, interest,
fees or any other amount payable hereunder;
55
(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
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 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, Company 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; PROVIDED, HOWEVER, that Company shall not be obligated to pay such
Lender any compensation attributable to any period prior to the date that is 90
days prior to the date on which such Lender gave notice to Company of the
circumstances entitling such Lender to compensation. Such Lender shall deliver
to Company (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 subsection 2.7A, and stating that such Lender is, if
it is legally entitled to do so, generally charging similar amounts to borrowers
that are similarly situated, which statement shall be conclusive and binding
upon all parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) PAYMENTS TO BE FREE AND CLEAR. All sums payable by
Company under this Agreement and the other Loan 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 Company 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.
(ii) GROSSING-UP OF PAYMENTS. If Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax (other than a Tax on the overall net income of
any Lender) from any sum paid or payable by Company to Administrative
Agent or any Lender under any of the Loan Documents:
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(a) Company shall notify Administrative Agent of
any such requirement or any change in any such requirement as
soon as Company becomes aware of it;
(b) Company 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 Company) for its
own account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Company 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 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
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay,
Company 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 that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the 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 of this Agreement or at the date of such Assignment Agreement, as
the case may be, in respect of payments to such Lender.
(iii) EVIDENCE OF EXEMPTION FROM U.S. WITHHOLDING TAX.
(a) Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Lender listed on the
signature pages hereof) 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 Company or Administrative
Agent (each in the reasonable exercise of its discretion), (1)
two original copies of Internal Revenue Service Form ▇-▇,
▇-▇▇▇▇ ▇▇ ▇-▇▇▇▇ (as applicable to it), or any successor
forms, properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not
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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 Loan Documents or (2) if such Lender is not a "bank" or
other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver Internal Revenue Service Form
▇-▇, ▇-▇▇▇▇ ▇▇ ▇-▇▇▇▇ pursuant to clause (1) above, a
Certificate re Non-Bank Status together with any other
certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder 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 Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) 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 (1) deliver to Administrative Agent
for transmission to Company two new original copies of
Internal Revenue Service Form W-9, W-8BEN or W-8ECI, or
successor applicable forms, or a Certificate re Non-Bank
Status, as the case may be, properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required in order 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 Loan Documents or (2)
notify Administrative Agent and Company of its inability to
deliver any such forms, certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (b) or (c)
of subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); PROVIDED that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the
Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (b) or (c) of subsection 2.7B(ii)
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 in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof 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, the National
58
Association of Insurance Commissioners 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, the National Association of Insurance
Commissioners 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 Loans or
Commitments or Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit 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, Company
shall promptly pay to such Lender, upon receipt of the statement referred to in
the next sentence, such additional amount or amounts as will compensate such
Lender or such controlling corporation on an after-tax basis for such reduction;
PROVIDED HOWEVER, that Company shall not be obligated to pay such Lender any
compensation attributable to any period prior to the date that is 90 days prior
to the date on which such Lender gave notice to Company of the circumstances
entitling such Lender to compensation. Such Lender shall deliver to Company
(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 subsection 2.7C and stating that such Lender is, if it is
legally entitled to do so, generally charging similar amounts to borrowers that
are similarly situated, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, 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 or Issuing Lender to receive payments under subsection
2.7 or subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing 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 or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; PROVIDED that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A
59
certificate as to the amount of any such expenses payable by Company pursuant to
this subsection 2.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Company (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
2.9 SUBSTITUTE LENDERS.
In the event Company is required under the provisions of
subsection 2.7 or 3.6 to make payments in a material amount to any Lender or in
the event any Lender fails to lend to Company in accordance with this Agreement,
Company may, so long as no Event of Default or Potential Event of Default shall
have occurred and be continuing, elect to terminate such Lender as a party to
this Agreement; PROVIDED that, concurrently with such termination, (i) Company
shall pay that Lender all principal, interest and fees and other amounts
(including without limitation, amounts, if any, owed under subsection 2.7 and
3.6) owed to such Lender through such date of termination, (ii) another
financial institution satisfactory to Company and Administrative Agent (or if
Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to assume
all obligations of the Lender to be terminated as of such date, and (iii) all
documents and supporting materials necessary, in the judgment of Administrative
Agent (or if Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent), to evidence the substitution of such Lender
shall have been received and approved by Administrative Agent as of such date.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. LETTERS OF CREDIT. In addition to Company requesting that
Lenders make Revolving Loans pursuant to subsection 2.1A(iii) and that Swing
Line Lender make Swing Line Loans pursuant to subsection 2.1A(iv), Company may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date, that one or more Lenders issue Letters of Credit
for the account of Company for the purposes specified in the definitions of
Commercial Letters of Credit and Standby Letters of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any one or more Lenders may, but (except
as provided in subsection 3.1B(ii)) shall not be obligated to, issue such
Letters of Credit in accordance with the provisions of this subsection 3.1;
PROVIDED that Company shall not request that any Lender issue (and no Lender
shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $25,000,000;
(iii) any Standby Letter of Credit having an expiration
date later than the earlier of (a) the Revolving Loan Commitment
Termination Date and (b) the date which
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is one year from the date of issuance of such Standby Letter of Credit;
PROVIDED that the immediately preceding clause (b) shall not prevent
any Issuing Lender from agreeing that a Standby Letter of Credit will
automatically be extended for one or more successive periods not to
exceed one year each unless such Issuing Lender elects not to extend
for any such additional period; and PROVIDED FURTHER that such Issuing
Lender shall elect not to extend such Standby Letter of Credit if it
has knowledge that an Event of Default has occurred and is continuing
(and has not been waived in accordance with subsection 10.6) at the
time such Issuing Lender must elect whether or not to allow such
extension;
(iv) any Commercial Letter of Credit having an expiration
date (a) later than the earlier of (1) the date which is 30 days prior
to the Revolving Loan Commitment Termination Date and (2) the date
which is one year from the date of issuance of such Commercial Letter
of Credit or (b) that is otherwise unacceptable to the applicable
Issuing Lender in its reasonable discretion; or
(v) any Letter of Credit denominated in a foreign
currency which in the judgment of the applicable Issuing Lender is not
readily and freely available.
B. MECHANICS OF ISSUANCE.
(i) NOTICE OF ISSUANCE. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to Administrative
Agent a Notice of Issuance of Letter of Credit substantially in the
form of EXHIBIT III annexed hereto no later than 1:30 P.M. (New York
time) at least three Business Days (in the case of Standby Letters of
Credit), at least one Business Day (in the case of Commercial Letters
of Credit), or in each case such shorter period as may be agreed to by
the Issuing Lender in any particular instance, in advance of the
proposed date of issuance. The Notice of Issuance of Letter of Credit
shall specify (a) the proposed date of issuance (which shall be a
Business Day), (b) whether the Letter of Credit is to be a Standby
Letter of Credit or a Commercial Letter of Credit, (c) the face amount
of the Letter of Credit, (d) in the case of a Letter of Credit which
Company requests to be denominated in a currency other than Dollars,
the currency in which Company requests such Letter of Credit to be
issued, (e) the expiration date of the Letter of Credit, (f) the name
and address of the beneficiary, and (f) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing
Lender to make payment under the Letter of Credit; PROVIDED that the
Issuing Lender, in its reasonable discretion, may require changes in
the text of the proposed Letter of Credit or any such documents; and
PROVIDED FURTHER that no Letter of Credit shall require payment against
a conforming draft to be made thereunder on the same business day
(under the laws of the jurisdiction in which the office of the Issuing
Lender to which such draft is required to be presented is located) that
such draft is presented if such presentation is made after 10:30 A.M.
(in the time zone of such office of the Issuing Lender) on such
business day.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of Credit in the event that
any of the matters to which Company is required to certify in the
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applicable Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of Credit,
and upon the issuance of any Letter of Credit Company shall be deemed
to have re-certified, as of the date of such issuance, as to the
matters to which Company is required to certify in the applicable
Notice of Issuance of Letter of Credit.
(ii) DETERMINATION OF ISSUING LENDER. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Letter of
Credit, in the event Administrative Agent elects to issue such Letter
of Credit, Administrative Agent shall promptly so notify Company, and
Administrative Agent shall be the Issuing Lender with respect thereto.
In the event that Administrative Agent, in its sole discretion, elects
not to issue such Letter of Credit, Administrative Agent shall promptly
so notify Company, whereupon Company may request any other Lender to
issue such Letter of Credit by delivering to such Lender a copy of the
applicable Notice of Issuance of Letter of Credit. Any Lender so
requested to issue such Letter of Credit shall promptly notify Company
and Administrative Agent whether or not, in its sole discretion, it has
elected to issue such Letter of Credit, and any such Lender which so
elects to issue such Letter of Credit shall be the Issuing Lender with
respect thereto. In the event that all other Lenders shall have
declined to issue such Letter of Credit, notwithstanding the prior
election of Administrative Agent not to issue such Letter of Credit,
Administrative Agent shall be obligated to issue such Letter of Credit
and shall be the Issuing Lender with respect thereto, notwithstanding
the fact that the Letter of Credit Usage with respect to such Letter of
Credit and with respect to all other Letters of Credit issued by
Administrative Agent, when aggregated with Administrative Agent's
outstanding Revolving Loans and Swing Line Loans, may exceed
Administrative Agent's Revolving Loan Commitment then in effect;
PROVIDED that Administrative Agent shall not be obligated to issue any
Letter of Credit denominated in a foreign currency which in the
judgment of Administrative Agent is not readily and freely available.
(iii) ISSUANCE OF LETTER OF CREDIT. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set forth
in subsection 4.4, the Issuing Lender shall issue the requested Letter
of Credit in accordance with the Issuing Lender's standard operating
procedures.
(iv) NOTIFICATION TO LENDERS. Upon the issuance of any
Letter of Credit the applicable Issuing Lender shall promptly notify
Administrative Agent and each other Lender of such issuance, which
notice shall be accompanied by a copy of such Letter of Credit.
Promptly after receipt of such notice (or, if Administrative Agent is
the Issuing Lender, together with such notice), Administrative Agent
shall notify each Lender of the amount of such Lender's respective
participation in such Letter of Credit, determined in accordance with
subsection 3.1C.
(v) REPORTS TO LENDERS. Within 15 days after the end of
each calendar quarter ending after the Closing Date, so long as any
Letter of Credit shall have been outstanding during such calendar
quarter, each Issuing Lender shall deliver to each other Lender a
report setting forth for such calendar quarter the daily aggregate
amount available to be
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drawn under the Letters of Credit issued by such Issuing Lender that
were outstanding during such calendar quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to the greater of (1) $500 and (2) 0.25% per annum
of the daily amount available to be drawn under such Letter of Credit
and (b) a letter of credit fee, payable to Administrative Agent for the
account of Lenders, equal to the daily amount available to be drawn
under such Standby Letter of Credit MULTIPLIED by the Applicable
Eurodollar Rate Margin (as determined in accordance with subsection
2.2A), each such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) the last Business Day of each of
March, June, September and December of each year and computed on the
basis of a 360-day year for the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit,
fronting and letter of credit fees, payable directly to the applicable
Issuing Lender for its own account, at such times and in such amounts
as are in accordance with such Issuing Lender's standard schedule for
such charges in effect at the time of such issuance; and
(iii) with respect to the issuance, amendment or transfer
of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii)
above), reasonable and customary documentary and processing charges
payable directly to the applicable Issuing Lender for its own account
in accordance with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment, transfer or
payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (2) any amount described in such clauses which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) of this subsection 3.2, Administrative Agent shall distribute to each
Lender its Pro Rata Share of such amount.
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3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. In the event an Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, such Issuing Lender shall immediately notify
Company and Administrative Agent, and Company shall reimburse such Issuing
Lender on or before the Business Day immediately following the date on which
such drawing is honored (the "REIMBURSEMENT DATE") in an amount in Dollars
(which amount, in the case of a drawing under a Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated by reference
to the applicable Exchange Rate) and in same day funds equal to the amount of
such honored drawing; PROVIDED that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and such Issuing Lender prior to 1:00 P.M. (New York time) on the date
such drawing is honored that Company intends to reimburse such Issuing Lender
for the amount of such honored drawing with funds other than the proceeds of
Revolving Loans, Company shall be deemed to have given a timely Notice of
Borrowing to Administrative Agent requesting Lenders to make Revolving Loans
that are Base Rate Loans on the Reimbursement Date in an amount in Dollars
(which amount, in the case of a drawing under a Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated by reference
to the applicable Exchange Rate) equal to the amount of such honored drawing and
(ii) Lenders shall, on the Reimbursement Date, make Revolving Loans that are
Base Rate Loans in the amount of such honored drawing, the proceeds of which
shall be applied directly by Administrative Agent to reimburse such Issuing
Lender for the amount of such honored drawing; and PROVIDED, FURTHER that if for
any reason proceeds of Revolving Loans are not received by such Issuing Lender
on the Reimbursement Date in an amount equal to the amount of such honored
drawing, Company shall reimburse such Issuing Lender, on demand, in an amount in
same day funds equal to the excess of the amount of such honored drawing over
the aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Company shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS
OF CREDIT.
(i) PAYMENT BY LENDERS. In the event that Company shall
fail for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount (calculated, in the case of a drawing
under a Letter of Credit denominated in a currency other than Dollars,
by reference to the applicable Exchange Rate) equal to the amount of
any drawing honored by such Issuing Lender under a Letter of Credit
issued by it, such Issuing Lender shall promptly notify each other
Lender of the unreimbursed amount of
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such honored drawing and of such other Lender's respective
participation therein based on such Lender's Pro Rata Share. Each
Lender shall make available to such Issuing Lender an amount equal to
its respective participation, in Dollars and in same day funds, at the
office of such Issuing Lender specified in such notice, not later than
3:00 P.M. (New York time) on the first business day (under the laws of
the jurisdiction in which such office of such Issuing Lender is
located) after the date notified by such Issuing Lender. In the event
that any Lender fails to make available to such Issuing Lender on such
business day the amount of such Lender's participation in such Letter
of Credit as provided in this subsection 3.3C, such Issuing Lender
shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the rate customarily used by such
Issuing Lender for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. Nothing in this
subsection 3.3C shall be deemed to prejudice the right of any Lender to
recover from any Issuing Lender any amounts made available by such
Lender to such Issuing Lender pursuant to this subsection 3.3C in the
event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of
Credit by such Issuing Lender in respect of which payment was made by
such Lender constituted gross negligence or willful misconduct on the
part of such Issuing Lender.
(ii) DISTRIBUTION TO LENDERS OF REIMBURSEMENTS RECEIVED
FROM COMPANY. In the event any Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or
any portion of any drawing honored by such Issuing Lender under a
Letter of Credit issued by it, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing such other
Lender's Pro Rata Share of all payments subsequently received by such
Issuing Lender from Company in reimbursement of such honored drawing
when such payments are received. Any such distribution shall be made to
a Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) PAYMENT OF INTEREST BY COMPANY. Company agrees to pay
to each Issuing Lender, with respect to drawings honored under any
Letters of Credit issued by it, interest on the amount paid by such
Issuing Lender in respect of each such honored drawing from the date
such drawing is honored to but excluding the date such amount is
reimbursed by Company (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date such drawing is honored to
but excluding the Reimbursement Date, the rate then in effect under
this Agreement with respect to Revolving Loans that are Base Rate Loans
and (b) thereafter, a rate which is 2% per annum in excess of the rate
of interest otherwise payable under this Agreement with respect to
Revolving Loans that are Base Rate Loans. Interest payable pursuant to
this subsection 3.3D(i) shall be computed on the basis of a 365-day
year for the actual number of days elapsed in the period during which
it accrues and shall be payable on demand or, if no demand is made, on
the date on which the related drawing under a Letter of Credit is
reimbursed in full.
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(ii) DISTRIBUTION OF INTEREST PAYMENTS BY ISSUING LENDER.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under
a Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Lender, out of the interest received by such
Issuing Lender in respect of the period from the date such drawing is
honored to but excluding the date on which such Issuing Lender is
reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Lender would have been
entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such
Letter of Credit, and (b) in the event such Issuing Lender shall have
been reimbursed by other Lenders pursuant to subsection 3.3C(i) for all
or any portion of such honored drawing, such Issuing Lender shall
distribute to each other Lender which has paid all amounts payable by
it under subsection 3.3C(i) with respect to such honored drawing such
other Lender's Pro Rata Share of any interest received by such Issuing
Lender in respect of that portion of such honored drawing so reimbursed
by other Lenders for the period from the date on which such Issuing
Lender was so reimbursed by other Lenders to but excluding the date on
which such portion of such honored drawing is reimbursed by Company.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Issuing Lender or
other Lender or any other Person or, in the case of a Lender, against
Company, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Company or one of its Subsidiaries and
the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any
Letter of Credit against presentation of a draft or other document
which does not substantially comply with the terms of such Letter of
Credit;
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(v) the occurrence or existence of any Material Adverse
Effect;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto; or
(vii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
PROVIDED, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel) which such Issuing Lender may incur
or be subject to as a consequence, direct or indirect, of (i) the issuance of
any Letter of Credit by such Issuing Lender, other than as a result of (a) the
gross negligence or willful misconduct of such Issuing Lender as determined by a
final judgment of a court of competent jurisdiction or (b) subject to the
following clause (ii), the wrongful dishonor by such Issuing Lender of a proper
demand for payment made under any Letter of Credit issued by it or (ii) the
failure of such Issuing Lender to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority (all
such acts or omissions herein called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company and any
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of
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such Issuing Lender, including any Governmental Acts, and none of the above
shall affect or impair, or prevent the vesting of, any of such Issuing Lender's
rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing Lender
under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or 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, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Tax on the overall net income of such Issuing Lender or
Lender) with respect to the issuing or maintaining of any Letters of
Credit or the purchasing or maintaining of any participations therein
or any other obligations under this Section 3, whether directly or by
such being imposed on or suffered by any particular Issuing Lender;
(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 in respect of any Letters of Credit issued by any Issuing
Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section 3
or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of
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the statement referred to in the next sentence, such additional amount or
amounts as may be necessary to compensate such Issuing Lender or Lender for any
such increased cost or reduction in amounts received or receivable hereunder;
PROVIDED, HOWEVER, that Company shall not be obligated to pay such Issuing
Lender or Lender any compensation attributable to any period prior to the date
that is 90 days prior to the date on which such Issuing Lender or Lender gave
notice to Company of the circumstances entitling such Issuing Lender or Lender
to compensation. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
3.7 CONFIRMATION OF LETTERS OF CREDIT ISSUED UNDER EXISTING CREDIT
AGREEMENT.
All Letters of Credit issued under the Existing Credit
Agreement outstanding on the Restatement Effective Date shall be deemed Letters
of Credit issued hereunder.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT AND EFFECTIVENESS OF
AGREEMENT
The conditions to the making of the initial Loans, to the
effectiveness of this Agreement and to the making of subsequent Loans and the
issuance of Letters of Credit are set forth herein as follows:
4.1 CONDITIONS TO TERM LOANS AND INITIAL REVOLVING LOANS AND SWING LINE
LOANS UNDER EXISTING CREDIT AGREEMENT.
The obligations of Lenders to make the Term Loans and any
Revolving Loans and Swing Line Loans made on the Closing Date were, in addition
to the conditions precedent specified in subsection 4.2 of the Existing Credit
Agreement, subject to prior or concurrent satisfaction or waiver of the
following conditions:
A. LOAN PARTY DOCUMENTS. On the Closing Date, Company delivered,
and caused each other Loan Party to deliver, to Lenders (or to Administrative
Agent for Lenders with sufficient originally executed copies, where appropriate,
for each Lender and its counsel) the following with respect to Company or such
Loan Party, as the case may be, each, unless otherwise noted, dated the Closing
Date:
(i) Copies of the Organizational Documents of such
Person, certified by the Secretary of State of its jurisdiction of
organization if such certification is generally available and in each
other case, by such Person's secretary or assistant secretary;
(ii) To the extent generally available, a good standing
certificate from the Secretary of State of its jurisdiction of
organization and a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of such jurisdiction, each dated a recent
date prior to the Closing Date;
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(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of
the Loan Documents and Related Agreements to which it is a party,
certified as of the Closing Date by the corporate secretary or an
assistant secretary of such Person as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of the officers
of such Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Notes and the other Loan
Documents to which such Person is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
B. HOLDINGS DOCUMENTS. On the Closing Date, Company delivered, or
caused to be delivered, to Lenders (or to Administrative Agent for Lenders with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) the following with respect to Holdings, each, unless otherwise
noted, dated the Closing Date:
(i) executed originals of the Holdings Pledge Agreement;
(ii) with respect to Holdings, evidence (which may be a
legal opinion), reasonably satisfactory in form and substance to
Administrative Agent, of the due authorization, execution and delivery
by Holdings of the Holdings Pledge Agreement and of the enforceability
of the Holdings Pledge Agreement against Holdings;
(iii) with respect to Holdings, signature and incumbency
certificates of the officers of Holdings executing the Holdings Pledge
Agreement; and
(iv) such other documents as Administrative Agent may
reasonably request.
C. CLOSING DATE. The Closing Date was October 2, 2000.
D. NO MATERIAL ADVERSE EFFECT. Since January 29, 2000 there had
occurred no Material Adverse Effect.
E. CORPORATE AND CAPITAL STRUCTURE, OWNERSHIP, ETC.
(i) CORPORATE STRUCTURE. The corporate organizational
structure of Company and its Subsidiaries, after giving effect to the
Merger, was as set forth in SCHEDULE 4.1E annexed hereto.
(ii) CAPITAL STRUCTURE AND OWNERSHIP. The capital
structure and ownership of Company and its Subsidiaries, after giving
effect to the Merger, was as set forth in SCHEDULE 4.1E annexed hereto.
(iii) EMPLOYMENT CONTRACTS. Administrative Agent and
Lenders received copies of any and all employment contracts with senior
management of Company.
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F. PROCEEDS OF DEBT AND EQUITY CAPITALIZATION OF COMPANY.
(i) DEBT AND EQUITY CAPITALIZATION OF COMPANY. On or
before the Closing Date, (a) the LGP Investors and the TPG Investors
had purchased Holdings Membership Interests for cash consideration of
not less than $190,000,000 and (b) Holdings and TCW had purchased
shares of the Capital Stock of Merger Sub for cash consideration of not
less than $195,000,000. An additional $3,200,000 of Company Stock had
been retained through "rollovers" by existing management shareholders.
(ii) OTHER DEBT CAPITALIZATION OF COMPANY. On or before
the Closing Date the Existing Senior Subordinated Notes had been sold
for gross proceeds of not less than $120,000,000 and the Existing
Senior Subordinated Note Agreement was in full force and effect and was
not amended, supplemented, waived or otherwise modified without the
consent of Agents, and executed or conformed copies thereof (including
all exhibits and schedules thereto) and any amendments thereto and all
documents executed in connection therewith were delivered to Agents.
(iii) USE OF PROCEEDS OF CAPITALIZATION. Company provided
evidence reasonably satisfactory to Administrative Agent that the
proceeds of the debt and equity capitalization of Company described in
clause (i) above had been irrevocably committed, prior to the
application of the proceeds of the Term Loans and a portion of the
Revolving Loans, to the payment of a portion of the Acquisition
Financing Requirements.
G. MERGER MATTERS.
(i) MERGER AGREEMENT AND CERTAIN OTHER RELATED
AGREEMENTS. Administrative Agent had received fully executed or
conformed copies of the Merger Agreement and any documents executed in
connection therewith, and the Merger Agreement was in full force and
effect and no provision thereof had been amended, supplemented, waived
or otherwise modified in any respect determined by Administrative Agent
to be material (including, without limitation, any increase in the
price to be paid for the Company Stock to an amount in excess of $22.00
per share), in each case without the consent of Administrative Agent;
(ii) All conditions to the Merger set forth in the Merger
Agreement were satisfied in all material respects or the fulfillment of
any such conditions had been waived with the consent of Administrative
Agent;
(iii) The Merger became effective in accordance with the
terms of the Merger Agreement and the Delaware General Corporation Law;
and
(iv) OFFICERS' CERTIFICATES. Administrative Agent received
an Officers' Certificate from Company to the effect that (a) the
representations and warranties of each of MergerSub and Company in the
Merger Agreement were true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though
made on and as of that date, (b) the Merger Agreement was in full force
and effect and no provision thereof had been amended, supplemented,
waived or otherwise modified in any material respect without the
consent of Administrative Agent, (c) each of Borrower and
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Merger Sub had complied with all agreements, terms and conditions
contained in the Merger Agreement and any agreements or documents
referred to therein required to be performed or complied with by each
of them on or before the Closing Date, except where such failure to
comply or perform could not reasonably be expected to have a Material
Adverse Effect, and none of such Persons were in default in their
performance or compliance with any of the terms or provisions thereof,
except where such default could not reasonably be expected to have a
Material Adverse Effect, and (d) the Merger has became effective in
accordance with the terms of the Merger Agreement and the Delaware
General Corporation Law. Administrative Agent received an Officer's
Certificate of Company setting forth the sources and uses of funds with
respect to the Merger and stating that Company would proceed to
consummate the Merger immediately upon making of the initial loans.
H. RELATED AGREEMENTS.
(i) APPROVAL OF RELATED AGREEMENTS. The Related
Agreements were each reasonably satisfactory in form and substance to
Administrative Agent.
(ii) RELATED AGREEMENTS IN FULL FORCE AND EFFECT.
Administrative Agent and Lenders received a fully executed or conformed
copy of each Related Agreement and any documents executed in connection
therewith, and each Related Agreement was in full force and effect and
no provision thereof had been modified or waived if such modification
or waiver would have a material adverse effect on the rights of Lenders
hereunder, in each case without the consent of Administrative Agent.
I. MATTERS RELATING TO EXISTING INDEBTEDNESS. On the Closing
Date, (i) Company and its Subsidiaries (a) repaid in full all Indebtedness
outstanding under the then existing credit agreement, (b) terminated any
commitments to lend or make other extensions of credit thereunder, (c) delivered
to Administrative Agent all documents or instruments necessary to release all
Liens securing Indebtedness or other obligations of Company and its Subsidiaries
thereunder, and (d) made arrangements satisfactory to Administrative Agent with
respect to the cancellation or replacement of any letters of credit outstanding
thereunder or the issuance of Letters of Credit to support the obligations of
Company and its Subsidiaries with respect thereto and (ii) Company and its
Subsidiaries had no existing Indebtedness outstanding other than existing
Capital Leases and existing Indebtedness in an aggregate amount not exceeding
$20,000,000.
J. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND THIRD PARTY
CONSENTS; EXPIRATION OF WAITING PERIODS, ETC. Company and each Sponsor had
obtained all Governmental Authorizations and all consents of other Persons, in
each case that were necessary or advisable in connection with the Merger and the
other transactions contemplated by the Loan Documents and the Related
Agreements, and each of the foregoing were in full force and effect, in each
case other than those the failure to obtain or maintain which, either
individually or in the aggregate, would not reasonably have been expected to
have had a Material Adverse Effect. All applicable waiting periods expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the Merger or
the financing thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing were
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pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.
K. SECURITY INTERESTS IN PERSONAL PROPERTY. Administrative Agent
received evidence satisfactory to it that Company and each Sponsor had taken or
had caused to be taken all such actions, executed and delivered or caused to be
executed and delivered all such agreements, documents and instruments, and made
or caused to be made all such filings and recordings (other than the filing or
recording of items described in clauses (iii) below) that were necessary or, in
the opinion of Administrative Agent, desirable in order to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and (upon such filing
and recording) perfected First Priority security interest in the entire personal
property Collateral. Such actions included the following:
(i) STOCK CERTIFICATES AND INSTRUMENTS. Delivery to
Administrative Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Administrative
Agent) representing all Capital Stock (other than the Company Preferred
Stock) pledged pursuant to the Pledge and Security Agreement, and (b)
all promissory notes or other instruments (duly endorsed, where
appropriate, in a manner satisfactory to Administrative Agent)
evidencing any Collateral with a fair market value or a face amount in
excess of $250,000;
(ii) LIEN SEARCHES AND UCC TERMINATION STATEMENTS.
Delivery to Administrative Agent of (a) the results of a recent search,
by a Person satisfactory to Administrative Agent, of all effective UCC
financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed
property of any Loan Party, together with copies of all such filings
disclosed by such search, and (b) UCC termination statements duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC
financing statements or fixture filings disclosed in such search (other
than any such financing statements or fixture filings in respect of
Liens permitted to remain outstanding pursuant to the terms of this
Agreement); and
(iii) UCC FINANCING STATEMENTS AND FIXTURE FILINGS.
Delivery to Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable Loan
Party with respect to all personal and mixed property Collateral of
such Loan Party, for filing in all jurisdictions as may be necessary
or, in the opinion of Administrative Agent, desirable to perfect the
security interests created in such Collateral pursuant to the
Collateral Documents.
L. FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or before
the Closing Date, Lenders received from Company (i) audited financial statements
for Company and its Subsidiaries for the Fiscal Year ended January 29, 2000,
consisting of balance sheets and the related consolidated statements of income,
stockholders' equity and cash flows for such Fiscal Year, setting forth in each
case in comparative form the corresponding figures for the previous Fiscal Year,
(ii) unaudited financial statements for Company and its Subsidiaries for the
Fiscal Quarter ended July 29, 2000 and any monthly fiscal period ended
subsequent to July 29, 2000 for which financial statements can be prepared, in
each case consisting of balance sheets and the
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related consolidated statements of income, stockholders' equity and cash flows
for such period, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the previous Fiscal Year,
(iii) pro forma consolidated balance sheets of Company and its Subsidiaries as
at the Closing Date, prepared in accordance with GAAP and reflecting the
consummation of the Merger, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, which pro forma
financial statements were in form satisfactory to Administrative Agent and
Lenders and (iv) final projected financial statements of Company and its
Subsidiaries for the eight-year period immediately following the Closing Date,
consisting of balance sheets and the related statements of operations,
stockholders' equity and cash flows for such period, all of the foregoing in
form and substance reasonably satisfactory to Administrative Agent.
M. SOLVENCY LETTER. On the Closing Date, Administrative Agent and
Lenders received a letter, dated the Closing Date, from Valuation Research
Corporation, to the effect that, after giving effect to the consummation of the
Merger, the related financings and the other transactions contemplated by the
Loan Documents and the Related Agreements, Company would be Solvent, and
otherwise in form and substance reasonably satisfactory to Administrative Agent.
N. EVIDENCE OF INSURANCE. Administrative Agent received insurance
binders evidencing that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect and that Administrative Agent on
behalf of Lenders has been named as additional insured and/or loss payee
thereunder to the extent required under subsection 6.4.
O. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders received
originally executed copies of one or more favorable written opinions of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ and/or Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for Loan
Parties, in form and substance reasonably satisfactory to Administrative Agent
and its counsel, dated as of the Closing Date and setting forth substantially
the matters in the opinions designated in EXHIBIT VIII-A annexed hereto.
P. OPINIONS OF ADMINISTRATIVE AGENT'S COUNSEL. Lenders received
originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇ LLP, counsel to Administrative Agent, dated as of the Closing
Date, substantially in the form of EXHIBIT IX annexed hereto.
Q. FEES. Company paid to Administrative Agent, for distribution
(as appropriate) to Administrative Agent and Lenders, the fees payable on the
Closing Date referred to in subsection 2.3.
R. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company delivered to Administrative Agent and Lenders an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 are true, correct and complete
in all material respects on and as of the Closing Date to the same extent as
though made on and as of that date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Company had performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall have
been performed or satisfied by it on or before the Closing
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Date except as otherwise disclosed to and agreed to in writing by Administrative
Agent and Lenders.
S. REVOLVING LOANS. As of the Closing Date, the Total Utilization
of Revolving Loan Commitments, after giving effect to the Merger, did not exceed
$20,000,000 except for outstanding Letters of Credit.
T. CLOSING DATE FINANCIAL PERFORMANCE. On the Closing Date,
Company delivered to Administrative Agent a Closing Date Compliance Certificate
demonstrating in reasonable detail compliance with the following conditions:
(i) Consolidated Pro Forma EBITDA of the Company and its
Subsidiaries for the four-Fiscal Quarter period ended July 29, 2000 was
at least $97,000,000.
(ii) As of the Closing Date the Company had senior secured
debt ratings from ▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's
Rating Service.
U. TRANSACTION COSTS. The aggregate of all amounts necessary to
pay Transaction Costs did not exceed an amount disclosed to and reasonably
acceptable to the Administrative Agent and the Syndication Agent prior to the
Closing Date.
V. LEASEHOLD MORTGAGES AND COLLATERAL ACCESS AGREEMENTS. On the
Closing Date, Administrative Agent received leasehold mortgages or Collateral
Access Agreements on as many of the distribution centers operated by Company and
its Subsidiaries as the Company could obtain consent from the landlords thereof
using commercially reasonable efforts and approximately 50 retail stores
identified by Agents and Company.
W. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel were
reasonably satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
4.2 CONDITIONS TO EFFECTIVENESS OF THE AGREEMENT.
The conditions to the effectiveness of this Agreement are, in
addition to the conditions precedent specified in subsection 4.3:
A. COMPANY DOCUMENTS. On or before the Restatement Effective
Date, Company shall deliver to Lenders (or to Administrative Agent for Lenders
with sufficient originally executed copies, where appropriate, for each Lender
and its counsel) the following with respect to Company, each, unless otherwise
noted, dated the Restatement Effective Date:
(i) A certificate of the Secretary or Assistant Secretary
of Company certifying that the Organizational Documents of Company have
not been amended, supplemented or otherwise modified since the Closing
Date;
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(ii) To the extent generally available, a good standing
certificate from the Secretary of State of its jurisdiction of
organization and a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of such jurisdiction, each dated a recent
date prior to the Restatement Effective Date;
(iii) Resolutions of the Board of Directors of Company
approving and authorizing the execution, delivery and performance of
the Loan Documents being executed on the Restatement Effective Date to
which it is a party, certified as of the Restatement Effective Date by
the corporate secretary or an assistant secretary of such Person as
being in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers
of Company executing the Loan Documents being executed on the
Restatement Effective Date to which it is a party;
(v) Executed originals of the Notes and the other Loan
Documents being executed on the Restatement Effective Date to which
Company is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
B. MASTER CONFIRMATION. Company shall, and shall cause each other
Loan Party to, deliver to Lenders (or to Administrative Agent for Lenders)
executed originals of the Master Confirmation.
C. PAYMENT OF LOANS.
(i) PAYMENT OF TRANCHE A TERM LOANS. The Tranche A Term
Loans made under the Existing Credit Agreement, including all interest
thereon, shall have paid in full.
(ii) PAYMENT OF TRANCHE B TERM LOAN. The Tranche B Term
Loans, as made under the Existing Credit Agreement and continued
hereunder, shall be paid to the extent necessary such that the
aggregate principal amount thereof upon the effectiveness of this
Agreement shall not exceed $195,000,000 and any interest on any such
amount so paid shall be paid.
(iii) PAYMENT OF REVOLVING LOANS. The Revolving Loans, as
made under the Existing Credit Agreement and continued hereunder, shall
be paid to the extent necessary such that the Total Utilization of
Revolving Loan Commitments shall not exceed $75,000,000.
D. ISSUANCE OF NEW SENIOR SUBORDINATED NOTES AND REPAYMENT OF
EXISTING SENIOR SUBORDINATED NOTES.
(i) NEW SENIOR SUBORDINATED NOTES. On or before the
Restatement Effective Date the New Senior Subordinated Notes shall have
been sold for gross cash proceeds of
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not less than $200,000,000, and the New Senior Subordinated Note
Indenture shall have been executed and delivered; and
(ii) REPAYMENT OF EXISTING SENIOR SUBORDINATED NOTES.
Concurrently with the sale of the New Senior Subordinated Notes, the
Existing Senior Subordinated Notes shall have been paid in full.
E. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders shall have
received originally executed copies of one or more favorable written opinions of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and/or Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for
Loan Parties, in form and substance reasonably satisfactory to Administrative
Agent and its counsel, dated as of the Restatement Effective Date and setting
forth substantially the matters in the opinions designated in EXHIBIT VIII-B
annexed hereto, and as to such other matters as Administrative Agent acting on
behalf of Lenders may reasonably request.
F. OPINIONS OF ADMINISTRATIVE AGENT'S COUNSEL. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇ LLP, counsel to Administrative Agent, dated as of the
Restatement Effective Date, substantially in the form of EXHIBIT IX-B annexed
hereto and as to such other matters as Administrative Agent acting on behalf of
Lenders may reasonably request.
G. FEES. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Restatement Effective Date referred to in subsection 2.3.
H. OFFICER'S CERTIFICATE. Company shall have delivered to
Administrative Agent and Lenders an Officer's Certificate, in form and substance
satisfactory to Administrative Agent, to the effect that the representations and
warranties in Section 5 are true, correct and complete in all material respects
on and as of the Restatement Effective Date to the same extent as though made on
and as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that Company shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall be
performed or satisfied by it on or before the Restatement Effective Date except
as otherwise disclosed to and agreed to in writing by Administrative Agent and
Lenders.
4.3 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief financial officer
or the treasurer of Company or by any executive officer of Company designated by
any of the above-described officers on behalf of Company in a writing delivered
to Administrative Agent.
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B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date;
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date; and
(v) The making of the Loans requested on such Funding
Date shall not violate any law including Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System.
4.4 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief financial officer or the treasurer of
Company or by any executive officer of Company designated by any of the
above-described officers on behalf of Company in a writing delivered to
Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.3B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a Loan and
the date of issuance of such Letter of Credit were a Funding Date.
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SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make or continue the Loans, as applicable, and to induce the Issuing Lender to
issue Letters of Credit and to induce other Lenders to purchase participations
therein, Company represents and warrants to each Lender, on the date of this
Agreement, on each Funding Date and on the date of issuance of each Letter of
Credit, that the following statements are true, correct and complete in all
material respects:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS, SPONSORS
AND SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation as specified in SCHEDULE 5.1A annexed hereto. Each Loan Party has
all requisite corporate power and authority to own and operate its properties,
to carry on its business as now conducted and as proposed to be conducted, to
enter into the Loan Documents and Related Agreements to which it is a party and
to carry out the transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party 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 will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to subsection 7.13.
D. SPONSORS AND SUBSIDIARIES. All of the Sponsors and all of the
Subsidiaries of Company, as well as the ownership interests of each in their
respective Subsidiaries, are identified in SCHEDULE 5.1A annexed hereto, as said
SCHEDULE 5.1A may be supplemented from time to time pursuant to the provisions
of subsection 6.1(xv). The number of shares of Company Common Stock and Company
Preferred Stock indirectly owned by each such Sponsor is identified in SCHEDULE
5.1A annexed hereto (as so supplemented). The Capital Stock of Company and of
each of the Subsidiaries of Company identified in SCHEDULE 5.1A annexed hereto
(as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such Capital Stock constitutes Margin Stock. Each of
the Subsidiaries of Company identified in SCHEDULE 5.1A annexed hereto (as so
supplemented) is duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of organization set forth therein, has all
requisite power and authority to own and operate its properties and to carry on
its business as now conducted and as proposed to be conducted, and 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, in each
case except where failure to be so qualified or in good standing or a lack of
such power and authority has not had and would not reasonably be expected to
have a Material Adverse Effect.
E. OPTIONS AND OTHER RIGHTS. As of the Restatement Effective
Date, except as set forth in SCHEDULE 5.1E, there are no outstanding
subscriptions, warrants, calls, options, rights (including unsatisfied
preemptive rights), commitments or agreements to which Company or any
79
of its Subsidiaries is bound that permit or entitle any Person to purchase or
otherwise receive from or to be issued any shares of Capital Stock of Company or
any of its Subsidiaries or any security or obligation of any kind convertible
into any class of Capital Stock of Company or any of its Subsidiaries. Neither
Company nor any of its Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
Capital Stock.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Related Agreements have been duly
authorized by all necessary corporate action on the part of each Loan Party that
is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Organizational Documents of Company or
any of its Subsidiaries or any order, judgment or decree of any court or other
agency of government binding on Company or any of its Subsidiaries, (ii) except
as set forth in SCHEDULE 5.2B annexed hereto, conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, which breach or
default could reasonably be expected to have a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of Company or any of its Subsidiaries (other than any Liens
created under any of the Loan Documents in favor of Administrative Agent on
behalf of Lenders), or (iv) except as set forth in SCHEDULE 5.2B annexed hereto,
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Company or any of its Subsidiaries, except
for such approvals or consents which will be obtained on or before the
Restatement Effective Date and disclosed in writing to Lenders or for which the
failure to obtain would not reasonably be expected to result in a Material
Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance
by Loan Parties of the Loan Documents and the Related Agreements to which they
are parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body, except for those registrations, consents, approvals, notices or other
actions which have been obtained on or before the Restatement Effective Date.
D. BINDING OBLIGATION. Each of the Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan 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.
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E. VALID ISSUANCE OF COMPANY STOCK, COMPANY PREFERRED STOCK AND
SENIOR SUBORDINATED NOTES.
(i) COMPANY STOCK. The Company Stock is duly and validly
issued, fully paid and nonassessable. The issuance and sale of such
Company Stock either (a) has been registered or qualified under
applicable federal and state securities laws or (b) was exempt
therefrom.
(ii) NEW SENIOR SUBORDINATED NOTES. The New Senior
Subordinated Notes when issued and paid for, will be the legally valid
and binding obligations of Company, enforceable against Company in
accordance with their 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. The subordination provisions of
the New Senior Subordinated Notes will be enforceable against the
holders thereof and the Loans and all other monetary Obligations
hereunder are and will be within the definition of "Senior
Indebtedness" included in such provisions.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) the audited
consolidated balance sheets of Company and its Subsidiaries as at February 3,
2001, and the related consolidated statements of income, and cash flows of
Company and its Subsidiaries for the Fiscal Year then ended; and (ii) the
unaudited consolidated balance sheets of Company and its Subsidiaries as at
August 4, 2001, and the related unaudited consolidated statements of income, and
cash flows of Company and its Subsidiaries for the six months then ended. All
such statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities 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. None of Company or any of its
Subsidiaries has (and will not following the funding of the initial Loans have)
any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is required in
accordance with GAAP to be reflected in the foregoing financial statements or
the notes thereto and that is not so reflected and which in any such case is
material in relation to the business, operations, properties, assets, financial
condition or prospects of Company and its Subsidiaries taken as a whole.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since February 3, 2001, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Except as disclosed in the Merger Agreement and the schedules
annexed thereto, neither Company 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 by
subsection 7.5.
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5.5 TITLE TO PROPERTIES.
Company and its Subsidiaries have (i) good and valid title to
(in the case of fee interests in real property), (ii) valid leasehold or
subleasehold, as applicable, interests in (in the case of leasehold or
subleasehold, as applicable, interests in material real or personal property)
subject to customary subordinations, if any, in favor of the lender of the fee
owner of such property except to the extent that the failure to have valid title
would not reasonably be expected to have a Material Adverse Effect, or (iii)
good title to (in the case of all other personal property), all of their
respective properties and assets reflected in the financial statements referred
to in subsection 5.3 or in the most recent financial statements delivered
pursuant to subsection 6.1, 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 subsection 7.7. Except as permitted by this Agreement,
all such properties and assets are free and clear of Liens other than Liens
which do not materially interfere with the present use thereof.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in SCHEDULE 5.6, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company or any of its Subsidiaries) at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign (including any Environmental Claims) that are pending or, to the
knowledge of Company, threatened against Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries and that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither Company nor any of its Subsidiaries (i) is in violation of any
applicable laws (including Environmental Laws) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or (ii) is subject to or in default with respect to any final judgments, writs,
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 result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3 and except as
set forth on SCHEDULE 5.7, all material tax returns and reports of Company and
its Subsidiaries required to be filed by any of them have been timely filed
(taking into account all available extensions), and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon Company and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid (other than any taxes the amount or validity of which is being contested in
a manner consistent with subsection 6.3A) except to the extent that the failure
to file such returns or pay such taxes would not reasonably be expected to have
a Material Adverse Effect.
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5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Company nor any of its Subsidiaries is a party to or
is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
B. SCHEDULE 5.8B contains a true, correct and complete list of
all the Material Contracts in effect on the Restatement Effective Date. Except
as set forth on SCHEDULE 5.8B, all such Material Contracts are in full force and
effect and no material defaults currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company 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.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Company only or of Company and
its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Company or any of its Subsidiaries and any Lender or any
Affiliate of any Lender, relating to Indebtedness and within the scope of
subsection 8.2, will be Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company, each of its Subsidiaries and each of their respective
ERISA Affiliates are in compliance with all applicable provisions and
requirements of ERISA 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 except to the extent that any
non-compliance or failure to perform would not reasonably be expected to have a
Material Adverse Effect.
B. No ERISA Event that is reasonably likely to result in a
Material Adverse Effect has occurred or is reasonably expected to occur.
C. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans
83
with respect to which assets exceed benefit liabilities), does not exceed
$5,000,000. SCHEDULE 5.11C sets forth a complete list of the Company's Employee
Benefit Plans.
D. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available and based solely on
information, if any, provided to Company by such Multiemployer Plan, the
potential liability of Company, 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, does not exceed an amount that
would reasonably be expected to have a Material Adverse Effect.
5.12 CERTAIN FEES.
Except for Transaction Costs disclosed and reasonably
acceptable to the Administrative Agent and the Syndication Agent, no broker's or
finder's fee or commission will be payable by Company or any of its Subsidiaries
with respect to this Agreement or any of the transactions contemplated hereby,
and Company hereby indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in SCHEDULE 5.13 annexed hereto:
(i) neither Company 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 (a) any Environmental Law, (b) any Environmental
Claim, or (c) any Hazardous Materials Activity that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(ii) neither Company 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. Section 9604) or any comparable state law;
(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim
against Company or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect;
(iv) neither Company nor any of its Subsidiaries nor, to
Company's knowledge, any predecessor of Company 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 Company or any of its Subsidiaries' operations
84
involves the generation, transportation, treatment, storage or disposal
of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any
state equivalent which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect; and
(v) compliance with all current requirements pursuant to
or under Environmental Laws will not, individually or in the aggregate,
have a reasonable possibility of giving rise to a Material Adverse
Effect.
Notwithstanding anything in this subsection 5.13 to the
contrary, no event or condition is occurring, or to Company's knowledge has
occurred, with respect to Company or any of its Subsidiaries relating to any
Environmental Law, any Release of Hazardous Materials, or any Hazardous
Materials Activity, including any matter disclosed on SCHEDULE 5.13 annexed
hereto, which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations
by such Loan Party on any date on which this representation is made, will be,
Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties and Sponsors, together with
(i) the actions taken on or prior to the date hereof pursuant to subsections
4.1, 4.2, 6.8 and 6.9 and (ii) the delivery to Administrative Agent of any
Pledged Collateral not delivered to Administrative Agent at the time of
execution and delivery of the applicable Collateral Document (all of which
Pledged Collateral has been so delivered) are effective to create in favor of
Administrative Agent for the benefit of Lenders, as security for the respective
Secured Obligations (as defined in the applicable Collateral Document in respect
of any Collateral), a valid and perfected First Priority Lien on all of the
Collateral, and all filings and other actions necessary or desirable to perfect
and maintain the perfection and First Priority status of such Liens have been
duly made or taken and remain in full force and effect, other than the filing of
any UCC financing statements or Mortgages delivered to Administrative Agent for
filing or recording, as applicable (but not yet filed or recorded) and the
periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
or any Sponsors of the Liens purported to be created in favor of Administrative
Agent pursuant to any of the Collateral Documents or (ii) the exercise by
Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created pursuant to any of the Collateral
Documents or created or
85
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A or as
permitted by subsection 7.2, (i) no effective UCC financing statement, fixture
filing or other instrument similar in effect covering all or any part of the
Collateral is on file in any filing or recording office and (ii) no document
granting any rights to any third party with respect to any Intellectual Property
has been recorded with the United States Patent and Trademark Office or any
successor or substitute office.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to
Administrative Agent by or on behalf of any Loan Party or any Sponsors with
respect to any of the Collateral (in each case taken as a whole with respect to
any particular Collateral) is accurate and complete in all material respects.
5.17 RELATED AGREEMENTS.
Company has delivered to Lenders complete and correct copies
of each Related Agreement and of all exhibits and schedules thereto.
5.18 DISCLOSURE.
The information furnished to Lenders by or on behalf of
Company in connection with the transactions contemplated by this Agreement,
together with the representations and warranties of Company and its Subsidiaries
contained in the Loan Documents and the Related Agreements and in any other
documents, certificates and written statements furnished to Lenders by or on
behalf of Company or any of its Subsidiaries or for use in connection with the
transactions contemplated by this Agreement, taken as a whole, do not contain
any untrue statement of a material fact or omit to state a material fact (known
to Company, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made (in each case taken as a whole).
Any projections and PRO FORMA financial information contained in such materials
are based upon good faith estimates and assumptions believed by Company 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.
5.19 INTELLECTUAL PROPERTY.
A. All patents and patent applications, trademark registrations
and applications, and copyright registrations and applications included in the
Intellectual Property are listed in SCHEDULE 5.19A annexed hereto, as such
SCHEDULE 5.19A may be supplemented from time to
86
time pursuant to subsection 6.1(xvii). Company and its Subsidiaries own, or are
licensed (to the extent required to be so licensed) to use, all Intellectual
Property, and the Loan Parties own all of the right, title and interest in and
to all Intellectual Property under the applicable laws of the United States of
America free and clear of any Lien (other than Liens permitted under this
Agreement), in each case except where the failure to do or have the foregoing
could not reasonably be expected to result in a Material Adverse Effect.
B. No material claim has been asserted by any Person with respect
to the use of any Intellectual Property, or challenging the validity or
effectiveness of any Intellectual Property. The use of any Intellectual Property
by Company or any of its Subsidiaries does not infringe on the rights of any
Person, subject to such claims and infringements as do not, individually or in
the aggregate, give rise to any liabilities on the part of Company or any of its
Subsidiaries that are material to Company and its Subsidiaries, taken as a
whole. The consummation of the transactions contemplated by this Agreement will
not in any material manner or to any material extent impair the ownership of (or
the license to use, as the case may be) any Intellectual Property by Company or
any of its Subsidiaries.
SECTION 6. AFFIRMATIVE COVENANTS OF COMPANY
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless the Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent and to
Syndication Agent:
(i) MONTHLY FINANCIALS: as soon as available and in any
event within 45 days after the end of each month ending after the
Restatement Effective Date, the consolidated balance sheet of Company
and its Subsidiaries as at the end of such month and the related
consolidated statements of earnings and cash flows of Company and its
Subsidiaries for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month, 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, to the
extent prepared on a monthly basis, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company
and its 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;
(ii) QUARTERLY FINANCIALS: within 45 days after the end of
each Fiscal Quarter, (a) the consolidated balance sheets of Company and
its Subsidiaries as at the end of such
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Fiscal Quarter and the related consolidated statements of earnings and
cash flows of Company 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 and certified by the chief financial officer of Company that
they fairly present, in all material respects, the financial condition
of Company and its Subsidiaries, as the case may be, 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, and (b) a narrative report describing the
operations of Company and its Subsidiaries in a form reasonably
satisfactory to Administrative Agent; PROVIDED, that such financial
statements for the fourth Fiscal Quarter of each Fiscal Year may be
marked "Draft" and the narrative report described in clause (b) of this
paragraph (ii) need not be delivered with respect to such fourth Fiscal
Quarter financial statements.
(iii) YEAR-END FINANCIALS: within 90 days after the end of
each Fiscal Year, (a) the consolidated balance sheets of Company and
its Subsidiaries as at the end of such Fiscal Year and the related
consolidated statements of earnings, stockholders' equity and cash
flows of Company and its Subsidiaries for such Fiscal Year, 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, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries, as
the case may be, as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a
narrative report describing the operations of Company and its
Subsidiaries in a form reasonably satisfactory to Administrative Agent,
and (c) in the case of such consolidated financial statements, a report
thereon of KPMG or other independent certified public accountants of
recognized national standing selected by Company and reasonably
satisfactory to Administrative Agent, which report shall be unqualified
as to scope of audit, shall express no doubts about the ability of
Company and its Subsidiaries to continue as a going concern, and shall
state that such consolidated financial statements fairly present, in
all material respects, the consolidated financial position of Company
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;
(iv) OFFICER'S AND COMPLIANCE CERTIFICATES: together with
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officer's
Certificate of Company stating that the signer has reviewed the terms
of this Agreement and has made, or caused to be made under such
signer's supervision, a review in reasonable detail of the transactions
and condition of Company and its Subsidiaries during the accounting
period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such
88
accounting period, and that the signer does not have knowledge of the
existence as at the date of such Officer's Certificate, of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto;
and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
with the restrictions contained in Section 7, in each case to the
extent compliance with such restrictions is required to be tested at
the end of the applicable accounting period;
(v) RECONCILIATION STATEMENTS: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3 (other than as a result of FAS 141 and 142), the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of this
subsection 6.1 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 (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiii) of this subsection 6.1 following such change,
consolidated financial statements of Company and its Subsidiaries, as
the case may be, for (y) the current Fiscal Year to the effective date
of such change and (z) the two full Fiscal Years immediately preceding
the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection
6.1 following such change, a written statement of the chief accounting
officer or chief financial officer of Company setting forth the
differences (including any differences that would affect any
calculations relating to the financial covenants set forth in
subsection 7.6) which would have resulted if such financial statements
had been prepared without giving effect to such change;
(vi) ACCOUNTANTS' CERTIFICATION: together with each
delivery of consolidated financial statements of Company and its
Subsidiaries pursuant to subdivision (iii) above, a written statement
by the independent certified public accountants giving the report
thereon stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or
Potential Event of Default under Section 7 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; PROVIDED that
such accountants shall not be liable by reason of any failure to obtain
knowledge of any such Event of Default or Potential Event of Default
that would not be disclosed in the course of their audit examination;
(vii) ACCOUNTANTS' REPORTS: upon request (unless restricted
by applicable professional standards), copies of all reports submitted
to Company by independent certified public accountants in connection
with each annual, interim or special audit of the financial statements
of Company and its Subsidiaries made by such accountants, including any
comment letter submitted by such accountants to management in
connection with their annual audit;
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(viii) SEC FILINGS AND PRESS RELEASES: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;
(ix) EVENTS OF DEFAULT, ETC.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, (b) that
any Person has given any notice to Company or any of its Subsidiaries
or taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, or (c) 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, an
Officer's Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of
Default, Potential Event of Default, default, event or condition, and
what action Company has taken, is taking and proposes to take with
respect thereto;
(x) LITIGATION OR OTHER PROCEEDINGS: (a) promptly upon
any officer of Company obtaining knowledge of (X) the institution of,
or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Company to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(a) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(b) 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 Company to enable Lenders and
their counsel to evaluate such matters; and (b) within twenty
days after the end of each Fiscal Quarter, a schedule of all
Proceedings involving an alleged liability of, or claims
against or affecting, Company or any of its Subsidiaries equal
to or greater than $5,000,000, and promptly after request by
Administrative Agent such other information as may be
reasonably requested by Administrative Agent to enable
Administrative Agent and its counsel to evaluate any of such
Proceedings;
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(xi) ERISA EVENTS: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Company, 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;
(xii) ERISA NOTICES: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (b) all notices received by Company, any
of its Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xiii) FINANCIAL PLANS: as soon as practicable and in any
event no later than 45 days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year (the
"FINANCIAL PLAN" for such Fiscal Year), including (a) forecasted
consolidated balance sheets and forecasted consolidated statements of
income and cash flows of Company and its Subsidiaries for such Fiscal
Year, together with a PRO FORMA Compliance Certificate for such Fiscal
Year and an explanation of the assumptions on which such forecasts are
based, (b) forecasted consolidated statements of income and cash flows
of Company and its Subsidiaries for each quarter of such Fiscal Year,
together with an explanation of the assumptions on which such forecasts
are based, and (c) such other information and projections as any Lender
may reasonably request;
(xiv) INSURANCE: as soon as practicable and in any event by
the last day of each Fiscal Year, a report outlining all material
insurance coverage maintained as of the date of such report by Company
and its Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) NEW SUBSIDIARIES: promptly upon any Person becoming a
Subsidiary of Company (unless such Subsidiary will be immediately
merged out of existence), a written notice setting forth with respect
to such Person (a) the date on which such Person became a Subsidiary of
Company and (b) all of the data required to be set forth in SCHEDULE
5.1A annexed hereto with respect to all Subsidiaries of Company (it
being understood that such written notice shall be deemed to supplement
SCHEDULE 5.1A annexed hereto for all purposes of this Agreement);
(xvi) INTELLECTUAL PROPERTY: annually provide written
notice of any change in the Intellectual Property set forth in SCHEDULE
5.19A (it being understood that such written notice shall be deemed to
supplement SCHEDULE 5.19A annexed hereto for all purposes of this
Agreement);
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(xvii) MARGIN DETERMINATION CERTIFICATE: together with each
delivery of financial statements pursuant to subdivisions (ii) and
(iii) above, a Margin Determination Certificate demonstrating in
reasonable detail the calculation of the Consolidated Total Leverage
Ratio for the four consecutive Fiscal Quarters ending on the day of the
accounting period covered by such financial statements; and
(xviii) OTHER INFORMATION: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate existence and all rights and franchises material
to its business; PROVIDED, HOWEVER, that neither Company nor any of its
Subsidiaries shall be required to preserve any such right or franchise if the
Board of Directors of Company or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Company or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Company, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty 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 that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (i) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (ii) in the case of a charge 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 charge or claim.
B. Company will not, 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 Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Company 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 and loss or damage from
casualty excepted, all material properties used or useful in the business of
Company and its Subsidiaries (including all Intellectual Property) and
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from time to time will make or use its reasonable efforts to cause to be made
all appropriate repairs, renewals and replacements thereof.
B. INSURANCE. Company 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 Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
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
corporations similarly situated in the industry. Each such policy of insurance
shall (a) name Administrative Agent for the benefit of Lenders as an additional
insured thereunder as its interests may appear and (b) in the case of each
business interruption and Casualty Insurance policy, contain a loss payable
clause or endorsement, reasonably satisfactory in form and substance to
Administrative Agent, in the case of losses over $250,000, that names
Administrative Agent for the benefit of Lenders as a loss payee thereunder and
provides for at least 30 days prior written notice to Administrative Agent of
any cancellation of such policy.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) BUSINESS INTERRUPTION INSURANCE. Upon receipt by
Company or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds from business interruption insurance, (a) so long as no Event
of Default shall have occurred and be continuing, Company or such
Subsidiary may retain and apply such Net Insurance/Condemnation
Proceeds for working capital or general corporate purposes, and (b) if
an Event of Default shall have occurred and be continuing, Company
shall, upon demand made therefor by Administrative Agent, apply an
amount equal to such Net Insurance/Condemnation Proceeds to prepay the
Loans (and/or the Revolving Loan Commitments shall be reduced) as
provided in subsection 2.4B(iii)(b);
(ii) CASUALTY INSURANCE/CONDEMNATION PROCEEDS. Upon
receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds other than from
business interruption insurance, (a) so long as no Event of
Default shall have occurred and be continuing, Company shall,
or shall cause one or more of its Subsidiaries to, promptly
and diligently (and in any event within 12 months of the date
of receipt of such Net Insurance/Condemnation Proceeds) apply
all such Net Insurance/Condemnation Proceeds in excess of
$250,000 to pay or reimburse the costs of repairing, restoring
or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or, to the
extent not so applied within such 12 month period (other than
as a result of the costs of repairing, restoring or replacing
such assets being less than the amount of such excess Net
Insurance Condemnation Proceeds, so long as Company has
applied Net Insurance/Condemnation Proceeds adequate to pay or
reimburse such costs) as provided in subsection 2.4B(iii)(b),
and (b) if an Event of Default shall have occurred and be
continuing, Company shall, upon demand made therefor by
Administrative Agent, apply an amount equal to such Net
93
Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) as provided
in subsection 2.4B(iii)(b).
(iii) NET INSURANCE/CONDEMNATION PROCEEDS RECEIVED BY
ADMINISTRATIVE AGENT. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, (a) if and to the extent
Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them directly) to
prepay the Loans and/or reduce the Revolving Loan Commitments,
Administrative Agent shall, and Company hereby authorizes
Administrative Agent to, apply such Net Insurance/Condemnation Proceeds
to prepay the Loans (and/or the Revolving Loan Commitments shall be
reduced) as provided in subsection 2.4B(iii)(b), and (b) to the extent
the foregoing clause (a) does not apply, Administrative Agent shall
deliver such Net Insurance/Condemnation Proceeds to Company, and
Company shall, or shall cause one or more of its Subsidiaries to,
promptly and diligently apply all such Net Insurance/Condemnation
Proceeds in excess of $250,000 to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which such
Net Insurance/Condemnation Proceeds were received or, to the extent not
so applied (other than as a result of the costs of repairing, restoring
or replacing such assets being less than the amount of such excess Net
Insurance Condemnation Proceeds, so long as Company has applied Net
Insurance/Condemnation Proceeds adequate to pay or reimburse such
costs), as provided in subsection 2.4B(iii)(b).
6.5 INSPECTION RIGHTS.
Company shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of Company or of any of its Subsidiaries subject
to the rights of any lessor or lessee of such property and provided that such
visit and inspection does not unreasonably interfere with (i) the business of
the Company at such property and (ii) any customers or other third parties at
such properties, 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
(provided that Company or any of its Subsidiaries may, if it so chooses, be
present at or participate in any such discussion), all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries
to comply, with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority (including all Environmental Laws),
noncompliance with which could reasonably be expected to cause, individually or
in the aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE.
Company will deliver to Administrative Agent and to
Syndication Agent:
(i) ENVIRONMENTAL AUDITS AND REPORTS. As soon as
practicable following receipt thereof, copies of all environmental
audits, investigations, analyses and reports of
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any kind or character, whether prepared by personnel of Company or any
of its Subsidiaries or by independent consultants, governmental
authorities or any other Persons, with respect to significant
environmental matters at any Facility which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect or with respect to any Environmental Claims which, individually
or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
(ii) NOTICE OF CERTAIN RELEASES, REMEDIAL ACTIONS, ETC.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any emergency Release required to be reported to
any federal, state or local governmental or regulatory agency, or other
Release that is reasonably likely to require investigation or remedial
action, under any applicable Environmental Laws that, individually or
in the aggregate, have a reasonable possibility of resulting in a
Material Adverse Effect and (b) any remedial action taken by Company or
any other Person in response to (1) 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 (2) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of
resulting in a Material Adverse Effect.
(iii) WRITTEN COMMUNICATIONS REGARDING ENVIRONMENTAL
CLAIMS, RELEASES, ETC. As soon as practicable following the sending or
receipt thereof by Company or any of its Subsidiaries, a copy of any
and all written communications with respect to (a) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of giving rise to a Material Adverse Effect, (b) any
emergency Release required to be reported to any federal, state or
local governmental or regulatory agency, or other Release that is
reasonably likely to require investigation or remedial action that,
individually or in the aggregate, have a reasonable possibility of
giving rise to a Material Adverse Effect, and (c) any request for
information from any governmental agency that suggests such agency is
investigating whether Company or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity that,
individually or in the aggregate, have a reasonable possibility of
giving rise to a Material Adverse Effect.
(iv) NOTICE OF CERTAIN PROPOSED ACTIONS HAVING
ENVIRONMENTAL IMPACT. Prompt written notice describing in reasonable
detail (a) any proposed acquisition of Capital Stock, assets, or
property by Company or any of its Subsidiaries that could reasonably be
expected to (1) expose Company 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 (2)
affect the ability of Company 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 (b)
any proposed action to be taken by Company or any of its Subsidiaries
to commence manufacturing or other industrial operations or to modify
current operations in a manner that could reasonably be expected to
subject Company or any of its Subsidiaries to any additional
obligations or requirements under any Environmental Laws that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
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(v) OTHER INFORMATION. With reasonable promptness, such
other documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters disclosed
pursuant to this subsection 6.7.
6.8 EXECUTION OF GUARANTY AND PERSONAL PROPERTY COLLATERAL DOCUMENTS BY
CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS. In the event that any Person becomes a Subsidiary of
Company after the date hereof and such Subsidiary has assets or revenues in
excess of $1,000,000, Company will promptly notify Administrative Agent of that
fact and (i) deliver a Pledge Amendment (as defined in the Pledge and Security
Agreement), together with the certificates or instruments, if any, representing
(i) all of the Capital Stock of such Subsidiary if such Subsidiary is a Domestic
Subsidiary and (ii) 66% of the Capital Stock of such Subsidiary if such
Subsidiary is a first-tier Foreign Subsidiary (limited to 60% of Canadian
Subsidiaries), in each case accompanied by irrevocable undated instruments of
transfer, duly endorsed in blank and otherwise in form and substance
satisfactory to Administrative Agent, (ii) cause any such Domestic Subsidiary to
execute and deliver to Administrative Agent a counterpart of the Subsidiary
Guaranty and the Pledge and Security Agreement, and (iii) take, or cause any
such Domestic Subsidiary to take, all such further actions and execute all such
further documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.1K) as may be necessary or, in the
opinion of Administrative Agent, desirable to create in favor of Administrative
Agent, for the benefit of Lenders, a valid and perfected First Priority Lien on
all or 66% (limited to 60% of Canadian Subsidiaries), as the case may be, of the
Capital Stock of such Subsidiary, and subject to Section 6.9 hereof on all the
real, personal and mixed property assets of such Domestic Subsidiary described
in the applicable Collateral Documents.
B. SUBSIDIARY ORGANIZATIONAL DOCUMENTS, LEGAL OPINIONS, ETC.
Company shall deliver to Administrative Agent, together with such Loan
Documents, (i) copies of the Organizational Documents of each Subsidiary
referred to in subsection 6.8A certified by the Secretary of State of its
jurisdiction of organization, if such certification is generally available, and
in each other case by its secretary or assistant secretary, together with a good
standing certificate from the Secretary of State of the jurisdiction of its
incorporation and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of such jurisdiction, each to be
dated a recent date prior to their delivery to Administrative Agent, (ii) a
certificate executed by the secretary or an assistant secretary of such
Subsidiary as to (a) the fact that the attached resolutions of the Board of
Directors of such Subsidiary approving and authorizing the execution, delivery
and performance of such Loan Documents are in full force and effect and have not
been modified or amended and (b) the incumbency and signatures of the officers
of such Subsidiary executing such Loan Documents.
6.9 MATTERS RELATING TO REAL PROPERTY COLLATERAL.
From and after the Restatement Effective Date, in the event
that (i) Company or any Subsidiary Guarantor acquires any fee interest in real
property or (ii) at the time any Person becomes a Subsidiary Guarantor, such
Person owns or holds any fee interest in real property, in either case excluding
any such real property asset the encumbrancing of which requires the
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consent of any applicable lessor or (in the case of clause (ii) above)
then-existing senior lienholder, where Company and its Subsidiaries are unable,
despite using commercially reasonable efforts, to obtain such lessor's or senior
lienholder's consent (any such non-excluded real property asset described in the
foregoing clause (i) or (ii) being a "MORTGAGED PROPERTY"), Company or such
Subsidiary Guarantor shall, if requested by Administrative Agent, deliver to
Administrative Agent, as soon as practicable after such Person acquires such
Mortgaged Property or becomes a Subsidiary Guarantor, as the case may be, the
following:
(i) MORTGAGE. A fully executed and notarized Mortgage in
proper form for recording in all appropriate places in all applicable
jurisdictions, encumbering the interest of such Loan Party in such
Mortgaged Property;
(ii) TITLE REPORT. A title report issued by the Title
Company with respect to such Mortgaged Property, dated not more than 30
days prior to the date such Mortgage is to be recorded and satisfactory
in form and substance to Administrative Agent;
(iii) COPIES OF DOCUMENTS RELATING TO TITLE EXCEPTIONS.
Copies of all recorded documents listed as exceptions to title or
otherwise referred to in the title report delivered pursuant to clause
(iii) above;
(iv) ENVIRONMENTAL AUDIT. If reasonably requested by
Administrative Agent, reports and other information, in form, scope and
substance reasonably satisfactory to Administrative Agent and prepared
by environmental consultants reasonably satisfactory to Administrative
Agent, concerning any environmental hazards or liabilities to which
Company or any of its Subsidiaries are likely to be subject with
respect to such Mortgaged Property.
6.10 [INTENTIONALLY OMITTED.].
6.11 DISTRIBUTION CENTERS COLLATERAL ACCESS AGREEMENTS.
If requested by Administrative Agent, Company shall, and shall
cause each of its Subsidiaries to, use its commercially reasonable efforts to
obtain a Collateral Access Agreement with respect to any distribution center not
owned by Company or any of its Subsidiaries upon which any Collateral is
located.
6.12 CASH MANAGEMENT SYSTEM.
If requested by Administrative Agent, Company shall, and shall
cause each of its Subsidiaries to, establish a cash management system,
reasonably satisfactory to Administrative Agent. In the event that the cash
management system of Company is with a Person other than any Lender, Company
shall cause such Person to take such action and to execute and deliver to
Administrative Agent such documents and instruments as may be necessary or, in
the reasonable opinion of Administrative Agent, desirable to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and perfected First
Priority Lien in the Deposit Accounts, securities accounts or like accounts of
Company and its Subsidiaries maintained with such Person.
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SECTION 7. NEGATIVE COVENANTS OF COMPANY
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
Company shall not, and shall not 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, any
Indebtedness, except:
(i) Company may become and remain liable with respect to
the Obligations;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases and
Indebtedness secured by Liens permitted under subsection 7.2A(v) and
any Refinancings thereof; PROVIDED that the aggregate principal amount
of all such Indebtedness shall not exceed $10,000,000 at any time
outstanding and that such Capital Leases are permitted under this
Agreement;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its Subsidiaries, and any Subsidiary of Company
may become and remain liable with respect to Indebtedness to Company or
any wholly-owned Subsidiary of Company; PROVIDED that (a) all such
intercompany Indebtedness owed by Company to any of its Subsidiaries
that are not Subsidiary Guarantors shall be subordinated in right of
payment to the payment in full of the Obligations pursuant to
documentation in form and substance satisfactory to Administrative
Agent and (b) upon demand by Administrative
Agent, all such intercompany Indebtedness owed by Company to
any Subsidiary Guarantor shall be subordinated in right of
payment to the payment in full of the Obligations pursuant to
documentation in form and substance satisfactory to
Administrative Agent; and PROVIDED FURTHER that such
intercompany Indebtedness owed by all Foreign Subsidiaries to
Company and all other Subsidiaries shall be subject to the
limitations imposed by subsection 7.3(ii);
(v) Company and its Subsidiaries, as applicable, may
remain liable with respect to Indebtedness described in SCHEDULE 7.1
annexed hereto and any Refinancings thereof;
98
(vi) Company may become and remain liable with respect to
Indebtedness evidenced by the New Senior Subordinated Notes and the
agreements entered into in connection therewith; PROVIDED that the
proceeds thereof are applied to repay the Loans and the Existing Senior
Subordinated Notes to the extent required by subsections 4.2C and 4.2D.
(vii) So long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or shall be caused
thereby, Company and its Subsidiaries may become liable with respect to
Assumed Indebtedness in connection with a Permitted Acquisition and any
Refinancings thereof and Company and such Subsidiaries may thereafter
remain liable with respect to such Assumed Indebtedness; PROVIDED that
Company and its Subsidiaries shall be in compliance on a consolidated
basis with each of the financial covenants set forth in subsection 7.6
after giving effect to the incurrence or assumption of such Assumed
Indebtedness as stated on the consolidated balance sheet of Company and
its Subsidiaries;
(viii) Indebtedness of the Company or its Subsidiaries in
respect of performance bonds, bid bonds, appeal bonds, surety bonds,
bankers' acceptances, workers compensation claims and similar
obligations and trade-related letters of credit issued under this
Agreement, in each case provided in the ordinary course of business,
and any extension, renewal or refinancing thereof to the extent not
provided to secure the repayment of other Indebtedness and to the
extent that the amount of refinancing Indebtedness is not greater than
the amount of Indebtedness being refinanced;
(ix) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
drawn against sufficient funds in the ordinary course of business,
PROVIDED that such Indebtedness is extinguished within five Business
Days of its incurrence;
(x) Unsecured and Subordinated Indebtedness of Company or
its Subsidiaries consisting of Earn-Out Obligations and Indebtedness
issued to sellers of business in an amount not to exceed $5,000,000
outstanding at any time and any Refinancings thereof;
(xi) Indebtedness in the form of a mortgage on real
property acquired by the Company for use as a new corporate
headquarters in an amount not to exceed $15,000,000 and any
Refinancings thereof; and
(xii) Company and its Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding and any
Refinancings thereof.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on any Indebtedness 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 Company or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit
99
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 Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in SCHEDULE 7.2 annexed hereto;
(iv) Liens permitted by subsection 6.9;
(v) Liens created to secure the purchase price of
property or assets; PROVIDED that (a) any such Lien shall attach only
to the property or assets purchased, (b) the Indebtedness secured by
any such Lien shall not exceed 100% of the purchase price of the
property or assets purchased, (c) any such Lien shall be created within
12 months following the acquisition of such property or assets and (d)
the principal amount of Indebtedness secured by such Liens does not
exceed $10,000,000 in the aggregate at any time; and
(vi) Liens in connection with Indebtedness permitted under
subsections 7.1(iii), (v), (vii), (xi) and (xii).
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; PROVIDED that, 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 permitted by the provisions of
subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither Company
nor any of its Subsidiaries shall enter into any agreement, prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired to secure Company's principal bank credit
agreement outstanding at any time.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR ITS
SUBSIDIARIES. Except as provided herein, Company will not, and will not 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 such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's Capital Stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company (other than
(a) customary restrictions on the assignment of real or
100
personal property leases, (b) customary restrictions on the transfer of property
or assets included in any instrument or agreement relating to Indebtedness
permitted under subsection 7.1A(iii), (c) restrictions under applicable law, (d)
restrictions contained in the Senior Subordinated Note Agreement, (e)
restrictions contained in joint venture arrangements applicable to assets of the
joint venture, (f) restrictions contained in Assumed Indebtedness or Capital
Stock of Persons acquired pursuant to Permitted Acquisitions relating to assets
acquired and (g) restrictions in contracts for sales or dispositions permitted
hereby; provided that such restrictions relate only to the assets being disposed
of).
7.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Subsidiaries may make and own
Investments in any Subsidiaries of Company and in Petcetera (including
Investments consisting of the acquisition of Persons which own minority
interests in Petcetera); PROVIDED that (a) any such new Subsidiary is
wholly-owned by Company or one of its Subsidiaries and the provisions
of subsection 6.8 have been complied with or (b) in the case of any
Subsidiary of Company that is not a wholly-owned Subsidiary Guarantor,
such creation or acquisition is permitted pursuant to clause (vi) of
this subsection 7.3; and PROVIDED FURTHER that the aggregate new
Investments in all Foreign Subsidiaries and in Petcetera (including
Investments made through one or more Subsidiaries and including
Investments consisting of the acquisition of Persons which own minority
interests in Petcetera) shall not exceed $15,000,000 from the Closing
Date until the Fiscal Year ending on the Fiscal Year End in 2002 and
$3,000,000 each Fiscal Year thereafter (each such amount the "MAXIMUM
FOREIGN INVESTMENT AMOUNT" for such Fiscal Year); PROVIDED FURTHER that
(x) the Maximum Foreign Investment Amount for any Fiscal Year shall be
increased by an amount equal to the excess, if any, of the Maximum
Foreign Investment Amount for the previous year (without giving effect
to any previous adjustment made in accordance with this proviso) over
the actual amount of Investments in Foreign Subsidiaries and in
Petcetera (including Investments consisting of the acquisition of
Persons which own minority interests in Petcetera) for such previous
Fiscal Year and (y) with respect to Investments in Petcetera (including
Investments consisting of the acquisition of Persons which own minority
interests in Petcetera) made after the date hereof, to the extent that
the amount of any such Investments is thereafter distributed by
Petcetera directly or indirectly to Company, then during the period of
one year from the date of such distribution the amount available for
Investments in Petcetera under this subsection 7.3(ii) shall be
increased by the amount of such distribution; PROVIDED STILL FURTHER
that any repayment of notes receivable held by Company or its
Subsidiaries on the Closing Date by any Canadian Persons may be used by
Company or its Subsidiaries to make a concurrent Investment in Foreign
Subsidiaries in an amount not to exceed $7,000,000;
(iii) Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iv);
101
(iv) Company and its Subsidiaries may make loans and
advances to employees, officers and Sponsors of Company and any of its
Subsidiaries in an aggregate amount not to exceed (a) $1,872,000 at any
time outstanding, which shall be used for the purpose of acquiring
Company Stock and (b) $2,000,000 at any time outstanding, which may be
used for any other purpose;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in SCHEDULE 7.3 annexed hereto;
(vi) Investments made by Company or any of its
Subsidiaries in Permitted Acquisitions;
(vii) Investments received in settlement of debts,
liabilities or other obligations owing to the Company or any of its
Subsidiaries;
(viii) Investments received as consideration in Asset Sales;
(ix) Investments of a Person that becomes a Subsidiary or
is merged, consolidated or amalgamated with or into or transfers all or
substantially all of its assets to, or is liquidated into, the Company
or any of its other Subsidiaries, or is otherwise acquired pursuant to
a Permitted Acquisition;
(x) Investments funded through capital contributions made
by the Sponsors or any of their Affiliates;
(xi) additional Investments made in Petopia, or any
successor E-Commerce Investment, after the Restatement Effective Date
(a) not to exceed $3,000,000 in the aggregate or (b) funded with the
proceeds of equity contributions from the Sponsors made after the
Closing Date;
(xii) Company and its Subsidiaries may make and own
Investments representing amounts held for employees of Company and its
Subsidiaries under Company's non-qualified deferred compensation plan,
PROVIDED the amount of such Investments (excluding income earned
thereon) shall not exceed the amount otherwise payable to such
employees the payment of which was deferred under such plan and any
amounts matched by Company under such plan; and
(xiii) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$3,000,000.
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable
with respect to Contingent Obligations in respect of the Subsidiary
Guaranty;
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(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of Letters of
Credit;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations under Hedge Agreements
with respect to Indebtedness in the ordinary course of business;
(iv) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with sales of assets;
(v) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of any
Indebtedness of Company and any of its Subsidiaries permitted by
subsection 7.1;
(vi) Company and its Subsidiaries, as applicable, may
remain liable with respect to Contingent Obligations described in
SCHEDULE 7.4 annexed hereto;
(vii) Subsidiary Guarantors may become and remain liable
with respect to Contingent Obligations arising under their subordinated
guaranties of the New Senior Subordinated Notes as set forth in the New
Senior Subordinated Note Indenture;
(viii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations under guarantees in the
ordinary course of business of the obligations of suppliers, customers,
franchisees and licensees of Company and its Subsidiaries in an
aggregate amount not to exceed at any time $2,000,000; and
(ix) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; PROVIDED that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations shall at
no time exceed $5,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; PROVIDED that (i) Company may make
regularly scheduled payments of interest in respect of Subordinated Indebtedness
in accordance with the terms of, and subject to the subordination provisions
contained in, the New Senior Subordinated Note Indenture or other applicable
documentation pursuant to which such Subordinated Indebtedness is issued, and
Company may repay the Existing Senior Subordinated Notes from the proceeds of
the New Senior Subordinated Notes. (ii) Company may redeem or otherwise
repurchase stock, stock equivalents or stock options issued by Company owned by
former employees, former directors or former officers of Company and its
Subsidiaries for an aggregate purchase price for all such stock, stock
equivalents and stock options not to exceed (a) $3,000,000 in any consecutive
12-month period PLUS for such consecutive 12-month period the aggregate amount
of Net Equity Securities Proceeds received by Company during such consecutive
12-month period from the reissuance by Company of Securities to employees,
directors or officers of Company and its Subsidiaries, and
103
(b) $5,000,000 in the aggregate for the term of this Agreement PLUS the
aggregate amount of Net Equity Securities Proceeds received by Company following
the Closing Date from the reissuance by Company of Securities to employees,
directors or officers of Company and its Subsidiaries; PROVIDED, HOWEVER, that
in no event shall the aggregate dollar amount of all such redemptions and
repurchases exceed $7,000,000 during the term of this Agreement; PROVIDED,
FURTHER that notwithstanding the limitations contained herein, Company may
redeem and repurchase additional stock, stock equivalents and stock options in
any Fiscal Year in an additional aggregate amount equal to key man life
insurance proceeds which it receives in such Fiscal Year, (iii) any Subsidiary
may declare and pay dividends to the Company or to a wholly owned Subsidiary of
the Company, and (iv) Company and its Subsidiaries may prepay Subordinated Debt
(other than the New Senior Subordinated Notes) incurred pursuant to subsection
7.1.
7.6 FINANCIAL COVENANTS.
A. MINIMUM CONSOLIDATED INTEREST EXPENSE COVERAGE RATIO. Company
shall not permit, as of the end of any Fiscal Quarter commencing with the Third
Fiscal Quarter 2001, the Consolidated Interest Expense Coverage Ratio for the
four-Fiscal Quarter period ending on such date during any of the periods set
forth below to be less than the correlative ratio indicated:
Minimum Consolidated Interest
Period Ending Last Day of Expense Coverage Ratio
------------------------- ----------------------
Third Fiscal Quarter 2001 2.35:1.00
Fourth Fiscal Quarter 2001 2.35:1.00
First Fiscal Quarter 2002 2.35:1.00
Second Fiscal Quarter 2002 2.35:1.00
Third Fiscal Quarter 2002 2.40:1.00
Fourth Fiscal Quarter 2002 2.50:1.00
First Fiscal Quarter 2003 2.50:1.00
Second Fiscal Quarter 2003 2.50:1.00
Third Fiscal Quarter 2003 2.65:1.00
Fourth Fiscal Quarter 2003 2.80:1.00
First Fiscal Quarter 2004 2.80:1.00
Second Fiscal Quarter 2004 2.80:1.00
Third Fiscal Quarter 2004 2.90:1.00
Fourth Fiscal Quarter 2004 3.00:1.00
First Fiscal Quarter 2005 3.00:1.00
Second Fiscal Quarter 2005 3.00:1.00
Third Fiscal Quarter 2005 3.00:1.00
Fourth Fiscal Quarter 2005 3.00:1.00
First Fiscal Quarter 2006 3.00:1.00
Second Fiscal Quarter 2006 3.00:1.00
Third Fiscal Quarter 2006 3.00:1.00
Fourth Fiscal Quarter 2006 3.00:1.00
First Fiscal Quarter 2007 3.00:1.00
Second Fiscal Quarter 2007 3.00:1.00
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Third Fiscal Quarter 2007 3.00:1.00
Fourth Fiscal Quarter 2007 and thereafter 3.00:1.00
B. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not permit,
as of the end of any Fiscal Quarter commencing with the Third Fiscal Quarter
2001, the Consolidated Fixed Charge Coverage Ratio for the four-Fiscal Quarter
period ending on such date during any of the periods set forth below to be less
than the correlative ratio indicated:
Minimum Fixed
Period Ending Last Day of Charge Coverage Ratio
------------------------- ---------------------
Third Fiscal Quarter 2001 1.00:1.00
Fourth Fiscal Quarter 2001 1.00:1.00
First Fiscal Quarter 2002 1.00:1.00
Second Fiscal Quarter 2002 1.00:1.00
Third Fiscal Quarter 2002 1.00:1.00
Fourth Fiscal Quarter 2002 1.00:1.00
First Fiscal Quarter 2003 1.05:1.00
Second Fiscal Quarter 2003 1.05:1.00
Third Fiscal Quarter 2003 1.10:1.00
Fourth Fiscal Quarter 2003 1.10:1.00
First Fiscal Quarter 2004 1.15:1.00
Second Fiscal Quarter 2004 1.15:1.00
Third Fiscal Quarter 2004 1.20:1.00
Fourth Fiscal Quarter 2004 1.25:1.00
First Fiscal Quarter 2005 1.30:1.00
Second Fiscal Quarter 2005 1.30:1.00
Third Fiscal Quarter 2005 1.35:1.00
Fourth Fiscal Quarter 2005 1.35:1.00
First Fiscal Quarter 2006 1.40:1.00
Second Fiscal Quarter 2006 1.40:1.00
Third Fiscal Quarter 2006 1.40:1.00
Fourth Fiscal Quarter 2006 1.40:1.00
First Fiscal Quarter 2007 1.40:1.00
Second Fiscal Quarter 2007 1.40:1.00
Third Fiscal Quarter 2007 1.40:1.00
Fourth Fiscal Quarter 2007 and thereafter 1.40:1.00
C. MAXIMUM CONSOLIDATED PRO FORMA SENIOR LEVERAGE RATIO. Company
shall not permit at any time the Consolidated Pro Forma Senior Leverage Ratio at
the end of the Fiscal Quarters set forth below to exceed the correlative ratio
indicated:
105
Maximum Consolidated Pro Forma
Period Ending Last Day of Senior Leverage Ratio
------------------------- ---------------------
Third Fiscal Quarter 2001 2.500:1.00
Fourth Fiscal Quarter 2001 2.250:1.00
First Fiscal Quarter 2002 2.250:1.00
Second Fiscal Quarter 2002 2.250:1.00
Third Fiscal Quarter 2002 2.250:1.00
Fourth Fiscal Quarter 2002 2.000:1.00
First Fiscal Quarter 2003 2.000:1.00
Second Fiscal Quarter 2003 2.000:1.00
Third Fiscal Quarter 2003 2.000:1.00
Fourth Fiscal Quarter 2003 1.750:1.00
First Fiscal Quarter 2004 1.750:1.00
Second Fiscal Quarter 2004 1.750:1.00
Third Fiscal Quarter 2004 1.750:1.00
Fourth Fiscal Quarter 2004 1.625:1.00
First Fiscal Quarter 2005 1.625:1.00
Second Fiscal Quarter 2005 1.625:1.00
Third Fiscal Quarter 2005 1.625:1.00
Fourth Fiscal Quarter 2005 1.500:1.00
First Fiscal Quarter 2006 1.500:1.00
Second Fiscal Quarter 2006 1.500:1.00
Third Fiscal Quarter 2006 1.500:1.00
Fourth Fiscal Quarter 2006 1.500:1.00
First Fiscal Quarter 2007 1.500:1.00
Second Fiscal Quarter 2007 1.500:1.00
Third Fiscal Quarter 2007 1.500:1.00
Fourth Fiscal Quarter 2007 and thereafter 1.500:1.00
D. MAXIMUM CONSOLIDATED PRO FORMA TOTAL LEVERAGE RATIO. Company
shall not permit Consolidated Pro Forma Total Leverage Ratio at the end of the
Fiscal Quarters set forth below to exceed the correlative ratio indicated:
Maximum Consolidated Pro Forma
Period Ending Last Day of Total Leverage Ratio
------------------------- --------------------
Third Fiscal Quarter 2001 4.50:1.00
Fourth Fiscal Quarter 2001 4.25:1.00
First Fiscal Quarter 2002 4.25:1.00
Second Fiscal Quarter 2002 4.25:1.00
Third Fiscal Quarter 2002 4.25:1.00
Fourth Fiscal Quarter 2002 4.00:1.00
First Fiscal Quarter 2003 4.00:1.00
Second Fiscal Quarter 2003 4.00:1.00
Third Fiscal Quarter 2003 3.75:1.00
106
Fourth Fiscal Quarter 2003 3.50:1.00
First Fiscal Quarter 2004 3.50:1.00
Second Fiscal Quarter 2004 3.50:1.00
Third Fiscal Quarter 2004 3.50:1.00
Fourth Fiscal Quarter 2004 3.25:1.00
First Fiscal Quarter 2005 3.25:1.00
Second Fiscal Quarter 2005 3.00:1.00
Third Fiscal Quarter 2005 3.00:1.00
Fourth Fiscal Quarter 2005 3.00:1.00
First Fiscal Quarter 2006 3.00:1.00
Second Fiscal Quarter 2006 3.00:1.00
Third Fiscal Quarter 2006 2.75:1.00
Fourth Fiscal Quarter 2006 2.50:1.00
First Fiscal Quarter 2007 2.50:1.00
Second Fiscal Quarter 2007 2.50:1.00
Third Fiscal Quarter 2007 2.50:1.00
Fourth Fiscal Quarter 2007 and thereafter 2.50:1.00
E. FIRST YEAR INTEREST EXPENSE CALCULATIONS. For purposes of
calculations in subsections 7.6A and 7.6B, for any four-Fiscal Quarter period
which includes the Restatement Effective Date, Consolidated Interest Expense
shall be Annualized.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, or enter into any transaction of merger 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),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all 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 of any Person, except:
(i) any Subsidiary of Company may be merged with or into
Company or any Subsidiary Guarantor, 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 Company or any Subsidiary
Guarantor; PROVIDED that, in the case of such a merger, Company or such
Subsidiary Guarantor shall be the continuing or surviving entity;
PROVIDED FURTHER that Petcetera may merge with and into Yukon;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8;
(iii) Company and its Subsidiaries may make Investments
permitted under subsection 7.3;
107
(iv) Company and its Subsidiaries may dispose of obsolete,
worn out or surplus property, and may close stores and distribution
centers, in the ordinary course of business;
(v) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
PROVIDED that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof;
(vi) Company and its wholly-owned Subsidiaries may make
Permitted Acquisitions; and
(vii) subject to subsection 7.12, Company and its
Subsidiaries may make Asset Sales (a) of assets having a fair market
value not in excess of $5,000,000 per Fiscal Year; PROVIDED that (x)
the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof; and (y) at least 80% of
the consideration received shall be cash; (b) of assets relating to
Petopia and Petcetera so long as the proceeds of such Asset Sales are
applied in accordance with subsection 2.4B(iii)(a), without giving
effect to Company's right otherwise to acquire Exchange Assets in
connection therewith; and (c) of assets comprising Company's corporate
headquarters, so long as the proceeds of such Asset Sales are applied
in accordance with subsection 2.4B(iii)(a); PROVIDED that any Exchange
Assets acquired by Company in connection therewith shall comprise a new
corporate headquarters facility.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries
to, make or incur (i) Consolidated Capital Expenditures in an aggregate
amount in excess of (x) $60,000,000 for any Fiscal Year through the Fiscal
Year ending on the Saturday closest to January 31 in 2003, and (y)
$65,000,000 for each Fiscal Year thereafter (such amount, for each such
Fiscal Year, the "MAXIMUM EXPENDITURE AMOUNT"), PROVIDED that the Maximum
Expenditure Amount for any Fiscal Year, beginning with the Fiscal Year ending
in 2004, shall be increased by an amount equal to the excess, if any, of the
Maximum Expenditure Amount for the previous year (without giving effect to
any previous adjustment made in accordance with this proviso) over the actual
amount of Consolidated Capital Expenditures for such previous Fiscal Year,
but in no event shall such increase exceed 10% of the Maximum Expenditure
Amount for such previous Fiscal Year and PROVIDED FURTHER that the Maximum
Expenditure Amount for the Fiscal Year ending in 2003 shall be increased by
an amount (not exceeding $6,000,000) equal to the excess, if any, of the
Maximum Expenditure Amount for the previous fiscal year over the actual
amount of Consolidated Capital Expenditures for such previous Fiscal Year.
7.9 SALES AND LEASE-BACKS.
Company shall not, and shall not 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, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Company or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Company or any of its Subsidiaries) or (ii) which Company or
any of its Subsidiaries intends to use for substantially
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the same purpose as any other property which has been or is to be sold or
transferred by Company or any of its Subsidiaries to any Person (other than
Company or any of its Subsidiaries) in connection with such lease; PROVIDED,
HOWEVER, that Company may engage in such sale-leaseback transactions to the
extent that all leases entered into by Company and its Subsidiaries in
connection therewith are Capital Leases permitted pursuant to subsection
7.1(iii) of this Agreement; and PROVIDED FURTHER that, with respect to Company's
corporate headquarters, Company may engage in sale-leaseback transactions (x) to
the extent that all leases entered into in connection therewith are Capital
Leases permitted pursuant to subsection 7.1(iii), or (y) if such transactions
are Asset Sales, so long as the proceeds of such Asset Sales are applied in
accordance with subsection 2.4B(iii)(a), without giving effect to Company's
right otherwise to acquire Exchange Assets in connection therewith.
7.10 SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable other than (i) in connection with trade discounts in the
ordinary course of business and consistent with past practice, and (ii) in aid
of collection.
7.11 TRANSACTIONS WITH SPONSORS AND AFFILIATES.
Company shall not, and shall not 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 holder of 10% or more of any class
of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to such Person than those that
might be obtained at the time from Persons who are not such a holder or
Affiliate; PROVIDED that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its Subsidiaries or between any of its
Subsidiaries; (ii) reasonable and customary fees and expenses paid to members
of the Boards of Directors of Company and its Subsidiaries, and customary
indemnification arrangements with such officers and directors, (iii) payments
on account of significant services provided by Sponsors and their respective
Affiliates in connection with a specific transaction, as to which such Person
may receive a reasonable and customary one-time fee for such services, and
(iv) Transaction Expenses paid to the Sponsors on the Closing Date, in
accordance with subsection 4.1U.
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7.12 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
any business reasonably related, complimentary or ancillary thereto or any
reasonable expansion of any of the foregoing and (ii) such other lines of
business as may be consented to by Requisite Lenders.
7.13 AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS; AMENDMENTS OF DOCUMENTS
RELATING TO CERTAIN INDEBTEDNESS; LIMITATION ON RESTRICTIONS ON
AMENDMENTS OR WAIVERS OF LOAN DOCUMENTS.
A. AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS. Neither Company
nor any of its Subsidiaries will agree to any material amendment to, or waive
any of its material rights under, any Related Agreement (other than the New
Senior Subordinated Note Indenture and the documents delivered in connection
therewith) after the Closing Date without in each case obtaining the prior
written consent of Requisite Lenders to such amendment or waiver if such
amendment or waiver would be materially adverse to the rights of Company or
Lenders.
B. AMENDMENTS OF DOCUMENTS RELATING TO CERTAIN INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to, amend or
otherwise change the terms of the New Senior Subordinated Notes, or make any
payment consistent with an amendment thereof or change thereto, if the effect of
such amendment or change is to increase the interest rate on the New Senior
Subordinated Notes, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
prepayment provisions thereof, change the subordination provisions thereof (or
any guaranty thereof), or change any collateral therefor (other than to release
such collateral), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any additional rights on the holders of
the New Senior Subordinated Notes (or a trustee or other representative on their
behalf) which would be materially adverse to Company or Lenders; PROVIDED that
this subsection 7.14B shall not prohibit the exchange of New Senior Subordinated
Notes for Exchange Notes (as defined in the New Senior Subordinated Note
Indenture pursuant to Section 9.16 of the New Senior Subordinated Note
Agreement.
C. AMENDMENTS OF COMPANY PREFERRED STOCK. Company shall not amend
or otherwise change the terms of the Company Preferred Stock, or make any
payment consistent with an amendment thereof or change thereto, if the effect of
such amendment or change is to increase the dividend rate on such Company
Preferred Stock, change in a manner adverse to Company the redemption or
prepayment provisions thereof, or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of Company thereunder or to confer any additional rights on the
holders of such Company Preferred Stock that would be adverse to Company or
Lenders.
D. LIMITATION ON RESTRICTIONS ON AMENDMENTS OR WAIVERS OF LOAN
DOCUMENTS. Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter
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into, suffer to exist or become or remain subject to any agreement or
instrument, except for the Loan Documents, that would prohibit or restrict
(including by way of a covenant, representation or warranty or event of
default), or require the consent of any Person to, any amendment to, or waiver
or consent to departure from the terms of, any of the Loan Documents.
7.14 FISCAL YEAR.
Company shall not change its Fiscal Year End.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise; failure by Company to pay when due any amount payable
to an Issuing Lender in reimbursement of any drawing under a Letter of Credit;
or failure by Company to pay any interest on any Loan or any fee or any other
amount due under this Agreement within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Material 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 subsection 8.1) or Contingent Obligations in an individual principal
amount of $3,000,000 or more or with an aggregate principal amount of $6,000,000
or more, in each case beyond the end of any grace period provided therefor; or
(ii) breach or default by Company or any of its Subsidiaries with respect to any
other material term of (a) one or more items of Indebtedness or Contingent
Obligations in the individual or aggregate principal amounts referred to in
clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or
condition contained in subsection 2.5, 6.1(ix) or 6.2 or Section 7 of this
Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by any Loan Party in any Loan Document or in any certificate at any time
given by any Loan Party in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false in any material respect on the date as of
which made; or
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8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 30
days after the earlier of (i) the date a senior executive officer of Company
knew or, in the orderly conduct of its business, should have known of such
failure and (ii) the receipt by Company of notice from Administrative Agent of
such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of Company or any of its Material
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 Company or any of its Material 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
Company or any of its Material 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, trustee or other custodian of
Company or any of its Material 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 Company or any of
its Material Subsidiaries, and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any if its Material Subsidiaries shall
have an order for relief entered with respect to it or 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, trustee or other custodian
for all or a substantial part of its property; or Company or any of its Material
Subsidiaries shall make any assignment for the benefit of creditors; or (ii)
Company or any of its Material 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 of Company or any of its Material
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment involving (i) in any individual case an
amount in excess of $3,000,000 or (ii) in the aggregate at any time an amount in
excess of $6,000,000 (in either case net of insurance) shall be entered or filed
against Company or any of its Material Subsidiaries or
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any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 45 days (or in any event later than five
days prior to the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company
or any of its Material Subsidiaries decreeing the dissolution or split up of
Company or that Material Subsidiary and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or might reasonably be expected to result in a
Material Adverse Effect on the Company during the term of this Agreement; or
8.11 CHANGE IN CONTROL.
(i) Prior to the initial public offering of Company Common
Stock, any of the Sponsors and their respective Related Parties shall cease
collectively to beneficially own and control at least 51% of the issued and
outstanding shares of Capital Stock of Company entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the Board
of Directors of Company; (ii) after the initial public offering of Company
Common Stock, (a) any Person or any two or more Persons acting in concert, other
than any of the Sponsors and their respective Related Parties, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act), directly or indirectly, of more than 35% of the voting stock
of Company, (b) Sponsors and their respective Related Parties no longer
collectively beneficially own (as defined in such Rules), directly or
indirectly, at least 35% of the voting stock of Company or cease to own,
directly or indirectly, a greater percentage, on a fully diluted basis, of the
issued and outstanding shares of Capital Stock of Company entitled (without
regard to the occurrence of any contingency) to vote for the election of the
Board of Directors of Company, than the percentage of such Capital Stock
beneficially owned by any other Person or any two or more other Persons acting
in concert, or (c) any of the Sponsors and their respective Related Parties
shall cease collectively to beneficially own and control a percentage of the
voting stock of the Company greater than the percentage beneficially owned and
controlled by any Person or any two or more Persons acting in concert, other
than any of the Sponsors and their respective Related Parties; or (iii) the
first day on which the majority of the members of the Board of Directors of
Company are not Continuing Directors; or
8.12 INVALIDITY OF SUBSIDIARY GUARANTY; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty of any Material Subsidiary 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, (ii) any Collateral Document shall cease to be in full force and
effect (other than by reason of a release of Collateral thereunder in accordance
with the terms hereof or thereof, the satisfaction in full of the Obligations or
any other termination of such
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Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered thereby having a fair market value, individually or in the aggregate,
exceeding $1,000,000, in each case for any reason other than the failure of
Administrative Agent or any Lender to take any action within its control (unless
the Administrative Agent has determined that it is not economical to maintain a
First Priority Lien on such Collateral), or (iii) any Loan Party shall contest
the validity or enforceability of any Loan Document in writing or deny in
writing that it has any further liability, including with respect to future
advances by Lenders, under any Loan Document to which it is a party; or
8.13 FAILURE TO CONSUMMATE ACQUISITION.
The Merger shall be unwound, reversed or otherwise rescinded
in whole or in part for any reason; or
8.14 ACTION RELATING TO SUBORDINATED INDEBTEDNESS.
Any event shall occur which, under the terms of the New Senior
Subordinated Note Indenture or any other agreement pursuant to which
Subordinated Indebtedness is issued, shall require Company or any of its
Subsidiaries to prepay or otherwise acquire, or offer to prepay or otherwise
acquire, all or any portion of any Subordinated Indebtedness or Company or any
of its Subsidiaries shall for any other reason prepay or otherwise acquire, or
offer to prepay or otherwise acquire, or make any other payments in respect of,
all or any portion of any Subordinated Indebtedness except to the extent
expressly permitted by subsection 7.5;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; PROVIDED that the
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent as cash collateral
pursuant to the terms of Section 17(c) of the Pledge and Security Agreement and
shall be applied as therein provided.
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Notwithstanding anything contained in the second preceding
paragraph, if at any time within 90 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Company shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
SECTION 9. ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
A. APPOINTMENT OF AGENT. ▇▇▇▇▇ Fargo is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. Administrative
Agent agrees to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Administrative Agent and Lenders and Company shall
have no rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, Administrative 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 Company or any of its Subsidiaries. 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 respective Affiliates.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Administrative Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein
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individually as a "SUPPLEMENTAL COLLATERAL AGENT" and collectively as
"SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company or any other
Loan Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Administrative Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Loan Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written
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or oral statements or in any financial or other statements, instruments, reports
or certificates or any other documents furnished or made by Administrative Agent
to Lenders or by or on behalf of Company to Administrative Agent or any Lender
in connection with the Loan Documents and the transactions contemplated thereby
or for the financial condition or business affairs of Company or any other
Person liable for the payment of any Obligations, nor shall Administrative 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 Loan Documents or as to the use of the proceeds of the Loans or the use
of the Letters of Credit or as to the existence or possible existence of any
Event of Default or Potential Event of Default. Anything contained in this
Agreement to the contrary notwithstanding, Administrative Agent shall not have
any liability arising from confirmations of the amount of outstanding Loans or
the Letter of Credit Usage or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither Administrative Agent nor any
of its officers, directors, employees or agents shall be liable to Lenders for
any action taken or omitted by Administrative Agent under or in connection with
any of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 10.6) and,
upon receipt of such instructions from Requisite Lenders (or such other Lenders,
as the case may be), Administrative 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) Administrative 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, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Administrative Agent as a result of Administrative
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. ADMINISTRATIVE AGENT 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, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from any
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Loan Party for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries.
Administrative Agent shall not 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 Loans or at any time or times thereafter, and Administrative Agent
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent, to the extent that Administrative
Agent shall not have been reimbursed by Company, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including reasonable counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Administrative Agent in exercising its powers, rights and
remedies or performing its duties hereunder or under the other Loan Documents or
otherwise in its capacity as Administrative Agent in any way relating to or
arising out of this Agreement or the other Loan Documents; PROVIDED that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Administrative Agent's gross negligence or willful misconduct. If
any indemnity furnished to Administrative Agent for any purpose shall, in the
opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided that 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, that this sentence shall 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.
9.5 SUCCESSOR AGENT AND SWING LINE LENDER.
A. SUCCESSOR AGENT. Administrative Agent may resign at any time
by giving 30 days' prior written notice thereof to Lenders and Company, and
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company 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 Company, to appoint a successor Administrative
Agent reasonably
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acceptable to Company, the consent of Company not to be unreasonably withheld;
PROVIDED, HOWEVER, that the consent of the Company shall not be required (i) to
appoint any Lender as successor Administrative Agent, or (ii) upon the
occurrence of and during the continuation of an Event of Default. 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 be discharged from its duties and obligations under
this Agreement. 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 under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of ▇▇▇▇▇ Fargo or its successor as Swing Line Lender, and
any successor Administrative Agent appointed pursuant to subsection 9.5A shall,
upon its acceptance of such appointment, become the successor Swing Line Lender
for all purposes hereunder. In such event (i) Company shall prepay any
outstanding Swing Line Loans made by the retiring or removed Administrative
Agent in its capacity as Swing Line Lender, (ii) upon such prepayment, the
retiring or removed Administrative Agent and Swing Line Lender shall surrender
the Swing Line Note held by it to Company for cancellation, and (iii) Company
shall issue a new Swing Line Note to the successor Administrative Agent and
Swing Line Lender substantially in the form of EXHIBIT VI annexed hereto, in the
principal amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
as secured party, and to continue as the Administrative Agent for and
representative of Lenders under the Subsidiary Guaranty and each Lender agrees
to be bound by the terms of each Collateral Document and the Subsidiary
Guaranty; PROVIDED that Administrative Agent shall not (i) enter into or consent
to any material amendment, modification, termination or waiver of any provision
contained in any Collateral Document or the Subsidiary Guaranty or (ii) release
any Collateral (except as otherwise expressly permitted or required pursuant to
the terms of this Agreement or the applicable Collateral Document), in each case
without the prior consent of Requisite Lenders (or, if required pursuant to
subsection 10.6, all Lenders); PROVIDED FURTHER, HOWEVER, that, without further
written consent or authorization from Lenders, Administrative Agent may execute
any documents or instruments necessary to (a) release any Lien encumbering any
item of Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or to which Requisite Lenders have otherwise
consented or (b) release any Subsidiary Guarantor from the Subsidiary Guaranty
if all of the Capital Stock of such Subsidiary Guarantor is sold to any Person
(other than an Affiliate of Company) pursuant to a sale or other disposition
permitted hereunder or to which Requisite Lenders have otherwise consented.
Anything contained in any of the Loan Documents to the contrary notwithstanding,
Company, Administrative Agent and each Lender hereby agree that (1) no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document or to enforce the Subsidiary Guaranty, it being
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understood and agreed that all powers, rights and remedies under the Collateral
Documents and the Subsidiary Guaranty may be exercised solely by Administrative
Agent for the benefit of Lenders in accordance with the terms thereof, and (2)
in the event of a foreclosure by Administrative Agent on any of the Collateral
pursuant to a public or private sale, Administrative Agent or any Lender may be
the purchaser of any or all of such Collateral at any such sale and
Administrative Agent, as agent for and representative of Lenders (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 Administrative Agent at such sale.
9.7 CO-AGENTS.
The parties hereto hereby acknowledge and agree that in
connection with the syndication of the Commitments and Loans, certain financial
institutions that become Lenders hereunder may be designated by GSCP, as
Syndication Agent and Arranger, ▇▇▇▇▇ Fargo, as Administrative Agent and
Arranger, as a "Co-Agent" or as the "Documentation Agent." None of the Lenders
so designated as a "Co-Agent" or "Documentation Agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so designated as a "Co-Agent" or "Documentation Agent" shall
have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders so designated in deciding to enter into this Agreement or in taking or
not taking action hereunder.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have
the right at any time to (i) sell, assign or transfer to any Eligible Assignee,
or (ii) sell participations to any Person in, all or any part of its Commitments
or any Loan or Loans made by it or its Letters of Credit or participations
therein or any other interest herein or in any other Obligations owed to it;
PROVIDED that no such sale, assignment, transfer or participation shall, without
the consent of Company, require Company to file a registration statement with
the Securities and Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities laws of any state;
PROVIDED, FURTHER that no such sale, assignment or transfer described in clause
(i) above shall be effective unless and until an Assignment Agreement effecting
such sale, assignment or transfer shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 10.1B(ii);
PROVIDED, FURTHER that no such sale, assignment, transfer or participation of
any Letter of Credit or any participation therein may be made separately from a
sale, assignment, transfer or participation of a corresponding interest in the
Revolving Loan Commitment and the Revolving Loans of the Lender effecting such
sale, assignment, transfer or participation; and PROVIDED, FURTHER that,
anything contained herein to the contrary notwithstanding, the Swing Line Loan
Commitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described in clause (i) above to any Person other
than a successor Administrative Agent and Swing Line Lender to the extent
contemplated
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by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender.
B. ASSIGNMENTS.
(i) AMOUNTS AND TERMS OF ASSIGNMENTS. Each Commitment,
Loan, Letter of Credit or participation therein, or other Obligation
may (a) be assigned in any amount to another Lender, or to an Affiliate
of the assigning Lender or another Lender, with the giving of notice to
Company and Administrative Agent or (b) be assigned in an aggregate
amount of not less than $5,000,000 in respect of the Revolving Loans
and $1,000,000 in respect of the Tranche B Term Loans (or such lesser
amount as shall constitute the aggregate amount of the Commitments,
Loans, Letters of Credit and participations therein, and other
Obligations of the assigning Lender) to any other Eligible Assignee
with the consent of Administrative Agent and, except in the event any
Event of Default or Potential Event of Default shall have occurred and
be continuing, Company (which consent of Company and Administrative
Agent shall not be unreasonably withheld or delayed). To the extent of
any such assignment in accordance with either clause (a) or (b) above,
the assigning Lender shall be relieved of its obligations with respect
to its Commitments, Loans, Letters of Credit or participations therein,
or other Obligations or the portion thereof so assigned. The parties to
each such assignment shall execute and deliver to Administrative Agent,
for its acceptance and recording in the Register an Assignment
Agreement, together with a processing and recordation fee of $2,000
(provided that for any assignment to a Lender, an Affiliate of a
Lender, or to Administrative Agent, or made by or to GSCP, the
processing and recordation fee shall be $500) and 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 to Administrative Agent
pursuant to subsection 2.7B(iii)(a). Upon such execution, delivery,
acceptance and recordation from and after the effective date specified
in such Assignment Agreement, (y) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment Agreement, shall
have the rights and obligations of a Lender hereunder and (z) the
assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights (other than any rights
which survive the termination of this Agreement under subsection 10.9B)
and be released from its obligations under this Agreement (and, in the
case of an Assignment Agreement covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto; PROVIDED that, anything
contained in any of the Loan Documents to the contrary notwithstanding,
if such Lender is the Issuing Lender with respect to any outstanding
Letters of Credit such Lender shall continue to have all rights and
obligations of an Issuing Lender with respect to such Letters of Credit
until the cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder). The Commitments
hereunder shall be modified to reflect the Commitment of
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such assignee and any remaining Commitment of such assigning Lender
and, if any such assignment occurs after the issuance of any Notes
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the assignee and/or the
assigning Lender in accordance with subsection 2.1E, be issued to the
assignee and to the assigning Lender, substantially in the form of
EXHIBIT IV-B, EXHIBIT V or EXHIBIT VI annexed hereto, as the case may
be, with appropriate insertions, to reflect the new Commitments and/or
outstanding Term Loans of the assignee and the assigning Lender.
(ii) ACCEPTANCE BY ADMINISTRATIVE AGENT; RECORDATION IN
REGISTER. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 10.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment
evidenced thereby (in each case to the extent such consent is required
pursuant to subsection 10.1B(i)), (a) accept such Assignment Agreement
by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent
to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
10.1B(ii).
C. PARTICIPATIONS. The holder of any 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 action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
and all amounts payable by Company hereunder (including amounts payable to such
Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be determined as if such
Lender had not sold such participation.
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; PROVIDED that (i) no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any such assignment and pledge and (ii) in no event shall such Federal Reserve
Bank be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
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F. REPRESENTATIONS OF LENDERS. Each Lender listed on the
signature pages hereof hereby represents and warrants (i) that it is an Eligible
Assignee described in clause (i) of the definition thereof; (ii) that it has
experience and expertise in the making of loans such as the Loans; and (iii)
that it will make its Loans for its own account in the ordinary course of its
business and without a view to distribution of such Loans within the meaning of
the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
out-of-pocket costs and expenses of preparation of the Loan Documents and any
consents, amendments, waivers or other modifications thereto; (ii) all the
reasonable costs of furnishing all opinions by counsel for Company and its
Subsidiaries (including any opinions reasonably requested by Lenders as to any
legal matters arising hereunder) and of Company's performance of and compliance
with all agreements and conditions on its part to be performed or complied with
under this Agreement and the other Loan Documents including with respect to
confirming compliance with environmental, insurance and solvency requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to
Administrative Agent in connection with the negotiation, preparation and
execution and administration of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and any other documents or matters
requested by Company; (iv) all the actual costs and reasonable out-of-pocket
expenses of creating and perfecting Liens in favor of Administrative Agent on
behalf of Lenders pursuant to any Collateral Document, 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 Administrative Agent and of counsel providing any opinions that
Administrative Agent or Requisite Lenders may reasonably request in respect of
the Collateral Documents or the Liens created pursuant thereto; (v) all the
actual costs and reasonable out-of-pocket expenses (including the reasonable
fees, expenses and disbursements of any auditors, accountants or appraisers and
any environmental or other consultants, advisors and agents employed or retained
by Administrative Agent or its counsel) of obtaining and reviewing any
environmental audits or reports provided for under subsection 6.9(vi); (vi) all
costs incurred in connection with the custody or preservation of any of the
Collateral; (vii) all other actual and reasonable costs and expenses incurred by
Administrative Agent in connection with the syndication of the Commitments and
the negotiation, preparation and execution of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (viii) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees and
costs of settlement, reasonably incurred by Administrative Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such 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 Guaranties) or
in connection with
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any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings. Administrative Agent shall provide to Company a written
statement setting forth in reasonable detail the basis for requesting Company to
pay amounts under this subsection 10.2.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Administrative Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative Agent
and Lenders (collectively called the "INDEMNITEES"), from and against any and
all Indemnified Liabilities (as hereinafter defined); PROVIDED that Company
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the gross negligence, willful misconduct or breach of contract of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), 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 Loan Documents or the Related
Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or the issuance of Letters of Credit hereunder or the use or
intended use of any thereof), or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Subsidiary Guaranty), or (ii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, or land
ownership of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 10.3 may be unenforceable in
whole or in part because they are violative of any law or public policy, Company
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.
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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 of and during the continuation of any Event of Default each Lender is
hereby authorized by Company at any time or from time to time, without notice to
Company or to any other Person, 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 that Lender to or for the credit or
the account of Company against and on account of the obligations and liabilities
of Company then due and owing to that Lender under this Agreement, the Letters
of Credit and participations therein and the other Loan Documents, including all
claims of any nature or description arising out of or connected with this
Agreement, the Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not that Lender shall have made any demand
hereunder.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of Loans
made and applied in accordance with the terms of this Agreement), by realization
upon security, 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 Loan
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, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan 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 (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) 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 that 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 Company 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. Company 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 Company or any of its Subsidiaries to
that holder with respect thereto as fully as if that holder were owed the amount
of the participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any
provision of the Loan Documents, or consent to any departure by Company
therefrom, shall in any event be effective
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without the written concurrence of Requisite Lenders; provided that no such
amendment, modification, termination, waiver or consent shall, without the
consent of each Lender (with Obligations directly affected in the case of the
following clause (i)): (i) postpone the date or reduce the amount of any
scheduled payment (but not any mandatory prepayment pursuant to subsection
2.4B(iii)) of principal of any of the Loans, or extend the stated expiration
date of any Letter of Credit beyond the Revolving Loan Commitment Termination
Date, or reduce the rate of interest on any Loan (other than any waiver of any
increase in the interest rate applicable to any Loan pursuant to subsection
2.2E) or any commitment fees or letter of credit fees payable hereunder, or
extend the time for payment of any such interest or fees, or reduce the
principal amount of any Loan or any reimbursement obligation in respect of any
Letter of Credit, (ii) amend, modify, terminate or waive any provision of this
subsection 10.6, (iii) reduce the percentage specified in the definition of
"Requisite Lenders" (it being understood that, with the consent of Requisite
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of "Requisite Lenders" on substantially the same
basis as the Term Loan Commitments, the Term Loans, the Revolving Loan
Commitments and the Revolving Loans are included on the Closing Date), (iv)
consent to the assignment or transfer by Company of any of its rights and
obligations under this Agreement or (v) release all or substantially all of the
Collateral or all or substantially all of the Subsidiary Guarantors from the
Subsidiary Guaranty except as expressly provided in the Loan Documents;
provided, further that no such amendment, modification, termination or waiver
shall (a) increase the Commitments of any Lender over the amount thereof then in
effect without the consent of such Lender (it being understood that no
amendment, modification or waiver of any condition precedent, covenant,
Potential Event of Default or Event of Default shall constitute an increase in
the Commitment of any Lender, and that no increase in the available portion of
any Commitment of any Lender shall constitute an increase in such Commitment of
such Lender); (b) amend, modify, terminate or waive any provision of subsection
2.1A(iv) or any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans without the consent of Swing Line
Lender; (c) amend the definition of "Requisite Class Lenders" without the
consent of Requisite Class Lenders of each Class, or alter the required
application of any repayments or prepayments as between Classes pursuant to
subsection 2.4B(iv) without the consent of Requisite Class Lenders of each Class
which is being allocated a lesser repayment or prepayment as a result thereof
(although Requisite Lenders may waive, in whole or in part, any mandatory
prepayment so long as the application, as between Classes, of any portion of
such prepayment which is still required to be made is not altered); and (d)
amend, modify, terminate or waive any obligation of Lenders relating to the
purchase of participations in Letters of Credit as provided in subsection 3.1C
without the written concurrence of Administrative Agent and of each Issuing
Lender which has a Letter of Credit then outstanding or which has not been
reimbursed for a drawing under a Letter of Credit issued by it; or (e) amend,
modify, terminate or waive any provision of Section 9 as the same applies to any
Agent, or any other provision of this Agreement as the same applies to the
rights or obligations of any Agent, in each case without the consent of such
Agent. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that 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 Company in any case shall entitle Company 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
subsection 10.6 shall be binding
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upon each Lender at the time outstanding, each future Lender and, if signed by
Company, on Company.
B. If, in connection with any proposed change, waiver, discharge
or termination to any of the provisions of this Agreement as contemplated by the
proviso in the first sentence of subsection 10.6A, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Company may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination, (i)
Company shall pay that Lender all principal, interest and fees and other amounts
owed to such Lender through such date of termination, (ii) another financial
institution satisfactory to Company and Administrative Agent (or if
Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to assume
all obligations of the Lender to be terminated as of such date, and (iii) all
documents and supporting materials necessary, in the judgment of Administrative
Agent (or if Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent), to evidence the substitution of such Lender
shall have been received and approved by Administrative Agent as of such date.
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 an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given 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, 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 that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans and the issuance of the Letters of Credit hereunder.
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B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan 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. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative 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.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes 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.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan 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 subject to the provisions of this Agreement
and the other Loan Documents each Lender shall be entitled to protect and
enforce its rights arising out of this
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Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 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 INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
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 (it being understood
that Lenders' rights of assignment are subject to subsection 10.1). Neither
Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written consent of all
Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE PARTIES TO THIS
AGREEMENT ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY HERETO, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) 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 SUCH PARTY, AS
THE CASE MAY BE, AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 10.8;
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(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY, AS
THE CASE MAY BE, IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT;
(V) AGREES THAT THE OTHER PARTIES HERETO RETAIN THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH PARTY, AS THE CASE MAY BE, IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN 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 their related future dealings. Each
party hereto further warrants and represents that it has reviewed 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 SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN 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.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with such Lender's
customary procedures for
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handling confidential information of this nature and in accordance with safe and
sound banking practices, it being understood and agreed by Company that in any
event a Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process;
PROVIDED that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and PROVIDED, FURTHER that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.
10.20 MAXIMUM AMOUNT.
A. It is the intention of Company and Lenders to conform strictly
to the usury and similar laws relating to interest from time to time in force,
and all agreements between Company, Administrative Agent and Lenders, whether
now existing or hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
acceleration of maturity hereof or otherwise, shall the amount paid or agreed to
be paid in the aggregate to Lenders or to Administrative Agent on behalf of
Lenders as interest hereunder or under the other Loan Documents or in any other
security agreement given to secure the Obligations, or in any other document
evidencing, securing or pertaining to the indebtedness evidenced hereby or
thereby, exceed the maximum amount permissible under applicable usury or such
other laws (the "MAXIMUM AMOUNT"). If under any circumstances whatsoever
fulfillment of any provision hereof, or of any of the other Loan Documents, at
the time performance of such provision shall be due, shall involve exceeding the
Maximum Amount, then, IPSO FACTO, the obligation to be fulfilled shall be
reduced to the Maximum Amount. For the purposes of calculating the actual amount
of interest paid and/or payable hereunder in respect of laws pertaining to usury
or such other laws, all sums paid or agreed to be paid to Lenders for the use,
forbearance or detention of the indebtedness of Company evidenced hereby,
outstanding from time to time shall, to the extent permitted by applicable law,
be amortized, pro rated, allocated and spread from the date of disbursement of
the proceeds of the Loans until payment in full of all of such indebtedness, so
that the actual rate of interest on account of such indebtedness is uniform
throughout the term hereof. The terms and provisions of this subsection shall
control and supersede every other provision of all agreements between Company,
Administrative Agent and Lenders.
B. If under any circumstances Lenders shall receive an amount
which would exceed the Maximum Amount, such amount shall be deemed a payment in
reduction of the principal amount of the Loans and shall be treated as a
voluntary prepayment under subsection 2.4B(i), and shall be so applied in
accordance with subsection 2.4B(iv) hereof, or if such amount exceeds the unpaid
balance of the Loans and any other indebtedness of Company in favor of Lenders,
the excess shall be deemed to have been a payment made by mistake and shall be
refunded to Company.
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10.21 COUNTERPARTS; EFFECTIVENESS; EFFECT IF AGREEMENT DOES NOT BECOME
EFFECTIVE.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate 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;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof and the satisfaction of each of the conditions
set forth in subsection 4.2. Until this Agreement becomes effective, the
Existing Credit Agreement remains in full force and effect and, in the event
this Agreement does not become effective on or before November 15, 2001, the
execution and delivery of this Agreement shall be disregarded and this Agreement
shall be deemed null and void for all purposes.
[Remainder of page intentionally left blank]
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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.
COMPANY:
PETCO ANIMAL SUPPLIES, INC.
By:
-------------------------------------------
Name. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
Notice Address:
PETCO ANIMAL SUPPLIES, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: 858/▇▇▇-▇▇▇▇
Facsimile: 858/657-2085
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
with copies to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 310/▇▇▇-▇▇▇▇
Facsimile: 310/954-0404
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
Texas Pacific Group
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 415/▇▇▇-▇▇▇▇
Facsimile: 415/743-1501
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
CREDIT AGREEMENT
LENDERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By:
---------------------------------------------
Notice Address:
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Facsimile: 212/357-0932
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Facsimile: 212/346-2608
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
individually and as Administrative Agent
By:
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 213/▇▇▇-▇▇▇▇
Facsimile: 213/628-9694
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Documentation
Agent pursuant to Subsection 9.7 of
this Agreement
By:
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Risk Manager
Notice Address:
NORTHWOODS CAPITAL LTD.,
By:
-------------------------------------------
Name. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
NORTHWOODS CAPITAL ii, LTD.,
By:
-------------------------------------------
Name. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director