Exhibit 10.1
$335,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF JANUARY 28, 1999
AMONG
THE PANTRY, INC.,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Syndication Agent
and
NATIONSBANK, N.A.,
as Documentation Agent
Arranged by:
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.,
FIRST UNION CAPITAL MARKETS CORP.
and
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
TABLE OF CONTENTS
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Section 1. DEFINITIONS...........................................................................2
1.1 Certain Defined Terms.................................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.........................................................29
1.3 Other Definitional Provisions and Rules of Construction..............................29
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS...........................................29
2.1 Commitments; Making of Loans; the Register; Notes....................................29
2.2 Interest on the Loans................................................................37
2.3 Fees.................................................................................40
2.4 Repayments, Prepayments and Reductions in Acquisition Term
Loan Commitments and Revolving Loan Commitments; General
Provisions Regarding Payments; Application of Proceeds of
Collateral and Payments Under Subsidiary Guaranty....................................41
2.5 Use of Proceeds......................................................................50
2.6 Special Provisions Governing Eurodollar Rate Loans...................................51
2.7 Increased Costs; Taxes; Capital Adequacy.............................................53
2.8 Obligation of Lenders and Issuing Lenders to Mitigate................................57
Section 3. LETTERS OF CREDIT....................................................................57
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein...............................................................57
3.2 Letter of Credit Fees................................................................60
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit...................61
3.4 Obligations Absolute.................................................................63
3.5 Indemnification; Nature of Issuing Lenders' Duties...................................64
3.6 Increased Costs and Taxes Relating to Letters of Credit..............................65
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT............................................66
4.1 Conditions to Initial Term Loans and Revolving Loans on the
Effective Date.......................................................................66
4.2 Conditions to All Loans..............................................................73
4.3 Conditions to Letters of Credit......................................................75
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Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES.............................................75
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.........................................................................75
5.2 Authorization of Borrowing, etc......................................................76
5.3 Financial Condition..................................................................77
5.4 No Material Adverse Change; No Restricted Junior Payments............................78
5.5 Title to Properties; Liens; Real Property............................................78
5.6 Litigation; Adverse Facts............................................................79
5.7 Payment of Taxes.....................................................................79
5.8 Performance of Agreements; Materially Adverse Agreements;
Material Contracts...................................................................79
5.9 Governmental Regulation..............................................................80
5.10 Securities Activities................................................................80
5.11 Employee Benefit Plans...............................................................80
5.12 Certain Fees.........................................................................81
5.13 Environmental Protection.............................................................81
5.14 Employee Matters.....................................................................82
5.15 Solvency.............................................................................82
5.16 Matters Relating to Collateral.......................................................82
5.17 Related Agreements...................................................................83
5.18 Disclosure...........................................................................84
5.19 Permits..............................................................................84
5.20 Year 2000............................................................................84
Section 6. COMPANY'S AFFIRMATIVE COVENANTS......................................................85
6.1 Financial Statements and Other Reports...............................................85
6.2 Corporate Existence, etc.............................................................90
6.3 Payment of Taxes and Claims; Tax Consolidation.......................................90
6.4 Maintenance of Properties; Insurance; Application of Net Asset
Sale Proceeds........................................................................91
6.5 Inspection Rights; Lender Meeting....................................................93
6.6 Compliance with Laws, etc............................................................93
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws............................94
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6.8 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents by Certain Subsidiaries and Future Subsidiaries............................96
6.9 Matters Relating to Additional Real Property Collateral..............................97
6.10 Year 2000............................................................................99
6.11 Interest Rate Protection.............................................................99
Section 7. COMPANY'S NEGATIVE COVENANTS........................................................100
7.1 Indebtedness........................................................................100
7.2 Liens and Related Matters...........................................................101
7.3 Investments; Joint Ventures.........................................................102
7.4 Contingent Obligations..............................................................103
7.5 Restricted Junior Payments..........................................................104
7.6 Financial Covenants.................................................................105
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions....................106
7.8 Consolidated Capital Expenditures...................................................109
7.9 Sales and Lease-Backs...............................................................109
7.10 Sale or Discount of Receivables.....................................................110
7.11 Transactions with Shareholders and Affiliates.......................................110
7.12 Disposal of Subsidiary Stock........................................................110
7.13 Conduct of Business.................................................................111
7.14 Amendments or Waivers of Certain Related Agreements;
Amendments of Documents Relating to Subordinated
Indebtedness; Designation of "Designated Senior Indebtedness".......................111
7.15 Fiscal Year.........................................................................112
Section 8. EVENTS OF DEFAULT...................................................................112
8.1 Failure to Make Payments When Due...................................................112
8.2 Default in Other Agreements.........................................................112
8.3 Breach of Certain Covenants.........................................................112
8.4 Breach of Warranty..................................................................113
8.5 Other Defaults Under Loan Documents.................................................113
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc................................113
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc..................................113
8.8 Judgments and Attachments...........................................................114
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8.9 Dissolution.........................................................................114
8.10 Employee Benefit Plans..............................................................114
8.11 Change in Control...................................................................114
8.12 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation
of Obligations......................................................................115
8.13 Failure to Consummate Target Company Acquisition and the
Redemption of the Senior Notes......................................................115
Section 9. AGENTS..............................................................................116
9.1 Appointment.........................................................................116
9.2 Powers and Duties; General Immunity.................................................117
9.3 Representations and Warranties; No Responsibility For Appraisal
of Creditworthiness.................................................................119
9.4 Right to Indemnity..................................................................119
9.5 Successor Administrative Agent and Swing Line Lender................................119
9.6 Collateral Documents and Guaranties.................................................120
Section 10. MISCELLANEOUS.......................................................................121
10.1 Assignments and Participations in Loans and Letters of Credit.......................121
10.2 Expenses............................................................................124
10.3 Indemnity...........................................................................125
10.4 Set-Off; Security Interest in Deposit Accounts......................................126
10.5 Ratable Sharing.....................................................................126
10.6 Amendments and Waivers..............................................................127
10.7 Independence of Covenants...........................................................128
10.8 Notices.............................................................................128
10.9 Survival of Representations, Warranties and Agreements..............................128
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative...............................129
10.11 Marshalling; Payments Set Aside.....................................................129
10.12 Severability........................................................................129
10.13 Obligations Several; Independent Nature of Lenders' Rights..........................129
10.14 Headings............................................................................129
10.15 Applicable Law......................................................................130
10.16 Successors and Assigns..............................................................130
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10.17 Consent to Jurisdiction and Service of Process......................................130
10.18 Waiver of Jury Trial................................................................131
10.19 Confidentiality.....................................................................131
10.20 Counterparts; Effectiveness.........................................................132
Signature pages ....................................................................S-1
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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 ACQUISITION TERM NOTE
V FORM OF TRANCHE A TERM NOTE
VI FORM OF TRANCHE B TERM NOTE
VII FORM OF REVOLVING NOTE
VIII FORM OF SWING LINE NOTE
IX FORM OF COMPLIANCE CERTIFICATE
X FORM OF OPINION OF ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
XI FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
XII FORM OF ASSIGNMENT AGREEMENT
XIII FORM OF MORTGAGE
XIV FORM OF FINANCIAL CONDITION CERTIFICATE
XV FORM OF SUBSIDIARY GUARANTY
XVI FORM OF SUBSIDIARY PLEDGE AGREEMENT
XVII FORM OF SUBSIDIARY SECURITY AGREEMENT
XVIII FORM OF SUBSIDIARY TRADEMARK SECURITY AGREEMENT
XIX FORM OF MASTER ASSIGNMENT AGREEMENT
XX FORM OF ACKNOWLEDGEMENT AND CONSENT AGREEMENT
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SCHEDULES
1.1 1999 CONSOLIDATED PRO FORMA EBITDA ADJUSTMENTS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
5.1 SUBSIDIARIES OF COMPANY
5.2B CERTAIN CONFLICTS
5.5 REAL PROPERTY
5.7 TAXES
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
5.17 AFFILIATE AGREEMENTS; AMENDMENTS TO RELATED
AGREEMENTS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
vii
THE PANTRY, INC.
$335,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
January 28, 1999 and entered into by and among THE PANTRY, 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"), FIRST UNION NATIONAL BANK ("First Union"), as
administrative agent for Lenders (in such capacity, the "Administrative Agent"),
CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as syndication agent for Lenders
(in such capacity, "Syndication Agent"), and NATIONSBANK, N.A. ("NationsBank"),
as documentation agent for the Lenders (in such capacity, "Documentation
Agent").
R E C I T A L S
WHEREAS, Company, Administrative Agent, Syndication Agent and
certain Lenders are party to that certain Credit Agreement dated as of October
23, 1997, as amended by that certain First Amendment to Credit Agreement dated
as of July 2, 1998 (the "Existing Credit Agreement") by and among Company, the
financial institutions listed on the signature pages thereto, Administrative
Agent and Syndication Agent;
WHEREAS, Company desires to increase the amount that can be
borrowed under the Existing Credit Agreement and to add a term loan facility and
to refinance its existing acquisition term loans;
WHEREAS, Company and Lenders desire to make other amendments
to the terms and provisions of the Existing Credit Agreement;
WHEREAS, Company intends to use the proceeds of such term loan
facility and up to $5.0 million in revolving loans (i) to refinance $85.0
million in outstanding acquisition term loans under the Existing Credit
Agreement; (ii) to redeem the Company's outstanding Senior Notes in the
aggregate principal amount of $49.0 million and to pay $1.2 million in accrued
and unpaid interest on the Senior Notes; (iii) to pay $2.0 million in call
premiums with respect to the redemption of the Senior Notes; (iv)(a) to acquire
(1) all of the outstanding capital stock of ▇▇▇▇▇▇ Enterprises, Inc. ("MEI") and
(2) certain real property and certain other assets used in MEI's business but
owned by related entities for an aggregate cash purchase price of approximately
$82.0 million, and (b) to make reimbursements of certain capital expenditures
made by MEI or its affiliates of approximately $12.0 million (collectively, the
"Target Company Acquisition"); and (v) to pay (x) fees and expenses in an amount
up to $5.0 million related to the foregoing and (y) the purchase price
adjustment, if any, contemplated by the definitive acquisition agreement related
to the Target Company Acquisition;
WHEREAS, to facilitate the restructuring of the credit
facilities under the Existing Credit Agreement, all Lenders under the Existing
Credit Agreement have agreed to assign to Administrative Agent all of their
Acquisition Term Loans, their Acquisition Term Loan Commitments, their Revolving
Loans and their Revolving Loan Commitments pursuant to the Master Assignment
Agreement and the Administrative Agent has agreed pursuant to the Master
Assignment Agreement to assign to each Lender under this Agreement the Loans and
Commitments as set forth on Schedule 2.1 hereto;
WHEREAS, to effect the foregoing, Company, Lenders,
Administrative Agent and Syndication Agent desire to amend and restate the
Existing Credit Agreement as hereinafter set forth; and
WHEREAS, Company has agreed to continue to secure its
Obligations as the Borrower hereunder and the Company's Restricted Subsidiaries
have agreed to continue to guaranty the Obligations of Company hereunder and to
continue to secure such guaranty;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Lenders,
Administrative Agent, Syndication Agent and Documentation Agent agree as
follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings:
"Acknowledgement and Consent" means the Acknowledgement and
Consent Agreement delivered by Subsidiary Guarantors on the Effective Date,
substantially in the form of Exhibit XX annexed hereto, as such Acknowledgement
and Consent may be amended, supplemented or otherwise modified from time to
time.
"Acquisition Term Loan Commitment" means the commitment of a
Lender to make Acquisition Term Loans to Company pursuant to subsection 2.1A(i),
and "Acquisition Term Loan Commitments" means such commitments of all Lenders in
the aggregate.
"Acquisition Term Loan Commitment Termination Date" means
January 31, 2001.
"Acquisition Term Loan Exposure" means, with respect to any
Lender as of any date of determination (i) prior to the termination of the
Acquisition Term Loan Commitments, the sum of (a) that Lender's Acquisition Term
Loan Commitment plus (b) the aggregate outstanding principal amount of the
Acquisition Term Loans of that Lender and (ii) after the termination of the
Acquisition Term Loan Commitments, the aggregate outstanding principal amount of
the Acquisition Term Loans of that Lender.
"Acquisition Term Loans" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(i).
2
"Acquisition Term Notes" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E(i)(a) on the Effective Date and (ii)
any promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Acquisition Term Loan
Commitments or Acquisition Term Loans of any Lenders, in each case substantially
in the form of Exhibit IV annexed hereto, as they may be amended, supplemented
or otherwise modified from time to time.
"Adjusted Eurodollar Rate" means a rate per annum (rounded
upwards, if necessary, to the next higher 1/100th of 1%) determined by
Administrative Agent pursuant to the following formula:
Adjusted Eurodollar Rate = LIBOR
----------------------------------
1.00-Eurodollar Reserve Percentage
"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.
"Affected Lender" means a Lender during such period of time as
such Lender's obligation to make Loans as, or to convert Loans to, Eurodollar
Rate Loans is suspended pursuant to 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, or, in the case of any Lender which is an investment fund, trust or
other entity that invests in bank loans, the investment advisor thereof and any
investment fund, trust or other such entity managed by the same investment
advisor or an Affiliate thereof. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power 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.
"Affiliate Agreements" means, collectively, all employment
agreements, consulting agreements, and any other agreements, documents or
arrangements between any Loan Party and any of its Affiliates, officers,
directors, shareholders or any Affiliates of any such officers, directors or
shareholders.
"Agents" means, collectively, the Administrative Agent, the
Syndication Agent and the Documentation Agent, and also means and includes any
successor Administrative Agent, Syndication Agent or Documentation Agent, as the
case may be, appointed pursuant to subsection 9.5A.
"Agreement" means this Amended and Restated Credit Agreement
dated as of January 28, 1999, as it may be amended, supplemented or otherwise
modified from time to time.
"Applicable Base Rate Margin" means, as of any date of
determination, the following:
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(x) with respect to Acquisition Term Loans, Tranche A Term
Loans and Revolving Loans, 1.50% per annum; and
(y) with respect to Tranche B Term Loans, 2.00% per annum.
"Applicable Eurodollar Margin" means, as of any date of
determination, the following:
(x) with respect to Acquisition Term Loans, Tranche A Term
Loans and Revolving Loans, 3.00% per annum; and
(y) with respect to Tranche B Term Loans, 3.50% per annum.
"Asset Sale" means (A) the sale, assignment or other transfer
(whether voluntary or involuntary) for value (collectively, a "transfer") by
Company or any of its Restricted Subsidiaries to any Person other than Company
or any of its wholly-owned Restricted Subsidiaries of (i) any of the stock of
PHH or any of Company's Restricted Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Company or any of its Restricted
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Company or any of its Restricted Subsidiaries or (B) the occurrence of any loss
or damage of any assets of Company or any of its Restricted Subsidiaries giving
rise to insurance proceeds, including without limitation the proceeds of any
related business interruption insurance, in each case other than (a) inventory
sold in the ordinary course of business and (b) any such other assets to the
extent that the aggregate value of such assets transferred, lost or damaged (x)
is equal to $50,000 or less in any single transaction or related series of
transactions or (y) is equal to $500,000 or less in any Fiscal Year.
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit XII annexed hereto.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime
Rate and (y) 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 State of New York or North
Carolina 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 interbank Eurodollar market.
4
"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.
"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 of America 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 of America 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.
"Certificate re Non-Bank Status" means a certificate, in form
and substance satisfactory to Administrative Agent, delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii) pursuant to which such
Lender certifies that it is not (i) a "bank" as such term is defined in
subsection 881(c)(3) of the Internal Revenue Code; (ii) a 10 percent shareholder
of Company within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of
the Internal Revenue Code; or (iii) a "controlled" foreign corporation related
to Company within the meaning of Section 864(d)(4) of the Internal Revenue Code.
"CIBC" has the meaning assigned to that term in the
introduction to this Agreement.
"CIBC ▇▇▇▇▇▇▇▇▇▇▇" means CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
"Class" means, with respect to Lenders, the following four
classes of Lenders: (i) Lenders having Acquisition Term Loan Exposure, (ii)
Lenders having Tranche A Term Loan Exposure, (iii) Lenders having Tranche B Term
Loan Exposure and (iv) Lenders having Revolving Loan Exposure.
"Closing Date" means October 23, 1997.
"CMC" means Chase Manhattan Capital, L.P.
5
"Collateral" means, collectively, all of the real, personal
and mixed property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"Collateral Account" has the meaning assigned to that term in
the Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account
Agreement executed and delivered by Company and Administrative Agent on the
Closing Date, as such Collateral Account Agreement may be amended, supplemented
or otherwise modified from time to time.
"Collateral Documents" means the Company Pledge Agreement, the
Company Security Agreement, the Company Trademark Security Agreement, the
Collateral Account Agreement, the Subsidiary Pledge Agreements, the Subsidiary
Security Agreements, the Subsidiary Trademark Security Agreement, the Mortgages,
and all other instruments or documents delivered by any Loan Party pursuant to
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, personal or
mixed 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 Restricted Subsidiaries in the ordinary course of business
of Company or such Restricted 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.
"Company Certificate of Designations" means the provisions of
Company's Certificate of Designations, Preferences and Relative, Participating,
Optional and Other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions Thereof relating to the Company Preferred Stock, in
the form delivered to Agents and Lenders prior to the Closing Date and as such
provisions may be amended from time to time thereafter to the extent permitted
under subsection 7.14A.
"Company Capital Stock" means, collectively, (i) the common
stock, par value $.01 per share, of Company and (ii) the Company Preferred
Stock.
"Company Pledge Agreement" means the Company Pledge Agreement
executed and delivered by Company on the Closing Date, as such Company Pledge
Agreement may be amended, supplemented or otherwise modified from time to time.
"Company Preferred Stock" means, collectively, (i) the Series
A Preferred Stock, par value $.01 per share, of Company, and (ii) the Series B
Preferred Stock, par value $.01 per share, of Company.
6
"Company Security Agreement" means the Company Security
Agreement executed and delivered by Company on the Closing Date, as such Company
Security Agreement may be amended, supplemented or otherwise modified from time
to time.
"Company Trademark Security Agreement" means the Company
Trademark Security Agreement executed and delivered by Company on the Closing
Date, as such Company Trademark Security Agreement may be amended, supplemented
or otherwise modified from time to time.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit IX annexed hereto delivered to Administrative Agent and
Lenders by Company pursuant to subsection 6.1(iv).
"Consolidated Capital Expenditures" means, for any period, the
sum of 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 property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries net of the amount of any reimbursement
payments made to Company or any of its Subsidiaries by any third parties in
connection with any such expenditures to the extent that such expenditures have
actually been made by Company or its Subsidiaries but excluding however any such
expenditures made in connection with any Permitted Acquisition.
"Consolidated Current Assets" means, as of any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may be properly classified as current assets in
conformity with GAAP, but excluding Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as of any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may be properly classified as current liabilities in
conformity with GAAP, excluding the current portion of long-term debt.
"Consolidated EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) the amount of
the call premiums paid in connection with the redemption of the Senior Notes up
to a maximum aggregate amount of $2.0 million, (v) total depreciation expense,
(vi) total amortization expense, including but not limited to goodwill,
organization costs and other intangibles, and (vii) other non-cash items
reducing Consolidated Net Income less other non-cash items increasing
Consolidated Net Income, 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 and capitalized interest) 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
7
costs under Interest Rate Agreements, but excluding, however, any amounts
referred to in subsection 2.3 payable to Agents, Affiliates of Agents and
Lenders on or before the Effective Date.
"Consolidated Net Income" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (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 cash dividends or other distributions actually paid to
Company or any of its Subsidiaries by such Person during such period, (ii) the
income (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 income 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, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to Asset Sales or returned surplus assets
of any Pension Plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-Cash extraordinary losses.
"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
and after the Effective Date, (i) EBITDA of such acquired business determined as
though such business were acquired as of the first day of such period by Company
and its Subsidiaries, plus (ii) the amount of any historical extraordinary or
nonrecurring costs or expenses or other verifiable costs or expenses that will
not continue after the acquisition date (including without limitation excess
owner/management compensation) plus (iii) any reasonable operating expenses to
be eliminated that are approved by Administrative Agent, including, without
limitation, allocated general and administrative expenses plus (c) the
adjustments set forth on Schedule 1.1.
"Consolidated Pro Forma Leverage Ratio" means, as of any date
of determination, the ratio of (i) Consolidated Total Debt as of the last day of
the Fiscal Quarter of Company ending immediately prior to such date to (ii)
Consolidated Pro Forma EBITDA for the four consecutive Fiscal Quarter period
ending as of the last day of the Fiscal Quarter of Company ending immediately
prior to such date of determination.
"Consolidated Rental Payments" means, for any period, the
aggregate amount of all rents paid or payable by Company and its Subsidiaries on
a consolidated basis during that period under all Operating Leases to which
Company or any of its Subsidiaries is a party as lessee (net of sublease
income).
"Consolidated Total Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
8
"Consolidated Working Capital" means, as of any date of
determination, the excess (or deficit) of Consolidated Current Assets over
Consolidated Current Liabilities.
"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, dividend 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) (X) 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 (Y) 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 (X) or (Y) 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 amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.
"Continuing Directors" means the directors of Company on the
Effective Date, and each other director, if in each case, such other director's
nomination for election to the board of directors of Company is recommended by a
majority of the then Continuing Directors.
"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.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"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.
"Documentation Agent" has the meaning assigned to that term in
the recitals of this Agreement.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
9
"EBITDA" means for any business acquired by Company and its
Subsidiaries, "Consolidated EBITDA" as defined herein substituting references to
such acquired business for references to "Company and its Subsidiaries" as used
in such definition.
"Effective Date" means the date on or before February 28, 1999
on which the conditions precedent set forth in Section 4.1 hereof shall have
been satisfied or waived.
"Eligible Assignee" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof having unimpaired
capital and surplus of not less than $500,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof having unimpaired capital and surplus of not less than
$500,000,000; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof having unimpaired capital and surplus
of not less than $500,000,000; provided that (x) such bank is acting through a
branch or agency located in the United States or (y) 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 (iv)
any other entity that has net assets of not less than $250,000,000 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 (B) any Lender and
any Affiliate of any 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 written investigation, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other published requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. ss. 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42
U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601
et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
ss.136 et seq.), the Occupational Safety and Health Act (29 U.S.C. ss. 651 et
seq.), the Oil Pollution Act (33 U.S.C. ss. 2701 et seq.) and the Emergency
Planning and
10
Community Right-to-Know Act (42 U.S.C. ss. 11001 et seq.), each as amended or
supplemented, any analogous present or future state or local statutes or laws,
and any regulations promulgated pursuant to any of the foregoing.
"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 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 and 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); (ii) the failure to meet the
minimum funding standards of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by 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 liability 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
constitutes grounds under ERISA for the 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 liability 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
it is insolvent 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
fines, penalties,
11
taxes or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits or for a qualified domestic relations order) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Eurodollar Reserve Percentage" means, for any day, the
percentage (expressed as a decimal and rounded upwards, if necessary, to the
next higher 1/100th of 1%) which is in effect for such day as prescribed by the
Federal Reserve Board (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental or emergency
reserves) in respect of Eurocurrency liabilities or any similar category of
liabilities for a member bank of the Federal Reserve System in New York City.
"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.
"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 plus (b) the amount (which may be a negative
number) by which Consolidated Working Capital as of the beginning of such period
exceeds (or is less than) Consolidated Working Capital as of the end of such
period minus (ii) the sum, without duplication, of the amounts for such period
of (a) voluntary and scheduled repayments of Consolidated Total Debt (excluding
repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayment), (b)
Consolidated Interest Expense, (c) Consolidated Capital Expenditures (net of any
proceeds of any related financing with respect to such expenditures) which are
made in Cash during such period or which have not yet been made but which are
committed in writing to be made (and are so made) by Company and its
Subsidiaries within 90 days of any Fiscal Year-end, (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 Cash portion (other than proceeds of
Loans made under this Agreement) of any consideration paid during such period
with respect to Permitted Acquisitions and (f) the amount of the call premium
paid in connection with the redemption of the Senior Notes.
"Existing Credit Agreement" has the meaning given to such term
in the recitals of this Agreement.
12
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased or operated 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" means Company's consolidated plan and
financial forecast for each Fiscal Year.
"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 any
Permitted Encumbrances having priority by operation of law over the Liens
purported to be created pursuant to the Collateral Documents and (ii) such Lien
is the only Lien (other than Permitted Encumbrances) to which such Collateral is
subject.
"First Union" has the meaning assigned to that term in the
introduction to this Agreement.
"First Union CMC" means First Union Capital Markets
Corporation, a wholly-owned Subsidiary of First Union Corporation.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its
Subsidiaries ending on the last Thursday in September of each 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.
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. Incorporated, a
Delaware corporation, and/or its affiliated investment funds.
"Funding and Payment Office" means (i) the office of
Administrative Agent and Swing Line Lender located at First Union National Bank,
One First Union Center TW-10, ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Syndication Agency Services, 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.
"Funding Date" means the date of the funding of a Loan.
13
"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 or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"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, 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 flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity of
any Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
"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 and
any such
14
obligations which represent accounts payable incurred in the ordinary course of
business), which purchase price (a) is due more than six months from the date of
incurrence of the obligation in respect thereof or (b) is 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. Obligations under Interest Rate
Agreements and Currency Agreements constitute (X) in the case of Hedge
Agreements, Contingent Obligations, and (Y) in all other cases, Investments, and
in neither case constitute Indebtedness.
"Indemnitee" means each of the Agents, the Lenders, CIBC
▇▇▇▇▇▇▇▇▇▇▇, First Union CMC, NationsBanc and their respective officers,
directors, employees, agents and affiliates which are indemnified by Company
pursuant to subsection 10.3.
"Information Systems and Equipment" means all computer
hardware, firmware and software, as well as other information processing
systems, or any equipment containing embedded microchips, whether directly
owned, licensed, leased, operated or otherwise controlled by Company or any of
its Subsidiaries, including through third-party service providers, and which, in
whole or in part, are used, operated, relied upon or integral to, Company's or
any of its Subsidiaries' conduct of their business.
"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 as currently
conducted that are material to the condition (financial or otherwise), business
or operations of Company and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base
Rate Loan, each January 31, April 30, July 31 and October 31 of each year,
commencing on April 30, 1999, 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" means the interest period for each
Eurodollar Rate Loan selected by Company, which interest period shall consist of
a one, two, three or six month period.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party.
"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.
15
"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.
"Investment" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Restricted Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person, (ii) any direct or
indirect redemption, retirement, purchase or other acquisition for value, by any
Restricted Subsidiary of Company from any Person other than Company or any of
its Restricted Subsidiaries, of any equity Securities of such Person, (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 Restricted Subsidiaries to any other Person (other than a wholly-owned
Restricted Subsidiary of Company), 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, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"IP Collateral" means, collectively, the Collateral under the
Company Trademark Security Agreement and the Subsidiary Trademark Security
Agreements.
"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.
16
"LIBOR" means the rate for deposits in Dollars for a period
equal to the Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 A.M. (London time), two (2) Business Days prior to the
commencement of the applicable Interest Period. If, for any reason, such rate is
not available, then "LIBOR" shall mean the rate per annum at which, as
determined by Administrative Agent, Dollars in the amount of $5,000,000 are
being offered to leading banks at approximately 11:00 A.M. (London time), two
(2) Business Days prior to the commencement of the applicable Interest Period
for settlement in immediately available funds by leading banks in the London
interbank market for a period equal to the Interest Period selected.
"Lien" means any lien, mortgage, 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.
"Lil' Champ" means Lil' Champ Food Stores, Inc., a Florida
corporation.
"Loan" or "Loans" means one or more of the 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.
"Loan Party" means each of Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "Loan Parties"
means all such Persons, collectively.
"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 Assignment Agreement" means that certain Master
Assignment Agreement substantially in the form of Exhibit XIX annexed hereto,
among Company, the lenders under the Existing Credit Agreement, the Lenders
under this Agreement and the Administrative Agent pursuant to which all lenders
under the Existing Credit Agreement assign their Loans and/or Acquisition Term
Loan Commitments and/or Revolving Loan Commitments to the Administrative Agent,
and the Administrative Agent assigns to each Lender under this Agreement, and
each Lender purchases from Agent, the Loans and/or Acquisition Term Loan
Commitments and/or Revolving Loan Commitments as set forth on Schedule 2.1
hereto.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries, taken as a whole, or
(ii) the material impairment of the ability of any Loan Party to perform, or 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 have a Material Adverse Effect.
17
"MEI" means ▇▇▇▇▇▇ Enterprises, Inc., a Florida corporation.
"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, substantially in the form of Exhibit XIII annexed hereto or in
such other form as may be approved by Administrative Agent in its sole
discretion, in each case with such changes thereto as may be recommended by
Administrative Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices, as such security instrument may be amended,
supplemented or otherwise modified from time to time.
"Multiemployer Plan" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NationsBanc" means NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.
"NationsBank" has the meaning given to such term in the
recitals of this Agreement.
"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, and including any Cash received under any insurance policy
or as a result of the taking of any assets pursuant to the power of eminent
domain, condemnation or otherwise) received from such Asset Sale, net of any
direct costs incurred in connection with such Asset Sale, including (i) taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of 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 reserves established in good
faith by Company to satisfy any indemnification obligations undertaken in
connection with such Asset Sale.
"Notes" means one or more of the Acquisition Term Notes,
Tranche A Term Notes, 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 with respect to a proposed borrowing.
"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 with respect to a proposed
conversion or continuation of the applicable basis for determining the interest
rate with respect to the Loans specified therein.
"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) with respect to the proposed
issuance of a Letter of Credit.
18
"Obligations" means all obligations of every nature of each
Loan Party from time to time owed to Agents, Lenders or any of them under the
Loan Documents and Hedge Agreements to which any of the Lenders is a party,
whether for principal, interest, reimbursement of amounts drawn under Letters of
Credit, fees, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by its
chief financial officer or its treasurer; provided that every Officers'
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 or
officers making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement relating
thereto, (ii) a statement that, in the opinion of the signers, they have made or
have caused to be made such examination or investigation as is necessary to
enable them 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 signers, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(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 other
than any such lease under which that Person is the lessor.
"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 an acquisition of assets or a
business effected in accordance with the provisions of subsection 7.7(vi).
"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, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):
(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 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 30 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 portion of the Collateral, such contest
19
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
portion of the Collateral on account thereof;
(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 as security for the
Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted under this Agreement, (b) restriction or
encumbrance 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
restriction or encumbrance referred to in the preceding clause
(b), so long as the holder of such restriction or encumbrance
agrees to recognize the rights of such lessee or sublessee
under such lease;
(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 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
20
similar agreements entered into in the ordinary course of
business of Company and its Subsidiaries; and
(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.
"Permitted Holders" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or any successor
entity thereof controlled by principals of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and any entity
controlled by, or under common control with, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ Capital
Partners and/or its affiliated investment funds.
"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.
"PHH" means PH Holding Corporation, a North Carolina
corporation and a wholly-owned subsidiary of Company.
"Pledged Collateral" means, collectively, the "Pledged
Collateral" as defined in the Company Pledge Agreement and the Subsidiary Pledge
Agreements.
"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 that First Union announces from
time to time as its prime lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. First Union or any other Lender may
make commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Acquisition Term Loan Commitment
or the Acquisition Term Loans of any Lender, the percentage obtained by dividing
(x) the Acquisition Term Loan Exposure of that Lender by (y) the aggregate
Acquisition Term Loan Exposure of all Lenders, (ii) with respect to all
payments, computations and other matters relating to the Tranche A Term Loan
Commitment or the Tranche A Term Loan of any Lender, the percentage obtained by
dividing (x) the Tranche A Term Loan Exposure of that Lender by (y) the
aggregate Tranche A Term Loan Exposure of all Lenders, (iii) with respect to all
payments, computations and other matters relating to the Tranche B Term Loan
Commitment or the Tranche B Term Loan of any Lender, the percentage obtained by
dividing (x) the Tranche B Term Loan Exposure of that Lender by (y) the
aggregate Tranche B Term Loan Exposure of all Lenders, (iv) 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 any
Swing Line Loans purchased by any Lender, the percentage obtained by
21
dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (v) for all other purposes with
respect to each Lender, the percentage obtained by dividing (x) the sum of the
Acquisition Term Loan Exposure of that Lender plus the Tranche A Term Loan
Exposure of that Lender plus the Tranche B Term Loan Exposure of that Lender
plus the Revolving Loan Exposure of that Lender by (y) the sum of the aggregate
Acquisition Term Loan Exposure of all Lenders plus the aggregate Tranche A Term
Loan Exposure of all Lenders plus the aggregate Tranche B 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.
"PTO" means the United States Patent and Trademark Office or
any successor or substitute office in which filings are necessary or, in the
opinion of Administrative Agent, desirable in order to create or perfect Liens
on any IP Collateral.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Refunded Swing Line Loans" means Swing Line Loans which are
refunded through the proceeds of Revolving Loans made by the Lenders.
"Register" means the register established pursuant to
subsection 2.1D for the recordation of each Lender's Commitments and Loans.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Reimbursement Date" means the date on which Company is
required to reimburse the Issuing Lender for a drawing on a Letter of Credit.
"Related Agreements" means, collectively, the Company
Certificate of Designations, the Stockholders Agreement, the Related Financing
Documents, the Affiliate Agreements and the Target Company Purchase Agreement.
"Related Financing Documents" means, collectively, the Senior
Subordinated Notes, the Senior Subordinated Note Indenture and all other
agreements or instruments delivered pursuant to or in connection with any of the
foregoing including any purchase agreement or registration rights agreement.
"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.
22
"Requisite Class Lenders" means, at any time, (i) for Class
Lenders having Acquisition Term Loan Exposure, Lenders having or holding 66-2/3%
of the aggregate Acquisition Term Loan Exposure of all Lenders, (ii) for Class
Lenders having Tranche A Term Loan Exposure, Lenders having or holding 66-2/3%
of the aggregate Tranche A Term Loan Exposure of all Lenders, (iii) for Class
Lenders having Tranche B Term Loan Exposure, Lenders having or holding 66-2/3%
of the aggregate Tranche B Term Loan Exposure of all Lenders and (iv) for Class
Lenders having Revolving Loan Exposure, Lenders having or holding 66-2/3% 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 Acquisition Term Loan Exposure of all Lenders,
the aggregate Tranche A Term Loan Exposure of all Lenders, the aggregate Tranche
B Term Loan Exposure of all Lenders and the aggregate Revolving Loan Exposure of
all Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (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.
"Restricted Subsidiary" means any Subsidiary of Company other
than an Unrestricted Subsidiary.
"Revolving Loan Commitment" means the commitment of a Lender
to make Revolving Loans to Company pursuant to subsection 2.1A(iv), and
"Revolving Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Revolving Loan Commitment Termination Date" means January 31,
2004.
"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.
23
"Revolving Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(iv).
"Revolving Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(i)(d) on the Effective Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving Loan Commitments and
Revolving Loans of any Lenders, in each case substantially in the form of
Exhibit VII 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.
"Senior Note Indenture" means the indenture dated as of
November 4, 1993 between Company and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as
trustee, pursuant to which the Senior Notes were issued, as such indenture may
be amended through the date hereof.
"Senior Notes" means $100,000,000 in initial aggregate
principal amount of 12% Series B Senior Notes due 2000 of Company issued
pursuant to the Senior Note Indenture.
"Senior Subordinated Note Indenture" means the indenture dated
as of October 23, 1997, between Company, the guarantors named therein and United
States Trust Company of New York, as trustee, pursuant to which the Senior
Subordinated Notes were issued, as such indenture may be amended from time to
time to the extent permitted under subsection 7.14B.
"Senior Subordinated Notes" means the 10 1/4% Senior
Subordinated Notes due 2007 of Company issued pursuant to the Senior
Subordinated Note Indenture, as such notes may be amended from time to time to
the extent permitted under subsection 7.14B.
"Solvent" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) 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
and potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) 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
24
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.
"Standby Letter of Credit" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Restricted Subsidiaries in respect of industrial revenue
or development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Restricted Subsidiaries, (iii) the obligations of third
party insurers of Company or any of its Restricted Subsidiaries arising by
virtue of the laws of any jurisdiction requiring third party insurers, (iv)
obligations with respect to Capital Leases or Operating Leases of Company or any
of its Restricted Subsidiaries, and (v) performance, payment, deposit, surety or
indemnity obligations of Company or any of its Restricted Subsidiaries, in any
case if required by law or governmental rule or regulation or in accordance with
custom and practice in the industry; provided that Standby Letters of Credit may
not be issued for the purpose of supporting (a) trade payables or (b) any
Indebtedness constituting "antecedent debt" (as that term is used in Section 547
of the Bankruptcy Code).
"Stockholders Agreement" means that certain Stockholders'
Agreement dated as of August 19, 1996 by and among Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, CMC
and the other stockholders of Company, in the form delivered to Agents and
Lenders prior the Closing Date and as such agreement may be amended from time to
time thereafter to the extent permitted under subsection 7.14A.
"Subordinated Indebtedness" means (i) the Indebtedness of
Company evidenced by the Senior Subordinated Notes and any subordinated
indebtedness issued in compliance with subsection 7.1(vii) and (ii) any other
Indebtedness of Company 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 satisfactory to Administrative Agent and Requisite
Lenders.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"Subsidiary Guarantor" means any Restricted Subsidiary of
Company that executes and delivers a counterpart of the Subsidiary Guaranty on
the Closing Date or on the Effective Date or from time to time thereafter
pursuant to subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed
and delivered by existing Restricted Subsidiaries of Company on the Closing Date
or on the Effective Date, or executed and delivered by additional Restricted
Subsidiaries of Company from time to time thereafter in accordance with
subsection 6.8 substantially in the form of Exhibit XV annexed
25
hereto, as such Subsidiary Guaranty may be amended, supplemented or otherwise
modified from time to time.
"Subsidiary Pledge Agreement" means each Subsidiary Pledge
Agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or on the Effective Date or executed and delivered by any
additional Subsidiary Guarantor from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XVI annexed hereto, as such
Subsidiary Pledge Agreement may be amended, supplemented or otherwise modified
from time to time, and "Subsidiary Pledge Agreements" means all such Subsidiary
Pledge Agreements, collectively.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or on the Effective Date, or executed and delivered by any
additional Subsidiary Guarantor from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XVII annexed hereto, as
such Subsidiary Security Agreement may be amended, supplemented or otherwise
modified from time to time, and "Subsidiary Security Agreements" means all such
Subsidiary Security Agreements, collectively.
"Subsidiary Trademark Security Agreement" means each
Subsidiary Trademark Security Agreement executed and delivered by an existing
Subsidiary Guarantor on the Closing Date or on the Effective Date, or executed
and delivered by any additional Subsidiary Guarantor from time to time
thereafter in accordance with subsection 6.8, substantially in the form of
Exhibit XVIII annexed hereto, as such Subsidiary Trademark Security Agreement
may be amended, supplemented or otherwise modified from time to time, and
"Subsidiary Trademark Security Agreements" means all such Subsidiary Trademark
Security Agreements, collectively.
"Supplemental Collateral Agent" means any additional
collateral agent appointed pursuant to subsection 9.1D.
"Swing Line Lender" means First Union, 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(v).
"Swing Line Loans" means the Loans made by Swing Line Lender
to Company pursuant to subsection 2.1A(v).
"Swing Line Note" means (i) the promissory note of Company
issued pursuant to subsection 2.1E(ii) on the Effective Date and (ii) any
promissory note issued by Company to any successor Administrative Agent and
Swing Line Lender pursuant to the last sentence of subsection 9.5B, in each case
substantially in the form of Exhibit VIII 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.
26
"Target Company" means MEI and its Subsidiaries.
"Target Company Acquisition" has the meaning assigned to that
term in the recitals of this Agreement.
"Target Company Purchase Agreement" means that certain
Purchase Agreement dated as of November 30, 1998, among Lil' Champ, the selling
shareholders of MEI, ▇▇▇▇▇▇ Brothers, Circle Investments, Ltd. and MEI.
"Tax" or "Taxes" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; 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 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).
"Term Loans" means the Acquisition Term Loans, Tranche A Term
Loans and Tranche B Term Loans.
"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 plus (ii) the aggregate principal amount of all
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"Tranche A Term Loan Commitment" means the commitment of a
Lender to make a Tranche A Term Loan to Company pursuant to subsection 2.1A(ii),
and "Tranche A Term Loan Commitments" means such commitments of all Lenders in
the aggregate.
"Tranche A Term Loan Exposure" means, with respect to any
Lender as of any date of determination (i) prior to the termination of all of
the Tranche A Term Loan Commitments, the sum of (a) that Lender's Tranche A Term
Loan Commitment plus (b) the aggregate outstanding principal amount of the
Tranche A Term Loan of that Lender and (ii) after the termination of the Tranche
A Term Loan Commitments, the aggregate outstanding principal amount of the
Tranche A Term Loan of that Lender.
"Tranche A Term Loans" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(ii).
"Tranche A Term Notes" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E(i)(b) on the Effective Date and (ii)
any promissory notes issued by Company pursuant to the Company pursuant to the
last sentence of subsection 10.1B(i) in connection with assignments of the
Tranche A Term Loan Commitments or Tranche A Term Loans of any Lenders, in each
case substantially in the form of Exhibit V annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
27
"Tranche B Term Loan Commitment" means the commitment of a
Lender to make a Tranche B Term Loan to Company pursuant to subsection
2.1A(iii), and "Tranche B Term Loan Commitments" means such commitments of all
Lenders in the aggregate.
"Tranche B Term Loan Exposure" means, with respect to any
Lender as of any date of determination (i) prior to the termination of all of
the Tranche B Term Loan Commitments, the sum of (a) that Lender's Tranche B Term
Loan Commitment plus (b) the aggregate outstanding principal amount of the
Tranche B Term Loan of that Lender and (ii) after the termination of the Tranche
B Term Loan Commitments, the aggregate 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(iii).
"Tranche B Term Notes" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E(i)(c) on the Effective Date and (ii)
any promissory notes issued by Company pursuant to the Company pursuant to the
last sentence of subsection 10.1B(i) in connection with assignments of the
Tranche B Term Loan Commitments or Tranche B Term Loans of any Lenders, in each
case substantially in the form of Exhibit VI annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"Transaction Costs" means the fees, costs and expenses payable
by Company on or before the Effective Date in connection with the transactions
contemplated by the Loan Documents and the Related Agreements.
"Type" means a Term Loan, a Revolving Loan or a Swing Line
Loan (each of which is a "Type" of Loan) and with respect to a Term Loan, an
Acquisition Term Loan, a Tranche A Term Loan or a Tranche B Term Loan (each of
which is a "Type" of Term Loan).
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Unrestricted Subsidiaries" means PHH and its two wholly-owned
subsidiaries, TC Capital Management, Inc. and Pantry Properties, Inc.
"Year 2000 Compliant" means that all Information Systems and
Equipment accurately process date data (including, but not limited to,
calculating, comparing and sequencing) before, during and after the year 2000,
as well as same and multi-century dates, or between the years 1999 and 2000,
taking into account all leap years, including the fact that the year 2000 is a
leap year, and further, that when used in combination with, or interfacing with,
other Information Systems and Equipment, shall accurately accept, release and
exchange date data, and shall in all material respects continue to function in
the same manner as it performs on the date hereof and shall not otherwise impair
the accuracy or functionality of Information Systems and Equipment.
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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; 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 hereby severally agrees to make the Loans
described in subsections 2.1A(i), 2.1A(ii), 2.1A(iii) and/or 2.1A(iv), as the
case may be, and Swing Line Lender hereby agrees to make the Loans described in
subsection 2.1A(v).
(i) Acquisition Term Loans. Each Lender having an Acquisition
Term Loan Commitment severally agrees, subject to the
provisions set forth in subsection 7.7(vi), to lend to Company
from time to time during the period from the Effective Date to
but excluding the Acquisition Term Loan Commitment Termination
Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the Acquisition Term Loan Commitments to
be used for the purposes identified in subsection 2.5A. The
amount of each Lender's Acquisition Term Loan Commitment as of
the Effective Date is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate amount of the Acquisition
Term
29
Loan Commitments is $50,000,000; provided that the Acquisition
Term Loan Commitments of Lenders shall be adjusted to give
effect to any assignments of the Acquisition Term Loan
Commitments pursuant to subsection 10.1B; and provided,
further that the amount of the Acquisition Term Loan
Commitment of any Lender shall be reduced from time to time by
the amount of any Acquisition Term Loan made by such Lender
and shall be further 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 Acquisition Term Loan
Commitment shall expire on the Acquisition Term Loan
Commitment Termination Date and all outstanding Acquisition
Term Loans on such date shall be repaid in accordance with
subsection 2.4A. Amounts borrowed under this subsection
2.1A(i) and subsequently repaid or prepaid may not be
reborrowed.
(ii) Tranche A Term Loans. Each Lender having a Tranche A Term
Loan Commitment severally agrees to lend to Company on the
Effective Date an amount not exceeding its Pro Rata Share of
the aggregate amount of the Tranche A Term Loan Commitments to
be used for the purposes identified in subsection 2.5B. The
original amount of each Lender's Tranche A Term Loan
Commitment is set forth opposite its name on Schedule 2.1
annexed hereto and the aggregate amount of the Tranche A Term
Loan Commitments is $80,000,000; provided that the Tranche A
Term Loan Commitments of Lenders shall be adjusted to give
effect to any assignments of the Tranche A Term Loan
Commitments pursuant to subsection 10.1B. Amounts borrowed
under this subsection 2.1A(ii) and subsequently repaid or
prepaid may not be reborrowed.
(iii) Tranche B Term Loans. Each Lender having a Tranche B
Term Loan Commitment severally agrees to lend to Company on
the Effective Date an amount not exceeding its Pro Rata Share
of the aggregate amount of the Tranche B Term Loan Commitments
to be used for the purposes identified in subsection 2.5B. The
original amount of each Lender's Tranche B Term Loan
Commitment is set forth opposite its name on Schedule 2.1
annexed hereto and the aggregate amount of the Tranche B Term
Loan Commitments is $160,000,000; provided that the Tranche B
Term Loan Commitments of Lenders shall be adjusted to give
effect to any assignments of the Tranche B Term Loan
Commitments pursuant to subsection 10.1B. Amounts borrowed
under this subsection 2.1A(iii) and subsequently repaid or
prepaid may not be reborrowed.
(iv) Revolving Loans. Each Lender having a Revolving Loan
Commitment 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
Effective 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 2.5C. The original amount of each Lender's
Revolving Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate original amount
of the Revolving Loan Commitments is $45,000,000; provided
that the
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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(iv) may be repaid
and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the aggregate
Revolving Loan Commitments then in effect.
(v) 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
Commitments available to Company from time to time during the
period from the Effective 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 2.5C, 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
original amount of the Swing Line Loan Commitment is
$5,000,000; 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, any 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(v) may be
repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, 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, at any time in its sole and absolute
discretion, deliver to Administrative Agent (with a copy to
31
Company), no later than 11:00 A.M. (Charlotte, NC time) on the
first Business Day in advance of the proposed Funding Date, 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.
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 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 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 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.
Immediately upon the funding of each Swing Line Loan by Swing
Line Lender, 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 without giving effect to clauses (d) and (e) of
the definition of Revolving Loan Exposure) 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 Funding and Payment Office. In order to evidence such
participation, each Lender agrees to enter into a separate
participation agreement at the request of Swing Line Lender in
form and substance reasonably satisfactory to all parties. 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
32
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 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) any
adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries; (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 (X) 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 (Y)
the satisfaction of any such condition not satisfied had been
waived in accordance with subsection 10.6.
B. Borrowing Mechanics. Term Loans or 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(v) 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) shall be in an aggregate minimum amount
of $1,000,000 and integral multiples of $500,000 in excess of that amount;
provided that Term Loans or Revolving Loans made on any Funding Date as
Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate
minimum amount of $3,000,000 and integral multiples of $1,000,000 in excess of
that amount. Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $200,000 and integral multiples of $100,000 in excess of that
amount. Whenever Company desires that Lenders make Term Loans or Revolving Loans
it shall deliver to Administrative Agent a Notice of Borrowing no later than
11:00 A.M. (Charlotte, NC 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
12:00 Noon (Charlotte, NC 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 and any Loans made on the Effective Date or any Loans made on the two
Business Days immediately succeeding the Effective Date, that such Loans shall
be Base Rate Loans, (iv) in the case of Term Loans and Revolving Loans not made
on the Effective Date, 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
33
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 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 Term Loans and Revolving Loans
under this Agreement shall be made by Lenders having a Commitment of that Type
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 such Lender or Swing Line Lender, as the case may be, of the proposed
borrowing. Each such Lender shall make the amount of its Loan available to
Administrative Agent not later than 1:00 P.M. (Charlotte, NC 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 2:00
P.M.(Charlotte, NC time) on the applicable Funding Date, in each case in same
day funds in Dollars, at the Funding and Payment Office. Except as provided in
subsection 2.1A(v) 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
Loans made on the Effective Date) and 4.2 (in the case of all Loans),
Administrative Agent shall make the proceeds of such Loans available to Company
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
34
Line Lender, as the case may be, to be credited to the account of Company at the
Funding and Payment 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
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 for Base Rate 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
Acquisition Term Loan Commitment, Tranche A Term Loan
Commitment, Tranche B Term Loan Commitment and Revolving Loan
Commitment and the Acquisition Term Loans, Tranche A Term
Loans, Tranche B Term Loans 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 Acquisition Term Loans, Tranche A Term Loans,
Tranche B Term Loans 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 held by such Lender) the amount of any
Acquisition Term Loan, Tranche A Term Loan, Tranche B Term
Loan and Revolving Loan made by it and each payment in
35
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 absent manifest
error.
(iv) Company, Agents 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 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 designates First Union 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 First Union serves in such
capacity, First Union and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all
purposes under subsection 10.3.
E. Notes. Company shall execute and deliver on the Effective
Date (i) to each Lender having a Commitment for that Type of Loan (or to
Administrative Agent for that Lender) (a) an Acquisition Term Note substantially
in the form of Exhibit IV annexed hereto to evidence that Lender's Acquisition
Term Loans, in the principal amount of that Lender's Acquisition Term Loan
Commitment and with other appropriate insertions, (b) a Tranche A Term Note
substantially in the form of Exhibit V annexed hereto to evidence that Lender's
Tranche A Term Loan, in the principal amount of that Lender's Tranche A Term
Loan Commitment and with other appropriate insertions, (c) a Tranche B Term Note
substantially in the form of Exhibit VI annexed hereto to evidence that Lender's
Tranche B Term Loan, in the principal amount of that Lender's Tranche B Term
Loan Commitment and with other appropriate insertions, and (d) a Revolving Note
substantially in the form of Exhibit VII annexed hereto to evidence that
Lender's Revolving Loans, in the principal amount of that Lender's Revolving
Loan Commitment and with other appropriate insertions, and (ii) to Swing Line
Lender (or to Administrative Agent for Swing Line Lender) a Swing Line Note
substantially in the form of Exhibit VIII annexed hereto to evidence Swing Line
Lender's Swing Line Loans, in the principal amount of the Swing Line Loan
Commitment and with other appropriate insertions.
36
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 to 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 to 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 a 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 basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the
Term Loans and the Revolving Loans shall bear interest through maturity as
follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin; or
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Applicable Eurodollar
Margin.
Subject to the provisions of subsections 2.2E and 2.7, the
Swing Line Loans shall bear interest to maturity at the sum of the Base Rate
plus the Applicable Base Rate Margin.
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 Conversion/Continuation, each
successive Interest Period shall commence on the day on which
the next preceding Interest Period expires;
37
(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
Acquisition Term Loans shall extend beyond January 31, 2004,
no Interest Period with respect to any portion of the Tranche
A Term Loans shall extend beyond January 31, 2004, no Interest
Period with respect to any portion of the Tranche B Term Loans
shall extend beyond January 31, 2006 and no Interest Period
with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of any
Type of Term Loans shall extend beyond a date on which Company
is required to make a scheduled payment of principal of such
Type of Term Loans unless the sum of (a) the aggregate
principal amount of such Type of Term Loans that are Base Rate
Loans plus (b) the aggregate principal amount of such Type of
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 such Type of Term
Loans on such date;
(vii) there shall be no more than twelve Interest Periods
outstanding at any time; and
(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.
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).
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 Term
38
Loans or Revolving Loans equal to $1,000,000 and integral multiples of $500,000
in excess of that amount from Loans bearing interest at a rate determined by
reference to one basis to Loans bearing interest at a rate determined by
reference to an alternative basis; provided that Loans converted to Eurodollar
Loans shall be in an aggregate minimum amount of $3,000,000 and integral
multiples of $1,000,000 in excess of that amount; or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $3,000,000 and integral multiples of $1,000,000 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 11:00 A.M. (Charlotte, NC 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, 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
39
demand at a rate that is 2.00% 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 2.00%
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 2.00% 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 any Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on any
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. Revolving Loan Commitment Fees. Company agrees to pay to
Administrative Agent, for distribution to each Lender having a Revolving Loan
Commitment in proportion to that Lender's Pro Rata Share of the Revolving Loan
Commitments, commitment fees for the period from and including the Effective
Date to and excluding the Revolving Loan Commitment Termination Date in an
amount equal to (x) the daily excess of the Revolving Loan Commitments over the
sum of (i) the aggregate principal amount of outstanding Revolving Loans plus
(ii) the aggregate principal amount of outstanding Swing Line Loans plus (iii)
the Letter of Credit Usage multiplied by (y) 0.50% per annum, such commitment
fees to be calculated on the basis of a 360-day year and the actual number of
days elapsed and to be payable quarterly in arrears on January 31, April 30,
July 31 and October 31 of each year, commencing on April 30, 1999, and on the
Revolving Loan Commitment Termination Date.
B. Acquisition Term Loan Commitment Fees. Company agrees to
pay to Administrative Agent, for distribution to each Lender having an
Acquisition Term Loan Commitment in proportion to that Lender's Pro Rata Share
of the Acquisition Term Loan Commitments, commitment fees for the period from
and including the Effective Date to and excluding the Acquisition Term Loan
Commitment Termination Date in an amount equal to (x) the aggregate Acquisition
Term Loan Commitments over the aggregate principal amount of outstanding
Acquisition Term Loans multiplied by (y) 0.50% per annum, such commitment fees
to be calculated on the basis of a 360-day year and the actual number of days
elapsed and to be payable quarterly in arrears on January 31, April 30, July 31
and October 31 of each year, commencing on April 30, 1999, and on the
Acquisition Term Loan Commitment Termination Date.
40
C. Other Fees. Company agrees to pay to Agents, CIBC
▇▇▇▇▇▇▇▇▇▇▇, First Union CMC and/or NationsBanc, as the case may be, such other
fees in the amounts and at the times agreed upon between Company, Agents, CIBC
▇▇▇▇▇▇▇▇▇▇▇, First Union CMC and/or NationsBanc, as the case may be.
2.4 Repayments, Prepayments and Reductions in Acquisition Term Loan
Commitments and Revolving Loan Commitments; General Provisions
Regarding Payments; Application of Proceeds of Collateral and Payments
Under Subsidiary Guaranty.
A. Scheduled Payments of Term Loans.
(i) Scheduled Payments of Acquisition Term Loans. Company
shall make principal payments on the Acquisition Term Loans in
installments on each January 31, April 30, July 31 and October
31, commencing on April 30, 2001, in an amount equal to 8.33%,
or 8.37% with respect to the installment payable on January
31, 2004, of the aggregate amount of the Acquisition Term
Loans outstanding on the Acquisition Term Loan Commitment
Termination Date; provided that the scheduled installments of
principal of the Acquisition Term Loans shall be reduced in
connection with any voluntary or mandatory prepayments of the
Acquisition Term Loans in accordance with subsection 2.4B(iv);
and provided, further that the Acquisition Term Loans and all
other amounts owed hereunder with respect to the Acquisition
Term Loans shall be paid in full no later than January 31,
2004, and the final installment payable by Company in respect
of the Acquisition 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 Acquisition Term Loans.
(ii) Scheduled Payments of Tranche A Term Loans. Company shall
make principal payments on the Tranche A Term Loans in
installments on the dates and in the amounts set forth below:
Scheduled Repayment of
Date Tranche A Term Loans
---- --------------------
April 30, 1999 $875,000
July 31, 1999 $875,000
October 31, 1999 $875,000
January 31, 2000 $875,000
April 30, 2000 $3,500,000
July 31, 2000 $3,500,000
October 31, 2000 $3,500,000
January 31, 2001 $3,500,000
April 30, 2001 $4,500,000
July 31, 2001 $4,500,000
October 31, 2001 $4,500,000
January 31, 2002 $4,500,000
April 30, 2002 $5,000,000
July 31, 2002 $5,000,000
41
October 31, 2002 $5,000,000
January 31, 2003 $5,000,000
April 30, 2003 $6,125,000
July 31, 2003 $6,125,000
October 31, 2003 $6,125,000
January 31, 2004 $6,125,000
----------
$80,000,000
; provided that the scheduled installments of principal of the
Tranche A Term Loans shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche A Term Loans
in accordance with subsection 2.4B(iv); and provided, further
that the Tranche A Term Loans and all other amounts owed
hereunder with respect to the Tranche A Term Loans shall be
paid in full no later than January 31, 2004, and the final
installment payable by Company in respect of the Tranche A
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 A Term Loans.
(iii) 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
Date Tranche B Term Loans
---- --------------------
April 30, 1999 $400,000
July 31, 1999 $400,000
October 31, 1999 $400,000
January 31, 2000 $400,000
April 30, 2000 $400,000
July 31, 2000 $400,000
October 31, 2000 $400,000
January 31, 2001 $400,000
April 30, 2001 $400,000
July 31, 2001 $400,000
October 31, 2001 $400,000
January 31, 2002 $400,000
April 30, 2002 $400,000
July 31, 2002 $400,000
October 31, 2002 $400,000
January 31, 2003 $400,000
April 30, 2003 $400,000
July 31, 2003 $400,000
October 31, 2003 $400,000
January 31, 2004 $400,000
April 30, 2004 $16,000,000
July 31, 2004 $16,000,000
42
October 31, 2004 $16,000,000
January 31, 2005 $16,000,000
April 30, 2005 $22,000,000
July 31, 2005 $22,000,000
October 31, 2005 $22,000,000
January 31, 2006 $22,000,000
-----------
$160,000,000
; provided that the scheduled installments of principal of the
Tranche B Term Loans shall be reduced in connection with any
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 and all other amounts owed
hereunder with respect to the Tranche B Term Loans shall be
paid in full no later than January 31, 2006, and the final
installment payable by Company in respect of the 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 Reductions in Commitments.
(i) Voluntary Prepayments. Company may, upon written or
telephonic notice to Administrative Agent at or prior to 12:00
Noon (Charlotte, NC 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 in an aggregate
minimum amount of $200,000 and integral multiples of $100,000
in excess of that amount. 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 12:00 Noon
(Charlotte, NC 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 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 $500,000 in excess of
that amount; provided, however, that a Eurodollar Rate Loan
may only be prepaid on a date prior to the date of the
expiration of the Interest Period applicable thereto upon
payment of all amounts due with respect to such prepayment
under subsection 2.6D. 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 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
43
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, (a) 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 or (b) the Acquisition Term Loan Commitments in an
amount up to the amount by which the Acquisition Term Loan
Commitments exceed the aggregate principal amount of
outstanding Acquisition Term Loans; provided that any such
partial reduction of the Revolving Loan Commitments or the
Acquisition Term Loan Commitments shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of
$500,000 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 or the Acquisition
Term Loan Commitments shall be effective on the date specified
in Company's notice and shall reduce the Revolving Loan
Commitment or the Acquisition Term Loan Commitments, as
applicable, of each Lender proportionately to its Pro Rata
Share.
(iii) Mandatory Prepayments and Mandatory Reductions of
Commitments. The Loans shall be prepaid and/or the 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. Prepayments and Reductions From Net Asset Sale
Proceeds. No later than the first Business Day following the
date of receipt by Company or any of its Restricted
Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale and subject to subsection 6.4C in the case of
insurance proceeds which constitute Net Asset Sale Proceeds,
Company shall prepay the Loans and/or the Revolving Loan
Commitments and/or the Acquisition Term Loan Commitments shall
be permanently reduced in an aggregate amount equal to such
Net Asset Sale Proceeds; provided, however, that, so long as
no Event of Default shall have occurred and be continuing, Net
Asset Sale Proceeds received by Company and its Restricted
Subsidiaries from and after the date hereof need not be
applied to the mandatory prepayment of the Loans pursuant to
this subsection 2.4B(iii)(a) under the circumstances and in
the amounts provided below: (i) subject to clause (iii) below,
in the case of Net Asset Sale Proceeds derived from any
sale/leaseback of properties owned by the Target Company on
the Effective Date, which sale/leaseback is completed within
270 days after the Effective Date 50% of such Net Asset Sale
Proceeds need not be applied to mandatory prepayment and/or
commitment reductions; (ii) subject to clause (iii) below, in
the case of Net Asset Sales Proceeds derived from any
sale/leasebacks of properties owned by the Company and its
Restricted Subsidiaries (excluding properties covered by
clause (i) above but including properties acquired by the
Target Company after the Effective Date), none of such Net
Asset Sale Proceeds up to (x) $15,000,000
44
in any Fiscal Year and (y) $40,000,000 in the aggregate for
all Fiscal Years need to be applied to mandatory prepayments
and/or commitment reductions so long as such excluded proceeds
are reinvested in the manner contemplated by clause (iv) below
within 270 days of the receipt thereof; (iii) the first
$10,000,000 in aggregate Net Asset Sale Proceeds received from
any sale/leaseback of such properties owned by Company and its
Restricted Subsidiaries or such other Target Company
properties covered by the preceding clauses (i) or (ii) shall
not be so excluded but shall be applied to prepay Loans and/or
to reduce Revolving Loan Commitments and/or Acquisition Term
Loan Commitments; and (iv) no Net Asset Sale Proceeds which
are reinvested in assets or properties currently utilized or
anticipated to be utilized in any line of business engaged in
by Company and its Restricted Subsidiaries on the Effective
Date, or any similar or related business, within 270 days of
receipt thereof need be applied to mandatory prepayments
and/or commitment reductions so long as the aggregate amount
of such Net Asset Sale Proceeds so held for reinvestment and
excluded from the mandatory prepayment provisions of this
clause (iv) does not exceed $10,000,000 at any time, but any
excess over such $10,000,000 at any time shall be so applied;
provided that any Non-Excluded Proceeds (as hereinafter
defined) shall not be subject to reinvestment under this
clause (iv). "Non-Excluded Proceeds" shall mean any Net Asset
Sale Proceeds which are derived from sale/leasebacks of the
types described in the foregoing clauses (i)-(iii) and which
are not specifically excluded from being applied to mandatory
prepayments and/or commitment reductions (i.e., the remaining
50% of Net Asset Sale Proceeds described in clause (i), Net
Asset Sale Proceeds described in clause (ii) in excess of
$15,000,000 per Fiscal Year or $40,000,000 in the aggregate
and the $10,000,000 in Net Asset Sale Proceeds described in
clause (iii)). The Company shall, within ten Business Days of
the receipt by Company or any of its Restricted Subsidiaries
of any Net Asset Sale Proceeds to be excluded from such
mandatory prepayment provisions pursuant to the foregoing
clauses (i) - (iv), deliver to Administrative Agent an
Officers' Certificate setting forth the amount of such Net
Asset Sale Proceeds, the amount of other Net Asset Sale
Proceeds excluded from such mandatory prepayment provisions
and held for reinvestment pursuant to the foregoing clause
(iv), and the amount of any mandatory prepayment to be made
pursuant to this subsection 2.4B(iii)(a) and setting forth in
reasonable detail the calculations from which such amounts
were derived, which Officers' Certificate with respect to Net
Asset Sale Proceeds being held for reinvestment may be amended
at any time and from time to time by Company during the
270-day period following receipt of such Net Asset Sale
Proceeds. In the event that any portion of any Net Asset Sale
Proceeds received by Company or any of its Restricted
Subsidiaries and held for reinvestment which are so excluded
from the mandatory prepayment of the Loans are not expended
for the purposes permitted pursuant to this subsection
2.4B(iii)(a) within the 270-day period, Company shall,
immediately upon the expiration of the applicable 270-day
period, make a mandatory prepayment of the Loans as specified
in the first sentence of this subsection 2.4B(iii)(a) in an
amount equal to such unexpended portion.
45
(b) Prepayments and Reductions Due to Issuance of Equity
Securities. No later than the first Business Day after the
date of receipt by Company 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
Securities Proceeds") from the issuance of any equity
Securities of Company after the Effective Date (other than
issuances of equity to management employees pursuant to
agreements or stock option plans permitted under subsection
7.11), Company shall prepay the Loans and/or the Revolving
Loan Commitments and/or the Acquisition Term Loan Commitments
shall be permanently reduced in an aggregate amount equal to
50% of such Net Securities Proceeds.
(c) Prepayments and Reductions Due to Issuance of Debt
Securities. On the date of receipt by Company of the Net
Securities Proceeds from the issuance of any debt Securities
of Company after the Effective Date (other than as permitted
pursuant to subsection 7.1 (i)-(viii)), Company shall prepay
the Loans and/or the Revolving Loan Commitments and/or the
Acquisition Term Loan Commitments shall be permanently reduced
in an aggregate amount equal to such Net Securities Proceeds.
(d) Prepayments from Excess Cash Flow. Within 90 days
after the end of any Fiscal Year commencing with the Fiscal
Year ending September 30, 1999 in which the Company has Excess
Cash Flow, Company shall prepay the Loans and/or the Revolving
Loan Commitments and/or Acquisition Term Loan Commitments
shall be permanently reduced in an aggregate amount equal to
50% of such Excess Cash Flow.
(e) 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 and/or the Acquisition Term
Loan Commitments pursuant to subsections 2.4B(iii)(a)-(d),
Company shall deliver to Administrative Agent an Officers'
Certificate demonstrating the calculation of the amount (the
"Net Proceeds Amount") of the applicable Net Asset Sale
Proceeds, Net Securities Proceeds or Excess Cash Flow 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
Officers' Certificate, Company shall promptly make an
additional prepayment of the Loans (and/or, if applicable, the
Revolving Loan Commitments and/or the Acquisition Term Loan
Commitments shall be permanently reduced) in an amount equal
to the amount of such excess, and Company shall concurrently
therewith deliver to Administrative Agent an Officers'
Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
(f) 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
46
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 (i) any voluntary prepayments of any Tranche A Term Loan
or Tranche B Term Loan shall be applied ratably to the Tranche
A Term Loans and the Tranche B Term Loans and shall be applied
to the scheduled installments thereof in the inverse order of
maturity; (ii) any voluntary prepayments of the Acquisition
Term Loans shall be applied first in forward order of maturity
to reduce scheduled installments thereof due in the next
succeeding twelve months and thereafter shall be applied to
the scheduled installments thereof in the inverse order of
maturity; and (iii) 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 the
outstanding Revolving Loans to the full extent thereof; third
to repay outstanding Acquisition Term Loans to the full extent
thereof; and fourth to repay outstanding Tranche A Term Loans
and Tranche B Term Loans to the full extent thereof.
(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 and/or the
Acquisition Term Loan Commitments pursuant to subsections
2.4B(iii)(a)-(d) shall be applied first to the ratable
prepayment of the Tranche A Term Loans and the Tranche B Term
Loans to the full extent thereof, second, to the extent of any
remaining portion of the Applied Amount, to the prepayment of
the Acquisition Term Loans to the full extent thereof, and
third, to the extent of any remaining portion of the Applied
Amount, to the prepayment of the Revolving Loans and to
permanently reduce the Revolving Loan Commitment to the full
extent thereof; provided, that the Company may elect to offer
the Lenders with Tranche B Loans outstanding the opportunity
to waive the right to receive the amount of such mandatory
prepayment, and if any such Lender so elects, 100% of the
amount that would otherwise have been applied as a mandatory
prepayment of such Lender's Tranche B Term Loan shall be
applied to the prepayment of the Tranche A Term Loans.
(c) Application of Mandatory Prepayments of Term Loans
by Order of Maturity. Any mandatory prepayments of any Type of
Term Loans pursuant to subsection 2.4B(iii) shall be applied
to reduce the scheduled installments of principal of such Type
of Term Loans set forth in subsection 2.4A in inverse order of
maturity.
(d) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering each Type of Loan being
prepaid separately, any prepayment thereof shall be applied
first to Base Rate Loans to the full extent thereof before
47
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 Administrative
Agent not later than 12:00 Noon (Charlotte, NC time) on the
date due at the Funding and 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, 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 shall be applied to the payment of interest
before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of each Type of Loan shall be
apportioned among all outstanding Loans to which such payments
relate, in each case proportionately to such Lenders'
respective Pro Rata Shares. Administrative Agent shall
promptly distribute to each such 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),
48
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
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 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 such proceeds,
to the payment to or upon the order of such Loan Party or to
whosoever 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
49
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 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 such payments,
to the payment to the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
2.5 Use of Proceeds.
A. Acquisition Term Loans. Subject to subsection 7.7(vi), the
proceeds of the Acquisition Term Loans may be used by Company to finance
Permitted Acquisitions. No Acquisition Term Loans may be borrowed on the
Effective Date.
B. Certain Term Loans. The proceeds of the Tranche A Term
Loans and the Tranche B Term Loans, together with up to $5.0 million in
Revolving Loans, shall be used (i) to refinance $85.0 million in outstanding
acquisition term loans under the Existing Credit Agreement, (ii) to redeem the
Company's outstanding Senior Notes in the aggregate principal amount of $49.0
million, and to pay $1.2 million in accrued and unpaid interest on the Senior
Notes, (iii) to pay $2.0 million in call premiums with respect to the redemption
of the Senior Notes, (iv) to pay a cash purchase price of $82.0 million for and
to make $12.0 million in reimbursements related to the Target Company
Acquisition and (v) to pay (x) fees and expenses in an amount up to $5.0 million
related to the foregoing and (y) the purchase price adjustment, if any,
contemplated by the definitive acquisition agreement relating to the Target
Company Acquisition.
C. Revolving Loans; Swing Line Loans. Up to $5,000,000 of the
Revolving Loan Commitments may be used by Company on the Effective Date to make
Revolving Loans for purposes specified in subsection 2.5B. The proceeds of any
Revolving Loans made after the Effective Date and any Swing Line Loans shall be
applied by Company for working capital and general corporate purposes, which may
include the making of intercompany loans to any of Company's wholly-owned
Restricted Subsidiaries, in accordance with subsection 7.1(iv), for their own
working capital and general corporate purposes.
D. 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.
50
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 10:00 A.M. (Charlotte, NC 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 interbank Eurodollar 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 rescinded by Company.
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,
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 interbank Eurodollar 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
51
outstanding Eurodollar Rate Loans shall be terminated at the earlier to occur of
the expiration of the Interest Periods then in effect with respect to such
outstanding Eurodollar Rate Loans or when required by law, and (d) such
outstanding Eurodollar Rate 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 (which request shall set forth the basis for requesting such amounts),
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 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.
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
52
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 a Potential Event of Default or 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 (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 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) 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;
(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 interbank
Eurodollar 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
53
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such increased
cost or reduction in amounts received or receivable hereunder. Such Lender shall
deliver to 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, 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
or any other Loan Party 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 any other Loan Party or
by any federation or organization of which the United States
of America or any such jurisdiction is a member at the time of
payment.
(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 from any sum paid or payable by
Company or any other Loan Party to any Agent or any Lender
under any of the Loan Documents:
(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 such Agent or such
Lender, as the case may be) on behalf of and in the name of
such 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, such 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;
54
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. Upon the
reasonable request of Company, and at Company's expense, each Lender
shall cooperate with Company in seeking to obtain refunds of Taxes paid
by Company. If a Lender shall receive a refund (or a refund in the form
of a credit) from a taxing authority (as a result of any error in the
imposition of Tax by such taxing authority) of any Taxes paid by
Company pursuant to this subsection 2.7B(ii), such Lender, so long as
no Event of Default shall then exist, shall promptly pay to Company the
amount so received.
(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 Effective 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 1001 or
4224 (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 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 either
Internal Revenue Service Form 1001 or 4224 pursuant to clause
(1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any
successor form), 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 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,
55
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 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, 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 (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 or prior to the
Effective 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 (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 or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's 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, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to
56
Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such additional amounts, 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
reasonable 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 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.
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(iv) and that Swing Line
Lender make Swing Line Loans pursuant to subsection 2.1A(v), 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):
57
(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 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 upon the
giving of 30 days' prior notice thereof to Company and the
beneficiary of such Letter of Credit, 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; or
(iv) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (X) the Revolving Loan
Commitment Termination Date and (Y) the date which is 180 days
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.
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 12:00
Noon (Charlotte, NC time) at least three Business Days (in the
case of Standby Letters of Credit) or five Business Days (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) the expiration
date of the Letter of Credit, (e) 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
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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
10:00 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 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.
(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions
set forth in subsection 4.3, the Issuing Lender shall issue
the requested Letter of Credit in accordance with the Issuing
Lender's standard operating procedures.
(iv) 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
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aggregate amount available to be 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 (X) $500
and (Y) 0.25% per annum of the daily amount available to be
drawn under such Standby Letter of Credit and (b) a letter of
credit fee, payable to the Administrative Agent for the
account of Lenders having Revolving Loan Commitments, equal to
the Applicable Eurodollar Margin multiplied by the daily
amount available to be drawn under such Letter of Credit, each
such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) each January 31, April 30,
July 31 and October 31 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, (a) a
fronting fee, payable directly to the applicable Issuing
Lender for its own account, equal to the greater of (X) $100
and (Y) 0.25% per annum of the daily amount available to be
drawn under such Commercial Letter of Credit and (b) a letter
of credit fee, payable to the Administrative Agent for the
account of Lenders having Revolving Loan Commitments, equal to
the Applicable Eurodollar Margin minus 1.00% per annum
multiplied by the daily amount available to be drawn under
such Commercial Letter, each such fronting fee or letter of
credit fee to be payable in arrears on and to (but excluding)
each January 31, April 30, July 31 and October 31 of each year
and computed on the basis of a 360-day year for the actual
number of days elapsed; 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), 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, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close
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of business on any date of determination. Promptly upon receipt by
Administrative Agent of any amount described in clauses (i)(b) or (ii)(b) of
this subsection 3.2, Administrative Agent shall distribute to each Lender having
a Revolving Loan Commitment its Pro Rata Share of such amount.
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 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 11:00 A.M. (Charlotte, NC 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 equal to the amount of such honored
drawing and (ii) subject to satisfaction or waiver of the conditions specified
in subsection 4.2B, 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 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 such honored
drawing and of such other
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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 12:00 Noon (Charlotte, NC 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 360-day year for the
actual number of days elapsed in the period during which it
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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.
(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);
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(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;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) 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 and allocated costs of internal
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
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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 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,
65
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 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. 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.
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of
Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 Conditions to Initial Term Loans and Revolving Loans on the Effective
Date.
The obligations of Lenders to make any Term Loans and
Revolving Loans to be made on the Effective Date are, in addition to the
conditions precedent specified in subsection 4.2, subject to prior or concurrent
satisfaction of the following conditions:
A. Loan Party Documents. On or before the Effective Date,
Company shall, and shall cause 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 Effective Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of such Person, together with a good standing
certificate from the Secretary of State of its jurisdiction of
incorporation and each other state in which such Person is
qualified as a foreign corporation to do business 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 each of
such jurisdictions, each dated a recent date prior to the
Effective Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Effective Date by such Person's corporate secretary or an
assistant secretary;
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(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and
performance of those Loan Documents, Related Agreements and
the Acknowledgement and Consent Agreement to which it is a
party that are to be executed as of the Effective Date,
certified as of the 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
such Person executing those Loan Documents, Related Agreements
and the Acknowledgement and Consent Agreement to which it is a
party that are to be executed as of the Effective Date;
(v) Executed originals of those Loan Documents, Related
Agreements and the Acknowledgement and Consent Agreement to
which such Person is a party that are to be executed on or
before the Effective Date; and
(vi) Such other documents as any Agent may reasonably request.
B. No Material Adverse Effect. Since September 24, 1998, no
Material Adverse Effect (in the sole opinion of Agents) shall have occurred, and
there shall exist no pending or threatened litigation, proceedings or
investigation which could reasonably be expected to have a Material Adverse
Effect.
C. Corporate and Capital Structure, Ownership, Management,
Etc.
(i) Corporate Structure. The corporate organizational
structure of Company and its Subsidiaries, both before and
after giving effect to the Target Company Acquisition, shall
be as set forth on Schedule 4.1C annexed hereto.
(ii) Capital Structure and Ownership. The capital structure
and ownership of Company, both before and after giving effect
to the Target Company Acquisition, shall be as set forth on
Schedule 4.1C annexed hereto.
(iii) Management. The management structure of Company after
giving effect to the Target Company Acquisition shall be as
set forth on Schedule 4.1C annexed hereto.
D. Satisfactory Completion of Due Diligence. CIBC ▇▇▇▇▇▇▇▇▇▇▇,
First Union CMC and NationsBanc shall have confirmed that the results of their
legal, environmental and accounting due diligence review as of the Effective
Date are not materially and adversely different from those as of November 30,
1998 due to any new information provided to any of CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union
CMC and NationsBanc after November 30, 1998.
E. Related Agreements.
(i) Approval of Related Agreements. The Related Agreements
shall each be satisfactory in form and substance to Agents.
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(ii) Related Agreements in Full Force and Effect. Agents shall
have received a fully executed or conformed copy of each
Related Agreement and any documents executed in connection
therewith, and each Related Agreement shall be in full force
and effect and no provision thereof shall have been modified
or waived in any respect determined by Agents to be material,
in each case without the consent of Agents. Agents shall have
received an Officer's Certificate certifying that the Target
Company Purchase Agreement shall not have been modified or
waived in any material respect except as disclosed and
consented to by Agents.
F. Existing Credit Agreement Payments and Assignments.
(i) With respect to the Existing Credit Agreement, Company
shall have paid to First Union, as administrative agent under
the Existing Credit Agreement, for distribution to lenders and
issuing lenders, as applicable, under the Existing Credit
Agreement all unpaid accrued interest on all loans, all unpaid
accrued commitment fees and all unpaid accrued fees on all
Letters of Credit, in each case through but excluding the
Effective Date.
(ii) On or before the Effective Date, Company, each lender
under the Existing Credit Agreement, First Union, as
administrative agent under the Existing Credit Agreement, and
each Lender and Administrative Agent under this Agreement
shall have executed and delivered the Master Assignment
Agreement, substantially in the form of Exhibit XIX annexed
hereto, and on the Effective Date, each such lender, First
Union, Lender and Administrative Agent shall have sold,
purchased and/or assigned such loans and/or revolving loan
commitments and acquisition term loan commitments pursuant to
the Master Assignment Agreement such that each Lender's Pro
Rata Share of the Loans and/or Commitments upon the Effective
Date shall be as set forth on Schedule 2.1 annexed hereto.
G. Necessary Governmental Authorizations and Consents;
Expiration of Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Target Company Acquisition, the
redemption of the Senior Notes and the other transactions contemplated by the
Loan Documents and the Related Agreements, and the continued operation of the
business conducted by Company, Target Company and their respective Subsidiaries
in substantially the same manner as conducted prior to the consummation of the
Target Company Acquisition, and each of the foregoing shall be in full force and
effect, in each case other than those the failure to obtain or maintain which,
in the aggregate, would not have a Material Adverse Effect. All applicable
waiting periods shall have expired without any action being taken or threatened
by any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the Target Company Acquisition or the financing thereof.
No action, request for stay, petition for review or rehearing, reconsideration,
or appeal with respect to any of the foregoing shall be pending, and the time
for any applicable agency to take action to set aside its consent on its own
motion shall have expired.
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H. Consummation of Target Company Acquisition.
(i) All conditions to the Target Company Acquisition set forth
in the Target Company Purchase Agreement shall have been
satisfied or the fulfillment of any such conditions shall have
been waived with the consent of Agents;
(ii) Agents shall have received an Officers' Certificate of
Company to the effect set forth in clause (i) above and
stating that Company will proceed to consummate the Target
Company Acquisition immediately upon the making of the initial
Loans.
I. Effective Date Mortgages; Effective Date Mortgage Policies;
Etc. Administrative Agent shall have received from Company and each applicable
Subsidiary Guarantor with respect to any Real Property Assets required to be
subject to a Lien in favor of Administrative Agent for the benefit of Lenders
pursuant to subsection 6.9:
(i) Effective Date Mortgages. Fully executed and notarized
Mortgages encumbering the owned Real Property Assets of
Company and its Restricted Subsidiaries existing as of the
Effective Date (each an "Effective Date Mortgage" and,
collectively, the "Effective Date Mortgages"), duly recorded
or in proper form for recording, as the case may be, in all
appropriate places in all applicable jurisdictions,
encumbering each Real Property Asset (each an "Effective Date
Mortgaged Property" and, collectively, the "Effective Date
Mortgaged Properties") or fully executed and notarized
amendments to existing Mortgages to the extent such amendments
may be required to continue the perfection of such mortgages
with respect to the amendment and restatement of the Existing
Credit Agreement effected by this Agreement, duly recorded or
in proper form for recording, as the case may be, in all
appropriate places in all applicable jurisdictions.
(ii) Opinions of Local Counsel. If requested by Agents, an
opinion of counsel in each state in which a Effective Date
Mortgaged Property is located with respect to the
enforceability of the form(s) of Effective Date Mortgages to
be recorded in such state and such other matters as Agents may
reasonably request, in each case in form and substance
reasonably satisfactory to Agents;
(iii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an
insurance broker or a municipal engineer, as to whether (1)
any Effective Date Mortgaged Property is a Flood Hazard
Property and (2) the community in which any such Flood Hazard
Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard
Properties, such Loan Party's written acknowledgement of
receipt of written notification from Administrative Agent (1)
as to the existence of each such Flood Hazard Property and (2)
as to whether the community in which each such Flood Hazard
Property is located is participating in the National Flood
Insurance Program, and (c) in the event any such Flood Hazard
Property is located in a community that participates in the
National Flood Insurance Program, evidence that Company has
obtained flood insurance in respect of such Flood
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Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve
System; and
(iv) Environmental Indemnity . An environmental indemnity
agreement, satisfactory in form and substance to Agents and
their counsel, with respect to the indemnification of Agents
and Lenders for any liabilities that may be imposed on or
incurred by any of them as a result of any Hazardous Materials
Activity.
J. Security Interests in Personal and Mixed Property. Agents
shall have received evidence satisfactory to them that Company and Subsidiary
Guarantors have taken or 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), (iv)
and (v) below) that may be necessary or, in the opinion of Agents, desirable in
order to create or continue 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 and mixed property Collateral acquired
after the Closing Date. Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Agents of
accurate and complete schedules to all of the applicable
Collateral Documents.
(ii) Stock Certificates and Instruments. To the extent not
previously delivered to the Administrative Agent, 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 Agents) representing all capital stock pledged
pursuant to the Company Pledge Agreement and the Subsidiary
Pledge Agreements and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner
satisfactory to Agents) evidencing any Collateral acquired
after the Closing Date;
(iii) Lien Searches and UCC Termination Statements. Delivery
to Agents of (a) the results of a recent search, by a Person
satisfactory to Agents, of all effective UCC financing
statement 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
disclosed in such search (other than any such financing
statements in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement).
(iv) UCC Financing Statements and Fixture Filings. To the
extent not previously delivered to the Administrative Agent,
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 acquired after the
Closing Date, for filing in all jurisdictions as may be
necessary or, in the opinion of Agents, desirable to
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perfect the security interests created in such Collateral
pursuant to the Collateral Documents;
(v) PTO Cover Sheets, Etc. To the extent not previously
delivered to the Administrative Agent, delivery to
Administrative Agent of all cover sheets or other documents or
instruments required to be filed with the PTO in order to
create or perfect Liens in respect of any IP Collateral
acquired after the Closing Date;
(vi) Certificates of Title, Etc. To the extent not previously
delivered to the Administrative Agent and if requested by
Agents, delivery to Administrative Agent of certificates of
title with respect to all motor vehicles and other rolling
stock of Loan Parties and the taking of all actions necessary
to cause Administrative Agent to be noted as lienholder
thereon or otherwise necessary to perfect the First Priority
Lien granted to Administrative Agent on behalf of Lenders in
such rolling stock; and
(vii) Opinions of Local Counsel. Delivery to Agents of an
opinion of counsel (which counsel shall be reasonably
satisfactory to Agents) under the laws of each jurisdiction in
which any Loan Party or any personal or mixed property
Collateral acquired after the Closing Date is located with
respect to the creation and perfection or continuity of
perfection of the security interests in favor of
Administrative Agent in such Collateral and such other matters
governed by the laws of such jurisdiction regarding such
security interests as Agents may reasonably request, in each
case in form and substance reasonably satisfactory to Agents.
K. Environmental Reports. Agents and Lenders shall have
completed their environmental due diligence investigation in connection with the
Target Company Acquisition, including the receipt of reports and other
information concerning any environmental liabilities of Target Company and its
Subsidiaries, and the results of such environmental investigations and reports
shall be satisfactory in form and in substance to the Agents.
L. Financial Statements; Pro Forma Balance Sheet. On or before
the Effective Date, Lenders shall have received from Company (i) audited
financial statements of Company and its Subsidiaries for the Fiscal Year ended
September 24, 1998, consisting of balance sheets and the related consolidated
and consolidating statements of income, stockholders' equity and cash flows for
such period, (ii) audited financial statements of Target Company and its
Subsidiaries for the Fiscal Years ended March 27, 1996, April 2, 1997 and April
1, 1998, in each case consisting of balance sheets and the related consolidated
and consolidating statements of income, stockholders' equity and cash flows for
such period, which financial statements have already been received, and (iii)
unaudited financial statements of Company and Target Company and their
respective Subsidiaries for the fiscal periods most recently ended at least 30
days prior to the Effective Date, in each case consisting of a balance sheet and
the related consolidated and consolidating statements of income, stockholders'
equity and cash flows for the two-month period and eight-month periods
respectively ending on such date, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present the financial
condition of Company and its Subsidiaries and Target Company and
71
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, (iv) pro forma consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the Effective
Date, prepared in accordance with GAAP and reflecting the consummation of the
Target Company Acquisition, the redemption of the Senior Notes and the other
transactions contemplated by the Loan Documents and the Related Agreements,
which pro forma financial statements shall be substantially consistent with any
financial statements for the same periods delivered to Agents prior to November
30, 1998, and otherwise in form and substance satisfactory to Lenders, and (v)
projected consolidated and consolidating financial statements of Company and its
Subsidiaries for the five-year period after the Effective Date consisting of
consolidated and consolidating balance sheets and the related consolidated and
consolidating statements of income, shareholders' equity and cash flows, which
projected financial statements shall be substantially consistent with any
projected financial results for the same period delivered to Agents prior to
November 30, 1998 and otherwise in form and substance satisfactory to Agents and
Lenders.
M. Solvency Assurances. On the Effective Date, Agents and
Lenders shall have received an opinion from an independent valuation consultant
or appraiser satisfactory to the Agents and the Lenders and a Financial
Condition Certificate dated the Effective Date, substantially in the form of
Exhibit XIV annexed hereto and with appropriate attachments.
N. Opinions of Counsel to Loan Parties. Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for Loan Parties,
in form and substance reasonably satisfactory to Agents and their counsel, dated
as of the Effective Date and setting forth substantially the matters in the
opinions designated in Exhibit X annexed hereto and as to such other matters as
Agents acting on behalf of Lenders may reasonably request and (ii) evidence
satisfactory to Agents that Company has requested such counsel to deliver such
opinions to Lenders.
O. Opinions of Agents' Counsel. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇ LLP, counsel to Agents, dated as of the Effective Date,
substantially in the form of Exhibit XI annexed hereto and as to such other
matters as Agents acting on behalf of Lenders may reasonably request.
P. Opinions of Counsel Delivered Under Related Agreements.
Agents and their counsel shall have received copies of each of the opinions of
counsel delivered to the parties under the Related Agreements, if any as of the
Effective Date, together with a letter from each such counsel (to the extent not
inconsistent with such counsel's established internal policies) authorizing
Lenders and Agents to rely upon such opinion to the same extent as though it
were addressed to Lenders and Agents.
Q. Fees. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Agents, Lenders, CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union
CMC, and NationsBanc the fees payable on the Effective Date referred to in
subsection 2.3.
R. Representations and Warranties; Performance of Agreements.
Company shall have delivered to Agents an Officers' Certificate, in form and
substance satisfactory to Agents, to the effect that the representations and
warranties in Section 5 hereof are true, correct
72
and complete in all material respects on and as of the 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), 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
Effective Date except as otherwise disclosed to and agreed to in writing by
Agents and Requisite Lenders. Company shall also have delivered to Agents an
Officers' Certificate certifying that the Indebtedness incurred or to be
incurred by Company under this Agreement is permitted under the terms of the
Senior Subordinated Note Indenture and, to the extent that such certification
relies on Company's Consolidated Fixed Charge Coverage Ratio (as defined in the
Senior Subordinated Note Indenture) demonstrating that after giving effect to
the incurrence of such Indebtedness and the application of the proceeds thereof,
that such Consolidated Fixed Charge Coverage Ratio will exceed 2.0 to 1.0.
S. 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 Agents, acting on behalf of Lenders, and their counsel shall be
satisfactory in form and substance to Agents and such counsel, and Agents and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Agents may reasonably request.
T. Redemption of Senior Notes. Company shall not have revoked,
cancelled, terminated or otherwise modified or amended that certain Notice of
Redemption dated December 24, 1998, pursuant to which the Trustee under the
Senior Note Indenture has called for redemption not less than $49.0 million in
principal amount of Senior Notes, constituting all of Company's outstanding
Senior Notes for an aggregate cash payment not exceeding such principal amount
plus accrued and unpaid interest plus up to $2,000,000 in redemption premiums.
U. Maximum Consolidated Pro Forma Leverage Ratio. As of the
Effective Date, the ratio of Consolidated Total Debt to Consolidated Pro Forma
EBITDA shall not exceed 4.80:1.00 and Company shall have delivered an Officer's
Certificate to such effect.
V. No Disruption of Financial and Capital Markets. There shall
not have occurred and be continuing any material adverse change after November
30, 1998 through and including the Effective Date in the syndication markets for
credit facilities similar in nature to those provided under this Agreement, and
there shall not have occurred and be continuing a material disruption of or
material adverse change in the financial, banking or capital markets that would
have an adverse effect on such syndication market, in each case as determined by
the Agents in their sole discretion.
4.2 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,
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in each case signed by the chief executive officer, 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.
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;
(v) The making of the Loans requested on such Funding Date
shall not violate any law including Regulation T, Regulation U
and Regulation X of the Board of Governors of the Federal
Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting
Company or any of its Subsidiaries or any property of Company
or any of its Subsidiaries that has not been disclosed by
Company in writing pursuant to subsection 5.6 or 6.1(x) prior
to the making of the last preceding Loans (or, in the case of
the initial Loans, prior to the execution of this Agreement),
and there shall have occurred no development not so disclosed
in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either
event, in the opinion of Administrative Agent or of Requisite
Lenders, would be expected to have a Material Adverse Effect;
and no injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed
with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover
any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of Loans
hereunder.
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4.3 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 executive officer, 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 4.2B 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.
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce Issuing Lenders 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:
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1 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 Restricted
Subsidiaries are engaged only in the businesses permitted to be engaged in
pursuant to subsection 7.13.
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D. Subsidiaries. All of the Subsidiaries of Company as of the
Effective Date are identified in Schedule 5.1 annexed hereto, as said Schedule
5.1 may be supplemented from time to time pursuant to the provisions of
subsection 6.1(xvi). The capital stock of each of the Subsidiaries of Company
identified in Schedule 5.1 annexed hereto 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 5.1 annexed
hereto is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation set forth
therein, has all requisite corporate 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 corporate power and authority
has not had and will not have a Material Adverse Effect. Schedule 5.1 annexed
hereto correctly sets forth for Company and each of its Subsidiaries (i) the
ownership interest of Company and each of its Subsidiaries in each of the
Subsidiaries of Company identified therein, (ii) the jurisdiction of
incorporation of Company and each such Subsidiary, (iii) the number of issued
and outstanding shares of capital stock of each such Subsidiary and the owners
thereof, and (iv) as of the Effective Date, the number of issued and outstanding
shares of capital stock of Company and the owners thereof. As of the Effective
Date, the fair market value of the aggregate amount of assets of the
Unrestricted Subsidiaries does not exceed $1,500,000 and there exists no
Indebtedness nor Contingent Obligations of the Unrestricted Subsidiaries owed to
Company or any of its Restricted Subsidiaries or for which Company or any of its
Restricted Subsidiaries is or may become liable. As of the Effective Date, the
fair market value of the assets owned by Aucilla Properties, Inc. does not
exceed $50,000.
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 Certificate or Articles of Incorporation
or Bylaws 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, 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,
(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) 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 Effective Date and disclosed in writing to Lenders.
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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.
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.
E. Valid Issuance of Company Capital Stock, Senior
Subordinated Notes.
(i) Company Capital Stock. The Company Capital Stock is duly
and validly issued, fully paid and nonassessable. Except as
set forth in the Stockholders Agreement, no stockholder of
Company has or will have any preemptive rights to subscribe
for any additional equity Securities of Company. The issuance
and sale of such Company Capital Stock either (a) has been
registered or qualified under applicable federal and state
securities laws or (b) is exempt therefrom.
(ii) Senior Subordinated Notes. Company had the corporate
power and authority to issue the Senior Subordinated Notes at
the time they were issued. The Senior Subordinated Notes are
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 Senior Subordinated Notes are
enforceable against the holders thereof and the Loans and all
other monetary Obligations hereunder are within the definition
of "Senior Indebtedness" included in such provisions. The
Senior Subordinated Notes either (a) have been registered or
qualified under applicable federal and state securities laws
or (b) are exempt therefrom.
5.3 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) audited
financial statements of Company and its Subsidiaries for the Fiscal Year ended
September 24, 1998, consisting of balance sheets and the related consolidated
and consolidating statements of income, stockholders' equity and cash flows for
such period, (ii) audited financial statements of Target Company and Aucilla
Properties, Inc. for the fiscal years ended March 27, 1996, April 2, 1997 and
April 1, 1998, in each case consisting of balance sheets and the related
consolidated and consolidating statements of income, stockholders' equity and
cash flows for such period, (iii) unaudited balance sheet and statements of
income, changes in stockholders' equity and cash flow of Peninsular Petroleum
Company as of and for the fiscal years ended December 31, 1995, December 31,
1996 and December 31,
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1997 and for the nine month period ended September 30, 1998, and (iv) unaudited
financial statements of Company and Target Company and their respective
Subsidiaries for the fiscal periods most recently ended at least 30 days prior
to the effective date, in each case consisting of a balance sheet and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows for the two-month period and eight-month periods
respectively ending on such dates, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present the financial
condition of Company and its Subsidiaries and Target 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. 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 and
the absence of footnotes. None of Company, Target Company nor any of their
respective Subsidiaries has (and will not following the Effective Date have) any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
foregoing financial statements or the notes thereto and which in any such case
is material and adverse in relation to the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company, Target
Company and their respective Subsidiaries, taken as a whole.
5.4 No Material Adverse Change; No Restricted Junior Payments.
Since September 24, 1998, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect. 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. For purposes of this subsection, Target Company will not be
deemed a Subsidiary of Company until the Effective Date.
5.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. Company and its Subsidiaries
have (i) good, sufficient and legal title to (in the case of fee interests in
real property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), 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.
B. Real Property. As of the Effective Date, Schedule 5.5
annexed hereto contains a true, accurate and complete list of (i) all fee
properties and (ii) all leases, subleases or assignments of leases (together
with all amendments, modifications, supplements, renewals or extensions of any
thereof) affecting each Real Property Asset of any Loan Party, regardless of
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whether such Loan Party is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or assignment.
Except as specified in Schedule 5.5 annexed hereto, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Company does not have knowledge of any default that has occurred and is
continuing thereunder which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect, and each such agreement
constitutes the legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
5.6 Litigation; Adverse Facts.
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 or
affecting 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, all tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Company and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid prior
to delinquency. Except as set forth in Schedule 5.7, Company knows of no
proposed tax assessment against Company or any of its Subsidiaries which is not
being actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. Neither Company nor any of its Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
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B. 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.
C. All 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 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. Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal Revenue Code
is so qualified.
B. No ERISA Event has occurred or is reasonably expected to
occur.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code or except as set forth in Schedule 5.11 annexed hereto, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employee of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates.
D. 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
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aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities), does not
exceed $1,000,000.
E. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available, 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 $1,000,000.
5.12 Certain Fees.
No broker's or finder's fee or commission will be payable 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. ss. 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) Company maintains an environmental management system for
its and each of its Subsidiaries' operations that demonstrates
a commitment to environmental compliance and includes
procedures for (a) preparing and updating written compliance
manuals covering pertinent regulatory areas, (b) tracking
changes in applicable Environmental Laws and modifying
operations to comply with new requirements thereunder, (c)
training employees to comply with applicable environmental
requirements and updating such training as necessary,
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(d) performing regular internal compliance audits of each
Facility and ensuring correction of any incidents of
non-compliance detected by means of such audits, and (e)
reviewing the compliance status of off-site waste disposal
facilities;
(v) compliance with all current or reasonably foreseeable
future 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 has occurred or is occurring 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 has had or 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, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.1I, 4.1J,
6.8, 6.9 and 7.7(vi) and the filing of any UCC financing statements and PTO
filings delivered to Administrative Agent for filing (but not yet filed) and the
recording of any Effective Date Mortgages delivered to Administrative Agent for
recording (but not yet recorded) or amendments to the Mortgages existing prior
to the Effective Date, 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 or to continue
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 and PTO filings delivered to
Administrative Agent for filing (but not yet filed) and the recording of any
Effective Date Mortgages delivered to Administrative Agent for recording (but
not yet recorded) and the periodic filing of UCC continuation statements in
respect of UCC financing statements filed by or on behalf of Administrative
Agent.
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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
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
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 except as such may constitute Permitted Encumbrances, (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 effective filing covering all or any part of the IP
Collateral is on file in the PTO.
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 Agents by or on behalf of any Loan Party 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.
A. Delivery of Related Agreements. Company has delivered to
Lenders complete and correct copies of each Related Agreement and of all
exhibits and schedules thereto. Schedule 5.17 annexed hereto lists all Affiliate
Agreements as of the Effective Date. Except as set forth in Schedule 5.17
annexed hereto, none of the Related Agreements have been amended, amended and
restated, supplemented, restated or otherwise modified on or before the
Effective Date since the date any such Related Agreement was first entered into.
▇. ▇▇▇'▇ Warranties. Except to the extent otherwise set forth
herein or in the schedules hereto, to Company's best knowledge, each of the
representations and warranties given by MEI to Company in the Target Company
Purchase Agreement is true and correct in all material respects as of the date
hereof (or as of any earlier date to which such representation and warranty
specifically relates) and will be true and correct in all material respects as
of the Effective Date (or as of such earlier date, as the case may be), in each
case subject to the qualifications set forth in the schedules to the Target
Company Purchase Agreement.
C. Survival. Notwithstanding anything in the Target Company
Purchase Agreement to the contrary, the representations and warranties of
Company set forth in subsection 5.17B shall, solely for purposes of this
Agreement, survive the Effective Date for the benefit of Lenders.
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5.18 Disclosure.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document or Related Agreement or in any other
document, certificate or written statement furnished to Lenders by or on behalf
of Company or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits 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. 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. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Company
(other than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
5.19 Permits.
Each of the Loan Parties, prior to and after giving effect to
the Target Company Acquisition, the redemption of the Senior Notes and the
related transactions contemplated by the Loan Documents and the Related
Agreements, has such certificates, permits, licenses, franchises, consents,
approvals, authorizations and clearances that are material to the condition
(financial or otherwise), business or operations of any Loan Party ("Permits")
and is (and will be immediately after the consummation of such transactions) in
compliance in all respects with all applicable laws as are necessary to own,
lease or operate its properties and to conduct its businesses in the manner as
presently conducted and to be conducted immediately after the consummation of
such transactions except where failure to be in compliance could not reasonably
be expected to result in a Material Adverse Effect, and all such Permits are
valid and in full force and effect and will be valid and in full force and
effect immediately upon consummation of such transactions except for those where
the failure to be valid or in effect could not reasonably be expected to result
in a Material Adverse Effect. Each of the Loan Parties, prior to and after
giving effect to such transactions, is and will be in compliance in all respects
with its obligations under such Permits except where failure to be in compliance
could not reasonably be expected to result in a Material Adverse Effect, and no
event has occurred that allows, or after notice or lapse of time would allow,
revocation or termination of such Permits except where such revocation or
termination could not reasonably be expected to result in a Material Adverse
Effect.
5.20 Year 2000.
All Information Systems and Equipment are either Year 2000
Compliant, or any reprogramming, remediation, or any other corrective action,
including the internal testing of all such Information Systems and Equipment
will be completed by December 31, 1999, except insofar as the failure to do so
will not result in a Material Adverse Effect. Further, to the extent that such
reprogramming/remediation and testing action is required, the cost thereof, as
well as
84
the cost of the reasonably foreseeable consequences of failure to become Year
2000 Compliant, to Company and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of other systems or equipment) will not
result in an Event of Default or a Material Adverse Effect.
Section 6. COMPANY'S AFFIRMATIVE COVENANTS
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 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 Lenders:
(i) Monthly Financials: as soon as available and in any event
within 30 days after the end of each month ending after the
Closing Date, the consolidated balance sheet of Company and
its Subsidiaries as at the end of such month and the related
consolidated statements of income, stockholders' equity 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: as soon as available and in any
event within 45 days after the end of each of the first three
Fiscal Quarters of each Fiscal Year and within 90 days after
the end of the fourth Fiscal Quarter of each Fiscal Year, (a)
the consolidated and consolidating balance sheets of Company
and its Subsidiaries as at the end of such Fiscal Quarter and
the related consolidated and consolidating statements of
income, stockholders' equity 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 at
85
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 the form prepared for presentation to
senior management for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end
of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a)
the consolidated and consolidating balance sheets of Company
and its Subsidiaries as at the end of such Fiscal Year and the
related consolidated and consolidating statements of income,
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 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 the form prepared for
presentation to senior management for such Fiscal Year, and
(c) in the case of such consolidated financial statements, a
report thereon of Deloitte & Touche LLP or other independent
certified public accountants of recognized national standing
selected by Company, which report shall be unqualified, 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) Officers' and Compliance Certificates: (a) together with
each delivery of financial statements of Company and its
Subsidiaries pursuant to subdivisions (i), (ii) and (iii)
above, an Officers' Certificate of Company stating that the
signers have reviewed the terms of this Agreement and have
made, or caused to be made under their 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
accounting period, and that the signers do not have knowledge
of the existence as at the date of such Officers' 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) together
with each delivery of financial statements of Company and its
Subsidiaries pursuant to subdivisions (ii)
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and (iii) above, 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;
(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, 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 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 (a) stating that their audit
examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that
constitutes an Event of Default or Potential Event of Default
has come to their attention and, if such a condition or event
has come to their attention, specifying the nature and period
of existence thereof; 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, and
(c) stating that based on their audit examination nothing has
come to their attention that causes them to believe either or
both that the information contained in the certificates
delivered therewith pursuant to subdivision (iv) above is not
correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (b) of
subdivision (iv) above for the applicable Fiscal Year are not
stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards),
copies of all reports submitted to Company by independent
certified public accountants in connection with each annual,
interim
87
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;
(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,
or becoming aware that any Lender has given any notice (other
than to Administrative Agent) or taken any other action with
respect to a claimed 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, (c) of any condition or event
that would be required to be disclosed in a current report
filed by Company with the Securities and Exchange Commission
on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect
on the date hereof) if Company were required to file such
reports under the Exchange Act, or (d) 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
Officers' 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: 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:
(I) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
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(II) 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;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event
that could reasonably be expected to result in a material
liability, 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 that could reasonably be
expected to result in a material liability; 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 30 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 sheet and
forecasted consolidated statements of income and cash flows of
Company and its Subsidiaries for such Fiscal Year, together
with an explanation of the assumptions on which such forecasts
are based, and (b) 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 in form and
substance satisfactory to Administrative Agent outlining all
material insurance coverage maintained as of the date of such
report by Company and its Restricted Subsidiaries and all
material insurance coverage planned to be maintained by
Company and its Restricted Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written
notice of any change in the Board of Directors of Company;
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, 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
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required to be set forth in Schedule 5.1 annexed hereto with
respect to all Subsidiaries of Company (it being understood
that such written notice shall be deemed to supplement
Schedule 5.1 annexed hereto for all purposes of this
Agreement);
(xvii) Material Contracts: promptly, and in any event within
ten Business Days after any Material Contract of Company or
any of its Restricted Subsidiaries is terminated or amended in
a manner that is materially adverse to Company or such
Restricted Subsidiary, as the case may be, a written statement
describing such event with copies of such material amendments,
and an explanation of any actions being taken with respect
thereto;
(xviii) UCC Search Report: as promptly as practicable after
the date of delivery to Administrative Agent of any UCC
financing statement executed by any Loan Party pursuant to
subsection 4.1J(iv), 6.8A or 7.7(vi), copies of completed UCC
searches evidencing the proper filing, recording and indexing
of all such UCC financing statement and listing all other
effective financing statements that name such Loan Party as
debtor, together with copies of all such other financing
statements not previously delivered to Administrative Agent by
or on behalf of Company or such Loan Party; and
(xix) 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 through Administrative Agent.
6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Restricted 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 Restricted Subsidiaries shall be required to preserve any such right
or franchise if the Board of Directors of Company or such Restricted Subsidiary
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of Company or such Restricted Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any material respect
to Company, such Restricted Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Restricted
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 (1) such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (2) in the case of a charge or claim
which has or may become
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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 Asset Sale
Proceeds.
A. Maintenance of Properties. Company will, and will cause
each of its Restricted Subsidiaries to, maintain or cause to be maintained in
good repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of Company and its Restricted
Subsidiaries (including all Intellectual Property) and from time to time will
make or 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 Restricted 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. Without limiting
the generality of the foregoing, Company will maintain or cause to be maintained
(i) flood insurance with respect to each Flood Hazard Property that is located
in a community that participates in the National Flood Insurance Program, in
each case in compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System, and (ii) replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times satisfactory to Administrative Agent in its
commercially reasonable judgment. 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, satisfactory in form and substance to Administrative Agent, that
names Administrative Agent for the benefit of Lenders as the loss payee
thereunder for any covered loss in excess of $1,000,000 and provides for at
least 30 days prior written notice to Administrative Agent of any modification
or cancellation of such policy.
C. Application of Certain Net Asset Sale Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company
or any of its Restricted Subsidiaries of any business
interruption insurance proceeds constituting Net Asset Sale
Proceeds, (a) so long as no Event of Default shall have
occurred and be continuing, Company or such Restricted
Subsidiary may retain such Net Asset Sale Proceeds, and (b) if
an Event of Default shall have occurred and be continuing,
Company shall apply an amount equal to such Net Asset Sale
Proceeds to prepay the Loans (and/or the Revolving Loan
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Commitments and/or the Acquisition Term Loan Commitments shall
be reduced) as provided in subsection 2.4B(iii)(a);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
Company or any of its Restricted Subsidiaries of any insurance
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
Restricted Subsidiaries to, promptly and diligently apply such
Net Asset Sale Proceeds to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of
which such Net Asset Sale Proceeds were received or, to the
extent not so applied or in the process of being so applied,
to prepay the Loans (and/or the Revolving Loan Commitments
and/or the Acquisition Term Loan Commitments shall be reduced)
as provided in subsection 2.4B(iii)(a); provided that if the
aggregate amount of Net Asset Sale Proceeds received by
Company or any of its Restricted Subsidiaries in respect of
any covered loss exceeds $10,000,000, Company shall deliver
such Net Asset Sale Proceeds to Administrative Agent to be
held and disbursed by Administrative Agent in accordance with
clause (b)(2) of subsection 6.4(C)(iii), and (b) if an Event
of Default shall have occurred and be continuing, Company
shall apply an amount equal to such Net Asset Sale Proceeds to
prepay the Loans (and/or the Revolving Loan Commitments and/or
the Acquisition Term Loan Commitments shall be reduced) as
provided in subsection 2.4B(iii)(a). In the event that after
receipt of any such insurance proceeds an Event of Default
occurs, then so long as such Event of Default is continuing,
Company shall cease using such Net Asset Sale Proceeds to pay
or reimburse the costs of repairing, restoring or replacing
any such assets and, in the event that such Event of Default
is not cured or waived within 15 days after the occurrence
thereof, Company shall apply an amount equal to such
unexpended Net Asset Sale Proceeds to prepay the Loans (and/or
the Revolving Loan Commitments and/or the Acquisition Term
Loan Commitments shall be reduced) as provided in subsection
2.4B(iii)(a).
(iii) Net Asset Sale Proceeds Received by Administrative
Agent. Upon receipt by Administrative Agent of any Net Asset
Sale Proceeds as loss payee, (a) if and to the extent Company
would have been required to apply such Net Asset Sale Proceeds
(if it had received them directly) to prepay the Loans and/or
reduce the Revolving Loan Commitments and/or reduce the
Acquisition Term Loan Commitments, Administrative Agent shall,
and Company hereby authorizes Administrative Agent to, apply
such Net Asset Sale Proceeds to prepay the Loans (and/or the
Revolving Loan Commitments and/or the Acquisition Term Loan
Commitments shall be reduced) as provided in subsection
2.4B(iii)(a), and (b) to the extent the foregoing clause (a)
does not apply and (1) the aggregate amount of such Net Asset
Sale Proceeds received (and reasonably expected to be
received) by Administrative Agent in respect of any covered
loss does not exceed $10,000,000, Administrative Agent shall
deliver such Net Asset Sale Proceeds to Company, and Company
shall, or shall cause one or more of its Restricted
Subsidiaries to, promptly apply such Net Asset
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Sale Proceeds to the costs of repairing, restoring, or
replacing the assets in respect of which such Net Asset Sale
Proceeds were received, and (2) if the aggregate amount of Net
Asset Sale Proceeds received (and reasonably expected to be
received) by Administrative Agent in respect of any covered
loss exceeds $10,000,000, Administrative Agent shall hold such
Net Asset Sale Proceeds pursuant to the terms of the
Collateral Account Agreement and, so long as Company or any of
its Restricted Subsidiaries proceeds diligently to repair,
restore or replace the assets of Company or such Restricted
Subsidiary in respect of which such Net Asset Sale Proceeds
were received, Administrative Agent shall from time to time
disburse to Company or such Restricted Subsidiary from the
Collateral Account, to the extent of any such Net Asset Sale
Proceeds remaining therein in respect of the applicable
covered loss, amounts necessary to pay the cost of such
repair, restoration or replacement after the receipt by
Administrative Agent of invoices or other documentation
reasonably satisfactory to Administrative Agent relating to
the amount of costs so incurred and the work performed
(including, if required by Administrative Agent, lien releases
and architects' certificates). In the event that after receipt
of any such insurance proceeds an Event of Default occurs,
then so long as such Event of Default is continuing,
Administrative Agent shall cease using such Net Asset Sale
Proceeds to pay or reimburse Company for the costs of
repairing, restoring or replacing any such assets and, in the
event that such Event of Default is not cured or waived within
15 days after the occurrence thereof, Administrative Agent
shall, and Company hereby authorizes Administrative Agent to,
apply an amount equal to such unexpended Net Asset Sale
Proceeds to prepay the Loans (and/or the Revolving Loan
Commitments and/or the Acquisition Term Loan Commitments shall
be reduced) as provided in subsection 2.4B(iii)(a).
6.5 Inspection Rights; Lender Meeting.
A. Inspection Rights. Company shall, and shall cause each of
its Restricted 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 Restricted Subsidiaries, to inspect, copy and take extracts from its and
their financial and accounting records, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants (provided that Company 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.
B. Lender Meeting. Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
6.6 Compliance with Laws, etc.
Company shall comply, and shall cause each of its Restricted
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.
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6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's
Actions Regarding Hazardous Materials Activities, Environmental Claims
and Violations of Environmental Laws.
A. Environmental Review and Investigation. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Company and (ii) in the event (a)
Administrative Agent reasonably believes that Company has breached any
representation, warranty or covenant contained in subsection 5.6, 5.13, 6.6 or
6.7 or that there has been a material violation of Environmental Laws at any
Facility or by Company or any of its Restricted Subsidiaries at any other
location or (b) an Event of Default has occurred and is continuing, subject to
the terms of any applicable lease, conduct its own investigation of any
Facility; provided that, in the case of any Facility no longer owned, leased,
operated or used by Company or any of its Restricted Subsidiaries, Company shall
only be obligated to use its best efforts to obtain permission for
Administrative Agent's professional consultant to conduct an investigation of
such Facility. For purposes of conducting such a review and/or investigation,
subject to the terms of any applicable lease, Company hereby grants to
Administrative Agent and its agents, employees, consultants and contractors the
right to enter into or onto any Facilities currently owned, leased, operated or
used by Company or any of its Restricted Subsidiaries and to perform such tests
on such property (including taking samples of soil, groundwater and suspected
asbestos-containing materials) as are reasonably necessary in connection
therewith. Any such investigation of any Facility shall be conducted, unless
otherwise agreed to by Company and Administrative Agent, during normal business
hours and, to the extent reasonably practicable, shall be conducted so as not to
interfere with the ongoing operations at such Facility or to cause any damage or
loss to any property at such Facility. Company and Administrative Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of Administrative Agent pursuant to this subsection 6.7A will be
obtained and shall be used by Administrative Agent and Lenders for the purposes
of Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents.
Administrative Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (x) it will
indemnify and hold harmless Administrative Agent and each Lender from any costs,
losses or liabilities relating to Company's use of or reliance on such report,
(y) neither Administrative Agent nor any Lender makes any representation or
warranty with respect to such report, and (z) by delivering such report to
Company, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
B. Environmental Disclosure. Company will deliver to
Administrative Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character,
whether prepared by personnel of 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
94
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 Release required to be
reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws 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, 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 Release required to be reported to any
federal, state or local governmental or regulatory agency 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, and (c) any request
for information from any governmental agency that suggests
such agency is investigating whether Company or any of its
Restricted 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 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 Restricted 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
Restricted Subsidiaries to modify current operations in a
manner that could reasonably be expected to subject Company or
any of its Restricted Subsidiaries to any material additional
obligations or requirements under any Environmental Laws.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be
reasonably requested by
95
Administrative Agent in relation to any matters disclosed
pursuant to this subsection 6.7.
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Company shall, to the extent required by
applicable law and orders of governmental authorities having
jurisdiction, promptly undertake, and shall cause each of its
Restricted Subsidiaries promptly to undertake, any and all
investigations, studies, sampling, testing, abatement,
cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or ▇▇▇▇▇ any
Hazardous Materials Activity on, under or about any Facility
that is in violation of any Environmental Laws. In the event
Company or any of its Restricted Subsidiaries undertakes any
such action with respect to any Hazardous Materials, Company
or such Restricted Subsidiary shall conduct and complete such
action in compliance with all applicable Environmental Laws
and in accordance with the policies, orders and directives of
all federal, state and local governmental authorities except
when, and only to the extent that, Company's or such
Restricted Subsidiary's liability with respect to such
Hazardous Materials Activity is being contested in good faith
by Company or such Restricted Subsidiary.
(ii) Actions with Respect to Environmental Claims and
Violations of Environmental Laws. Company shall promptly take,
and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any material violation
of applicable Environmental Laws by Company or its Restricted
Subsidiaries except when, and only to the extent that,
Company's or such Restricted Subsidiary's liability with
respect to such Hazardous Materials Activity is being
contested in good faith by Company or such Restricted
Subsidiary and (ii) make an appropriate response to any
Environmental Claim against Company or any of its Subsidiaries
and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect.
6.8 Execution of Subsidiary 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 Closing Date, Company will promptly notify Administrative
Agent of that fact and cause such Subsidiary to execute and deliver to
Administrative Agent, unless otherwise extended for a period of up to six months
by Administrative Agent, within 30 days after such Person becomes a Subsidiary,
a counterpart of the Subsidiary Guaranty and a Subsidiary Pledge Agreement, a
Subsidiary Security Agreement (subject to prohibitions of security interests
imposed by state gaming laws and regulations with regard to any gaming license
and related assets used by Company and its Restricted Subsidiaries in their
video poker and lottery ticket sales activities) and a Subsidiary Trademark
Security Agreement and to take all such further actions and execute all such
further documents and instruments (including actions, documents and instruments
comparable to those
96
described in subsection 4.1J) 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 of the
personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Company
shall deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business 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
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a copy of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant secretary as of a recent
date prior to their delivery to Administrative Agent, (iii) 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, and (iv) a favorable opinion of counsel to such
Subsidiary, in form and substance satisfactory to Administrative Agent and its
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of such
Loan Documents, (c) the enforceability of such Loan Documents against such
Subsidiary, (d) such other matters (including matters relating to the creation
and perfection of Liens in any Collateral pursuant to such Loan Documents) as
Administrative Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Administrative Agent and its counsel.
6.9 Matters Relating to Additional Real Property Collateral.
A. From and after the Closing 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 (a) any
such Real Property Asset the encumbrancing of which requires the consent of any
applicable then-existing senior lienholder, where Company and its Subsidiaries
are unable to obtain such senior lienholder's consent or (b) so long as no Event
of Default shall have occurred and be continuing, any such Real Property Asset
that Company or such Subsidiary Guarantor intends to sell and lease back in
accordance with subsection 7.9 within 270 days of the date of acquisition of
such Real Property Asset (provided that for purposes of this subsection, Company
will be deemed to have acquired the Sprint Stores with a sale/leaseback value of
up to $9,000,000 on the Effective Date) or the date such Person becomes a
Subsidiary Guarantor, as the case may be (any such non-excluded Real Property
Asset described in the foregoing clause (i) or (ii) being an "Additional
Mortgaged Property"), Company will promptly notify Administrative Agent of that
fact and Company or such Subsidiary Guarantor shall deliver to Administrative
Agent, unless otherwise extended for a period of up to six months by
Administrative Agent, within 30 days after such Person acquires such Additional
Mortgaged Property or becomes a Subsidiary Guarantor or, in the case of any such
Real Property Asset
97
which was excluded from being an Additional Mortgaged Property pursuant to
clause (b) above, and which was not sold and leased back within the applicable
270-day period, within 30 days of the expiration of such 270-day period, as the
case may be, the following:
(i) Additional Mortgage. A fully executed and notarized
Mortgage (an "Additional Mortgage"), duly recorded in all
appropriate places in all applicable jurisdictions,
encumbering the interest of such Loan Party in such Additional
Mortgaged Property;
(ii) Opinions of Counsel. Unless otherwise approved by
Administrative Agent, with respect to each Additional
Mortgaged Property with a fair market value of $2,500,000 or
more or which Additional Mortgaged Property is located in a
jurisdiction as to which Lenders have not previously received
an opinion as to the enforceability of the form of Mortgage to
be placed on such Additional Mortgaged Property, (a) a
favorable opinion of counsel to such Loan Party, in form and
substance satisfactory to Administrative Agent and its
counsel, as to the due authorization, execution and delivery
by such Loan Party of such Additional Mortgage and such other
matters as Administrative Agent may reasonably request, and
(b) an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) in the state in which
such Additional Mortgaged Property is located with respect to
the enforceability of the form of Additional Mortgage to be
recorded in such states and such other matters (including any
matters governed by the laws of such state regarding personal
property security interests in respect of any Collateral) as
Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative
Agent;
(iii) Title Insurance. Unless otherwise approved by
Administrative Agent, with respect to each Additional
Mortgaged Property with a fair market value of $2,500,000 or
more or if any Loan Party is purchasing title insurance or is
otherwise being provided with title insurance with respect to
such Additional Mortgaged Property, an ALTA mortgagee title
insurance policy or an unconditional commitment therefor (an
"Additional Mortgage Policy") with respect to such Additional
Mortgaged Property, in an amount satisfactory to
Administrative Agent, insuring fee simple title to such
Additional Mortgaged Property vested in such Loan Party and
assuring Administrative Agent that such Additional Mortgage
creates a valid and enforceable First Priority mortgage Lien
on such Additional Mortgaged Property, subject only to a
standard survey exception, which Additional Mortgage Policy
(1) shall include an endorsement for mechanics' liens, for
future advances under this Agreement and for any other matters
reasonably requested by Administrative Agent and (2) shall
provide for affirmative insurance and such reinsurance as
Administrative Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to
Administrative Agent;
(iv) Title Report. Unless otherwise approved by Administrative
Agent, a title report issued by a title company with respect
thereto, in form and substance
98
satisfactory to Administrative Agent, and copies of all
recorded documents listed as exceptions to title or otherwise
referred to in such title report;
(v) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker
or a municipal engineer, as to (1) whether such Additional
Mortgaged Property is a Flood Hazard Property and (2) if so,
whether the community in which such Flood Hazard Property is
located is participating in the National Flood Insurance
Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgement of
receipt of written notification from Administrative Agent (1)
that such Additional Mortgaged Property is a Flood Hazard
Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the
National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that
is located in a community that participates in the National
Flood Insurance Program, evidence that Company has obtained
flood insurance in respect of such Flood Hazard Property to
the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System; and
(vi) Environmental Audit. Unless otherwise approved by
Administrative Agent, reports and other information, in form,
scope and substance satisfactory to Administrative Agent,
concerning any environmental hazards or liabilities to which
Company or any of its Subsidiaries may be subject with respect
to such Additional Mortgaged Property.
B. In the event that the real property securing the
Obligations located in the State of Florida increases in value after the
Effective Date by an amount that the Administrative Agent in the exercise of its
reasonable discretion deems to be material, then Company hereby agrees upon
request by the Administrative Agent to amend the Mortgages on the Florida real
property to reflect such increase in value and to pay any recording or other
real property taxes or fees arising as a result of such increased value and the
recording of such amendments.
6.10 Year 2000.
Company will use its best efforts to implement a program
designed with the objective that its Information Systems and Equipment be at all
times after December 31, 1999 Year 2000 Compliant, except insofar as the failure
to do so will not result in a Material Adverse Effect, and shall notify
Administrative Agent promptly upon detecting any failure of the Information
Systems and Equipment to be Year 2000 Compliant that would be reasonably
expected to result in a Material Adverse Effect. In addition, Company shall
provide Administrative Agent and any Lender with such information about its Year
2000 computer readiness (including, without limitation, information as to
contingency plans, budgets and testing results) as the Administrative Agent or
such Lender shall reasonably request.
6.11 Interest Rate Protection
At all times after the date which is 120 days after the
Effective Date, Company shall maintain in effect one or more Interest Rate
Agreements with respect to the Loans, in an
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aggregate notional principal amount of not less than 50% of the Term Loans
borrowed or outstanding on the Effective Date, each such Interest Rate Agreement
to be in form and substance satisfactory to Agent and with a term of not less
than two years after the Effective Date.
Section 7. COMPANY'S NEGATIVE COVENANTS
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 Restricted
Subsidiaries to perform, all covenants in this Section 7.
7.1 Indebtedness.
Company shall not, and shall not permit any of its Restricted
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 Restricted 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 Restricted Subsidiaries may become and
remain liable with respect to Indebtedness in respect of
Capital Leases and Indebtedness incurred in the ordinary
course of business to finance the cost of acquisition or the
cost of construction, improvement or remodeling of an asset
used in the business of Company and its Restricted
Subsidiaries; provided that (x) the principal amount of such
Indebtedness does not exceed the sum of 100% of such cost of
acquisition plus the reasonable fees and expenses incurred in
connection therewith, (y) any lien or encumbrance securing
such Indebtedness is placed on such asset not more than 270
days after its acquisition or the completion of construction,
improvement or remodeling, as the case may be, provided that
for purposes of this subsection, the Sprint Stores with a
sale/leaseback value of up to $9,000,000 will be deemed to
have been acquired on the Effective Date and (z) the aggregate
amount of Indebtedness in respect of such Capital Leases and
other Indebtedness does not exceed $30,000,000 at any time
outstanding; provided, further that for purposes of this
subsection 7.1(iii) assets of the Target Company are deemed
acquired on the Effective Date;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Restricted
Subsidiaries, and any wholly-owned Restricted Subsidiary of
Company may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Restricted
Subsidiary of Company; provided that (a) all such intercompany
Indebtedness shall be
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evidenced by promissory notes, (b) all such intercompany
Indebtedness owed by Company to any of its Restricted
Subsidiaries shall be subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of
the applicable promissory notes or an intercompany
subordination agreement, and (c) any payment by any Restricted
Subsidiary of Company under any guaranty of the Obligations
shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by such Restricted Subsidiary
to Company or to any of its Restricted Subsidiaries for whose
benefit such payment is made;
(v) Company and its Restricted Subsidiaries, as applicable,
may remain liable with respect to Indebtedness described in
Schedule 7.1 annexed hereto;
(vi) Company may become and remain liable with respect to
Indebtedness evidenced by the Senior Subordinated Notes;
provided that the aggregate principal amount of the Senior
Subordinated Notes does not exceed $200,000,000;
(vii) Company may become and remain liable with respect to
unsecured subordinated indebtedness in an amount not to exceed
$50,000,000, provided that (a) the terms and conditions of
such subordinated indebtedness shall be the same as those of
the Senior Subordinated Notes or as is otherwise approved by
Requisite Lenders and (b) after giving effect to the
incurrence of such Indebtedness and the application of the
proceeds thereof, Company is in pro forma compliance with
subsection 7.6 and no Potential Event of Default or Event of
Default has occurred and is continuing or would arise as a
result of the incurrence of such Indebtedness; and
(viii) Company and its Restricted Subsidiaries may become and
remain liable with respect to other Indebtedness in an
aggregate principal amount not to exceed $5,000,000 at any
time outstanding.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Company or any of its Restricted Subsidiaries, whether
now owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the 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;
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(iv) Liens securing Indebtedness permitted pursuant to
subsection 7.1(iii); and
(v) Other Liens securing Indebtedness in an aggregate amount
not to exceed $3,000,000 at any time outstanding.
B. Equitable Lien in Favor of Lenders. If Company or any of
its Restricted Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted 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 (i)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to an Asset Sale, or (ii)
subject to compliance with subsection 7.13, prohibitions on liens imposed by the
gaming laws and regulations of the state of South Carolina with regard to Global
Communications, Inc.'s gaming license and assets related to its video poker and
lottery ticket sales activities in that state, or restrictions imposed by gaming
laws or regulations in other jurisdictions as such laws or regulations affect
the Company's or its Restricted Subsidiaries' assets used in their video poker
and lottery ticket sales activities, neither Company nor any of its Restricted
Subsidiaries shall enter into any agreement (other than the Senior Subordinated
Note Indenture or any other agreement prohibiting only the creation of Liens
securing Subordinated Indebtedness) prohibiting the creation or assumption of
any Lien upon any of its properties or assets, whether now owned or hereafter
acquired.
D. No Restrictions on Subsidiary Distributions to Company or
Other Subsidiaries. Except as provided herein, Company will not, and will not
permit any of its Restricted 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 Restricted Subsidiary to (i) pay dividends
or make any other distributions on any of such Restricted Subsidiary's capital
stock owned by Company or any other Restricted Subsidiary of Company, (ii) repay
or prepay any Indebtedness owed by such Restricted Subsidiary to Company or any
other Restricted Subsidiary of Company, (iii) make loans or advances to Company
or any other Restricted Subsidiary of Company, or (iv) transfer any of its
property or assets to Company or any other Restricted Subsidiary of Company
provided that the foregoing clause (iv) shall not apply to (x) restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness and (y) customary provisions in leases or
other contracts restricting the assignment thereof.
7.3 Investments; Joint Ventures.
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
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(i) Company and its Restricted Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Restricted Subsidiaries may continue to
own the Investments owned by them as of the Closing Date, and
may make additional Investments, in any Restricted
Subsidiaries of Company;
(iii) Company and its Restricted Subsidiaries may make
intercompany loans to the extent permitted under subsection
7.1(iv);
(iv) Company and its Restricted Subsidiaries may make
Consolidated Capital Expenditures permitted by subsection 7.8;
(v) Company and its Restricted Subsidiaries may make and own
Investments in connection with Permitted Acquisitions made in
accordance with subsection 7.7(vi); provided that such
Investments shall at all times be Restricted Subsidiaries of
Company;
(vi) Company may continue to own the Investments owned by
Company in the Unrestricted Subsidiaries as of the Closing
Date and Company may make additional Investments in the
Unrestricted Subsidiaries after the Closing Date in an
aggregate amount not exceeding $4,500,000;
(vii) Company and its Restricted Subsidiaries may continue to
own the Investments owned by them and described in Schedule
7.3 annexed hereto;
(viii) Company or any of its Restricted Subsidiaries may make
loans to their employees for the purpose of purchasing Capital
Stock of Company; provided that the aggregate amount of such
loans shall not exceed $1,000,000 at any time outstanding; and
(ix) Company and its Restricted Subsidiaries may make and own
other Investments (excluding Interest Agreements or Currency
Agreements not constituting Hedge Agreements) in an aggregate
amount not to exceed at any time $1,000,000.
7.4 Contingent Obligations.
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Restricted Subsidiaries of Company may become and remain
liable with respect to Contingent Obligations in respect of
the Subsidiary Guaranty;
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
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(iii) Company and its Restricted 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 Asset Sales
or other sales of assets;
(iv) Company and its Restricted 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 Restricted Subsidiaries in an aggregate
amount not to exceed at any time $3,000,000;
(v) Company and its Restricted Subsidiaries, as applicable,
may remain liable with respect to Contingent Obligations
described in Schedule 7.4 annexed hereto;
(vi) Subsidiary Guarantors may become and remain liable with
respect to Contingent Obligations arising under guaranties of
the Senior Subordinated Notes as set forth in and to the
extent required under the Senior Subordinated Note Indenture
as in effect on the Closing Date;
(vii) Company may become and remain liable with respect to
Contingent Obligations under guarantees in respect of Capital
Leases and Operating Leases entered into by Company's
Restricted Subsidiaries in the ordinary course of business or
under guarantees in respect of obligations of Company's
Restricted Subsidiaries (other than Indebtedness for borrowed
money) incurred in the ordinary course of business; and
(viii) Company and its Restricted 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 Restricted Subsidiaries in
respect of all such Contingent Obligations shall at no time
exceed $3,000,000.
7.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Restricted
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 the Senior Subordinated
Notes and of any Subordinated Indebtedness issued in accordance with subsection
7.1(vii) hereof in accordance with the terms of, and only to the extent required
by, and subject to the subordination provisions contained in, the Senior
Subordinated Indenture or the indenture pursuant to which such other
Subordinated Indebtedness is issued, as the case may be, in each case, as such
indenture may be amended from time to time to the extent permitted under
subsection 7.14B and (ii) the Company may make Restricted Junior Payments
pursuant to and in accordance with stock option plans, stock purchase plans or
other benefit plans for management or employees of the Company or any Subsidiary
including the redemption or purchase of shares of common stock of the Company
held by former employees of the Company or any Subsidiary following the
termination of their employment, in an amount not to exceed $500,000 (net of any
amounts received by the Company after the Effective Date and
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prior to making such Restricted Junior Payment from the issuance of additional
shares of its common stock to members of management or employees of the Company
and its Subsidiaries).
7.6 Financial Covenants.
A. Minimum Coverage Ratio. Company shall not permit the ratio
of (i) Consolidated EBITDA plus Consolidated Rental Payments to (ii)
Consolidated Interest Expense plus Consolidated Rental Payments, in each case
for any consecutive four-Fiscal Quarter period ending during any of the periods
set forth below, to be less than the correlative ratio indicated:
Minimum
Period Coverage Ratio
As of the last day of the second, third and fourth Fiscal Quarters in 1.50:1.00
Fiscal Year 1999
As of the last day of each Fiscal Quarter in Fiscal Year 2000 1.60:1.00
As of the last day of each Fiscal Quarter in Fiscal Year 2001 1.70:1.00
As of the last day of each Fiscal Quarter in Fiscal Year 2002 1.80:1.00
As of the last day of each Fiscal Quarter in Fiscal Year 2003 1.90:1.00
As of the last day of each Fiscal Quarter in Fiscal Year 2004, and as 2.00:1.00
of the last day of each Fiscal Quarter thereafter
B. Maximum Consolidated Pro Forma Leverage Ratio. Company
shall not permit the Consolidated Pro Forma Leverage Ratio at any time during
any of the periods set forth below to exceed the correlative ratio indicated:
Maximum
Consolidated Pro
Forma Leverage Ratio
Period
As of the last day of the second, third and fourth Fiscal Quarters in 5.00:1.00
Fiscal Year 1999
As of the last day of each Fiscal Quarter in Fiscal Year 2000 4.75:1.00
As of the last day of each Fiscal Quarter in Fiscal Year 2001 4.25:1.00
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As of the last day of each Fiscal Quarter in Fiscal Year 2002 4.00:1.00
As of the last day of each Fiscal Quarter in Fiscal Year 2003 3.50:1.00
As of the last day of each Fiscal Quarter in Fiscal Year 2004, and as 3.25:1.00
of the last day of each Fiscal Quarter thereafter
C. Minimum Consolidated Pro Forma EBITDA. Company shall not
permit Consolidated Pro Forma EBITDA for any consecutive four-Fiscal Quarter
period ending during any of the periods set forth below to be less than the
correlative amount indicated:
Minimum
Consolidated Pro
Period Forma EBITDA
As of the last day of the second, third and fourth Fiscal Quarters in $82,000,000
Fiscal Year 1999
As of the last day of each Fiscal Quarter in Fiscal Year 2000 $85,000,000
As of the last day of each Fiscal Quarter in Fiscal Year 2001 $88,500,000
As of the last day of each Fiscal Quarter in Fiscal Year 2002 $92,000,000
As of the last day of each Fiscal Quarter in Fiscal Year 2003 $96,000,000
As of the last day of each Fiscal Quarter in Fiscal Year 2004, and as $100,000,000
of the last day of each Fiscal Quarter thereafter
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of its Restricted Subsidiaries, 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:
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(i) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or shall be
caused thereby, (a) any Restricted Subsidiary of Company may
be merged with or into Company or any wholly-owned 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
wholly-owned Subsidiary Guarantor and (b) in connection with
any Permitted Acquisition, Company or any Subsidiary Guarantor
may merge into or consolidate with any other Person or permit
any other Person to merge into or consolidate with it;
provided that, in the case of such a merger, Company or such
wholly-owned Subsidiary Guarantor shall be the continuing or
surviving corporation or that such continuing or surviving
corporation shall be a wholly-owned Subsidiary of Company and
shall comply with subsections 6.8 and 6.9 hereof;
(ii) subject to subsection 7.7 (vi), Company and its
Restricted Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.8;
(iii) Company and its Restricted Subsidiaries may dispose of
obsolete, worn out or surplus property in the ordinary course
of business;
(iv) Company and its Restricted 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;
(v) subject to subsection 7.12, Company and its Restricted
Subsidiaries may make Asset Sales of (a) assets having a fair
market value not in excess of $10,000,000 and (b)
sale/leasebacks permitted by subsection 7.9; provided that (x)
the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; (y)
the sole consideration received shall be cash; and (z) the
proceeds of such Asset Sales shall be applied as required by
subsection 2.4B(iii)(a); and
(vi) Company or any Restricted Subsidiary of Company may make
non-hostile acquisitions of assets and businesses (including
non-hostile acquisitions of the capital stock or other equity
interests of another Person); provided that:
(a) immediately prior to and after giving effect to any
such acquisition, Company and its Restricted Subsidiaries
shall be in compliance with the provisions of subsection 7.13
hereof;
(b) such Person becomes a Restricted Subsidiary of
Company, or such business, property or other assets are
acquired by Company or a Restricted Subsidiary of Company;
(c) prior to the consummation of such acquisition,
Company shall deliver to Administrative Agent (1) an Officers'
Certificate (i) certifying that no Potential
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Event of Default or Event of Default under this Agreement
shall then exist or shall occur as a result of such
acquisition and (ii) demonstrating that after giving effect to
such acquisition and to all Indebtedness to be incurred or
assumed or repaid in connection with or as consideration for
such acquisition, that Company is in pro forma compliance with
the financial covenants referred to in subsection 7.6 for the
four consecutive Fiscal Quarter period ending immediately
prior to the date of the proposed acquisition, provided that
with respect to any acquisition consummated during the second
Fiscal Quarter in Fiscal Year 1999 for purposes of determining
such pro forma compliance, Consolidated Pro Forma EBITDA for
the four consecutive Fiscal Quarter period ended as of the
last day of the first Fiscal Quarter in Fiscal Year 1999 shall
be adjusted by adding back to Consolidated EBITDA for the
first Fiscal Quarter in Fiscal Year 1999 the amounts set forth
on Schedule 1.1 for the second Fiscal Quarter in Fiscal Year
1999, (2) a copy of all environmental reports obtained in
connection with such acquisition and delivering a copy of the
principal documents (e.g., purchase agreement, merger
agreement) related to such acquisition, and (3) a copy,
prepared in conformity with GAAP, of (i) financial statements
of the Person or business so acquired for the immediately
preceding four consecutive Fiscal Quarter period corresponding
to the calculation period for the financial covenants in the
immediately preceding clause (and if an asset purchase, pro
forma financial statements on a historical basis), and (ii) if
the aggregate consideration paid by Company and its Restricted
Subsidiaries in connection with such proposed acquisition and
any other related series of acquisitions (including without
limitation earn outs or deferred compensation or
non-competition arrangements and the amount of Indebtedness or
other liability assumed by Company or any of its Restricted
Subsidiaries) exceeds $20,000,000, then (u) audited financial
statements of the Person or business so acquired for the
fiscal year ended within such period and for the fiscal year
immediately preceding such fiscal year, (v) unaudited interim
financial statements (consisting of a balance sheet and
statements of income, stockholders' equity and cash flows) of
the Person or business so acquired for the fiscal periods most
recently ended prior to the proposed acquisition, (w) a pro
forma balance sheet of Company and its Subsidiaries as of the
date of the proposed acquisition after giving effect thereto,
(x) projected financial statements (including balance sheets
and statements of income, stockholders' equity and cash flows)
of Company and its Subsidiaries for the five-year period after
the date of the proposed acquisition after giving effect
thereto and (y) such other information as Administrative Agent
may reasonably request;
(d) Company shall, and shall cause its Restricted
Subsidiaries to, comply with the requirements of subsections
6.8 and 6.9 with respect to such acquisitions;
(e) (i) excluding the Target Company Acquisition, the
aggregate consideration paid by Company and its Restricted
Subsidiaries in connection with such proposed acquisition and
any other related series of acquisitions (including without
limitation earn outs or deferred compensation or
non-competition arrangements and the amount of Indebtedness or
other liability assumed by
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Company or any of its Subsidiaries) shall not exceed
$50,000,000; and (ii) Company may make the Target Company
Acquisition for an aggregate consideration which does not
exceed $94,000,000 plus the purchase price adjustment
contemplated by the Target Company Purchase Agreement; and
(vii) Company and its Restricted Subsidiaries may make
transfers of any of their properties or assets to another
Person in transactions in which 80% of the consideration
received by the transferor consists of properties or assets
(other than Cash) that will be used in the business of the
transferor; provided that (i) the aggregate fair market value
(as determined in good faith by the Board of Directors of
Company) of the property or assets being transferred by
Company or such Restricted Subsidiary is not greater than the
aggregate fair market value (as determined in good faith by
the Board of Directors of Company), of the property or assets
received by Company or such Restricted Subsidiary in such
exchange and (ii) the aggregate fair market value (as
determined in good faith by the Board of Directors of Company)
of all property or assets transferred by Company and any of
its Restricted Subsidiaries in connection with such exchanges
in any Fiscal Year shall not exceed $20,000,000.
7.8 Consolidated Capital Expenditures.
Company shall not, and shall not permit its Restricted
Subsidiaries to, make or incur Consolidated Capital Expenditures, in any Fiscal
Year indicated below, in an aggregate amount in excess of the corresponding
amount (the "Maximum Consolidated Capital Expenditures Amount") set forth below
opposite such Fiscal Year; provided that the Maximum Consolidated Capital
Expenditures Amount for any Fiscal Year shall be increased by an amount equal to
the excess, if any, of the Maximum Consolidated Capital Expenditures Amount for
the previous Fiscal Year (prior to any adjustment in accordance with this
proviso) over the actual amount of Consolidated Capital Expenditures for such
previous Fiscal Year; provided, further that in no event shall the amount of
such increase exceed the Maximum Consolidated Capital Expenditures Amount for
such previous Fiscal Year (prior to any adjustment in accordance with this
proviso):
Maximum Consolidated
Period Capital Expenditures
Fiscal Year 1999 $46,000,000
Fiscal Year 2000 and each $34,000,000
Fiscal Year thereafter
7.9 Sales and Lease-Backs.
Company shall not, and shall not permit any of its Restricted
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
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real, personal or mixed), whether now owned or hereafter acquired, (i) which
Company or any of its Restricted Subsidiaries has sold or transferred or is to
sell or transfer to any other Person (other than Company or any of its
Restricted Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Restricted
Subsidiaries to any Person (other than Company or any of its Restricted
Subsidiaries) in connection with such lease; provided that Company and its
Restricted Subsidiaries may become and remain liable as lessee, guarantor or
other surety with respect to any such lease to the extent that (i) such lease,
if a Capital Lease, is permitted pursuant to subsection 7.1(iii), (ii) the
consideration received is at least equal to the fair market value of the
property sold as determined in good faith by Company's Board of Directors, (iii)
to the extent such sale and lease-back transaction relates to properties or
assets acquired by Company or any of its Restricted Subsidiaries after the
Closing Date, such sale and lease-back transaction occurs within 270 days of the
acquisition or completion of construction, improvement or remodeling, as the
case may be, of such property or asset by Company or any of its Restricted
Subsidiaries, provided that for purposes of this subsection, the Sprint Stores
with a sale/leaseback value of up to $9,000,000 will be deemed to have been
acquired on the Effective Date, (iv) the Net Asset Sale Proceeds received for
all such sold properties or assets under clause (ii) of subsection 2.4B(iii)(a)
does not exceed $40,000,000 in the aggregate, (v) the Net Asset Sale Proceeds
received in any Fiscal Year for all such sold properties or assets under clause
(ii) of subsection 2.4B(iii)(a) does not exceed $15,000,000 and (vi) the Net
Asset Sale Proceeds derived from the sale/leaseback of such sold properties or
assets owned by the Company and its Restricted Subsidiaries shall be applied to
prepay Loans and/or reduce commitments to the extent required by subsection
2.4B(iii)(a).
7.10 Sale or Discount of Receivables.
Company shall not, and shall not permit any of its Restricted
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.
7.11 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its Restricted
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 5% or more of any class of
equity Securities of Company or with any Affiliate of Company or of any such
holder (collectively "Related Persons") on terms that are less favorable to
Company or that Restricted Subsidiary, as the case may be, than those that might
be obtained at the time in an arm's length transaction from Persons who are not
Related Persons; provided that the foregoing restriction shall not apply to (i)
any transaction between Company and any of its wholly-owned Restricted
Subsidiaries or between any of its wholly-owned Restricted Subsidiaries, (ii)
reasonable and customary fees paid to members of the Boards of Directors of
Company, or (iii) Affiliate Agreements relating to any services (including,
without limitation, consulting, management, broker or investment banking
services) to be provided by any of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, CMC or any of their
respective Affiliates to any Loan Party as in effect on the Closing Date or as
amended from time to time to the extent permitted under subsection 7.14.
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7.12 Disposal of Subsidiary Stock.
Except for any sale of 100% of the capital stock or other
equity Securities of any of its Restricted Subsidiaries in compliance with the
provisions of subsection 7.7(v), Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other
equity Securities of any of its Restricted Subsidiaries,
except to qualify directors if required by applicable law; or
(ii) permit any of its Restricted Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise encumber or
dispose of any shares of capital stock or other equity
Securities of any of its Restricted Subsidiaries (including
such Restricted Subsidiary), except to Company, another
Restricted Subsidiary of Company, or to qualify directors if
required by applicable law.
7.13 Conduct of Business.
From and after the Closing Date, Company shall not, and shall
not permit any of its Restricted Subsidiaries to, engage in any business other
than the businesses engaged in by Company and its Restricted Subsidiaries on the
Closing Date and similar or related businesses. The fair market value of the
consolidated assets utilized by Company and its Restricted Subsidiaries in
gaming activities and the revenue derived by Company and its Restricted
Subsidiaries from gaming activities shall not exceed an amount equal to 4% of
the consolidated revenues of Company and its Subsidiaries.
7.14 Amendments or Waivers of Certain Related Agreements; Amendments of
Documents Relating to Subordinated Indebtedness; Designation of
"Designated Senior Indebtedness".
A. Amendments or Waivers of Certain Related Agreements. Neither Company nor any
of its Restricted Subsidiaries will agree to any material amendment to, or waive
any of its material rights under, any Related Agreement (other than any Related
Agreement evidencing or governing the any Subordinated Indebtedness) after the
Closing Date without in each case obtaining the prior written consent of
Requisite Lenders to such amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness. Company shall
not, and shall not permit any of its Subsidiaries to, amend or otherwise change
the terms of any Subordinated Indebtedness, 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 such Subordinated Indebtedness,
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 redemption, prepayment or
defeasance provisions thereof, change the subordination provisions thereof (or
of 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
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materially the obligations of the obligor thereunder or to confer any additional
rights on the holders of such Subordinated Indebtedness (or a trustee or other
representative on their behalf) which would be adverse to Company or Lenders.
C. Designation of "Designated Senior Indebtedness". Company
shall not designate any Indebtedness as "Designated Senior Indebtedness" (as
defined in the Senior Subordinated Note Indenture or the indenture pursuant to
which any Subordinated Indebtedness permitted under subsection 7.1(vii) is
issued) for purposes of the Senior Subordinated Note Indenture or such other
Indenture without the prior written consent of Requisite Lenders.
7.15 Fiscal Year.
No Loan Party shall change its Fiscal Year-end from the last
Thursday in September; provided that Loan Parties may change their Fiscal
Year-end once after giving Administrative Agent not less than 30 days' prior
written notice of such change.
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 notice of
voluntary prepayment, 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 (it being understood that the payment of such
amount with the proceeds of Revolving Loans in accordance with subsection 3.3B
hereof shall not be a failure by Company to pay when due such amount); 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 Restricted 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 with an aggregate principal amount of
$5,000,000 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 Restricted Subsidiaries with respect to any
other material term of (a) one or more items of Indebtedness
or Contingent Obligations in the 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
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underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other statement
made by Company or any of its Restricted Subsidiaries in any Loan Document or in
any statement or certificate at any time given by Company or any of its
Restricted Subsidiaries 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
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) an officer of Company or such Loan Party becoming
aware of such default or (ii) receipt by Company and such Loan Party of notice
from Administrative Agent or any Lender 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
Restricted 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 Restricted 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 Restricted 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 Restricted 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 Restricted
Subsidiaries, and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or
discharged; or
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8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Company or any of its Restricted 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 Restricted
Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Company or any of its Restricted
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 Restricted 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, writ or warrant of attachment or similar
process involving in the aggregate at any time an amount in excess of $5,000,000
(not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Restricted Subsidiaries or any of their respective assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
60 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 Restricted Subsidiaries decreeing the dissolution or split up of
Company or that Restricted 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
liability of Company, any of its Restricted Subsidiaries or any of their
respective ERISA Affiliates in excess of $1,000,000 during the term of this
Agreement; or there shall exist an 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
with respect to which assets exceed benefit liabilities), which exceeds
$1,000,000; or
8.11 Change in Control.
(a) Prior to the issuance by Company of shares of its common
stock to the public pursuant to a bona fide underwritten public offering, (i)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall cease to beneficially own and control, directly or
indirectly, at least a majority of the issued and
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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, or (ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall cease to have the ability
to elect a majority of the members of the Board of Directors of Company; (b)
after the issuance by Company of shares of its common stock to the public
pursuant to a bona fide underwritten public offering, (i) Permitted Holders
shall cease to beneficially own, directly or indirectly, shares representing at
least 30% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of Company, or (ii) any Person or group (within the
meaning of Rule 13d-5 of the Exchange Act) other than the Permitted Holders
shall beneficially own, directly or indirectly, shares of capital stock of
Company representing more than the percentage of the aggregate ordinary voting
power represented by the shares beneficially owned, directly or indirectly, by
the Permitted Holders; (c) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Company by Persons who are not
Continuing Directors; (d) a "Change of Control" as defined in the Senior
Subordinated Note Indenture or the indenture pursuant to which any Subordinated
Indebtedness permitted under subsection 7.1(vii) is issued shall have occurred;
(e) Company shall cease to beneficially own and control 100% of capital stock of
Lil' Champ or Company shall cease to have the ability to elect all of the Board
of Directors of Lil' Champ; (f) Lil' Champ shall cease to beneficially own and
control 100% of capital stock of MEI or Lil' Champ shall cease to have the
ability to elect all of the Board of Directors of MEI; or (g) any of the
Permitted Holders shall cease to beneficially own and control, directly or
indirectly, at least 50% 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 owned by
such Permitted Holder on the Effective Date; 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 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 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, in each case for any reason other than the
failure of Administrative Agent or any Lender to take any action within its
control, 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 Target Company Acquisition and the Redemption of
the Senior Notes.
The Target Company Acquisition shall not be consummated in
accordance with this Agreement and the applicable Related Agreements on or prior
to the Effective Date, or the Target Company Acquisition shall be unwound,
reversed or otherwise rescinded in whole or in part for any reason, or the
Senior Notes shall not have been redeemed on the Effective Date;
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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 Issuing Lender 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(v).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 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
any 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. AGENTS
9.1 Appointment.
A. Appointment of Agents. First Union is hereby appointed as
Administrative Agent, CIBC is hereby appointed as Syndication Agent and
NationsBank is hereby appointed as
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Documentation Agent, each so appointed hereunder and under the other Loan
Documents and each Lender hereby authorizes such Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. Each
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 each Agent and each Lender 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, each Agent shall act
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for Company or any of its Subsidiaries.
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 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
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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 each 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 such Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Each Agent may exercise such powers, rights and remedies and
perform such duties by or through its agents or employees. No Agent shall have,
by reason 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 any 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. No Agent shall 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 or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or delivered by such Agent to Lenders or by or on
behalf of Company to such 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 such 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, no Agent shall 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. None of the Agents nor any of their
respective officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any such Agent under or in connection with
any of the Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection 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 such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 10.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
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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 any Agent as a result
of such 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. Agents Entitled to Act as Lenders. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, any Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans and the Letters
of Credit, each 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 such Agent in its individual capacity. Each Agent and their
respective 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 Company 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. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify each Agent, to the extent that such Agent shall not have
been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Loan Documents or otherwise in its capacity
as Documentation Agent, Syndication Agent or Administrative Agent, as the case
may be, 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
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disbursements resulting from any Agent's gross negligence or willful misconduct.
If any indemnity furnished to any Agent for any purpose shall, in the opinion of
such Agent, be insufficient or become impaired, such Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
9.5 Successor Administrative Agent and Swing Line Lender.
A. Successor Administrative Agent. Administrative Agent may
resign at any time by giving 30 days' prior written notice thereof to the other
Agents, Lenders and Company. Upon any such notice of resignation of
Administrative Agent, Requisite Lenders shall have the right, upon the consent
of Company (which approval shall not be unreasonably withheld), to appoint a
successor Administrative Agent; provided that in the event that Company
withholds such consent with respect to any successor Administrative Agent, such
successor Administrative Agent may nevertheless be appointed as successor
Administrative Agent by the Requisite Lenders if Company shall not have
identified a successor Administrative Agent approved by the Requisite Lenders
(which approval shall not be unreasonably withheld) within 60 days. 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 Administrative Agent and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation 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 of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation of First Union 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
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 VIII 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 be the 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
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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, Agents and each Lender
hereby agree that (X) 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 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 (Y) in the event of a foreclosure by
Administrative Agent on any of the Collateral pursuant to a public or private
sale, any 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.
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 participations in Swing Line
Loans 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
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
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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,
participation in Swing Line Loans, 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 (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 or as
otherwise consented to by Administrative Agent) to any other
Eligible Assignee with the consent of Company (so long as no
Event of Default exists) and Administrative Agent (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
$3,500 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); provided, however, that such $3,500
recordation fee will not be required in connection with
assignments between any Lender and any of its Affiliates or
between any Lenders party to this Agreement as of the
Effective Date. 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 Commitments of such assignee and
any remaining
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Commitments of such assigning Lender and, if any such
assignment occurs after the issuance of the Notes hereunder,
the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender
its applicable Notes to Administrative Agent for cancellation,
and thereupon new Notes shall be issued to the assignee and,
if applicable, to the assigning Lender, substantially in the
form of Exhibit IV, Exhibit V, Exhibit VI or Exhibit VII
annexed hereto, as the case may be, with appropriate
insertions, to reflect the new Commitments and/or outstanding
Term Loans, as the case may be, of the assignee and, if
applicable, 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, if required, 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. Company and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 10.4 and 10.5,
(a) any participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks, Pledges by Funds. In
addition to the assignments and participations permitted under the foregoing
provisions of this subsection 10.1, any Lender may, without the consent of
Company or any Agent, assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any (a) 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 or (b) trustee of such Lender if such Lender is an investment fund;
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 or
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such trustee, as applicable, 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.
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 (A) of the definition thereof; (ii) that it has
experience and expertise in the making of or investing in loans such as the
Loans; and (iii) that it will make or invest in 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
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions 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 Agents, CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union CMC and NationsBanc
(including allocated costs of internal counsel) in connection with the
negotiation, preparation, 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 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 Agents, CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union CMC and NationsBanc and of
counsel providing any opinions that Agents, CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union CMC,
NationsBanc or Requisite Lenders may request in respect of the Collateral
Documents or the Liens created pursuant thereto; (v) all the actual costs and
reasonable 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 Agents, CIBC
▇▇▇▇▇▇▇▇▇▇▇, First Union CMC, NationsBanc or their respective counsel) of
obtaining and reviewing any environmental audits or reports provided for under
subsection 4.1K or 6.9(v); (vi) actual costs and reasonable expenses of the
custody or preservation of any of the Collateral; (vii) all other actual and
reasonable costs and expenses incurred by Agents, CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union
CMC and NationsBanc in connection with the syndication of the Commitments and
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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
(including allocated costs of internal counsel) and costs of settlement,
incurred by Agents, CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union CMC, NationsBanc 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 Subsidiary
Guaranty) or in connection with 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.
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 Agents, Lenders, CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union
CMC and NationsBanc and the officers, directors, employees, trustees, agents and
affiliates of Agents, Lenders, CIBC ▇▇▇▇▇▇▇▇▇▇▇, First Union CMC and NationsBanc
(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 solely
from the gross negligence or willful misconduct 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), (ii) the statements
contained in the commitment letter delivered by any Lender to Company with
respect thereto, or (iii) any Environmental Claim or any Hazardous Materials
Activity relating to or arising from, directly or indirectly, any
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past or present activity, operation, land ownership, or practice 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.
10.4 Set-Off; Security Interest in Deposit Accounts.
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 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 to that Lender under
this Agreement, the Letters of Credit and participations therein or in Swing
Line Loans 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 (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further grants to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
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
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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 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.
No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, or consent to any departure by
Company therefrom, shall in any event be effective 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)
extend the scheduled final maturity of any Loan or Note, or extend the stated
expiration date of any Letter of Credit beyond the Revolving Loan Commitment
Termination Date, or reduce the rate of interest (other than any waiver of any
increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E) or fees thereon, or extend the time of payment of interest,
principal or fees thereon, or reduce the principal amount thereof, (ii) except
as otherwise permitted by this Agreement, release a material portion of the
Collateral, release all or substantially all of the Loan Parties that are party
to the Subsidiary Guaranty from the Subsidiary Guaranty or release Lil' Champ or
MEI from the Subsidiary Guaranty except in each case as expressly provided in
the Loan Documents, (iii) amend, modify, terminate or waive any provision of
this subsection 10.6, (iv) reduce the percentage specified in the definition of
Requisite Lenders or Requisite Class Lenders (it being understood that, with the
consent of the Requisite Lenders, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Requisite Lenders on
substantially the same basis as the Acquisition Term Loan Commitments, Tranche A
Term Loan Commitments, Tranche B Term Loan Commitments or the Revolving Loan
Commitments are included) or (v) consent to the assignment or transfer by
Company of any of its respective rights and obligations under this Agreement;
provided further that no such amendment, modification, termination or waiver
shall (1) increase the Commitments of any Lender over the amount thereof then in
effect without the consent of such Lender (it being understood that amendments,
modifications or waivers of conditions precedent, covenants, Potential Events of
Default or Events of Default or of a mandatory reduction in the Commitments
shall not constitute an increase of the Commitment of any Lender, and that an
increase in the available portion of any Commitment of any Lender shall not
constitute an increase in the Commitment of such Lender), (2) no amendment,
modification, termination or waiver of any provision of subsection 2.1A(v) or
any other provision of this Agreement relating to the Swing Line Loan Commitment
or the Swing Line Loans shall be effective without the written concurrence of
Swing Line Lender, (3) no amendment, modification, termination or waiver
relating to the obligations of Lenders relating to the purchase or participation
in Letters of Credit shall be effective without the written concurrence of each
Issuing Lender having a Letter of Credit then outstanding or which has not been
reimbursed for a drawing under a Letter of Credit issued by it and of
Administrative Agent, (4) no amendment, modification, termination or
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waiver of any provision of Section 9 or of any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of any Agent
shall be effective without the written concurrence of such Agent, and (5) no
amendment, modification, termination or waiver of any provision of subsection
2.4 which has the effect of changing any interim scheduled payments, voluntary
and mandatory prepayments, or Commitment reductions applicable to any Class in a
manner that disproportionately disadvantages such Class relative to the other
Classes shall be effective without the written concurrence of Requisite Class
Lenders of such Class (it being understood and agreed that any amendment,
modification, termination or waiver of voluntary or mandatory prepayment, or
Commitment reduction from those set forth in subsection 2.4 with respect to one
Class but not the other Classes shall be deemed to disadvantage such Class for
purposes of this clause (5)). 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 upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.
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 Agents 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 Agents, 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 any Agent, any Lender, CIBC
▇▇▇▇▇▇▇▇▇▇▇, First Union CMC and/or NationsBanc 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.
None of Agents 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 any Agent or Lenders (or to any Agent for the benefit of
Lenders), or any Agent or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
10.12 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 each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
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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 COMPANY 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, COMPANY, 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 COMPANY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY
SUCH PROCEEDING IN ANY SUCH
130
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE
IN EVERY RESPECT;
(V) AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST COMPANY 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 which has been identified as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature and in accordance with safe
and sound investment 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 or any proposed assignee, transferee or participant in connection
with the contemplated assignment
131
or transfer by such Lender of any Loans or any participations therein or to any
direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such proposed
assignee, transferee, participant, counterparty or advisor agrees to hold all
non-public information obtained from such Lender and which has been identified
as confidential by Company in accordance with such Person's customary procedures
for handling confidential information of this nature and in accordance with safe
and sound investment practices) 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
routine examination 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 Counterparts; Effectiveness.
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
Agents of written or telephonic notification of such execution and authorization
of delivery thereof.
[Remainder of page intentionally left blank]
132
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:
THE PANTRY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Senior Vice President, Finance,
Chief Financial Officer and
Secretary
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Post Office Box 1410
Sanford, NC 27330
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------
LENDERS:
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
Notice Address:
Leverage Finance Division
1 First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CANADIAN IMPERIAL BANK OF COMMERCE,
as Syndication Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Title: Executive Director
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.,
AS AGENT
CIBC INC., as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Title: Executive Director
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.,
AS AGENT
Notice Address:
Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONSBANK, N.A.,
individually and as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
Notice Address:
NationsBank, N.A.
NC1-007-13-06
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
ROYAL BANK OF CANADA,
as a Lender
By: /s/ ▇▇▇▇ ▇'▇▇▇▇▇▇
-------------------------------------
Title: Manager
Notice Address:
Royal Bank of Canada
Grand Cayman (North America No. 1) Branch
c/o New York Branch
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Royal Bank of Canada
Leveraged Finance Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇'▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
Notice Address:
Credit Lyonnais New York Branch
1301 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
▇▇▇▇▇ FARGO BANK, N.A.,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
Notice Address:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE, as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
-------------------------------------
Title: Vice President
Notice Address:
Compagnie Financiere de CIC et de l'Union
Europeenne
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
THE PROVIDENT BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
-------------------------------------
Title: Vice President
Notice Address:
The Provident Bank
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
Notice Address:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-5
REPUBLIC NATIONAL BANK OF MIAMI,
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
Notice Address:
Republic National Bank of Miami
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ SENIOR FLOATING
RATE FUND, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President & Director
Notice Address:
▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-6
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME
TRUST, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President & Director
Notice Address:
▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ PRIME
INCOME TRUST, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
Notice Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Prime Income Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-7
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Title: Executive Director
CIBC Oppenheimer Corp., AS AGENT
Notice Address:
Canadian Imperial Bank of Commerce
2 Paces West, Suite 1200
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC. as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Senior Floating Rate Fund, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-8
KZH CNC LLC, as a Lender
By: /s/ ▇▇▇▇▇ Wasterhaus
-------------------------------------
Title: Authorized Agent
Notice Address:
KZH CNC LLC
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
KZH CYPRESSTREE - 1 LLC,
as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Authorized Agent
Notice Address:
KZH CypressTree - 1 LLC
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-9
▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇ INCORPORATED,
as Agent for KEYPORT LIFE INSURANCE COMPANY,
As a Lender
By: /s/ ▇▇▇▇▇ ▇. Good
-------------------------------------
Title: Vice President and Portfolio Manager
Notice Address:
▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. Good
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇ FLOATING RATE
LIMITED LIABILITY COMPANY,
As a Lender
By: /s/ ▇▇▇▇▇ ▇. Good
-------------------------------------
Title: Vice President and Portfolio
Manager, ▇▇▇▇▇ ▇▇▇ & Farnham Incorporated,
as Advisor to the ▇▇▇▇▇ ▇▇▇ Floating Rate
Limited Liability Company
Notice Address:
▇▇▇▇▇ ▇▇▇ & Farnham Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. Good
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-10
CYPRESSTREE INSTITUTIONAL FUND,
LLC, as a Lender
By: CypressTree Investment Management
Company, Inc., its Managing Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: Principal
Notice Address:
CypressTree Investment Management Company,
Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇
▇▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
State Street Bank & Trust
Corporate Trust Department
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CYPRESSTREE INVESTMENT FUND, LLC,
as a Lender
By: CypressTree Investment Management
Company, Inc., its Managing Member
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Principal
Notice Address:
CypressTree Investment Management Company,
Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇
▇▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
State Street Bank & Trust
Corporate Trust Department
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-11
NORTH AMERICAN SENIOR FLOATING
RATE FUND, as a Lender
By: CypressTree Investment Management
Company, Inc., as Portfolio Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Principal
Notice Address:
CypressTree Investment Management Company,
Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇
▇▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
State Street Bank & Trust
Corporate Trust Department
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-12