EXECUTION COPY
SECOND AMENDMENT
SECOND AMENDMENT, dated as of October 20, 2004 (this "Second
Amendment"), to the Amended and Restated Credit Agreement, dated as of February
13, 1998, as amended and restated as of December 10, 2003, as further amended
and restated as of March 4, 2004, and as amended by the First Amendment thereto,
dated as of August 6, 2004 (the "Credit Agreement"), among Nebraska Book
Company, Inc., a Kansas corporation (the "Borrower"), NBC Holdings Corp., NBC
Acquisition Corp., the lenders party from time to time thereto (the "Lenders"),
JPMorgan Chase Bank as administrative agent (in such capacity, the
"Administrative Agent") and collateral agent, Citigroup Global Markets Inc., as
syndication agent, and Fleet National Bank and ▇▇▇▇▇ Fargo Bank N.A., as
co-documentation agents.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Administrative
Agent are parties to the Credit Agreement;
WHEREAS, the Borrower has requested that the Credit Agreement
be amended, among other things, (i) to provide for an Incremental Revolving
Credit Facility and (ii) to effect certain other related amendments to the
Credit Agreement; and
WHEREAS, the Lenders and the Administrative Agent are willing
to agree to such amendment to the Credit Agreement, subject to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the Borrower, the Lenders and the Administrative
Agent hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms which are defined in the Credit Agreement are used herein as therein
defined.
2. Amendment of the Credit Agreement. The Credit Agreement is
hereby amended to read in its entirety as set forth in Annex A hereto (the
"Amended Credit Agreement"), without any further actions required for the
effectiveness of such Amended Credit Agreement. On the Amendment Effective Date,
the terms "Agreement," "this Agreement," "herein," "hereinafter," "hereto,"
"hereof" and words of similar import, as used in the Credit Agreement, shall,
unless the context otherwise requires, refer to the Amended Credit Agreement,
and the term "Credit Agreement" or similar terms, as the case may be, as used in
the other Credit Documents, shall mean the Amended Credit Agreement.
3. Representations and Warranties.
(a) The Borrower hereby confirms, reaffirms and restates the
representations and warranties set forth in Section 4 of the Credit Agreement.
The Borrower represents and warrants that, after giving effect to this Second
Amendment, no Default or Event of Default has occurred and is continuing.
(b) The Borrower hereby represents and warrants that the
unaudited consolidated balance sheet of the Holdings and its consolidated
Subsidiaries as at June 30, 2004, and the related unaudited consolidated
statements of income and cash flows for the three-month period ended on such
date, present fairly in all material respects the consolidated financial
position of Holdings and its consolidated Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows
for the three-month period then ended. All such financial statements, including
the related schedules and any notes thereto, have been prepared in accordance
with GAAP applied consistently throughout the periods involved (except as
disclosed therein).
4. Amendment Fee. In consideration of the agreement of the
Lenders to the amendments contained herein, the Borrower agrees to pay to each
Lender which so agrees on or prior to 5:00 p.m., New York City time, on October
20, 2004 (by executing and delivering to the Administrative Agent or its counsel
this Second Amendment on or prior to such time), an amendment fee in an amount
equal to 1/10 of 1% of the aggregate amount of such Lender's Revolving Credit
Commitment and Term Loans in effect on the Second Amendment Effective Date; such
fees shall be payable on the Second Amendment Effective Date in immediately
available funds to the Administrative Agent on behalf of the applicable Lender.
5. Effectiveness. This Second Amendment shall become effective
as of the date set forth above (the "Second Amendment Effective Date") upon the
satisfaction of the following conditions precedent:
(a) Second Amendment. The Administrative Agent shall have
received this Second Amendment executed and delivered by the Administrative
Agent, the Borrower, each Lender with a Incremental Revolving Credit Commitment
and Lenders party to the Credit Agreement constituting the "Required Lenders"
thereunder (or, in the case of any Lender, a lender addendum or joinder
agreement in a form specified by the Administrative Agent).
(b) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid on or before the Second Amendment
Effective Date, and all expenses required to be paid on or before the Second
Amendment Effective Date for which invoices have been timely presented,
including, without limitation, the reasonable fees and expenses of legal
counsel, on or before the Second Amendment Effective Date.
(c) Security Documents. The Administrative Agent shall have
received the Acknowledgment and Confirmation, substantially in the form of
Exhibit A hereto, executed and delivered by an authorized officer of the
Borrower and each other Loan Party.
(d) Closing Certificate. The Administrative Agent shall have
received a certificate of each of Holdings and the Borrower, dated the Second
Amendment Effective Date, substantially in the form of Exhibits C-1 and C-2 to
the Credit Agreement, with appropriate insertions and attachments.
(e) Legal Opinions. The Administrative Agent shall have
received the legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇, Chtd, counsel
to the Borrower, in form and substance reasonably satisfactory to the
Administrative Agent.
6. Collateral. On or prior to the date which is 30 days after
the Second Amendment Effective Date, the Loan Parties shall have taken such
action as is reasonably specified by the Administrative Agent in order to secure
the Incremental Revolving Credit Facility equally and ratably with the Term
Facility and Revolving Credit Facility under the Loan Documents. The Lenders
authorize the Administrative Agent to enter into amendments to the Security
Documents in such form as are approved by the Administrative Agent in order to
implement the foregoing.
7. Continuing Effect of the Credit Agreement. This Second
Amendment shall not constitute an amendment of any other provision of the Credit
Agreement not expressly referred to herein and shall not be construed as a
waiver or consent to any further or future action on the part of the
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Borrower that would require a waiver or consent of the Lenders or the
Administrative Agent. Except as expressly amended hereby, the provisions of the
Credit Agreement are and shall remain in full force and effect.
8. Counterparts. This Second Amendment may be executed by the
parties hereto in any number of separate counterparts (including facsimiled
counterparts), each of which shall be deemed to be an original, and all of which
taken together shall be deemed to constitute one and the same instrument.
9. GOVERNING LAW. THIS SECOND AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10. Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of this Second
Amendment, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent.
[rest of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
NBC HOLDINGS CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
NBC ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
NEBRASKA BOOK COMPANY, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
JPMORGAN CHASE BANK, as
Administrative Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. BOYLAH
------------------------------------
Name: ▇▇▇▇ ▇. Boylah
Title: Managing Director
Signature page to the Second Amendment
dated as of October 20, 2004 to the
NEBRASKA BOOK COMPANY, INC.
Amended and Restated Credit Agreement
[INSERT LENDER NAME]
By: ____________________________________
Name:
Title:
SCHEDULE 1.1A
COMMITMENTS
COMMITMENTS IN DOLLARS
----------------------
INCREMENTAL REVOLVING CREDIT
NAME OF LENDER COMMITMENT
--------------------------------------------------------------------------------
JPMorgan Chase Bank $ 5,000,000.00
Citicorp North America, Inc. $ 5,000,000.00
TOTAL $10,000,000.00
EXHIBIT A
FORM OF ACKNOWLEDGMENT AND CONFIRMATION
1. Reference is made to Second Amendment, dated as of October
20, 2004 (the "Second Amendment"), to the Amended and Restated Credit Agreement,
dated as of February 13, 1998, as amended and restated as of December 10, 2003,
as further amended and restated as of March 4, 2004, and as amended by the First
Amendment thereto (as the same may be further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Nebraska Book
Company, Inc., a Kansas corporation (the "Borrower"), NBC Holdings Corp., NBC
Acquisition Corp., the lenders party from time to time thereto (the "Lenders"),
JPMorgan Chase Bank as administrative agent (in such capacity, the
"Administrative Agent") and collateral agent, Citigroup Global Markets Inc., as
syndication agent, and Fleet National Bank and ▇▇▇▇▇ Fargo Bank N.A., as
co-documentation agents.
2. Each of the parties hereto hereby agrees, with respect to
each Loan Document to which it is a party:
(a) all of its obligations, liabilities and
indebtedness under such Loan Document shall remain in full force and
effect on a continuous basis after giving effect to the Second
Amendment and its guarantee, if any, of the obligations, liabilities
and indebtedness of the other Loan Parties under the Credit Agreement
(or any predecessor agreement) shall extend to and cover any
Incremental Revolving Credit Loans made under the Credit Agreement and
interest thereon and fees and expenses and other obligations in respect
thereof and in respect of commitments related thereto; and
(b) all of the Liens and security interests created
and arising under such Loan Document remain in full force and effect on
a continuous basis, and the perfected status and priority of each such
Lien and security interest continues in full force and effect on a
continuous basis, unimpaired, uninterrupted and undischarged, after
giving effect to the Second Amendment, as collateral security for its
obligations, liabilities and indebtedness under the Credit Agreement
and under its guarantees in the Loan Documents, including the
Incremental Revolving Credit Facility and guarantees thereof.
3. THIS ACKNOWLEDGMENT AND CONFIRMATION SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
4. This Acknowledgment and Confirmation may be executed by one
or more of the parties hereto on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
[rest of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Acknowledgement and Confirmation to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first above written.
NBC HOLDINGS CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
NBC ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
NEBRASKA BOOK COMPANY, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
SPECIALTY BOOKS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
ANNEX A
================================================================================
$230,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
NBC HOLDINGS CORP.,
NBC ACQUISITION CORP.,
NEBRASKA BOOK COMPANY, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
JPMORGAN CHASE BANK,
AS ADMINISTRATIVE AGENT AND
COLLATERAL AGENT,
CITIGROUP GLOBAL MARKETS INC.,
AS SYNDICATION AGENT
AND
FLEET NATIONAL BANK AND ▇▇▇▇▇ FARGO BANK N.A., AS CO-
DOCUMENTATION AGENTS
DATED AS OF FEBRUARY 13, 1998,
AS AMENDED AND RESTATED AS OF DECEMBER 10, 2003 AND AS FURTHER AMENDED
AND RESTATED AS OF MARCH 4, 2004
================================================================================
▇.▇. ▇▇▇▇▇▇ SECURITIES INC. AND
CITIGROUP GLOBAL MARKETS INC.,
AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS............................................................................ 2
1.1 Defined Terms......................................................................... 2
1.2 Other Definitional Provisions......................................................... 36
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS........................................................ 37
2.1 Term Loan Commitments................................................................. 37
2.2 Procedure for Term Loan Borrowing..................................................... 38
2.3 Repayment of Term Loans............................................................... 38
2.4 Revolving Credit Commitments; Incremental Revolving Credit Commitments................ 39
2.5 Procedure for Revolving Credit Borrowing and Incremental Revolving Credit Borrowing... 40
2.6 Swing Line Commitment................................................................. 40
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans..................... 41
2.8 Repayment of Loans; Evidence of Debt.................................................. 42
2.9 Commitment Fees, etc.................................................................. 43
2.10 Termination or Reduction of Revolving Credit Commitments.............................. 44
2.11 Optional Prepayments.................................................................. 44
2.12 Mandatory Prepayments................................................................. 44
2.13 Conversion and Continuation Options................................................... 46
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches............................. 46
2.15 Interest Rates and Payment Dates...................................................... 47
2.16 Computation of Interest and Fees...................................................... 47
2.17 Inability to Determine Interest Rate.................................................. 47
2.18 Pro Rata Treatment and Payments....................................................... 48
2.19 Requirements of Law................................................................... 50
2.20 Taxes................................................................................. 51
2.21 Indemnity............................................................................. 53
2.22 Illegality............................................................................ 53
2.23 Change of Lending Office.............................................................. 54
2.24 Replacement of Lenders under Certain Circumstances.................................... 54
SECTION 3. LETTERS OF CREDIT...................................................................... 54
3.1 L/C Commitment........................................................................ 54
3.2 Procedure for Issuance of Letter of Credit............................................ 55
3.3 Commissions, Fees and Other Charges................................................... 55
3.4 L/C Participations.................................................................... 55
3.5 Reimbursement Obligation of the Borrower.............................................. 56
3.6 Obligations Absolute.................................................................. 57
3.7 Letter of Credit Payments............................................................. 57
3.8 Applications.......................................................................... 57
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PAGE
SECTION 4. REPRESENTATIONS AND WARRANTIES......................................................... 57
4.1 Financial Condition................................................................... 57
4.2 No Change............................................................................. 60
4.3 Corporate Existence; Compliance with Law.............................................. 60
4.4 Corporate Power; Authorization; Enforceable Obligations............................... 60
4.5 No Legal Bar.......................................................................... 60
4.6 No Material Litigation................................................................ 61
4.7 No Default............................................................................ 61
4.8 Ownership of Property; Liens.......................................................... 61
4.9 Intellectual Property................................................................. 61
4.10 Taxes................................................................................. 61
4.11 Federal Regulations................................................................... 62
4.12 Labor Matters......................................................................... 62
4.13 ERISA................................................................................. 62
4.14 Investment Company Act; Other Regulations............................................. 62
4.15 Subsidiaries.......................................................................... 63
4.16 Use of Proceeds....................................................................... 63
4.17 Environmental Matters................................................................. 63
4.18 Accuracy of Information, etc.......................................................... 64
4.19 Security Documents.................................................................... 64
4.20 Solvency.............................................................................. 65
4.21 Senior Indebtedness................................................................... 65
4.22 Regulation H.......................................................................... 65
SECTION 5. CONDITIONS PRECEDENT................................................................... 65
5.1 Conditions to Initial Extension of Credit............................................. 65
5.2 Conditions to Each Extension of Credit................................................ 69
SECTION 6. AFFIRMATIVE COVENANTS.................................................................. 69
6.1 Financial Statements.................................................................. 69
6.2 Certificates; Other Information....................................................... 70
6.3 Payment of Obligations................................................................ 72
6.4 Conduct of Business and Maintenance of Existence, etc................................. 72
6.5 Maintenance of Property; Insurance.................................................... 73
6.6 Inspection of Property; Books and Records; Discussions................................ 73
6.7 Notices............................................................................... 74
6.8 Environmental Laws.................................................................... 75
6.9 Interest Rate Protection.............................................................. 75
6.10 Additional Collateral, etc............................................................ 75
SECTION 7. NEGATIVE COVENANTS..................................................................... 77
7.1 Financial Covenants................................................................... 77
7.2 Limitation on Indebtedness............................................................ 79
7.3 Limitation on Liens................................................................... 81
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PAGE
7.4 Limitation on Fundamental Changes..................................................... 83
7.5 Limitation on Sale of Assets.......................................................... 83
7.6 Limitation on Dividends............................................................... 83
7.7 Limitation on Capital Expenditures.................................................... 85
7.8 Limitation on Investments, Loans and Advances......................................... 85
7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc............ 86
7.10 Limitation on Transactions with Affiliates............................................ 87
7.11 Limitation on Sales and Leasebacks.................................................... 87
7.12 Limitation on Changes in Fiscal Periods............................................... 88
7.13 Limitation on Negative Pledge Clauses................................................. 88
7.14 Limitation on Restrictions on Subsidiary Distributions................................ 88
7.15 Limitation on Lines of Business....................................................... 88
7.16 Merger Agreement...................................................................... 89
7.17 Limitation on Activities of Holdings and SuperHoldings................................ 89
SECTION 8. EVENTS OF DEFAULT...................................................................... 89
SECTION 9. THE AGENTS............................................................................. 93
9.1 Appointment........................................................................... 93
9.2 Delegation of Duties.................................................................. 93
9.3 Exculpatory Provisions................................................................ 93
9.4 Reliance by Administrative Agent...................................................... 94
9.5 Notice of Default..................................................................... 94
9.6 Non-Reliance on Agents and Other Lenders.............................................. 94
9.7 Indemnification....................................................................... 95
9.8 Agent in Its Individual Capacity...................................................... 95
9.9 Successor Administrative Agent........................................................ 95
9.10 Authorization to Release Liens........................................................ 96
9.11 Co-Documentation Agents and Syndication Agent......................................... 96
SECTION 10. MISCELLANEOUS......................................................................... 96
10.1 Amendments and Waivers................................................................ 96
10.2 Notices............................................................................... 97
10.3 No Waiver; Cumulative Remedies........................................................ 98
10.4 Survival of Representations and Warranties............................................ 98
10.5 Payment of Expenses................................................................... 98
10.6 Successors and Assigns; Participations and Assignments................................ 99
10.7 Adjustments; Set-off.................................................................. 102
10.8 Counterparts.......................................................................... 103
10.9 Severability.......................................................................... 103
10.10 Integration........................................................................... 103
10.11 GOVERNING LAW......................................................................... 103
10.12 Submission To Jurisdiction; Waivers................................................... 104
10.13 Acknowledgements...................................................................... 104
10.14 WAIVERS OF JURY TRIAL................................................................. 105
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PAGE
10.15 Confidentiality....................................................................... 105
10.16 Effect of Amendment and Restatement of the Existing Credit Agreement.................. 105
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ANNEXES:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Property
4.4 Consents, Authorizations, Filings and Notices
4.9 Intellectual Property
4.15 Subsidiaries
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
7.2(e) Existing Indebtedness
7.3(f) Existing Liens
7.8 Existing Investments
EXHIBITS:
A Form of Amended and Restated Guarantee and Collateral Agreement
B-1 Form of Borrower Compliance Certificate
B-2 Form of Holdings Compliance Certificate
B-3 Form of SuperHoldings Compliance Certificate
C-1 Form of Borrower Closing Certificate
C-2 Form of Holdings Closing Certificate
C-3 Form of Subsidiary Closing Certificate
C-4 Form of SuperHoldings Closing Certificate
D Form of Mortgage
E Form of Assignment and Assumption
F Form of Legal Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
H Form of Prepayment Option Notice
I Form of Exemption Certificate
J Form of Borrowing Base Certificate
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February
13, 1998, as amended and restated as of December 10, 2003, as further amended
and restated as of March 4, 2004, among NBC Holdings Corp., a Delaware
corporation ("SuperHoldings"), NBC Acquisition Corp., a Delaware corporation
("Holdings"), Nebraska Book Company, Inc., a Kansas corporation (the
"Borrower"), the several banks and other financial institutions or entities from
time to time parties to this Agreement (the "Lenders") and JPMORGAN CHASE BANK,
as administrative agent and collateral agent (in such capacity, the
"Administrative Agent"), CITIGROUP GLOBAL MARKETS INC., as syndication agent (in
such capacity, the "Syndication Agent") and FLEET NATIONAL BANK and ▇▇▇▇▇ FARGO
BANK, N.A., as co-documentation agents (in such capacities, the
"Co-Documentation Agents").
W I T N E S S E T H:
WHEREAS, the Borrower is a direct wholly-owned subsidiary of
Holdings, and Holdings is a direct subsidiary of SuperHoldings;
WHEREAS, the Borrower, Holdings, the Administrative Agent and
certain of the Lenders are parties to the Credit Agreement, dated as of February
13, 1998, as amended and restated as of December 10, 2003 (the "Existing Credit
Agreement");
WHEREAS, the Borrower and Holdings intend to enter into a
recapitalization transaction pursuant to which (i) indebtedness of the Borrower
under the Existing Credit Agreement will be refinanced, (ii) the Existing Credit
Agreement and the credit facilities thereunder will be amended and restated
pursuant to this Agreement, (iii) the Tender Offers (as hereinafter defined)
will be consummated, (iv) Weston Presidio Capital and certain of its affiliates
(collectively "WP") will purchase certain shares of the capital stock of
Holdings held by certain existing shareholders of Holdings, (v) WP and certain
members of management will contribute their shares of Holdings to SuperHoldings,
a newly created entity, (vi) WP will make a new equity contribution into
SuperHoldings, and will capitalize a newly created entity called New NBC
Acquisition Corp. with the proceeds of such contribution and (vii) the
transactions contemplated by the Merger Agreement (as hereinafter defined) will
be consummated (the foregoing, the "Transactions");
WHEREAS, in connection with the Transactions, the Borrower has
requested that the Lenders to provide senior credit facilities aggregating
$230,000,000; and
WHEREAS, the Lenders party hereto, including certain of the
Lenders under the Existing Credit Agreement (the "Continuing Lenders"), are
willing to make such senior credit facilities available upon and subject to the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree that, upon the
effectiveness of this Agreement, the Existing Credit Agreement is hereby amended
and restated in its entirety as follows:
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SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Account": as defined in the Uniform Commercial Code in effect
in the Sate of New York from time to time.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": JPMorgan Chase Bank, in its capacity
as administrative agent and collateral agent.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either
to (a) vote 10% or more of the securities having ordinary voting power
for the election of directors (or persons performing similar functions)
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agents": the collective reference to the Syndication Agent,
the Co-Documentation Agents and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender, an amount
equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments and (b) thereafter, the sum of (i) the aggregate
unpaid principal amount of such Lender's Term Loans, (ii) the amount of
such Lender's Revolving Credit Commitment or, if the Revolving Credit
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit and (iii) the amount of such Lender's Incremental
Revolving Credit Commitment or, if the Incremental Revolving Credit
Commitments have been terminated, the amount of such Lender's
Incremental Revolving Extensions of Credit.
"Aggregate Exposure Percentage": with respect to any Lender,
the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure to the Aggregate Exposure of all Lenders.
"Agreement": this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Margin": (a) (i) with respect to Revolving Credit
Loans and Incremental Revolving Credit Loans, 1.75% for Base Rate Loans
and 2.75% for Eurodollar Loans, and (ii) with respect to Swing Line
Loans, 1.75% provided, that on and after the first Adjustment Date
occurring after the completion of one full fiscal quarter of the
Borrower after the Closing Date, the Applicable Margin with respect to
Revolving Credit Loans, Incremental Revolving Credit Loans and Swing
Line Loans will be determined pursuant to the Pricing Grid; and
3
(b) with respect to Term Loans on any day, the rate per annum
set forth in the relevant column heading below opposite the Term Loan
Rating in effect for such day:
Level Term Loan Rating Eurodollar Loans Base Rate Loans
----- ---------------- ---------------- ---------------
I > or = B+/B1 2.25% 1.25%
II < B+/B1 2.50% 1.50%
The Borrower agrees that it shall cause the Term Loans to be rated by
each of S&P and Moody's until the Term Loans are repaid in full. For
purposes of the foregoing table, (i) if the ratings established or
deemed to have been established by ▇▇▇▇▇'▇ Investors Services
("Moody's") and Standard & Poor's Ratings Group ("S&P") for the Term
Loans shall fall within different Levels, the Applicable Margin shall
be based on the lower of the two ratings (i.e., the higher Level
number); and (ii) if the ratings established or deemed to have been
established by Moody's and S&P for the Term Loans shall be changed
(other than as a result of a change in the rating system of Moody's or
S&P), such change shall be effective as of the date on which it is
first announced by the applicable rating agency. Each change in the
Applicable Margin for the Term Loans shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If
the rating system of Moody's or S&P shall change, or if either such
rating agency shall cease to be in the business of rating corporate
debt obligations, the Borrower and the Lenders shall negotiate in good
faith to amend this definition to reflect such changed rating system or
the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Margin for the Term
Loans shall be determined by reference to the rating most recently in
effect prior to such change or cessation.on and after the first
Adjustment Date occurring after the completion of one full fiscal
quarter of the Borrower after the Closing Date, the Applicable Margin
with respect to Revolving Credit Loans, Incremental Revolving Credit
Loans and Swing Line Loans will be determined pursuant to the Pricing
Grid.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
open a Letter of Credit.
"Approved Fund": as defined in Section 10.6(b).
"Arrangers": ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Citicorp Global
Markets Inc.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c) or (d) of Section 7.5).
4
"Assignee": as defined in Section 10.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit E.
"Available Incremental Revolving Credit Commitment": as to any
Incremental Revolving Credit Lender at any time, an amount equal to the
excess, if any, of (a) such Lender's Incremental Revolving Credit
Commitment over (b) such Lender's Incremental Revolving Extensions of
Credit.
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment over (b) such Lender's
Revolving Extensions of Credit; provided, that in calculating any
Lender's Revolving Extensions of Credit for the purpose of determining
such Lender's Available Revolving Credit Commitment pursuant to Section
2.9(a), the aggregate principal amount of Swing Line Loans then
outstanding shall be deemed to be zero.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime
Rate" shall mean the rate of interest per annum publicly announced from
time to time by JPMorgan Chase Bank as its prime or base rate in effect
at its principal office in New York City (the Prime Rate not being
intended to be the lowest rate of interest charged by JPMorgan Chase
Bank in connection with extensions of credit to debtors). Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Base Rate.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Bookstore": any business establishment that has as its
primary business the sale of textbooks.
"Borrower": as defined in the recitals hereto.
"Borrower Pro Forma Financial Statements": as defined in
Section 4.1(a)(ii).
"Borrower Projections": as defined in Section 6.2(c)(ii).
"Borrowing Base": at the time of any determination an amount
equal to the sum, without duplication, of (a) the sum of (i) 60% of
Eligible Accounts Receivable in respect of Standard Sales Invoices at
such time and (ii) 85% of Eligible Accounts Receivable in respect of
Buy-Fund Invoices at such time; (b) 55% of Wholesale Inventory, Retail
5
Inventory and Information Systems Inventory that, in each case,
constitutes Eligible Inventory at such time (provided, however, that
the amount in respect of such Information Systems Inventory shall not
at any time exceed $500,000) minus the aggregate Rent Reserve at such
time; and (c) the sum of the Over Advance Amount then in effect and if
the time of such determination is (i) during the Peak Period, an amount
equal to 55% of Buy-Funds at such time and (ii) during the Non-Peak
Period, the lesser of (A) $1,000,000 and (B) an amount equal to 55% of
Buy-Funds at such time. The Borrowing Base at any time shall be
determined by reference to the most recent Borrowing Base Certificate
delivered to the Administrative Agent pursuant to Section 6.2(g),
absent any error in such Borrowing Base Certificate. In the event that
at any time after the date hereof (a) the Borrower materially alters
any of its accounting policies or procedures, (b) there occurs a
material change in the Borrower's customer base or (c) there occurs a
material change in the nature of the Borrower's Inventory, then the
Administrative Agent will be entitled in its reasonable discretion with
the consent of the Borrower, which consent shall not be unreasonably
withheld, to adjust the eligibility criteria and reserves in respect of
Eligible Accounts Receivable and Eligible Inventory.
"Borrowing Base Certificate": a certificate in substantially
the form of Exhibit J hereto (with such changes thereto from time to
time as may reasonably be required by the Administrative Agent to
reflect the components of and reserves against the Borrowing Base as
provided for herein), executed and certified by a Responsible Officer
of the Borrower, which certificate shall include appropriate exhibits,
schedules, supporting documentation and additional reports (i) as
outlined in Schedule 1 to Exhibit J and (ii) as provided for in Section
6.2(g).
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.
"Business": as defined in Section 4.17.
"Business Day": (i) for all purposes other than as covered by
clause (ii) below, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by
law to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in Dollar deposits
in the interbank eurodollar market.
"Buy-Funds": the aggregate amount of cash in the possession of
the Borrower's buyers conducting book-buys during any buy-back period
at an educational institution or commercial Bookstore, less the
aggregate amount represented by outstanding drafts issued by the
Borrower in respect of purchases of used books during such buy-back
period.
"Buy-Fund Invoice": an invoice resulting from the sale or
advance by the Borrower to, or the agreement by the Borrower with, an
educational institution or commercial Bookstore in respect of used
books that (a) have been purchased by the Borrower during any buy-back
period at such educational institution or commercial
6
Bookstore and (b) are designated to remain on the campus of such
educational institution or on the premises of such commercial
Bookstore, in each case net of any commission owed by the Borrower to
such educational institution or commercial Bookstore in respect of such
sale.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
which should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of
such Person under GAAP, and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date
of acquisition; (b) certificates of deposit, time deposits, eurodollar
time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued by any Lender or by
any commercial bank organized under the laws of the United States of
America or any state thereof having combined capital and surplus of not
less than $500,000,000; (c) commercial paper of an issuer rated at
least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or
A by Moody's; (f) securities with maturities of six months or less from
the date of acquisition backed by
7
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; or (g)
shares of money market mutual or similar funds which invest exclusively
in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Closing Date": March 4, 2004 or such later date not beyond
March 30, 2004 on which the conditions precedent set forth in Section
5.1 shall have been satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": as to any Lender, the sum of the Term Loan
Commitment, the Revolving Credit Commitment and the Incremental
Revolving Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Conduit Lender": any special purpose corporation organized
and administered by any Lender for the purpose of making Loans
otherwise required to be made by such Lender and designated by such
Lender in a written instrument; provided, that the designation by any
Lender of a Conduit Lender shall not relieve the designating Lender of
any of its obligations to fund a Loan under this Agreement if, for any
reason, its Conduit Lender fails to fund any such Loan, and the
designating Lender (and not the Conduit Lender) shall have the sole
right and responsibility to deliver all consents and waivers required
or requested under this Agreement with respect to its Conduit Lender,
and provided, further, that no Conduit Lender shall (a) be entitled to
receive any greater amount pursuant to Section 2.19, 2.20, 2.21 or 10.5
than the designating Lender would have been entitled to receive in
respect of the extensions of credit made by such Conduit Lender or (b)
be deemed to have any Commitment.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated February 2004 and furnished to the
Lenders.
"Consolidated Current Assets": at any date, all amounts (other
than cash and Cash Equivalents) which would, in conformity with GAAP,
be set forth opposite the caption "total current assets" (or any like
caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries at such date.
8
"Consolidated Current Liabilities": at any date, all amounts
which would, in conformity with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated
balance sheet of the Borrower and its Subsidiaries at such date, but
excluding (a) the current portion of any Funded Debt of the Borrower
and its Subsidiaries and (b) without duplication of clause (a) above,
all Indebtedness consisting of Revolving Extensions of Credit or
Incremental Revolving Extensions of Credit to the extent otherwise
included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected
as a charge in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization
expense, (d) amortization of intangibles (including, but not limited
to, goodwill) and organization costs, (e) any non-cash extraordinary,
unusual or non-recurring expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business and excluding any non-cash
expense to the extent that it represents an accrual of or reserve for
cash expenditures in any future period), (f) any other non-cash charges
and (g) any non-recurring stock compensation expenses and other
non-capitalized expenses incurred in connection with the Stock
Repurchase (as defined in the Existing Credit Agreement), and minus, to
the extent included in the statement of such Consolidated Net Income
for such period, the sum of (i) interest income, (ii) any
extraordinary, unusual or non-recurring income or gains (including,
whether or not otherwise includable as a separate item in the statement
of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business) and (iii) any other
non-cash income, all as determined on a consolidated basis.
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) Consolidated EBITDA for such period less the aggregate
amount actually paid by the Borrower and its Subsidiaries in cash
during such period on account of Capital Expenditures to (b)
Consolidated Fixed Charges for such period; provided that for purposes
of calculating Consolidated EBITDA and Consolidated Fixed Charges of
the Borrower and its Subsidiaries for any period, the Consolidated
EBITDA and Consolidated Fixed Charges of any Person or bookstore
location acquired or disposed of by the Borrower or its Subsidiaries
during such period shall be included on a pro forma basis, including
the effect of identified business synergies, for such period (assuming
the consummation of each such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the
first day of such period) if (other than the pro forma adjustments to
Consolidated EBITDA included in the calculation thereof for the
twelve-month period ended January 31, 2004 for the purposes of Section
5.1(k)) either (x) the consolidated balance sheet of such acquired
Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated
statements of income and stockholders' equity and of cash flows for the
period in respect of which Consolidated EBITDA and Consolidated Fixed
Charges is to be calculated have been previously provided to the
Administrative
9
Agent and the Lenders and reported on without a qualification arising
out of the scope of the audit by independent certified public
accountants of nationally recognized standing or (y) other financial
information in respect of such acquired Person or bookstore location
shall have been provided to the Administrative Agent and the Lenders
and shall have been found reasonably acceptable by the Required
Lenders.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
provision for cash income taxes made by the Borrower or any of its
Subsidiaries on a consolidated basis in respect of such period and (c)
scheduled payments made during such period on account of principal of
Indebtedness of the Borrower or any of its Subsidiaries (including
scheduled principal payments in respect of the Term Loans but excluding
scheduled principal payments under the Original Credit Agreement and
excluding payments made to redeem the Existing Senior Subordinated
Notes prior to June 30, 2004).
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period; provided that for purposes of
calculating Consolidated EBITDA and Consolidated Interest Expense of
the Borrower and its Subsidiaries for any period, the Consolidated
EBITDA and Consolidated Interest Expense of any Person or bookstore
location acquired or disposed of by the Borrower or its Subsidiaries
during such period shall be included on a pro forma basis, including
the effect of identified business synergies, for such period (assuming
the consummation of each such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the
first day of such period) if (other than the pro forma adjustments to
Consolidated EBITDA included in the calculation thereof for the
twelve-month period ended January 31, 2004 for the purposes of Section
5.1(k)) either (x) the consolidated balance sheet of such acquired
Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated
statements of income and stockholders' equity and of cash flows for the
period in respect of which Consolidated EBITDA and Consolidated
Interest Expense is to be calculated have been previously provided to
the Administrative Agent and the Lenders and reported on without a
qualification arising out of the scope of the audit by independent
certified public accountants of nationally recognized standing or (y)
other financial information in respect of such acquired Person or
bookstore location shall have been provided to the Administrative Agent
and the Lenders and shall have been found reasonably acceptable by the
Required Lenders.
"Consolidated Interest Expense": for any period, the sum of
(i) total cash interest expense (including that attributable to Capital
Lease Obligations) of the Borrower and its Subsidiaries for such period
with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries (including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Interest Rate
Protection Agreements to the extent such net costs are allocable to
such period in accordance with GAAP but excluding any amounts payable
on the Existing Senior Subordinated Notes prior to June 30, 2004) net
of cash interest income received during such period and (ii) the amount
of dividends paid in cash by the Borrower to Holdings during such
period to permit Holdings to pay cash interest on the
10
Holdings Discount Notes or the Existing Holdings Discount Debentures,
other than amounts used to redeem the Existing Holdings Discount
Debentures prior to June 30, 2004.
"Consolidated Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for such
period; provided that for purposes of calculating Consolidated EBITDA
of the Borrower and its Subsidiaries for any period, the Consolidated
EBITDA of any Person or bookstore location acquired or disposed of by
the Borrower or its Subsidiaries during such period shall be included
on a pro forma basis, including the effect of identified business
synergies, for such period (assuming the consummation of each such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period) if
(other than the pro forma adjustments to Consolidated EBITDA included
in the calculation thereof for the twelve-month period ended January
31, 2004 for the purposes of Section 5.1(k)) either (x) the
consolidated balance sheet of such acquired Person and its consolidated
Subsidiaries as at the end of the period preceding the acquisition of
such Person and the related consolidated statements of income and
stockholders' equity and of cash flows for the period in respect of
which Consolidated EBITDA is to be calculated have been previously
provided to the Administrative Agent and the Lenders and reported on
without a qualification arising out of the scope of the audit by
independent certified public accountants of nationally recognized
standing or (y) other financial information in respect of such acquired
Person or bookstore location shall have been provided to the
Administrative Agent and the Lenders and shall have been found
reasonably acceptable by the Required Lenders.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary of the Borrower or is merged
into or consolidated with the Borrower or any of its Subsidiaries, (b)
the income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is
actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings
of any Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not
at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.
"Consolidated Senior Leverage Ratio": as at the last day of
any period of four consecutive fiscal quarters, the ratio of (a)
Consolidated Total Debt less the aggregate principal amount of the
Senior Subordinated Notes and the Existing Senior Subordinated Notes
and any refinancing Indebtedness permitted by Section 7.2(g)(ii) on
such day to (b) Consolidated EBITDA for such period; provided that for
purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period, the Consolidated EBITDA of any Person or
bookstore location acquired or disposed of by
11
the Borrower or its Subsidiaries during such period shall be included
on a pro forma basis, including the effect of identified business
synergies, for such period (assuming the consummation of each such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period) if
(other than the pro forma adjustments to Consolidated EBITDA included
in the calculation thereof for the twelve-month period ended January
31, 2004 for the purposes of Section 5.1(k)) either (x) the
consolidated balance sheet of such acquired Person and its consolidated
Subsidiaries as at the end of the period preceding the acquisition of
such Person and the related consolidated statements of income and
stockholders' equity and of cash flows for the period in respect of
which Consolidated EBITDA is to be calculated have been previously
provided to the Administrative Agent and the Lenders and reported on
without a qualification arising out of the scope of the audit by
independent certified public accountants of nationally recognized
standing or (y) other financial information in respect of such acquired
Person or bookstore location shall have been provided to the
Administrative Agent and the Lenders and shall have been found
reasonably acceptable by the Required Lenders.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP (other than Revolving Extensions of Credit made
under the Borrowing Base) provided, however, any Existing Senior
Subordinated Notes shall be deemed to be not outstanding prior to June
30, 2004 for purposes of calculating Consolidated Total Debt.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
"Continuing Directors": as defined in Section 8(j) hereof.
"Continuing Lenders": as defined in the recitals hereto.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its Property is bound.
"Converted Term Loan": as defined in Section 2.1(b) hereof.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Defaulted Account": as defined in the definition of the
"Eligible Accounts Receivable".
"Disposition": with respect to any Property, any sale, sale
and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "Dispose" and "Disposed of" shall have
correlative meanings.
"Co-Documentation Agents": as defined in the preamble hereto.
12
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States
of America.
"ECF Percentage": 75%; provided, that with respect to each
fiscal year of the Borrower, the ECF Percentage shall be reduced to 50%
if the Consolidated Leverage Ratio as of the last day of such fiscal
year is not greater than 3.5 to 1.0.
"Eligible Accounts Receivable": at the time of any
determination, the gross outstanding balance at such time, determined
in accordance with GAAP and stated on a basis consistent with the
historical practices of the Borrower as of the date hereof, of Accounts
of the Borrower and its Subsidiaries, including the aggregate amount of
all Past-due Addbacks less, as applicable and without duplication, the
aggregate amount of (i) all charge-backs for returns, (ii) all finance
agreements, (iii) all trade discounts, (iv) all finance charges, late
fees and other fees that are unearned, (v) the aggregate amount of all
reserves for service fees and such other fees or commissions or similar
amounts that the Borrower or such Subsidiary has agreed to pay and (vi)
at the discretion of the Administrative Agent, a dilution reserve,
reasonably determined by the Administrative Agent based upon the
calculations set forth in the most recent Borrowing Base Certificate
delivered by the Borrower, in an amount equal to the product of (A) the
amount, expressed as a percentage, by which dilution of Eligible
Accounts Receivable in respect of Standard Sales Invoices exceeds 25%
and (B) the amount that would constitute Eligible Accounts Receivable
prior to the implementation of the reserve contemplated by this clause
(vi). Notwithstanding the foregoing, an Account shall not be included
in this definition of Eligible Accounts Receivable if, at the time of
any determination, without duplication:
(a) the Borrower or such Subsidiary has not complied
with all material requirements of applicable Federal, state
and local and laws, rules, regulations and orders (including
all laws, rules, regulations and orders of any governmental or
judicial authority relating to truth in lending, billing
practices, fair credit reporting, equal credit opportunity,
debt collection practices and consumer debtor protection)
applicable to such Account (or any related contracts) or
affecting the collectibility of such Account; or
(b) (i) such Account is not assignable or requires
consent of the Account debtor and such a requirement of
consent is enforceable law or (ii) a first priority security
interest in such Account in favor of the Administrative Agent
for the ratable benefit of the Lenders has not been obtained
and fully perfected by filing Uniform Commercial Code
financing statements against the Borrower or such Subsidiary;
or
(c) such Account is subject to any Lien whatsoever,
other than Liens expressly permitted by Section 7.3; or
13
(d) the Borrower or such Subsidiary, in order to be
entitled to collect such Account, is required to perform any
additional service for, or perform or incur any additional
obligation to, the Account debtor, except the portion of such
Account that has arisen in respect of the sale of any
Information Systems Inventory; or
(e) such Account does not constitute a legal, valid
and binding irrevocable payment obligation of the Account
debtor to pay the balance thereof in accordance with its terms
or is subject to any defense, setoff, recoupment or
counterclaim; or
(f) the Account debtor is an Affiliate, division or
employee of the Borrower or such Subsidiary; or
(g) (i) if such Account (A) is an account of the
United States Government or any of its agencies or
instrumentalities, (B) is subject to any Lien pursuant to the
Federal Assignment of Claims Act and (C) the Administrative
Agent has not received an assignment of claims in form and
substance satisfactory to it within 45 days of the creation of
such Account or (ii) such Account is (A) an account of the
government of any state of the United States or any political
subdivision thereof or any agency or instrumentality of any of
the foregoing and (B) a first priority security interest in
such account in favor of the Administrative Agent for the
ratable benefit of the Lenders has not been obtained and fully
perfected by filing Uniform Commercial Code financing
statements against the Borrower or such Subsidiary; or
(h) an estimated or accrual loss has been recognized
in respect of such Account, as determined in accordance with
the Borrower's or such Subsidiary's usual business practice
(each such Account, a "Defaulted Account"); or
(i) 20% or more of the aggregate outstanding amount
of all Accounts from the Account debtor in respect of such
Account and its Affiliates constitute Defaulted Accounts; or
(j) any representation or warranty contained in this
Agreement or in any other Loan Documents applicable either to
Accounts in general or to any such specific Account shall
prove to have been false or misleading in any material respect
when made or deemed made with respect to such Account; or
(k) 50% or more of the outstanding amount of all
Accounts from the same Account debtor have become, or have
been determined by the Administrative Agent to be, ineligible
pursuant to subparagraph (m) below; or
(l) the Account debtor (i) has filed a petition for
relief under the United States Bankruptcy Code (or similar
action under any successor law or under any comparable law),
(ii) has made a general assignment for the benefit of
creditors, (iii) has filed against it any petition or other
application for relief under the United States Bankruptcy Code
(or similar action under any successor law or
14
under any comparable law), (iv) has failed, suspended business
operations, become insolvent, called a meeting of its
creditors for the purpose of obtaining any financial
concession or accommodation or (v) had or suffered a receiver
or a trustee to be appointed for all or a significant portion
of its assets or affairs; or
(m) (i) any portion of such Account has remained
unpaid 120 or more days past the original invoice date thereof
or (ii) the Borrower or such Subsidiary has reason to believe
that all or a material portion of such Account is
uncollectible (in the reasonable discretion of the
Administrative Agent); or
(n) in respect of Buy-Fund Invoices, any portion of
such Account has remained unpaid 31 or more days past the
original invoice date therefor; or
(o) the sale represented by such Account is to an
Account debtor organized or located outside the states of the
United States, the District of Columbia or Canada unless, in
the case of any Account debtor controlled by an entity
organized or located outside one of the states of the United
States or the District of Columbia, the Administrative Agent
has, for the benefit of the Lenders, a valid, legal and
perfected first-priority security interest in such Account; or
(p) the Account debtor is a supplier or creditor of
the Borrower or such Subsidiary (but only to the extent of the
lesser of (i) the amount owing from such Account debtor to the
Borrower or such Subsidiary pursuant to Accounts that are
otherwise eligible and (ii) the amount owing to such Account
debtor by the Borrower or such Subsidiary); or
(q) such Account is not denominated in dollars or is
payable outside the United States; or
(r) if applicable, the sale represented by such
Account is on a ▇▇▇▇-and-hold, undelivered sale, guaranteed
sale, sale-or-return, consignment or sale-on-approval basis or
is subject to any right of return (other than (i) in the
ordinary course of business or (ii) a standard right of claim
for defective goods for which neither the related Account
debtor has made a claim nor the Borrower or such Subsidiary
has any basis to believe that such Account debtor is entitled
to such a claim), charge-back or setoff; or
(s) the Administrative Agent believes, in its
reasonable discretion, that the collection of such Account may
not be paid and the Administrative Agent shall so notify the
Borrower; or
(t) the Borrower or such Subsidiary is in default, in
any material respect, in the performance or observance of any
of the terms of any agreement giving rise to such Account; or
(u) the Borrower or such Subsidiary does not have
good and marketable title to such Account as sole owner of
such Account; or
15
(v) such Account does not arise from the sale and
delivery of goods or provision of services in the ordinary
course of business of the Borrower or such Subsidiary to the
Account debtor; or
(w) such Account is on terms other than those normal
or customary in the business or the Borrower or such
Subsidiary; or
(x) any amounts payable under or in connection with
such Account are evidenced by promissory notes, agreements to
repay cash advances or other instruments, unless such
promissory notes, agreements or instruments have been endorsed
and delivered to the Administrative Agent; or
(y) such Account has been paid by a check that has
been returned for insufficient funds; or
(z) the Account debtor is a third party credit card
company or a debit card company; or
(aa) such Account is not subject to the standard
credit and collection policies of the Borrower or such
Subsidiary; or
(bb) such Account has been placed with an attorney or
other third party for collection; or
(cc) the aggregate credit balances of the Borrower or
such Subsidiary on an Account debtor by Account debtor basis
of all Accounts have remained unpaid for the past due amounts
referenced in subparagraphs (m) and (n) above; or
(dd) such Account is subject to any adverse security
deposit, retainage or other similar advance made by or for the
benefit of the applicable Account debtor, in each case only to
the extent thereof; or
(ee) such Account was invoiced (i) in advance of
goods or services provided, or (ii) twice or more, or (iii)
the associated income has not been earned; or
(ff) the goods giving rise to such Account have not
been shipped and title has not been transferred to the Account
debtor, or the Account represents a progress-billing or
otherwise does not represent a complete sale, except the
portion of such Account that has arisen in respect of the sale
of any Information Systems Inventory; for purposes hereof,
"progress-billing" means any invoice for goods sold or leased
or services rendered under a contract or agreement pursuant to
which the Account debtor's obligation to pay such invoice is
conditioned upon the Borrower's or such Subsidiary's
completion of any further performance under the contract or
agreement; or
(gg) such Account is created on cash on delivery
terms;
16
provided that, all Accounts of any single Account debtor and
its Affiliates which, in the aggregate exceed (i) 20% in
respect of an Account debtor whose securities are rated
Investment Grade, and (ii) 15% in respect of all other Account
debtors, of the total amount of all Accounts at the time of
any determination shall be deemed not to be Eligible Accounts
Receivable to the extent of such excess.
"Eligible Inventory": at any date of determination thereof,
the value (determined at the lowest of cost or market or the
written-down value in accordance with the Borrower's historical
practice in accordance with GAAP) at such date of all inventories
("Inventory") of the Borrower and its Subsidiaries owned by the
Borrower and its Subsidiaries and in the possession of the Borrower and
its Subsidiaries or any warehouseman, bailee, agent or processor of the
Borrower and its Subsidiaries, including any educational institution or
commercial Bookstore, net of (i) any interdivisional profit, (ii) any
amounts payable by the Borrower and its Subsidiaries in respect of
commissions, processing fees or other charges, (iii) any advance
payments and unliquidated progress ▇▇▇▇▇▇▇▇ in respect of such
Inventory, (iv) the Obsolescence Reserve and (v) the RTV Reserve.
Notwithstanding the foregoing, Inventory shall not constitute Eligible
Inventory if, without duplication:
(a) such item of Inventory is not assignable or a
first priority security interest in such item of Inventory in
favor of the Administrative Agent for the ratable benefit of
the Lenders has not been obtained and fully perfected by
filing Uniform Commercial Code financing statements against
the Borrower or such Subsidiary; or
(b) such item of Inventory is subject to any Lien
whatsoever, other than Liens expressly permitted by Section
7.3 of this Agreement; or
(c) there shall have occurred any event that, or any
condition with respect to such item of Inventory, would
substantially impede the ability of the Borrower or such
Subsidiary to continue to use or sell such item of Inventory
in the normal course of business; or
(d) any claim disputing the title of the Borrower or
such Subsidiary to, or right to possession of or dominion
over, such item of Inventory shall have been asserted; or
(e) any representation or warranty contained in this
Agreement or in any other Loan Document applicable to either
Inventory in general or to such specific item of Inventory has
been breached with respect to such item of Inventory; or
(f) the Borrower or such Subsidiary does not have
good and marketable title to such item of Inventory as sole
owner of such item of Inventory; or
(g) such item of Inventory is located outside of the
United States; or
17
(h) such item of Inventory is evidenced by an
Account; or
(i) such item of Inventory consists of packing,
packaging and/or shipping supplies or materials; or
(j) such item of Inventory has been shipped to a
customer, even if on a consignment or "sale or return" basis;
or
(k) such item of Inventory consists of obsolete
Information Systems Inventory or Retail Inventory, including
books and related materials with titles classified as
slow-moving; or
(l) such item of Inventory consists of any unsaleable
Inventory; or
(m) such item of Inventory is located on a leasehold,
or is in the possession or control of any lessor,
warehouseman, bailee, agent or processor, unless (i) a Rent
Reserve has been established for Inventory at that location,
or (ii) the applicable lessor, warehouseman, bailee, agent or
processor (including any educational institution or commercial
Bookstore), has been notified of the Lien granted under the
Security Documents and has entered into a Landlord Waiver, or
(iii) (A) the Administrative Agent shall have received an
opinion, in form and substance acceptable to and from local
counsel approved by the Administrative Agent, and addressed to
the Administrative Agent, the Issuing Bank and the Lenders, to
the effect that there is no law in the jurisdiction where such
Inventory is located that would allow Inventory located on
such leasehold, or in the possession or control of such
warehouseman, bailee, agent or processor, to be subjected to
any Lien in favor of the applicable lessor, warehouseman,
bailee, agent or processor arising by operation of law and (B)
the Administrative Agent shall have received a certificate of
a Responsible Officer of the Borrower or such Subsidiary
certifying that there is no term or condition of any agreement
or other document governing the relationship between the
Borrower or such Subsidiary and the applicable lessor,
warehouseman, bailee, agent or processor that provides for any
such Lien; or
(n) such item of Inventory consists of food,
beverages or sundries; or
(o) such item of Inventory consists of cigarettes; or
(p) such item of Inventory is to be sold by the
Borrower or such Subsidiary from a vending machine; or
(q) such item of Inventory has been determined by the
Administrative Agent, exercising its reasonable discretion, to
be unacceptable because (i) the Administrative Agent believes
that such item of Inventory is not readily saleable under the
customary terms on which it is usually sold or (ii) such item
of Inventory (other than Information Systems Inventory) is not
of a type typically sold by campus Bookstores; or
18
(r) such item of Inventory is goods returned or
rejected by the Borrower's or such Subsidiary's customers due
to quality issues or is goods in transit to a third party; or
(s) such item of Inventory is a reserve computed by
the Borrower or such Subsidiary to accrue for future
adjustments to Inventory relating to inaccuracies arising from
the utilization of the gross profit method of accounting for
Retail Inventory; or
(t) such item of Inventory is an accrual computed by
the Borrower or such Subsidiary to accrue for anticipated
returns of sold Inventory.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum
rates (expressed as a decimal) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Telerate screen as
of 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period. In the event that such rate does not appear on
Page 3750 of the Telerate screen (or otherwise on such service), the
"Eurodollar Base Rate" for purposes of this definition shall be
determined by reference to such other comparable publicly available
service for displaying eurodollar rates as may be selected by the
Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered
Dollar deposits at or about 11:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency
and exchange operations are then being conducted for delivery on the
first day of such Interest Period for the number of days comprised
therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
19
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i)
Consolidated Net Income for such fiscal year, (ii) an amount equal to
the amount of all non-cash charges (including depreciation and
amortization) deducted in arriving at such Consolidated Net Income,
(iii) an amount equal to the aggregate net non-cash loss on the
Disposition of Property by the Borrower and its Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course
of business), to the extent deducted in arriving at such Consolidated
Net Income, (iv) the net increase during such fiscal year (if any) in
deferred tax accounts of the Borrower and its Subsidiaries and (v)
decreases in Consolidated Working Capital for such fiscal year over (b)
the sum, without duplication, of (i) an amount equal to the amount of
all non-cash credits included in arriving at such Consolidated Net
Income, (ii) the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such fiscal year on account of Capital
Expenditures, (iii) the aggregate amount actually paid by the Borrower
and its Subsidiaries in cash during such fiscal year on account of
acquisitions (net of any debt incurred in such fiscal year in
connection with such acquisition and without duplication of any amounts
included in clause (b)(ix) below), (iv) the aggregate amount of all
prepayments of Revolving Credit Loans and Swing Line Loans during such
fiscal year to the extent accompanying permanent optional reductions of
the Revolving Credit Commitments, (v) the aggregate amount of all
optional prepayments of the Term Loans during such fiscal year, (vi)
the aggregate amount of all regularly scheduled principal payments of
Funded Debt (including, without limitation, the Term Loans) of the
Borrower and its Subsidiaries made during such fiscal year (other than
in respect of any revolving credit facility to the extent there is not
an equivalent permanent reduction in commitments thereunder), (vii) an
amount equal to the aggregate net non-cash gain on the Disposition of
Property by the Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business), to
the extent included in arriving at such Consolidated Net Income, (viii)
the net decrease during such fiscal year (if any) in deferred tax
accounts of the Borrower and its Subsidiaries, (ix) increases in
Consolidated Working Capital for such fiscal year (without duplication
of any amounts included in clause (b)(iii) above) and (x) the aggregate
amount actually paid by the Borrower to Holdings during such fiscal
year pursuant to Section 7.6(b).
20
"Excess Cash Flow Application Date": as defined in Section
2.12(c).
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in
respect of which either (i) the pledge of all of the Capital Stock of
such Subsidiary as Collateral or (ii) the guaranteeing by such
Subsidiary of the Obligations, would, in the good faith judgment of the
Borrower, result in adverse tax consequences to the Borrower.
"Existing Credit Agreement": as defined in the recitals
hereto.
"Existing Holdings Discount Debentures": the 10 3/4% Senior
Discount Debentures of Holdings due 2009 and issued pursuant to the
Existing Holdings Discount Debentures Indenture.
"Existing Holdings Discount Debentures Indenture": the
Indenture dated as of February 13, 1998 entered into by Holdings in
connection with the issuance of the Existing Holdings Discount
Debentures, together with all instruments and other agreements entered
into by Holdings in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
Section 7.9.
"Existing Senior Subordinated Note Indenture": the Indenture
dated as of February 13, 1998 entered into by the Borrower in
connection with the issuance of the Existing Senior Subordinated Notes,
together with all instruments and other agreements entered into by the
Borrower in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
Section 7.9.
"Existing Senior Subordinated Notes": the 8 3/4% Senior
Subordinated Notes of the Borrower due 2008 and issued pursuant to the
Existing Senior Subordinated Note Indenture.
"Exiting Lender": each Lender (as defined in the Existing
Credit Agreement) that is not a Continuing Lender.
"Facility": each of (a) the Term Loan Commitments and the Term
Loans made thereunder (the "Term Loan Facility"), (b) the Revolving
Credit Commitments and the extensions of credit made thereunder (the
"Revolving Credit Facility") and (c) the Incremental Revolving Credit
Commitments and the extensions of credit made thereunder (the
"Incremental Revolving Credit Facility").
"Federal Funds Effective Rate"; for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Reference Lender from
three federal funds brokers of recognized standing selected by it.
21
"First Amendment": the First Amendment dated as of August 6,
2004 to this Agreement.
"First Amendment Effective Date": the date on which the
conditions precedent set forth in Section 7 of the First Amendment
shall have been satisfied, which date is August 6, 2004.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of such Person, to a date more than one year from such
date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of
more than one year from such date, including, without limitation, all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from
the date of its creation and, in the case of the Borrower, Indebtedness
in respect of the Loans.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the
Borrower and the Lenders pursuant to Section 10.2.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time, except that for
purposes of Section 7.1, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used
in the preparation of the most recent audited financial statements
delivered pursuant to Section 4.1(b). In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards
or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such Accounting
Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such
time as such an amendment shall have been executed and delivered by the
Borrower, the Administrative Agent and the Required Lenders, all
financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such Accounting Changes
had not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of
the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors
thereto or agencies with similar functions).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or
22
administrative functions of or pertaining to government (including,
without limitation, the National Association of Insurance
Commissioners).
"Guarantee and Collateral Agreement": the Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by
SuperHoldings, Holdings, the Borrower and each Subsidiary Guarantor,
substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantors": the collective reference to SuperHoldings,
Holdings and the Subsidiary Guarantors.
"Holdings": as defined in the preamble hereto.
"Holdings Discount Notes": the 11 % Senior Discount Notes of
Holdings due 2013 and issued pursuant to the Holdings Discount Notes
Indenture.
"Holdings Discount Notes Indenture": the Indenture dated as of
March 4, 2004 entered into by Holdings in connection with the issuance
of the Holdings Discount Notes, together with all instruments and other
agreements entered into by Holdings in
23
connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.9.
"Holdings Pro Forma Financial Statements": as defined in
Section 4.1(a)(i).
"Holdings Projections": as defined in Section 6.2(c)(i).
"Incremental Revolving Credit Commitment": as to any Lender,
the obligation of such Lender, if any, to make Incremental Revolving
Credit Loans, in an aggregate principal amount not to exceed the amount
set forth under the heading "Incremental Revolving Credit Commitment"
opposite such Lender's name on Schedule 1.1A to the Second Amendment or
in the Assignment and Assumption pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to
the terms hereof. The original amount of the Total Incremental
Revolving Credit Commitments is $10,000,000.
"Incremental Revolving Credit Commitment Period": the period
from and including the Second Amendment Effective Date to the
Incremental Revolving Credit Termination Date.
"Incremental Revolving Credit Lender": each Lender which has
an Incremental Revolving Credit Commitment or which has made
Incremental Revolving Credit Loans.
"Incremental Revolving Credit Loans": as defined in Section
2.4(b).
"Incremental Revolving Credit Percentage": as to any
Incremental Revolving Credit Lender at any time, the percentage which
such Lender's Incremental Revolving Credit Commitment then constitutes
of the Total Incremental Revolving Credit Commitments (or, at any time
after the Incremental Revolving Credit Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of
such Lender's Incremental Revolving Extensions of Credit then
outstanding constitutes of the aggregate principal amount of the Total
Incremental Revolving Extensions of Credit then outstanding).
"Incremental Revolving Credit Termination Date": June 30,
2005.
"Incremental Revolving Extensions of Credit": as to any
Incremental Revolving Credit Lender at any time, an amount equal to the
aggregate principal amount of all Incremental Revolving Credit Loans
made by such Lender then outstanding.
"Indebtedness": of any Person at any date, without duplication
(a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property
or services (other than current trade payables incurred in the ordinary
course of such Person's business), (c) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d)
all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to Property acquired by such
Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited
24
to repossession or sale of such Property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party under acceptance, letter
of credit or similar facilities, (g) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock (other than common stock) of such
Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above;
(i) all obligations of the kind referred to in clauses (a) through (h)
above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on
Property (including, without limitation, accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation, (j) for the purposes of
Section 8(e) only, all obligations of such Person in respect of
Interest Rate Protection Agreements and (k) the liquidation value of
any mandatorily redeemable preferred Capital Stock of such Person or
its Subsidiaries held by any Person other than such Person and its
Wholly Owned Subsidiaries.
"Information Systems Inventory": all Inventory located at the
Borrower's warehouses consisting of computer hardware and software,
including IBM point-of-sale register systems and related software.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to ▇▇▇ at law or in
equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each January, April, July and October to occur while such
Loan is outstanding and the final maturity date of such Loan, (b) as to
any Eurodollar Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any Eurodollar Loan
having an Interest Period longer than three months, each day which is
three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) as to
any Loan (other than any Revolving Credit Loan or Incremental Revolving
Credit Loan that is a Base Rate Loan and any Swing Line Loan), the date
of any repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two, three
or six months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect
25
thereto; and (b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date or the
Incremental Revolving Credit Termination Date or beyond the
date final payment is due on the Term Loans shall end on the
Revolving Credit Termination Date, the Incremental Revolving
Credit Termination Date or such due date, as applicable;
(iii) 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 end on the last
Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.
"Interest Rate Protection Agreement": any interest rate
protection agreement, interest rate futures contract, interest rate
option, interest rate cap or other interest rate hedge arrangement, to
or under which the Holdings or any of its Subsidiaries is a party or a
beneficiary on the date hereof or becomes a party or a beneficiary
after the date hereof.
"Inventory": as defined in the definition of "Eligible
Inventory".
"Investment Grade": having a rating established by a third
party rating agency, equivalent to a Standard & Poor's Ratings Group
BBB- or a ▇▇▇▇▇'▇ Investor's Services, Inc. Baa3 or better.
"Issuing Lender": JPMorgan Chase Bank, in its capacity as
issuer of any Letter of Credit.
"Landlord Waiver": a written agreement satisfactory in form
and substance to the Administrative Agent (i) acknowledging that
Inventory located on a leasehold or in possession or control of any
warehouseman, bailee, agent or processor is subject to the Lien granted
under the Security Documents, (ii) waiving and releasing any applicable
Lien held by such lessor, warehouseman, bailee, agent or processor with
respect to such item of Inventory (whether arising by operation of law
or otherwise) and (iii) providing
26
the Administrative Agent with the right to receive notice of default,
the right to repossess such item of Inventory at any time upon the
occurrence or during the continuance of a Default or Event of Default
and such other rights as may be reasonably required by the
Administrative Agent.
"L/C Commitment": $10,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit
Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
Section 3.5.
"L/C Participants": the collective reference to all the
Revolving Credit Lenders other than the Issuing Lender.
"Lenders": as defined in the preamble hereto; provided, that
unless the context otherwise requires, each reference herein to the
Lenders shall be deemed to include any Conduit Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents and
the Notes as the same may be amended, supplemented or otherwise
modified from time to time.
"Loan Parties": SuperHoldings, Holdings, the Borrower and each
other Subsidiary of SuperHoldings which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of
the Term Loans, the Total Revolving Extensions of Credit or the Total
Incremental Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, (a) in the case of the Revolving
Credit Facility, prior to any termination of the Revolving Credit
Commitments, the holders of more than 50% of the Total Revolving Credit
Commitments, or (b) in the case of the Incremental Revolving Credit
Facility, prior to any termination of the Incremental Revolving Credit
Commitments, the holders of more than 50% of the Total Incremental
Revolving Credit Commitments).
27
"Majority Incremental Revolving Credit Facility Lenders": the
Majority Facility Lenders in respect of the Incremental Revolving
Credit Facility.
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a)
the Transactions, (b) the business, operations, property, condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole, or (c) the validity or enforceability of this Agreement or any
of the other Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by
SuperHoldings and/or its Subsidiaries in excess of $1,000,000 for
remedial costs, compliance costs, compensatory damages, punitive
damages, fines, penalties or any combination thereof.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Merger": the merger pursuant to the Merger Agreement of New
NBC Acquisition Corp. with and into Holdings, with Holdings as the
surviving corporation.
"Merger Agreement": the Agreement and Plan of Merger dated as
of February 18, 2004 among the Borrower, Holdings, SuperHoldings and
New NBC Acquisition Corp. and all documents and agreements entered in
connection therewith, as the same may be amended, modified or
supplemented from time to time pursuant to Section 7.16.
"Mortgaged Properties": the owned real properties listed on
Schedule 1.1B, as to which the Administrative Agent for the benefit of
the Lenders has been or shall be granted a Lien pursuant to the
Mortgages.
"Mortgages": each mortgage referred to in Section 5.1(a) and
each of the mortgages and deeds of trust made by any Loan Party in
favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit D (with
such changes thereto as shall be advisable under the law of the
jurisdiction in which such mortgage or deed of trust is to be
recorded), as the same may be amended, supplemented or otherwise
modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as
28
and when received) of such Asset Sale or Recovery Event, net of
attorneys' fees, accountants' fees, investment banking fees, amounts
required to be applied to the repayment of Indebtedness secured by a
Lien expressly permitted hereunder on any asset which is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document), insurance proceeds applied to pay costs incurred in
connection with the repair or restoration of any Property that is real
property in the event of damage by casualty and other customary fees
and expenses actually incurred in connection therewith and net of taxes
paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax
sharing arrangements) and (b) in connection with any issuance or sale
of debt securities or instruments or the incurrence of loans, the cash
proceeds received from such issuance or incurrence, net of attorneys'
fees, investment banking fees, accountants' fees, underwriting
discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 2.20(a).
"Non-Peak Period": the collective reference to (i) the period
from and including January 16 of any year to and including April 30 of
the same year and (ii) the period from and including September 16 of
any year to and including November 30 of the same year.
"Non-U.S. Lender": as defined in Section 2.20(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and Reimbursement Obligations and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to the Administrative Agent
or to any Lender (or, in the case of Interest Rate Protection
Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit,
any Interest Rate Protection Agreement entered into with any Lender or
any affiliate of any Lender or any other document made, delivered or
given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender
that are required to be paid by the Borrower pursuant hereto) or
otherwise.
"Obsolescence Reserve": an amount equal to 50% of the excess
of (a) total Wholesale Inventory held by the Borrower over (b) the
Inventory listed in the Borrower's buyers' guide; provided that during
the Peak Period such percentage shall be reduced to 25% so long as the
Borrower provides the supporting documentation and additional reports
described in Schedule I to Exhibit J with respect to such Wholesale
Inventory.
29
"Optional Payment Amount": $15,000,000 plus the amount of any
Term Loan Prepayment Amount not accepted by the Accepting Lenders
pursuant to Section 2.18(d).
"Original Credit Agreement": the Credit Agreement, dated as of
February 18, 1998, among Holdings, the Borrower, the Administrative
Agent and the lenders party thereto.
"Original Term Loans": the term loans made to the Borrower
pursuant to this Agreement on the Closing Date.
"Original Term Loan Lenders": Lenders which hold the Original
Term Loans immediately prior to the First Amendment Effective Date.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement.
"Over Advance Amount": (i) for the period from and including
January 16 of any year to and including April 30 of the same year, $0,
(ii) for the period from and including May 1 of any year to and
including June 30 of the same year, $10,000,000, (iii) for the period
from and including July 1 of any year to and including August 9 of the
same year, $5,000,000, (iv) for the period from and including August 10
of any year to and including September 15 of the same year,
$10,000,000, (v) for the period from and including September 16 of any
year to and including November 30 of the same year, $0, and (vi) for
the period from and including December 1 of any year to and including
January 15 of next succeeding year, $10,000,000.
"Participant": as defined in Section 10.6(c).
"Past-due Addbacks": the aggregate amount of past due credit
balances aged over 120 days from the original invoice date.
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Peak Period": the collective reference to (i) the period from
and including May 1 of any year to and including September 15 of the
same year and (ii) the period from and including December 1 of any year
to and including January 15 of next succeeding year.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
30
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Primary Investors": the collective reference to the Sponsors
and their Related Parties, and any additional investment fund for which
any of the Sponsors is the sole advisor or which is effectively
controlled by any of the Sponsors.
"Pro Forma Financial Statements": the collective reference to
the Borrower Pro Forma Financial Statements and the Holdings Pro Forma
Financial Statements.
"Properties": as defined in Section 4.17.
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect of
any property, title or casualty insurance claim or any condemnation
proceeding relating to any asset of SuperHoldings, Holdings, the
Borrower or any of their respective Subsidiaries.
"Reference Lender": the Administrative Agent.
"Refunded Swing Line Loans": as defined in Section 2.7.
"Refunding Date": as defined in Section 2.7.
"Register": as defined in Section 10.6(b).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by
SuperHoldings, Holdings, the Borrower or any of their respective
Subsidiaries in connection therewith which are not applied to prepay
the Term Loans as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified
31
portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to
acquire assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring one year
after such Reinvestment Event and (b) the date on which the Borrower
shall have determined not to, or shall have otherwise ceased to,
acquire assets useful in the Borrower's business with all or any
portion of the relevant Reinvestment Deferred Amount.
"Related Party": with respect to any of the Sponsors (A) any
controlling stockholder or partner, a direct or indirect 80% (or more)
owned Subsidiary, or spouse or immediate family member (in the case of
an individual) of such Sponsor, (B) any trust, corporation, partnership
or other entity, the controlling beneficiaries, stockholders, partners
or owners of which, directly or indirectly, consist of the Sponsor
and/or such other Persons referred to in the immediately preceding
clause (A) and/or in the succeeding clause (D), (C) any partner or
stockholder of such Sponsor as of the Closing Date who acquires any
assets or voting stock of the Borrower or Holdings pursuant to a
general distribution by such Sponsor to each of its partners or
stockholders or (D) any officer or director of such Sponsor.
"Rent Reserve": on any date, with respect to any retail store,
distribution center, warehouse, or other location where any Eligible
Inventory subject to a Lien arising by operation of contract and/or law
is located and with respect to which no Landlord Waiver is in effect, a
reserve equal to three months' rent at such retail store, distribution
center, warehouse, or other location.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Replacement Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Replacement Term Loan to
the Borrower hereunder in a principal amount not to exceed the amount
agreed to by the Borrower, the Administrative Agent and such Lender.
The original aggregate amount of the Replacement Term Loan Commitments
is $179,550,000.
"Replacement Term Loan Lender": each Lender which has a
Replacement Term Loan Commitment or which has made a Replacement Term
Loan.
"Replacement Term Loans": as defined in Section 2.1(a) hereof.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20
of PBGC Reg. Section 2615.
32
"Required Lenders": the holders of more than 50% of (a) until
the Closing Date, the Commitments and (b) thereafter, the sum of (i)
the aggregate unpaid principal amount of the Term Loans, (ii) the Total
Revolving Credit Commitments or, if the Revolving Credit Commitments
have been terminated, the Total Revolving Extensions of Credit and
(iii) the Total Incremental Revolving Credit Commitments or, if the
Incremental Revolving Credit Commitments have been terminated, the
Total Incremental Revolving Extensions of Credit.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of the Term Loan Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is
subject.
"Responsible Officer": the chief executive officer, president
or chief financial officer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer, vice
president - finance or controller of the Borrower.
"Retail Inventory": all Inventory located at a Bookstore
consisting of: new and used textbooks, including any related study
aids; general subject books; medical, technical and reference books;
periodicals and magazines; clothing, including school insignia items;
electronics; gifts; stationery and cards; school and office supplies
and art; food, beverages and sundries; and all other items held for
resale in the ordinary course of business.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit, in an aggregate
principal and/or face amount not to exceed the amount set forth under
the heading "Revolving Credit Commitment" opposite such Lender's name
on Schedule 1.1A or in the Assignment and Assumption pursuant to which
such Lender became a party hereto, as the same may be changed from time
to time pursuant to the terms hereof. The original amount of the Total
Revolving Credit Commitments is $50,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4(a).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments
(or, at any time after the Revolving Credit
33
Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Revolving Extensions of
Credit then outstanding constitutes of the aggregate principal amount
of the Total Revolving Extensions of Credit then outstanding).
"Revolving Credit Termination Date": March 4, 2009.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding, (b) such Lender's Revolving Credit Percentage of the L/C
Obligations then outstanding and (c) such Lender's Revolving Credit
Percentage of the aggregate principal amount of Swing Line Loans then
outstanding.
"RTV Reserve": at any time, an amount equal to the amount of
Inventory that is identified as to be returned to vendor.
"Second Amendment": the Second Amendment dated as of October
20, 2004 to this Agreement.
"Second Amendment Effective Date": the date on which the
conditions precedent set forth in Section 5 of the Second Amendment
shall have been satisfied, which date is October 20, 2004.
"Securities Act": as defined in Section 4.1(a)(i) hereof.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other
security documents hereafter delivered to the Administrative Agent
granting a Lien on any Property of any Person to secure the obligations
and liabilities of any Loan Party under any Loan Document.
"Senior Subordinated Note Indenture": the Indenture dated as
of March 4, 2004 entered into by the Borrower in connection with the
issuance of the Senior Subordinated Notes, together with all
instruments and other agreements entered into by the Borrower in
connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the 8 5/8% Senior Subordinated
Notes of the Borrower due 2012 and issued pursuant to the Senior
Subordinated Note Indenture.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the
34
insolvency of debtors, (b) the present fair saleable value of the
assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not
have, as of such date, an unreasonably small amount of capital with
which to conduct its business, and (d) such Person will be able to pay
its debts as they mature. For purposes of this definition, (i) "debt"
means liability on a "claim", and (ii) "claim" means any (x) right to
payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
"Specified Acquisitions": the proposed acquisitions referred
to in the press release of the Borrower dated October 4, 2004. The
Specified Acquisitions shall be consummated on or prior to December 31,
2004 and the aggregate consideration therefor shall not exceed
$15,000,000.
"Sponsors": Weston Presidio Capital III, L.P., a Delaware
limited partnership, Weston Presidio Capital IV, L.P., a Delaware
limited partnership, WPC Entrepreneur Fund, L.P., a Delaware limited
partnership, and WPC Entrepreneur Fund II, L.P., a Delaware limited
partnership.
"Standard Sales Invoices": the collective reference to (i)
invoices resulting from sales by the Borrower to educational
institutions or commercial Bookstores of new or used books and other
instructional educational materials and (ii) invoices resulting from
sales by the Borrower to educational institutions or commercial
Bookstores of Information Systems Inventory or other Inventory in an
aggregate amount at any time of up to 10% of the gross Accounts with
respect to all invoices to educational institutions or commercial
Bookstores, excluding Buy-Fund Invoices, provided that the percentage
of the gross Accounts with respect to invoices to educational
institutions or commercial Bookstores which may result from sales of
Information Systems Inventory or other Inventory shall be subject to
revision by the Administrative Agent in its reasonable discretion with
the consent of the Borrower, which consent shall not be unreasonably
withheld.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.
35
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary.
"SuperHoldings": NBC Holdings Corp., a Delaware corporation
and, prior to the merger permitted by Section 7.4(d), the primary
stockholder of Holdings.
"Swing Line Commitment": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.6 in an aggregate
principal amount at any one time outstanding not to exceed $5,000,000.
"Swing Line Lender": JPMorgan Chase Bank, in its capacity as
the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
"Swing Line Participation Amount": as defined in Section 2.7.
"Syndication Agent": as defined in the preamble hereto.
"Tender Offers": the tender offers made to purchase the
Existing Holdings Discount Debentures and the Existing Senior
Subordinated Notes.
"Term Loan Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading
"Term Loan Commitment" opposite such Lender's name on Schedule 1.1A.
The original aggregate amount of the Term Loan Commitments is
$180,000,000.
"Term Loan Lenders": prior to the First Amendment Effective
Date, the Original Term Loan Lenders; and from and after the First
Amendment Effective Date, the Replacement Term Loan Lenders.
"Term Loan Percentage": as to any Term Loan Lender at any
time, the percentage which such Lender's Term Loan Commitment then
constitutes of the aggregate Term Loan Commitments (or, at any time
after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Term Loans then outstanding constitutes of the
aggregate principal amount of the Term Loans then outstanding).
"Term Loan Refinancing": the refinancing in full of the
outstanding Original Term Loans with the proceeds of the Replacement
Term Loans.
"Term Loans": prior to the First Amendment Effective Date, the
Original Term Loans; and from and after the First Amendment Effective
Date, the Replacement Term Loans.
"Total Incremental Revolving Credit Commitments": at any time,
the aggregate amount of the Incremental Revolving Credit Commitments at
such time.
36
"Total Incremental Revolving Extensions of Credit": at any
time, the aggregate amount of the Incremental Revolving Extensions of
Credit of the Incremental Revolving Credit Lenders at such time.
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments at such time.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving
Credit Lenders at such time.
"Transactions": as defined in the recitals hereto.
"Transferee": as defined in Section 10.15.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Warehouse": any warehouses being used by the Borrower or its
Subsidiaries.
"Wholesale Inventory": at any time, Inventory that is located
at a Warehouse at such time and consists of textbooks.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or through
other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and their respective
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
37
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) From and after the effective date of the merger permitted
by Section 7.4(d), (i) all references to SuperHoldings in the Credit Documents
shall be deemed to be inapplicable and (ii) the surviving corporation of such
merger shall assume all payment and performance obligations of the other
constituent corporation(s) and be "Holdings" for all purposes of the Credit
Documents and shall remain a guarantor of the Obligations and the pledgor of the
Capital Stock of the Borrower pursuant to the Guarantee and Collateral
Agreement.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. (a) (a) The Original Term Loans
were made to the Borrower on the Closing Date. Subject to the terms and
conditions hereof, each Replacement Term Loan Lender severally agrees to make a
term loan (or, in the case of a Continuing Term Lender, pursuant to clause (b),
elect to convert all of such Continuing Term Lender's Original Term Loans) (the
"Replacement Term Loans") to the Borrower on the First Amendment Effective Date
in an amount not to exceed the amount of the Replacement Term Loan Commitment of
such Lender. The Term Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.13.
(b) In connection with the making of the Replacement Term
Loans pursuant to clause (a) above, by delivering written notice to the
Administrative Agent on or prior to the First Amendment Effective Date, any
Continuing Term Lender may elect to make all of such Lender's Replacement Term
Loan requested by the Borrower to be made on the First Amendment Effective Date
by converting all of the outstanding principal amount of the Original Term Loans
held by such Lender into Replacement Term Loans in a principal amount equal to
the amount of the loans so converted (each, a "Converted Original Term Loan").
On the First Amendment Effective Date, the Converted Original Term Loans shall
be converted for all purposes of this Agreement into Replacement Term Loans, and
the Administrative Agent shall record in the Register the aggregate amounts of
Converted Original Term Loans converted into Replacement Term Loans. Any written
notice to the Administrative Agent delivered by an applicable Lender pursuant to
this Section shall specify the amount of such Lender's Replacement Term Loan
Commitment and the principal amount of the Original Term Loans held by such
Lender that are to be converted into Replacement Term Loans. Converted Term
Loans shall constitute Replacement Term Loans for all purposes of this
Agreement.
(c) The Term Loan Refinancing shall not extinguish the
Original Term Loans; provided that the Original Term Loans will be refinanced
with the proceeds of the Replacement Term Loans. Nothing herein contained shall
be construed as a substitution or novation of the Original Term Loans, which
shall remain outstanding after the First Amendment Effective Date as Replacement
Term Loans. Notwithstanding any provision of this Agreement, the provisions of
Sections 2.19, 2.20, 2.21 and 10.5 as in effect immediately prior to the First
Amendment Effective Date will continue to be effective as to all matters arising
out of or in any way related to facts or events existing or occurring prior to
the First Amendment Effective Date.
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(d) The aggregate principal amount of all Revolving Credit
Loans, all Swing Line Loans and all Letters of Credit outstanding under the
Credit Agreement on the First Amendment Effective Date shall continue to be
outstanding.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 10:00 A.M., New York City time, (a) three
Business Days prior to the requested First Amendment Effective Date, in the case
of Eurodollar Loans, or (b) one Business Day prior to the requested First
Amendment Effective Date, in the case of Base Rate Loans) requesting that the
Replacement Term Loan Lenders make Replacement Term Loans or convert the
Original Term Loans on the First Amendment Effective Date to Replacement Term
Loans. Upon receipt of such notice the Administrative Agent shall promptly
notify each Replacement Term Loan Lender thereof. Not later than 12:00 Noon, New
York City time, on the First Amendment Effective Date each Replacement Term Loan
Lender shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the Replacement Term Loan or
Replacement Term Loans to be made by such Lender. The Administrative Agent shall
apply the amounts made available to the Administrative Agent by the Replacement
Term Lenders to the repayment of principal of the Original Term Loans.
2.3 Repayment of Term Loans. The Term Loan of each Term Loan
Lender shall mature in 28 consecutive quarterly installments, commencing on June
30, 2004 and ending on March 4, 2011, each of which shall be in an amount equal
to such Lender's Term Loan Percentage multiplied by the amount set forth below
opposite such installment:
Installment Principal Amount
----------- ----------------
June 30, 2004 $ 450,000
September 30, 2004 $ 450,000
December 31, 2004 $ 450,000
March 31, 2005 $ 450,000
June 30, 2005 $ 450,000
September 30, 2005 $ 450,000
December 31, 2005 $ 450,000
March 31, 2006 $ 450,000
June 30, 2006 $ 450,000
September 30, 2006 $ 450,000
December 31, 2006 $ 450,000
March 31, 2007 $ 450,000
June 30, 2007 $ 450,000
September 30, 2007 $ 450,000
December 31, 2007 $ 450,000
March 31, 2008 $ 450,000
June 30, 2008 $ 450,000
September 30, 2008 $ 450,000
December 31, 2008 $ 450,000
March 31, 2009 $ 450,000
June 30, 2009 $ 450,000
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Installment Principal Amount
----------- ----------------
September 30, 2009 $ 450,000
December 31, 2009 $ 450,000
March 31, 2010 $ 450,000
June 30, 2010 $ 42,300,000
September 30, 2010 $ 42,300,000
December 31, 2010 $ 42,300,000
March 4, 2011 $ 42,300,000
2.4 Revolving Credit Commitments; Incremental Revolving Credit
Commitments. (a) Subject to the terms and conditions hereof, each Revolving
Credit Lender severally agrees to make revolving credit loans ("Revolving Credit
Loans") to the Borrower from time to time during the Revolving Credit Commitment
Period in an aggregate principal amount at any one time outstanding which, when
added to such Lender's Revolving Credit Percentage of the sum of (i) the L/C
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Loans then outstanding, does not exceed the amount of such Lender's
Revolving Credit Commitment; provided that no Revolving Credit Loans shall be
made if, after giving effect to the making of such Revolving Credit Loans, the
Total Revolving Extensions of Credit would exceed the lesser of (A) the
Borrowing Base then in effect and (B) the Total Revolving Credit Commitments.
During the Revolving Credit Commitment Period the Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof. The Revolving Credit Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.5 and 2.13, provided that no
Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Revolving Credit Termination Date.
(b) Subject to the terms and conditions hereof, each
Incremental Revolving Credit Lender severally agrees to make revolving credit
loans ("Incremental Revolving Credit Loans") to the Borrower from time to time
during the Incremental Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding which does not exceed the amount of
such Lender's Incremental Revolving Credit Commitment; provided that no
Incremental Revolving Credit Loans shall be made if, after giving effect to the
making of such Incremental Revolving Credit Loans, the Total Incremental
Revolving Extensions of Credit would exceed the Total Incremental Revolving
Credit Commitments. During the Incremental Revolving Credit Commitment Period
the Borrower may use the Incremental Revolving Credit Commitments by borrowing,
prepaying the Incremental Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Incremental Revolving Credit Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.5 and 2.13, provided that no
Incremental Revolving Credit Loan shall be made as a Eurodollar Loan after the
day that is one month prior to the Incremental Revolving Credit Termination
Date.
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(c) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date. The Borrower shall repay all
outstanding Incremental Revolving Credit Loans on the Incremental Revolving
Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing and Incremental
Revolving Credit Borrowing. The Borrower may borrow under the Revolving Credit
Commitments during the Revolving Credit Commitment Period and/or under the
Incremental Revolving Credit Commitments during the Incremental Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in the case of Base
Rate Loans), specifying (i) the amount and Type of Revolving Credit Loans or
Incremental Revolving Credit Loans, as the case may be, to be borrowed, (ii) the
requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Any Revolving Credit Loans made on the Closing
Date shall initially be Base Rate Loans. Each borrowing under the Revolving
Credit Commitments or Incremental Revolving Credit Commitments, as the case may
be, shall be in an amount equal to (x) in the case of Base Rate Loans,
$1,000,000 or a whole multiple thereof (or, if the then aggregate Available
Revolving Credit Commitments or Incremental Available Revolving Credit
Commitments, as the case may be, are less than $1,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of
$500,000 in excess thereof; provided, that the Swing Line Lender may request, on
behalf of the Borrower, borrowings under the Revolving Credit Commitments which
are Base Rate Loans in other amounts pursuant to Section 2.7. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Revolving Credit Lender or Incremental Revolving Credit Lender, as
the case may be, thereof. Each Revolving Credit Lender or Incremental Revolving
Credit Lender, as the case may be, will make the amount of its pro rata share of
each borrowing available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent in like funds as received by the Administrative
Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees to make available a portion of
the credit otherwise available to the Borrower under the Revolving Credit
Commitments from time to time during the Revolving Credit Commitment Period by
making swing line loans ("Swing Line Loans") to the Borrower; provided that (i)
the aggregate principal amount of Swing Line Loans outstanding at any time shall
not exceed the Swing Line Commitment then in effect (notwithstanding that the
Swing Line Loans outstanding at any time, when aggregated with the Swing Line
Lender's other outstanding Revolving Credit Loans hereunder, may exceed the
Swing Line Commitment then in effect) and (ii) the Borrower shall not request,
and the Swing Line Lender shall not make, any Swing Line Loan if, after giving
effect to the making of such Swing Line Loan, the aggregate amount of the
Available Revolving Credit Commitments would be less than zero. During the
Revolving Credit Commitment Period, the Borrower may use the Swing Line
Commitment by borrowing,
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repaying and reborrowing, all in accordance with the terms and conditions
hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans
on the Revolving Credit Termination Date.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans. (a) Whenever the Borrower desires that the Swing Line Lender make
Swing Line Loans it shall give the Swing Line Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swing Line Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Credit Commitment Period). Each borrowing under the Swing Line Commitment shall
be in an amount equal to $1,000,000 or a whole multiple of $100,000 in excess
thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Date
specified in a notice in respect of Swing Line Loans, the Swing Line Lender
shall make available to the Administrative Agent at the Funding Office an amount
in immediately available funds equal to the amount of the Swing Line Loan to be
made by the Swing Line Lender. The Administrative Agent shall make the proceeds
of such Swing Line Loan available to the Borrower on such Borrowing Date in
immediately available funds.
(b) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice given by the Swing Line Lender no later than 12:00 Noon, New York
City time, request each Revolving Credit Lender to make, and each Revolving
Credit Lender hereby agrees to make, a Revolving Credit Loan, in an amount equal
to such Revolving Credit Lender's Revolving Credit Percentage of the aggregate
amount of the Swing Line Loans (the "Refunded Swing Line Loans") outstanding on
the date of such notice, to repay the Swing Line Lender. Each Revolving Credit
Lender shall make the amount of such Revolving Credit Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date of
such notice. The proceeds of such Revolving Credit Loans shall be immediately
applied by the Swing Line Lender to repay the Refunded Swing Line Loans. The
Borrower irrevocably authorizes the Swing Line Lender to charge the Borrower's
accounts with the Administrative Agent (up to the amount available in each such
account) in order to immediately pay the amount of such Refunded Swing Line
Loans to the extent amounts received from the Revolving Credit Lenders are not
sufficient to repay in full such Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest in
an amount equal to (i) its Revolving Credit Percentage times (ii) the aggregate
principal amount of Swing Line
42
Loans then outstanding which were to have been repaid with such Revolving Credit
Loans (the "Swing Line Participation Amount").
(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Lender's Swing Line Participation
Amount, the Swing Line Lender receives any payment on account of the Swing Line
Loans, the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the
Loans referred to in Section 2.7(b) and to purchase participating interests
pursuant to Section 2.7(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender, Incremental Revolving Credit
Lender or Term Loan Lender or the Swing Line Lender, as the case may be, (i) the
then unpaid principal amount of each Revolving Credit Loan of such Revolving
Credit Lender on the Revolving Credit Termination Date (or such earlier date on
which the Loans become due and payable pursuant to Section 8), (ii) the then
unpaid principal amount of each Incremental Revolving Credit Loan of such
Incremental Revolving Credit Lender on the Incremental Revolving Credit
Termination Date (or such earlier date on which the Loans become due and payable
pursuant to Section 8), (iii) the then unpaid principal amount of each Swing
Line Loan of the Swing Line Lender on the Revolving Credit Termination Date (or
such earlier date on which the Loans become due and payable pursuant to Section
8) and (iv) the principal amount of each Term Loan of such Term Loan Lender in
installments according to the amortization schedule set forth in Section 2.3 (or
on such earlier date on which the Loans become due and payable pursuant to
Section 8). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.15.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each
43
Loan of such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(b), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Term Loans,
Revolving Credit Loans, Incremental Revolving Credit Loans or Swing Line Loans,
as the case may be, of such Lender, substantially in the forms of Exhibit G-1,
G-2 or G-3, respectively, with appropriate insertions as to date and principal
amount.
2.9 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of each Incremental Revolving Credit Lender a commitment fee for the
period from and including the Second Amendment Effective Date to the last day of
the Incremental Revolving Credit Commitment Period, computed at the Commitment
Fee Rate on the average daily amount of the Available Incremental Revolving
Credit Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Incremental Revolving Credit Termination Date, commencing on
the first of such dates to occur after the date hereof.
(c) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent.
44
2.10 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Revolving
Credit Commitments or, from time to time, to reduce the amount of the Revolving
Credit Commitments; provided that no such termination or reduction of Revolving
Credit Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Credit Commitments. Any such reduction shall be in an amount
equal to $500,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Credit Commitments then in effect.
(b) The Borrower shall have the right, upon not less than
three Business Days' notice to the Administrative Agent, to terminate the
Incremental Revolving Credit Commitments or, from time to time, to reduce the
amount of the Incremental Revolving Credit Commitments; provided that no such
termination or reduction of Incremental Revolving Credit Commitments shall be
permitted if the Total Incremental Revolving Extensions of Credit would exceed
the Total Incremental Revolving Credit Commitments. Any such reduction shall be
in an amount equal to $500,000, or a whole multiple thereof, and shall reduce
permanently the Incremental Revolving Credit Commitments then in effect.
2.11 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at least
three Business Days prior thereto in the case of Eurodollar Loans and at least
one Business Day prior thereto in the case of Base Rate Loans, which notice
shall specify the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans or Base Rate Loans; provided, that if a Eurodollar Loan is
prepaid on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof. If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein, together
with (except in the case of Revolving Credit Loans or Incremental Revolving
Credit Loans which are Base Rate Loans and Swing Line Loans) accrued interest to
such date on the amount prepaid. Partial prepayments of Term Loans, Revolving
Credit Loans and Incremental Revolving Credit Loans shall be in an aggregate
principal amount not less than $500,000. Partial prepayments of the Term Loans
shall be applied to remaining installments thereof in any order selected by the
Borrower. Partial prepayments of Swing Line Loans shall be in an aggregate
principal amount not less than $500,000.
2.12 Mandatory Prepayments. (a) Unless the Required Prepayment
Lenders shall otherwise agree, if any Indebtedness shall be incurred by
SuperHoldings, Holdings, the Borrower or any of their respective Subsidiaries,
an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the
date of such incurrence toward the prepayment of the Term Loans as set forth in
Section 2.12(d), provided, however, that the foregoing requirements of this
paragraph (a)(ii) shall not apply to any Indebtedness incurred in accordance
with Section 7.2 as in effect on the date of this Agreement.
(b) Unless the Required Prepayment Lenders shall otherwise
agree, if on any date SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries shall receive
45
Net Cash Proceeds from any Asset Sale or Recovery Event (or, in the event of
damage by casualty, the date the repair or restoration of the relevant Property
is completed) then, unless a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Term Loans as set forth in Section 2.12(d); provided, that,
notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Asset
Sales and Recovery Events that may be excluded from the foregoing requirement
pursuant to a Reinvestment Notice shall not exceed $1,000,000 in any fiscal year
of the Borrower, or $2,000,000 in any fiscal year of the Borrower immediately
succeeding a fiscal year of the Borrower as of the last day of which the
Consolidated Leverage Ratio is less than or equal to 4.0 to 1.0, and (ii) on
each Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall be
applied toward the prepayment of the Term Loans as set forth in Section 2.12(d);
and provided further, that notwithstanding the foregoing, such Net Cash Proceeds
which are not subject to a Reinvestment Notice shall not be required to be
applied toward the prepayment of the Term Loans until the date upon which the
aggregate amount of such Net Cash Proceeds received by SuperHoldings, Holdings,
the Borrower and their respective Subsidiaries and not previously applied toward
the prepayment of the Term Loans shall exceed $1,000,000.
(c) Unless the Required Prepayment Lenders shall otherwise
agree, if, for any fiscal year of the Borrower commencing with the fiscal year
ending March 31, 2005, there shall be Excess Cash Flow, the Borrower shall, on
the relevant Excess Cash Flow Application Date, apply the ECF Percentage of such
Excess Cash Flow toward the prepayment of the Term Loans as set forth in Section
2.12(d). Each such prepayment shall be made on a date (an "Excess Cash Flow
Application Date") no later than three months after the date on which the
financial statements of the Borrower referred to in Section 6.1(a), for the
fiscal year with respect to which such prepayment is made, are required to be
delivered to the Lenders.
(d) Amounts to be applied in connection with prepayments made
pursuant to this Section 2.12 shall be applied to the prepayment of the Term
Loans. The application of any prepayment pursuant to this Section 2.12 shall be
made first to Base Rate Loans and second to Eurodollar Loans. Each prepayment of
the Loans under this Section 2.12 shall be accompanied by accrued interest to
the date of such prepayment on the amount prepaid. Partial prepayments of the
Term Loans pursuant to this Section 2.12 shall be applied in the order set forth
in Section 2.18
(e) If, at any time the Total Revolving Extensions of Credit
exceeds the lesser of (A) the Borrowing Base in effect on such date and (B) the
Total Revolving Credit Commitments, the Borrower shall repay the Revolving
Credit Loans to the extent of such excess, provided that if the aggregate
principal amount of Revolving Credit Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative Agent for the benefit of
the Lenders on terms and conditions satisfactory to the Administrative Agent.
46
(f) If, at any time the Total Incremental Revolving Extensions
of Credit exceeds the Total Incremental Revolving Credit Commitments, the
Borrower shall repay the Incremental Revolving Credit Loans to the extent of
such excess.
(g) The Borrower agrees that during each calendar year there
shall be a period of at least 30 consecutive days during which there are no
Revolving Extensions of Credit outstanding.
2.13 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), provided that no Base Rate Loan under a particular
Facility may be converted into a Eurodollar Loan (i) when any Event of Default
has occurred and is continuing and the Administrative Agent or the Majority
Facility Lenders in respect of such Facility have determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Majority Facility Lenders in respect of
such Facility have determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base Rate Loans
on the last day of such then expiring Interest Period. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
2.14 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, (a) after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $2,500,000 or a whole
multiple of $500,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
47
2.15 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin (it being understood that Eurodollar Loans bear
interest from and including the first day of each Interest Period to but not
including the last day of such Interest Period).
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a rate
per annum which is equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section 2.15 plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to Base Rate Loans under the Revolving Credit Facility plus 2%, and
(ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
applicable to Base Rate Loans under the relevant Facility plus 2%.
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section 2.15 shall be payable from time to time on demand.
2.16 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.15(a) and the manner of performing any required calculation hereunder.
2.17 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
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(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period, the Administrative
Agent shall give telecopy or telephonic notice thereof to the Borrower
and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (y) any Loans under the relevant Facility that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any
outstanding Eurodollar Loans under the relevant Facility shall be
converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans under the relevant Facility shall be
made or continued as such, nor shall the Borrower have the right to
convert Loans under the relevant Facility to Eurodollar Loans.
2.18 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee and any reduction of the Commitments of the Lenders shall
be made pro rata according to the respective Term Loan Percentages, Revolving
Credit Percentages or Incremental Revolving Credit Percentages, as the case may
be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Loan Lenders (except as otherwise provided in Section 2.18(d)).
Except as otherwise provided in Section 2.11, as among the Term Loans,
prepayments shall be applied 75% ratably to the respective remaining
installments thereof and 25% in the direct order to the respective next four
installments thereof (or, to the extent that the aggregate principal amount of
the next four installments of the Term Loan Facility is less than such 25%, the
excess shall be applied ratably to the respective remaining installments
thereof). Amounts prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders. Each payment
(including each prepayment) by the Borrower on account of principal of and
interest on the Incremental Revolving Credit Loans shall be made pro rata
according to the respective outstanding principal amounts of the Incremental
Revolving Credit Loans then held by the Incremental Revolving Credit Lenders.
49
(d) Notwithstanding anything to the contrary in Section 2.12
or 2.18, so long as any Revolving Credit Loans are outstanding, each Term Loan
Lender may, at its option, decline up to 100% of the portion of any mandatory
payment applicable to the Term Loans of such Lender; accordingly, with respect
to the amount of any mandatory prepayment described in Section 2.12 that is
allocated to Term Loans (such amounts, the "Term Loan Prepayment Amount"), at
any time when Revolving Credit Loans remain outstanding, the Borrower will, in
lieu of applying such amount to the prepayment of Term Loans, on the date
specified in Section 2.12 for such prepayment, give the Administrative Agent
telephonic notice (promptly confirmed in writing) requesting that the
Administrative Agent prepare and provide to each Term Loan Lender a notice
(each, a "Prepayment Option Notice") as described below. As promptly as
practicable after receiving such notice from the Borrower, the Administrative
Agent will send to each Term Loan Lender a Prepayment Option Notice, which shall
be in the form of Exhibit H, and shall include an offer by the Borrower to
prepay on the date (each a "Prepayment Date") that is five Business Days after
the date of the Prepayment Option Notice, the relevant Term Loans of such Lender
by an amount equal to the portion of the Prepayment Amount indicated in such
Lender's Prepayment Option Notice as being applicable to such Lender's Term
Loans. On the Prepayment Date (i) the Borrower shall pay to the Administrative
Agent the aggregate amount necessary to prepay that portion of the outstanding
relevant Term Loans in respect of which Term Loan Lenders have accepted
prepayment as described above (such Lenders, the "Accepting Lenders"), and such
amount shall be applied to reduce the Term Loan Prepayment Amounts, with respect
to each Accepting Lender and (ii) the Borrower shall pay to the Administrative
Agent an amount equal to 100% of the portion of the Term Loan Prepayment Amount
not accepted by the Accepting Lenders, and such amount shall be applied to the
prepayment of the Revolving Credit Loans without a reduction in the Revolving
Credit Commitments.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Payment Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(f) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the
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required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section 2.18(f) shall be conclusive in
the absence of manifest error. If such Lender's share of such borrowing is not
made available to the Administrative Agent by such Lender within three Business
Days of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility (in lieu of interest otherwise
provided for hereunder), on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.19 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.20 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase, relative to the date
hereof, the cost to such Lender, by an amount which such Lender deems to be
material, of making, converting into, continuing or maintaining Eurodollar Loans
or issuing or participating in Letters of Credit, or to reduce, relative to the
date hereof, any amount receivable hereunder in respect thereof, then, in any
such case, the Borrower shall promptly pay such Lender, upon its demand, any
additional
51
amounts necessary to compensate such Lender for such increased cost or reduced
amount receivable. If any Lender becomes entitled to claim any additional
amounts pursuant to this Section 2.19, it shall promptly notify the Borrower
(with a copy to the Administrative Agent) of the event by reason of which it has
become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction;
provided that the Borrower shall not be required to compensate a Lender pursuant
to this paragraph for any amounts incurred more than six months prior to the
date that such Lender notifies the Borrower of such Lender's intention to claim
compensation therefor; and provided further that, if the circumstances giving
rise to such claim have a retroactive effect, then such six-month period shall
be extended to include the period of such retroactive effect.
(c) A certificate as to any additional amounts payable
pursuant to this Section 2.19 submitted by any Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the absence of manifest
error. The obligations of the Borrower pursuant to this Section 2.19 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.20 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided,
52
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to such Lender's failure to comply with the requirements of
paragraph (d) or (e) of this Section, (ii) that are United States withholding
taxes imposed on amounts payable to such Lender (including United States
withholding taxes with respect to amounts payable under this Section 2.20) under
laws in effect at the time the Lender becomes a party to this Agreement, except
to the extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to Section 2.20(a) or (iii) that is imposed as a
result of an event occurring after the Lender becomes a Lender other than a
change in law or regulation or the introduction of any law or regulation or a
change in interpretation or administration of any law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section 2.20 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
(d) Each Lender (or Participant) that is not a "U.S. Person"
as defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this Section 2.20(d), a Non-U.S. Lender shall not be required
to deliver any form pursuant to this Section 2.20(d) that such Non-U.S. Lender
is not legally able to deliver.
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(e) If the Administrative Agent or any Lender receives a
refund in respect of Non-Excluded Taxes or Other Taxes paid by the Borrower,
which in the good faith judgment of such Lender is allocable to such payment, it
shall promptly pay such refund, together with any other amounts paid by the
Borrower in connection with such refunded Non-Excluded Taxes or Other Taxes, to
the Borrower, net of all out-of-pocket expenses of such Lender incurred in
obtaining such refund, provided, however, that the Borrower agrees to promptly
return such refund to the Administrative Agent or the applicable Lender, as the
case may be, if it receives notice from the Administrative Agent or applicable
Lender that such Administrative Agent or Lender is required to repay such
refund. Each of the Administrative Agent and each Lender agrees that it will
contest such Non-Excluded Taxes, Other Taxes or liabilities if (i) the Borrower
furnishes to it an opinion of reputable tax counsel acceptable to the
Administrative Agent or such Lender to the effect that such Non-Excluded Taxes
or Other Taxes were wrongfully or illegally imposed and (ii) the Administrative
Agent or such Lender determines, in sole discretion, that it would not be
disadvantaged or prejudiced in any manner whatsoever as a result of such
contest.
2.21 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. A certificate as to any amounts payable pursuant to this Section 2.21
submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.22 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 2.21.
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2.23 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.19 or
2.20(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.23 shall
affect or postpone any of the obligations of any Borrower or the rights of any
Lender pursuant to Section 2.19 or 2.20(a).
2.24 Replacement of Lenders under Certain Circumstances. The
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Section 2.19 or 2.20 or (b) defaults
in its obligation to make Loans hereunder, with a replacement financial
institution; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Default or Event of Default shall have occurred and
be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under Section 2.23 so as to
eliminate the continued need for payment of amounts owing pursuant to Section
2.19 or 2.20, (iv) the replacement financial institution shall purchase, at par,
all Loans and other amounts owing to such replaced Lender on or prior to the
date of replacement, (v) the Borrower shall be liable to such replaced Lender
under Section 2.21 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.19 or 2.20, as the case may be,
and (ix) any such replacement shall not be deemed to be a waiver of any rights
which the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Revolving
Credit Lenders set forth in Section 3.4(a), agrees to issue letters of credit
("Letters of Credit") for the account of the Borrower on any Business Day during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance (i) the L/C Obligations would exceed the L/C Commitment, (ii) the
aggregate amount of the Available Revolving Credit Commitments would be less
than zero or (iii) the Total Revolving Extensions of Credit would exceed the
Borrowing Base then in effect. Each Letter of Credit shall (i) be denominated in
Dollars and (ii) expire no later than the earlier of (x) the first anniversary
of its date of issuance and (y) the date which is five Business Days prior to
the Revolving Credit Termination Date, provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above).
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(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of the Issuing Lender,
and such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).
3.3 Commissions, Fees and Other Charges. (a) The Borrower will
pay a commission on all outstanding Letters of Credit at a per annum rate equal
to the Applicable Margin then in effect with respect to Eurodollar Loans under
the Revolving Credit Facility, shared ratably among the Revolving Credit Lenders
and payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date. In addition, the Borrower shall pay to the Issuing Lender for its own
account a fronting fee of 1/4 of 1% per annum, payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and customary
costs and expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant
56
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Credit Percentage of the amount of such draft, or any part thereof, which is not
so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans under the Revolving Credit
Facility. A certificate of the Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 3.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (a) such draft
so paid and (b) any taxes, fees, charges or other costs or expenses incurred by
the Issuing Lender in connection with such payment. Each such payment shall be
made to the Issuing Lender at its address for notices specified herein in lawful
money of the United States of America and in immediately available funds.
Interest shall be payable on any and all amounts remaining unpaid by the
Borrower under this Section from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full at the
rate set forth in Section 2.15(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.5 of Base Rate Loans (or, at the option of
the Administrative Agent and the Swing Line Lender in their sole discretion, a
57
borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the date of
such drawing.
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with the Issuing Lender that the Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards or care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly notify
the Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, Holdings and the Borrower hereby jointly and severally
represent and warrant to the Administrative Agent and each Lender that:
4.1 Financial Condition. (a) (i) The unaudited pro forma
consolidated balance sheet of Holdings and its consolidated Subsidiaries as at
December 31, 2003 (including the notes thereto) (the "Holdings Pro Forma Balance
Sheet"), copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred
58
on December 31, 2003) to (i) the consummation of the Transactions, (ii) the
Loans to be made on the Closing Date and the use of proceeds thereof, (iii) the
payment of fees and expenses in connection with the foregoing and (iv) material
acquisitions consummated during the last two fiscal years of Holdings. The
Holdings Pro Forma Balance Sheet has been prepared based on the best information
available to Holdings as of the date of delivery thereof, and presents fairly in
all material respects on a pro forma basis the estimated financial position of
Holdings and its consolidated Subsidiaries as at December 31, 2003, assuming
that the events specified in the preceding sentence had actually occurred on
such date, prepared in accordance with Regulation S-X under the Securities Act
of 1933, as amended (the "Securities Act"). The unaudited pro forma consolidated
statement of operations of Holdings and its Subsidiaries for the nine-month
period ended December 31, 2003 (including the notes thereto) (the "Holdings Pro
Forma Income Statement"; collectively with the Holdings Pro Forma Balance Sheet,
the "Holdings Pro Forma Financial Statements"), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect (as if such
events had occurred on the first day of such nine-month period) to (i) the
consummation of the Transactions, (ii) the Loans to be made on the Closing Date
and the use of proceeds thereof and (iii) the payment of fees and expenses in
connection with the foregoing. The Holdings Pro Forma Income Statement has been
prepared based on the best information available to Holdings as of the date of
delivery thereof, and presents fairly in all material respects on a pro forma
basis the estimated consolidated financial condition of Holdings and its
consolidated Subsidiaries as at December 31, 2003 and the consolidated results
of their operations for the nine-month period then ended assuming that the
events specified in the preceding sentence had actually occurred on the first
day of such nine-month period, prepared in accordance with Regulation S-X under
the Securities Act.
(ii) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at December 31, 2003 (including
the notes thereto) (the "Borrower Pro Forma Balance Sheet"), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on December 31, 2003) to (i) the consummation of
the Transactions, (ii) the Loans to be made on the Closing Date and the use of
proceeds thereof, (iii) the payment of fees and expenses in connection with the
foregoing and (iv) material acquisitions consummated during the last two fiscal
years of the Borrower. The Borrower Pro Forma Balance Sheet has been prepared
based on the best information available to the Borrower as of the date of
delivery thereof, and presents fairly in all material respects on a pro forma
basis the estimated financial position of the Borrower and its consolidated
Subsidiaries as at December 31, 2003, assuming that the events specified in the
preceding sentence had actually occurred on such date, prepared in accordance
with Regulation S-X under the Securities Act. The unaudited pro forma
consolidated statement of operations of the Borrower and its Subsidiaries for
the nine-month period ended December 31, 2003 (including the notes thereto) (the
"Borrower Pro Forma Income Statement"; collectively with the Borrower Pro Forma
Balance Sheet, the "Borrower Pro Forma Financial Statements"), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on the first day of such nine-month period) to
(i) the consummation of the Transactions, (ii) the Loans to be made on the
Closing Date and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing. The Borrower Pro Forma Income
Statement has been prepared based on the best information available to the
Borrower as of the date of delivery thereof, and presents fairly in all material
respects on a pro forma basis the estimated consolidated financial condition of
the Borrower and its consolidated Subsidiaries as at
59
December 31, 2003 and the consolidated results of their operations for the
nine-month period then ended assuming that the events specified in the preceding
sentence had actually occurred on the first day of such nine-month period,
prepared in accordance with Regulation S-X under the Securities Act.
(b) (i) The audited consolidated balance sheets of Holdings
and its consolidated Subsidiaries as at March 31, 2001, March 31, 2002 and March
31, 2003, and the related consolidated statements of income and of cash flows
for the fiscal years ended March 31, 2001, March 31, 2002 and March 31, 2003,
reported on by and accompanied by an unqualified report from Deloitte & Touche
LLP present fairly in all material respects the consolidated financial condition
of Holdings and its consolidated Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. The unaudited consolidated balance sheet of
Holdings and its consolidated Subsidiaries as at December 31, 2003, and the
related unaudited consolidated statements of income and cash flows for the
nine-month period ended on such date, present fairly in all material respects
the consolidated financial condition of Holdings and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations and
its consolidated cash flows for the nine-month period then ended (subject to
normal year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firms of accountants and disclosed therein). Holdings and its
Subsidiaries do not have any material Guarantee Obligations, material contingent
liabilities or material liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, which are not reflected in the most recent
financial statements (including the notes thereto) referred to in this paragraph
(b)(i). During the period from March 31, 2003 to and including the date hereof,
there has been no Disposition by Holdings or any of its Subsidiaries of any
material part of its business or Property.
(ii) The audited consolidated balance sheets of the Borrower
and its consolidated Subsidiaries as at March 31, 2001, March 31, 2002 and March
31, 2003, and the related consolidated statements of income and of cash flows
for the fiscal years ended March 31, 2001, March 31, 2002 and March 31, 2003
reported on by and accompanied by an unqualified report from Deloitte & Touche
LLP present fairly in all material respects the consolidated financial condition
of the Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. The unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at December 31, 2003, and the
related unaudited consolidated statements of income and cash flows for the
nine-month period ended on such date, present fairly in all material respects
the consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations and
its consolidated cash flows for the nine-month period then ended (subject to
normal year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). The Borrower and its
Subsidiaries do not have any material Guarantee Obligations, material contingent
liabilities or material liabilities
60
for taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, which are
not reflected in the most recent financial statements (including the notes
thereto) referred to in this paragraph (b)(ii). During the period from March 31,
2003 to and including the date hereof, there has been no Disposition by the
Borrower or any of its Subsidiaries of any material part of its business or
Property.
4.2 No Change. Since December 31, 2003 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of
SuperHoldings, Holdings, the Borrower and their respective Subsidiaries (a) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and authority to
own and operate its Property, to lease the Property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of Property or the conduct of its
business requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect,
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower,
to authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Transactions and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect and (ii) the
filings referred to in Section 4.19. Each Loan Document has been duly executed
and delivered on behalf of each Loan Party party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any material Contractual Obligation of SuperHoldings,
Holdings, the Borrower or any of their respective Subsidiaries and will not
result in, or require, the creation or imposition of any Lien
61
on any of their respective properties or revenues pursuant to any Requirement of
Law or any such Contractual Obligation (other than the Liens created by the
Security Documents). No Requirement of Law or Contractual Obligation applicable
to the Borrower or any of its Subsidiaries could reasonably be expected to have
a Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of SuperHoldings, Holdings or the Borrower, threatened by or
against SuperHoldings, Holdings, the Borrower or any of their respective
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) which could reasonably be expected to have a Material
Adverse Effect.
4.7 No Default. Neither SuperHoldings, Holdings, the Borrower
nor any of their respective Subsidiaries is in default under or with respect to
any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.8 Ownership of Property; Liens. Each of SuperHoldings,
Holdings, the Borrower and their respective Subsidiaries has title in fee simple
to, or a valid leasehold interest in, all its real property, and good title to,
or a valid leasehold interest in, all its other Property, and none of such
Property is subject to any Lien except as permitted by Section 7.3. Schedule
1.1B lists, as of the Closing Date, each parcel of owned real property and each
leasehold interest in real property in respect of which aggregate annual rent
payments in excess of $250,000 are payable, in each case, located in the United
States and held by the Borrower or any of its Subsidiaries.
4.9 Intellectual Property. Each of SuperHoldings, Holdings,
the Borrower and each of their respective Subsidiaries owns, or is licensed to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted. Schedule 4.9 sets forth all of the applications for
registration and registered Intellectual Property owned or licensed by each of
SuperHoldings, Holdings, the Borrower and each of their respective Subsidiaries
on the Closing Date. No material claim has been asserted and is pending by any
Person challenging or questioning the use of any Intellectual Property or the
validity or effectiveness of any Intellectual Property, nor does SuperHoldings,
Holdings or Borrower know of any valid basis for any such claim. The use of
Intellectual Property by SuperHoldings, Holdings, the Borrower and their
respective Subsidiaries does not infringe on the rights of any Person in any
material respect.
4.10 Taxes. Each of SuperHoldings, Holdings, the Borrower and
each of their respective Subsidiaries has filed or caused to be filed all
Federal, state and other material tax returns which are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its Property and all other taxes, fees or
other charges imposed on it or any of its Property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of SuperHoldings, Holdings,
the Borrower or their respective Subsidiaries, as the case
62
may be); no tax Lien has been filed, and, to the knowledge of Holdings and the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.
4.11 Federal Regulations. No part of the proceeds of any Loans
or Letters of Credit will be used for "buying" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms under Regulation U as
now and from time to time hereafter in effect or for any purpose which violates
the provisions of the Regulations of the Board. If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
4.12 Labor Matters. There are no strikes or other labor
disputes against SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries pending or, to the knowledge of Holdings or the
Borrower, threatened that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. Hours worked by and payment made to
employees of SuperHoldings, Holdings, the Borrower and their respective
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with such matters that (individually
or in the aggregate) could reasonably be expected to have a Material Adverse
Effect. All payments due from SuperHoldings, Holdings, the Borrower or any of
their respective Subsidiaries on account of employee health and welfare
insurance that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect if not paid have been paid or accrued as a
liability on the books of SuperHoldings, Holdings, the Borrower or the relevant
Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan which has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
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4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of SuperHoldings at the date hereof.
4.16 Use of Proceeds. The proceeds of the Term Loans shall be
used to finance the Transactions and to pay related fees and expenses; and any
remaining proceeds of the Term Loans shall be used to finance the general
capital needs and general corporate purposes of the Borrower. The proceeds of
the Revolving Extensions of Credit and Incremental Revolving Extensions of
Credit shall be used to finance the general capital needs and general corporate
purposes of the Borrower. The Replacement Term Loans shall be used for the Term
Loan Refinancing.
4.17 Environmental Matters. (a) The facilities and properties
owned, leased or operated by SuperHoldings, Holdings, the Borrower or any of
their respective Subsidiaries (the "Properties") do not contain, and have not
previously contained, any Materials of Environmental Concern in amounts or
concentrations or under circumstances which (i) constitute or constituted a
violation of, or (ii) could give rise to liability under, any Environmental Law,
except in either case insofar as such violation or liability, or any aggregation
thereof, could not reasonably be expected to result in the payment of a Material
Environmental Amount.
(b) The Properties and all operations at the Properties are in
material compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by
SuperHoldings, Holdings, the Borrower or any of their respective Subsidiaries
(the "Business") which could materially interfere with the continued operation
of the Properties or impair the fair saleable value thereof in an amount
equaling or exceeding a Material Environmental Amount. As of the Closing Date,
neither SuperHoldings, Holdings, the Borrower nor any of their respective
Subsidiaries has assumed any liability of any other Person under Environmental
Laws.
(c) Neither SuperHoldings, Holdings, the Borrower nor any of
their respective Subsidiaries has received or is aware of any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does SuperHoldings,
Holdings or the Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened, except insofar as such notice or
threatened notice, or any aggregation thereof, does not involve a matter or
matters that could reasonably be expected to result in the payment of a Material
Environmental Amount.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Law, except insofar as any such violation or liability referred to
in this paragraph, or any aggregation thereof, could not reasonably be expected
to result in the payment of a Material Environmental Amount.
64
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of SuperHoldings, Holdings and the
Borrower, threatened, under any Environmental Law to which SuperHoldings,
Holdings, the Borrower or any of their respective Subsidiaries is or will be
named as a party with respect to the Properties or the Business, nor are there
any consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business, except
insofar as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, could not reasonably be expected to result in the payment
of a Material Environmental Amount.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of SuperHoldings, Holdings, the Borrower or any of
their respective Subsidiaries in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws, except insofar as any
such violation or liability referred to in this paragraph, or any aggregation
thereof, could not reasonably be expected to result in the payment of a Material
Environmental Amount.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Administrative Agent or the Lenders or any of them, by or on behalf of
any Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to any Loan Party that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the Administrative
Agent, and in the case of the other Collateral described in the Guarantee and
Collateral Agreement in which a security interest may be perfected by filing a
financing statement, when financing statements in appropriate form are filed in
the offices specified on Schedule 4.19(a), the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right,
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title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person.
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the amendments to the Mortgages referred to in Section 5.1(a)
are filed in the offices specified on Schedule 4.19(b), each such Mortgage shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Mortgaged Properties and the proceeds
thereof, as security for the Obligations (as defined in the relevant Mortgage),
in each case prior and superior in right to any other Person.
4.20 Solvency. Each Loan Party is, and after giving effect to
the Transactions and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the Senior Subordinated
Note Indenture. The obligations of each Guarantor under the Guarantee and
Collateral Agreement constitute "Guarantor Senior Indebtedness" of such
Guarantor under and as defined in the Senior Subordinated Note Indenture.
4.22 Regulation H. As of the Closing Date, no Mortgage
encumbers improved real property which is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968. If, after the Closing Date, any
Mortgage encumbers improved real property which is located in an area that has
been identified by the Secretary of Housing and Urban Development as an area
having special flood hazards, then flood insurance made available under the
National Flood Insurance Act of 1968 has been obtained, if such insurance is
available.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making of
such extension of credit on the Closing Date, of the following conditions
precedent (except that the conditions set forth in clauses (a)(iii) and (p)
below may be satisfied at any time within 30 days following the Closing Date):
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of SuperHoldings, Holdings and the Borrower, (ii)
the Guarantee and Collateral Agreement, executed and delivered by a
duly authorized officer of SuperHoldings, Holdings, the Borrower and
each Subsidiary Guarantor and (iii) an amendment (or an amendment and
restatement), in form and substance satisfactory to the Administrative
Agent, to each Mortgage existing
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on the Closing Date, executed and delivered by a duly authorized
officer of each party thereto.
(b) Transactions. The following transactions shall have been
consummated, in each case on terms and conditions reasonably
satisfactory to the Lenders:
(i) the transactions required to be consummated on or
prior to the Closing Date pursuant to the Merger Agreement
shall have been consummated;
(ii) the Borrower shall have received at least
$175,000,000 in gross cash proceeds from the issuance of the
Senior Subordinated Notes;
(iii) Holdings shall have received at least
$50,000,000 in gross cash proceeds from the issuance of the
Holdings Discount Notes; and
(iv) the Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be
incurred in connection with the Transactions and the financing
thereof shall not exceed $25,000,000.
(c) Ratable Holdings. The Lenders and the lenders under the
Existing Credit Agreement shall have made such payments among
themselves as directed by the Administrative Agent with the result that
on the Closing Date the Revolving Credit Commitments are held ratably
by the Revolving Credit Lenders and the Term Loans are held ratably by
the Term Loan Lenders.
(d) Pro Forma Financial Statements; Financial Statements. The
Lenders shall have received (i) the Pro Forma Financial Statements,
(ii) audited consolidated financial statements of each of Holdings and
the Borrower referred to in the first sentence of each of subsections
4.1(b)(i) and 4.1(b)(ii) and (iii) unaudited interim consolidated
financial statements of each of Holdings and the Borrower for each
fiscal month and quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clause
(ii) of this paragraph and, in the case of quarterly financial
statements, such quarterly period ending at least 45 days prior to the
Closing Date, and, in the case of monthly financial statements, such
month ending at least 30 days prior to the Closing Date, and such
financial statements shall be reasonably satisfactory to the
Administrative Agent.
(e) Approvals. All material governmental and third party
approvals (including landlords' and other consents) necessary in
connection with the Transactions, the continuing operations of
SuperHoldings, Holdings, the Borrower and their respective Subsidiaries
and the transactions contemplated hereby shall have been obtained and
be in full force and effect, and all applicable waiting periods shall
have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose
adverse conditions on the Transactions or the financing contemplated
hereby.
(f) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Administrative
Agent), with a copy for each Lender,
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true and correct copies, certified as to authenticity by the Borrower,
of such documents or instruments as may be reasonably requested by the
Administrative Agent, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which the
Loan Parties may be a party.
(g) Fees. The Lenders, the Administrative Agent and the
Arrangers shall have received all fees required to be paid, and all
expenses for which invoices have been presented, on or before the
Closing Date.
(h) Projections. The Lenders shall have received satisfactory
projections for fiscal years 2004-2011.
(i) Solvency Analysis. The Lenders shall have received a
reasonably satisfactory solvency opinion from an independent valuation
firm satisfactory to the Administrative Agent which shall document the
solvency of each of the Borrower and its subsidiaries and Holdings and
its subsidiaries after giving effect to the Transactions.
(j) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions of organization of the Loan Parties, and such search
shall reveal no liens on any of the assets of SuperHoldings, Holdings
or its Subsidiaries except for liens permitted by Section 7.3 or liens
to be discharged on or prior to the Closing Date in a manner
satisfactory to the Administrative Agent.
(k) Consolidated EBITDA. The Administrative Agent and the
Syndication Agent shall have received satisfactory evidence that the
Consolidated EBITDA of the Borrower for the twelve-month period ended
on January 31, 2004 is equal to or greater than $58,000,000; provided
that, the calculation of Consolidated EBITDA for purposes of this
Section 5.1(k) shall include on a pro forma basis the Consolidated
EBITDA of any Person or bookstore location acquired or disposed of by
Holdings or its Subsidiaries during such period, including the effect
of identified business synergies, for such period (assuming the
consummation of each such acquisition and the incurrence or assumption
of any Indebtedness in connection therewith occurred on the first day
of such period).
(l) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(m) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP,
counsel to SuperHoldings, Holdings and the Borrower,
substantially in the form of Exhibit F; and
(ii) the legal opinion of local counsel in Kansas.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
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(n) Pledged Stock; Stock Power; Pledged Notes. The
Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (ii) each promissory note pledged to
the Administrative Agent pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank satisfactory to the Administrative
Agent) by the pledgor thereof.
(o) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien
on the Collateral described therein, prior and superior in right to any
other Person (other than with respect to Liens expressly permitted by
Section 7.3), shall be in proper form for filing, registration or
recordation.
(p) Title Insurance; Flood Insurance. (i) The Administrative
Agent shall have received in respect of each Mortgaged Property a
mortgagee's title insurance policy (or policies) or marked up
unconditional binder for such insurance. Each such policy shall (A) be
in an amount satisfactory to the Administrative Agent; (B) be issued at
ordinary rates; (C) insure that the Mortgage insured thereby creates a
valid first Lien on such Mortgaged Property free and clear of all
defects and encumbrances, except as disclosed therein; (D) name the
Administrative Agent for the benefit of the Lenders as the insured
thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended
10/17/70 and 10/17/84) (or equivalent policies or such other form of
loan policy as is authorized in the state in which the Mortgaged
Property is located); (F) contain such endorsements and affirmative
coverage as the Administrative Agent may reasonably request and (G) be
issued by title companies reasonably satisfactory to the Administrative
Agent (including any such title companies acting as co-insurers or
reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence satisfactory to it
that all premiums in respect of each such policy, all charges for
mortgage recording tax, and all related expenses, if any, have been
paid.
(ii) If requested by the Administrative Agent, the
Administrative Agent shall have received (A) for each Mortgaged
Property which is located in a designated flood zone, a policy of flood
insurance which (1) covers any parcel of improved real property which
is encumbered by any Mortgage (2) is written in an amount not less than
the outstanding principal amount of the indebtedness secured by such
Mortgage which is reasonably allocable to such real property or the
maximum limit of coverage made available with respect to the particular
type of property under the National Flood Insurance Act of 1968,
whichever is less, and (3) has a term ending not later than the
maturity of the Indebtedness secured by such Mortgage and (B)
confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
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(iii) The Administrative Agent shall have received a copy of
all recorded documents referred to, or listed as exceptions to title
in, the title policy or policies referred to in clause (i) above and a
copy of all other material documents affecting the Mortgaged
Properties.
(q) Insurance. The Administrative Agent shall be satisfied
with the insurance program to be maintained by Holdings and its
Subsidiaries and shall have received satisfactory insurance
certificates with respect thereto.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is subject
to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct on and as of such date as
if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
5.3 Conditions to Initial Extension of Credit under the
Incremental Revolving Credit Facility. In addition to the conditions precedent
set forth in Section 5.2, the agreement of each Incremental Revolving Credit
Lender to make any extension of credit under the Incremental Revolving Credit
Facility requested to be made by it is subject to the satisfaction of the
condition precedent that the Specified Acquisitions shall have been consummated.
SECTION 6. AFFIRMATIVE COVENANTS
SuperHoldings, Holdings and the Borrower hereby jointly and
severally agree that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any Lender or
the Administrative Agent hereunder, each of SuperHoldings, Holdings and the
Borrower shall and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent
and each Lender:
(a) (i) within 90 days after the end of each fiscal year of
Holdings, a copy of the audited consolidated balance sheet of Holdings
and its consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of income and of cash flows for
such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception,
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or qualification arising out of the scope of the audit, by independent
certified public accountants of nationally recognized standing; and
(ii) within 90 days after the end of each fiscal year of the
Borrower, a copy of the audited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such year
and the related audited consolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the
scope of the audit, by independent certified public accountants of
nationally recognized standing;
(b) (i) not later than 45 days after the end of each of the
first three quarterly periods of each fiscal year of Holdings, the
unaudited consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments); and
(ii) not later than 45 days after the end of each of the first
three quarterly periods of each fiscal year of the Borrower, the
unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to the
Administrative Agent and each Lender, or, in the case of clause (h), to the
relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge,
each Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition,
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contained in this Agreement and the other Loan Documents to which it is
a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and (ii) in the case
of quarterly or annual financial statements, (x) a Compliance
Certificate containing all information necessary for determining
compliance by SuperHoldings, Holdings, the Borrower and their
respective Subsidiaries with the provisions of this Agreement referred
to therein as of the last day of the fiscal quarter or fiscal year of
the Borrower, as the case may be and (y) to the extent not previously
disclosed to the Administrative Agent, a description of any change in
the jurisdiction of organization of any Loan Party and a listing of any
applications for registration and registered Intellectual Property
acquired by any Loan Party since the date of the most recent list
delivered pursuant to this clause (y) (or, in the case of the first
such list so delivered, since the Closing Date);
(c) (i) as soon as available, and in any event no later than
45 days after the end of each fiscal year of Holdings, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of Holdings and its Subsidiaries
as of the end of the following fiscal year, and the related
consolidated statements of projected cash flow, projected changes in
financial position and projected income), and, as soon as available,
significant revisions, if any, of such budget and projections with
respect to such fiscal year (collectively, the "Holdings Projections"),
which Holdings Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Holdings
Projections are based on reasonable estimates, information and
assumptions and that such Responsible Officer has no reason to believe
that such Holdings Projections are incorrect or misleading in any
material respect; and
(ii) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as
available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Borrower Projections"), which Borrower Projections shall in each case
be accompanied by a certificate of a Responsible Officer stating that
such Borrower Projections are based on reasonable estimates,
information and assumptions and that such Responsible Officer has no
reason to believe that such Borrower Projections are incorrect or
misleading in any material respect;
(d) (i) within 45 days after the end of each fiscal quarter of
Holdings, a narrative discussion and analysis of the financial
condition and results of operations of Holdings and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the
then current fiscal year to the end of such fiscal quarter, as compared
to the portion of the Holdings Projections covering such periods and to
the comparable periods of the previous year; and
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(ii) within 45 days after the end of each fiscal quarter of
the Borrower, a narrative discussion and analysis of the financial
condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, as compared to the portion of the Borrower Projections
covering such periods and to the comparable periods of the previous
year;
(e) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the
Senior Subordinated Note Indenture, the Holdings Discount Notes
Indenture, the Existing Senior Subordinated Note Indenture or the
Existing Holdings Discount Debentures Indenture;
(f) within five days after the same are sent, copies of all
financial statements and reports which Holdings or the Borrower sends
to the holders of any class of its debt securities or public equity
securities and within five days after the same are filed, copies of all
financial statements and reports which Holdings or the Borrower may
make to, or file with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(g) no later than 12 Business Days following each fiscal month
of the Borrower, a completed Borrowing Base Certificate setting forth
the Borrowing Base as of the close of business on the last day of such
fiscal month, or, so long as the Total Revolving Extensions of Credit
exceed $25,000,000, no later than 3 Business Days following each week,
a completed Borrowing Base Certificate setting forth the Borrowing Base
as of the close of business on the last day of such week, and at any
other time requested by the Administrative Agent when the
Administrative Agent reasonably believes that the most recently
delivered Borrowing Base Certificate is materially inaccurate, as soon
as reasonably available but in no event later than 5 Business Days
after such request, a completed Borrowing Base Certificate setting
forth the Borrowing Base as of the date so requested, and at any
additional time at the option of the Borrower, a completed Borrowing
Base Certificate setting forth the Borrowing Base as of the date so
selected by the Borrower, in each case with supporting documentation
and additional reports with respect to the Borrowing Base as the
Administrative Agent may reasonably request; and
(h) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of SuperHoldings, Holdings, the Borrower or their
respective Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc. (a)
(i) Preserve, renew and keep in full force and effect its corporate existence
and (ii) take all reasonable action
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to maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business, except, in each case, as otherwise permitted by
Section 7.4 and except, in the case of clause (ii) above, to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (b) comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all Property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its Property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
6.6 Inspection of Property; Books and Records; Discussions.
(a) (i) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (ii)
permit representatives of any Lender upon reasonable prior written notice to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records during the Borrower's normal business hours and as
often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of Holdings, the Borrower and their
respective Subsidiaries with officers and employees of Holdings, the Borrower
and such Subsidiaries and with their independent certified public accountants.
(b) The Borrower will permit any representatives designated by
the Administrative Agent (including employees of the Administrative Agent or any
consultants, accountants, lawyers and appraisers retained by the Administrative
Agent) to conduct evaluations and appraisals of the Borrower's computation of
the Borrowing Base and the assets included in the Borrowing Base and such other
assets and other financial information and properties of the Borrower as the
Administrative Agent may require, as often as reasonably requested by the
Administrative Agent and with the consent of the Borrower, such consent not to
be unreasonably withheld; provided, however, that the Administrative Agent shall
not be entitled to conduct such evaluations and appraisals more frequently than
once per year unless (x) an Event of Default has occurred and is continuing or
(y) the Administrative Agent reasonably determines in consultation with the
Borrower that a material event or material change has occurred with respect to
the Loan Parties, their inventory practices or the performance of the Collateral
and that as a result of such event or change more frequent evaluations or
appraisals are required to effectively monitor the Borrowing Base, in which case
the Borrower will permit the Administrative Agent to conduct such evaluations
and appraisals at such reasonable times and as often as may be reasonably
requested, in each case so long as any Revolving Credit Loans, Incremental
Revolving Credit Loans or Letters of Credit shall be outstanding or shall have
been requested by the Borrower hereunder. The Borrower shall pay all fees,
including internally allocated fees and expenses of employees of the
Administrative Agent, and expenses as to which invoices have been furnished of
any such representatives retained by the Administrative Agent to conduct any
such evaluation or appraisal, including the reasonable fees and expenses
associated with collateral monitoring services performed by the Collateral Agent
Services Group of the
74
Administrative Agent. To the extent required by the Administrative Agent as a
result of any such evaluation, appraisal or monitoring, the Borrower also agrees
to modify or adjust the parameters for including Eligible Inventory and Eligible
Accounts Receivable in the Borrowing Base as the Administrative Agent shall
reasonably require based upon the results of such evaluation and appraisal,
provided that the Administrative Agent shall specify to the Borrower in writing
the reasons for any such additional adjustments.
(c) In the event that historical accounting practices, systems
or reserves relating to the components of the Borrowing Base are modified in a
manner that is adverse to the Lenders in any material respect, the Borrower
agrees to maintain additional reserves (for purposes of computing the Borrowing
Base) in respect of the components of the Borrowing Base and make other
adjustments (which may include maintaining additional reserves, modifying the
advance rates or modifying the eligibility criteria for the components of the
Borrowing Base) to the computation of the Borrowing Base, in each case, as
reasonably requested by the Administrative Agent and with the consent of the
Borrower, which consent shall not be unreasonably withheld, to provide for such
modification.
6.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries or (ii) litigation, investigation or proceeding
which may exist at any time between SuperHoldings, Holdings, the
Borrower or any of their respective Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting SuperHoldings,
Holdings, the Borrower or any of their respective Subsidiaries in which
the amount involved is $1,000,000 or more and not covered by insurance
or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of
any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan;
(e) any development or event which has had or could reasonably
be expected to have a Material Adverse Effect;
(f) as soon as possible after a Responsible Officer of the
Borrower knows or reasonably should know thereof, the failure to make
any rental payment when due and payable with respect to any property
leased by the Borrower or any of its Domestic
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Subsidiaries at which Inventory of the Borrower or any of its Domestic
Subsidiaries is located; and
(g) any sale or other disposition by the Primary Investors of
any Capital Stock having ordinary voting power in the election of
directors of SuperHoldings or Holdings.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action SuperHoldings, Holdings, the Borrower or the
relevant Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Interest Rate Protection. In the case of the Borrower,
within 90 days after the Closing Date, enter into Interest Rate Protection
Agreements to the extent necessary to provide that at least 50% of the aggregate
principal amount of the non-revolving long-term Indebtedness of Holdings and its
Subsidiaries is subject to either a fixed interest rate or interest rate
protection for a period of not less than two years, which Interest Rate
Protection Agreements shall have terms and conditions reasonably satisfactory to
the Administrative Agent.
6.10 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by SuperHoldings, Holdings, the
Borrower or any of their respective Subsidiaries (other than (x) any Property
described in paragraph (b), (c) or (d) below and (y) any Property subject to a
Lien expressly permitted by Section 7.3(g)) as to which the Administrative
Agent, for the benefit of the Lenders, does not have a perfected Lien, promptly
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the Administrative
Agent deems necessary or advisable in order to grant to the Administrative
Agent, for the benefit of the Lenders, a security interest in such Property and
(ii) take all actions necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in such Property, including without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
(b) With respect to any interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Closing Date by SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries (other than any
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such real property subject to a Lien expressly permitted by Section 7.3(g)),
promptly (i) execute and deliver a first priority Mortgage in favor of the
Administrative Agent, for the benefit of the Lenders, covering such real
property, (ii) if requested by the Administrative Agent, provide the Lenders
with (x) title and extended coverage insurance covering such real property in an
amount at least equal to the purchase price of such real estate (or such other
amount as shall be reasonably specified by the Administrative Agent) as well as
a current ALTA survey thereof, together with a surveyor's certificate and (y)
any consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date (which, for the
purposes of this paragraph (c), shall include any existing Subsidiary that
ceases to be an Excluded Foreign Subsidiary) by SuperHoldings, Holdings, the
Borrower or any of its Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary or advisable in order to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary which is
owned by SuperHoldings, Holdings, the Borrower or any of their respective
Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of SuperHoldings, Holdings,
the Borrower or such Subsidiary, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and
(B) to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Lenders a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement
with respect to such new Subsidiary (subject to any existing liens on such
Collateral securing Indebtedness existing at the time such new Subsidiary is
created or acquired, so long as such Indebtedness was not incurred in
anticipation of such creation or acquisition and such Lien is not spread to
encumber additional property of such Subsidiary), including, without limitation,
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by SuperHoldings, Holdings, the
Borrower or any of their respective Subsidiaries, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable in
order to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary which is owned by SuperHoldings, Holdings, the Borrower or any of
their respective Subsidiaries (provided that in no event shall more than 65% of
the total outstanding Capital Stock of any such new Subsidiary be required to be
so pledged), (ii) deliver to the Administrative Agent the
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certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of
SuperHoldings, Holdings, the Borrower or such Subsidiary, as the case may be,
and take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Lien of the Administrative Agent
thereon, and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
SECTION 7. NEGATIVE COVENANTS
SuperHoldings, Holdings and the Borrower hereby jointly and
severally agree that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any Lender or
the Administrative Agent hereunder, each of SuperHoldings, Holdings and the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 Financial Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter ending on the dates set
forth below to exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
June 30, 2004 6.60 to 1.0
September 30, 2004 6.60 to 1.0
December 31, 2004 6.60 to 1.0
March 31, 2005 6.50 to 1.0
June 30, 2005 6.50 to 1.0
September 30, 2005 6.25 to 1.0
December 31, 2005 6.25 to 1.0
March 31, 2006 6.00 to 1.0
June 30, 2006 6.00 to 1.0
September 30, 2006 5.65 to 1.0
December 31, 2006 5.65 to 1.0
March 31, 2007 5.25 to 1.0
June 30, 2007 5.25 to 1.0
September 30, 2007 4.85 to 1.0
December 31, 2007 4.85 to 1.0
March 31, 2008 4.50 to 1.0
June 30, 2008 4.50 to 1.0
September 30, 2008 4.25 to 1.0
December 31, 2008 4.25 to 1.0
March 31, 2009 4.00 to 1.0
June 30, 2009 4.00 to 1.0
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Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
September 30, 2009 3.75 to 1.0
December 31, 2009 3.75 to 1.0
Thereafter 3.50 to 1.0
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter ending on the dates set
forth below to be less than the ratio set forth below opposite such fiscal
quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- ---------------------
June 30, 2004 2.00 to 1.0
September 30, 2004 2.00 to 1.0
December 31, 2004 2.00 to 1.0
March 31, 2005 2.25 to 1.0
June 30, 2005 2.25 to 1.0
September 30, 2005 2.25 to 1.0
December 31, 2005 2.25 to 1.0
March 31, 2006 2.50 to 1.0
June 30, 2006 2.50 to 1.0
September 30, 2006 2.50 to 1.0
December 31, 2006 2.50 to 1.0
March 31, 2007 2.50 to 1.0
June 30, 2007 2.50 to 1.0
September 30, 2007 2.50 to 1.0
December 31, 2007 2.50 to 1.0
March 31, 2008 2.50 to 1.0
June 30, 2008 2.50 to 1.0
September 30, 2008 2.50 to 1.0
December 31, 2008 2.50 to 1.0
March 31, 2009 2.50 to 1.0
June 30, 2009 2.75 to 1.0
September 30, 2009 2.75 to 1.0
December 31, 2009 2.75 to 1.0
Thereafter 3.00 to 1.0
; provided, that for the purposes of determining the Consolidated Interest
Coverage Ratio for the fiscal quarters of the Borrower ending June 30, 2004,
September 30, 2004 and December 31, 2004, Consolidated Interest Expense for the
relevant period shall be deemed to equal Consolidated Interest Expense for such
fiscal quarter (and, in the case of the latter two such determinations, all
fiscal quarters commencing after March 31, 2004) multiplied by 4, 2 and 4/3,
respectively.
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(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter ending on the
dates set forth below to be less than the ratio set forth below opposite such
fiscal quarter:
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
June 30, 2004 1.15 to 1.0
September 30, 2004 1.15 to 1.0
December 31, 2004 1.15 to 1.0
March 31, 2005 1.15 to 1.0
June 30, 2005 1.15 to 1.0
September 30, 2005 1.20 to 1.0
December 31, 2005 1.20 to 1.0
March 31, 2006 1.20 to 1.0
June 30, 2006 1.20 to 1.0
September 30, 2006 1.25 to 1.0
December 31, 2006 1.25 to 1.0
March 31, 2007 1.25 to 1.0
June 30, 2007 1.25 to 1.0
September 30, 2007 1.25 to 1.0
December 31, 2007 1.25 to 1.0
March 31, 2008 1.25 to 1.0
June 30, 2008 1.25 to 1.0
September 30, 2008 1.25 to 1.0
December 31, 2008 1.25 to 1.0
March 31, 2009 1.25 to 1.0
June 30, 2009 1.25 to 1.0
September 30, 2009 1.25 to 1.0
December 31, 2009 1.25 to 1.0
Thereafter 1.25 to 1.0
; provided, that for the purposes of determining the Consolidated Fixed Charge
Coverage Ratio for the fiscal quarters of the Borrower ending June 30, 2004,
September 30, 2004 and December 31, 2004, Consolidated Interest Expense and
scheduled payments on account of principal of Indebtedness of the Borrower and
its Subsidiaries for the relevant period shall be deemed to equal Consolidated
Interest Expense and scheduled payments on account of principal of Indebtedness
of the Borrower and its Subsidiaries for such fiscal quarter (and, in the case
of the latter two such determinations, all fiscal quarters commencing after
March 31, 2004) multiplied by 4, 2 and 4/3, respectively.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
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(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;
(c) Indebtedness secured by Liens permitted by Section 7.3(g)
in an aggregate principal amount not to exceed $5,000,000 at any one
time outstanding;
(d) Capital Lease Obligations in an aggregate principal amount
not to exceed $10,000,000 at any one time outstanding;
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(e) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount
thereof);
(f) guarantees made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of any Wholly Owned
Subsidiary Guarantor;
(g) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$175,000,000, (ii) any refinancing thereof with an issuance of debt
securities of Holdings or the Borrower, provided that such securities
(excluding the interest rate) are (x) taken as a whole, at least as
favorable to Holdings, the Borrower and the Lenders as the Senior
Subordinated Notes and (y) at least as subordinated to payment of the
Obligations as the Senior Subordinated Notes and (iii) Guarantee
Obligations of Holdings and of any Subsidiary Guarantor in respect of
such Indebtedness of the Borrower; provided that such Guarantee
Obligations are subordinated to the obligations of such Guarantor under
the Loan Documents to the same extent as are the obligations of the
Borrower in respect of the Senior Subordinated Notes or, if applicable,
such refinancing securities;
(h) (i) Indebtedness of Holdings in respect of the Holdings
Discount Notes in an aggregate principal amount not to exceed
$77,000,000, (ii) any refinancing thereof with (x) the proceeds of a
substantially concurrent issuance of new common equity by Holdings or
(y) an issuance of debt securities of the Borrower or Holdings,
provided that such securities (excluding the interest rate) are (A)
taken as a whole, at least as favorable to Holdings, the Borrower and
the Lenders as the Holdings Discount Notes and (B) at least as
subordinated to payment of the Obligations as the Holdings Discount
Notes (in the case of a refinancing with an issuance of debt securities
by Holdings) or the Senior Subordinated Notes (in the case of a
refinancing with an issuance of debt securities by the Borrower), as
applicable and (iii) Guarantee Obligations of Holdings and of any
Subsidiary Guarantor in respect of such Indebtedness of the Borrower in
the case of a refinancing with an issuance of debt securities of the
Borrower; provided that such Guarantee Obligations are subordinated to
the obligations of such Guarantor under the Loan Documents to the same
extent as are the obligations of the Borrower in respect of the Senior
Subordinated Notes or, if applicable, any refinancing securities
permitted by Section 7.2(g)(ii);
(i) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount at any one time
outstanding for the Borrower and all
81
Subsidiaries) not to exceed $15,000,000 less the aggregate principal
amount of Indebtedness incurred pursuant to clauses (c) and (d) above
and (l) below at such time;
(j) Indebtedness of the Borrower in respect of Interest Rate
Protection Agreements;
(k) (i) Indebtedness of the Borrower in respect of up to
$22,000,000 of Existing Senior Subordinated Notes and subordinated
Guarantee Obligation of any Subsidiary Guarantor in respect thereof;
and (ii) Indebtedness of Holdings in respect of up to $15,500,000 of
Existing Holdings Discount Debentures; and
(l) Indebtedness consisting of the obligations of
SuperHoldings or Holdings to pay the deferred portion of the purchase
price of common stock or common stock options of Holdings or
SuperHoldings from former officers or employees of SuperHoldings,
Holdings, the Borrower or any of their respective Subsidiaries upon the
termination of employment of such officer or employee in connection
with purchases permitted by Section 7.6(d); provided that (i) interest
thereon shall be a per annum market rate and shall not be payable more
frequently than quarterly, (ii) except as permitted by Section 7.6(d),
no principal or interest shall be paid with respect to each such
obligation other than in-kind and (iii) each such obligation (x) is
subordinated to the Obligations of the relevant Loan Party under the
Loan Documents on terms satisfactory to the Administrative Agent, (y)
has a maturity that extends beyond September 15, 2011 (it being
understood that a portion of such obligations may have a shorter
maturity date as long as the payments that will become due with respect
to such obligations shall not exceed the amount permitted to be paid in
cash pursuant to Section 7.6(d)(ii)) and (z) is evidenced by a
promissory note having terms satisfactory to the Administrative Agent;
provided further that any Indebtedness incurred pursuant to this
Section 7.2(l) shall reduce the amount of Indebtedness permitted by
Sections 7.2(i).
Notwithstanding the foregoing, no Subsidiary of Holdings will create, incur,
assume or suffer to exist any Guarantee Obligation in respect of any
Indebtedness of Holdings.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of Holdings,
the Borrower or their respective Subsidiaries, as the case may be, in
conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
82
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(e), provided
that no such Lien is spread to cover any additional Property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the
acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any Property other than the Property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is
not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased;
(j) Liens not otherwise permitted by this Section 7.3 so long
as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets subject
thereto exceeds (as to the Borrower and all Subsidiaries) $1,000,000 at
any one time;
(k) any covenants, easements, restrictions, encumbrances and
exceptions contained in any mortgagee's title insurance policy
delivered in connection with the Existing Credit Agreement or referred
to in Section 5.1(o)(i);
(l) any existing leases or subleases of all or any portion of
a Mortgaged Property and any renewals and extensions thereof, any
leases or subleases entered into upon the expiration or termination of
any such lease or sublease, and any leases or subleases hereafter
entered into of all or any portion of a Mortgaged Property not required
by the Borrower for the operation of its business; and
(m) Liens, if any, consisting of amounts escrowed to redeem
the Existing Senior Subordinated Notes or Existing Holdings Discount
Debentures.
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7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation);
(b) the Borrower and any Subsidiary of the Borrower may
Dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any Wholly Owned Subsidiary Guarantor;
(c) Holdings may consummate the Merger; and
(d) SuperHoldings may merge with and into Holdings, with
Holdings as the surviving corporation; provided that the first priority
security interest in the Capital Stock of the Borrower in favor of the
Administrative Agent for the ratable benefit of the Lenders is
maintained.
7.5 Limitation on Sale of Assets. Dispose of any of its
Property or business (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Wholly Owned Subsidiary Guarantor or the sale or
issuance of the Borrower's Capital Stock to Holdings, in each case, so
long as such Capital Stock is pledged to the Administrative Agent for
the benefit of the Lenders to the extent required by the Guarantee and
Collateral Agreement; and
(e) the sale of other assets at fair market value provided
that (i) such assets have a fair market value not to exceed $2,000,000
for any fiscal year of the Borrower and not exceeding $5,000,000 in the
aggregate from the Closing Date and (ii) the consideration received by
Holdings, the Borrower and their respective Subsidiaries for each such
sale of assets shall not be less than 75% cash, provided, that the
requirements of Section 2.12(d) are complied with in connection
therewith.
7.6 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase,
84
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries or any warrants or options to purchase any such Capital
Stock, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of Holdings, the Borrower or any of their respective Subsidiaries
(collectively, "Restricted Payments"), except that:
(a) any Subsidiary of the Borrower may make Restricted
Payments to the Borrower or any Wholly Owned Subsidiary Guarantor (and
if such Subsidiary is not a Wholly Owned Subsidiary of the Borrower, to
its other holders of Capital Stock on a pro rata basis, provided that
any such Restricted Payment to such other holders of Capital Stock be
attributable only to cash flows of such Subsidiary);
(b) so long as no Default or Event of Default shall have
occurred and be continuing after giving effect to the payment of any
such dividend or investment, the Borrower may pay dividends to Holdings
or make investments in Holdings to permit Holdings to pay scheduled
cash interest payments on the Holdings Discount Notes or any
refinancing thereof permitted by Section 7.2(h)(ii) and, if still
outstanding, on the Existing Holdings Discount Debentures) or to permit
Holdings to make any payments permitted by Section 7.9(a)(ii) in an
amount not to exceed the amount of interest required to be paid in cash
by the terms of the Holdings Discount Notes Indenture or any
refinancing thereof permitted by Section 7.2(h)(ii) or the amount of
such payment made pursuant to Section 7.9(a)(ii), as applicable;
(c) the Borrower may pay dividends to Holdings or make
investments in Holdings to permit Holdings, and Holdings may pay
dividends to SuperHoldings or make investments in SuperHoldings to
permit SuperHoldings, to (i) pay corporate overhead expenses incurred
in the ordinary course of business not to exceed $250,000 in any fiscal
year and (ii) pay any taxes which are due and payable by SuperHoldings,
Holdings and the Borrower as part of a consolidated group;
(d) so long as no Default or Event of Default shall have
occurred and be continuing, (i) the Borrower may pay dividends to
Holdings or make investments in Holdings (and, if applicable, Holdings
may use such proceeds to pay dividends to SuperHoldings or make
investments in SuperHoldings) to permit Holdings to purchase Holdings'
common stock (or, if applicable, to permit SuperHoldings to purchase
SuperHolding's common stock) or common stock options from present or
former officers or employees, or the estate, heirs or legatees of such
former officers or employees, of Holdings, the Borrower or any of their
respective Subsidiaries upon the death, disability or termination of
employment of such officer or employee, and (ii) SuperHoldings and
Holdings may pay principal and interest on the Indebtedness permitted
by Section 7.2(l), and the Borrower may pay dividends to Holdings or
make investments in Holdings (and, if applicable, Holdings may use such
proceeds to pay dividends to SuperHoldings or make investments in
SuperHoldings) to permit Holdings to (or, if applicable, to permit
SuperHoldings to) pay principal and interest on the Indebtedness
permitted by Section 7.2(l), provided, that the aggregate amount of
payments under this paragraph (d) after the Closing Date shall not
exceed $1,000,000 per annum and $2,000,000 in the aggregate, net
85
of any cash proceeds received by Holdings (or, if applicable,
SuperHoldings) and contributed to the Borrower in connection with
resales of any common stock or common stock options so purchased;
(e) SuperHoldings, Holdings, the Borrower or any Subsidiary of
the foregoing may make any Restricted Payment required to be made on or
prior to the Closing Date pursuant to the Merger Agreement; and
(f) SuperHoldings or Holdings may make any Restricted Payment
permitted by Section 7.2(l).
7.7 Limitation on Capital Expenditures. Make or commit to make
(by way of the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except:
(a) in any fiscal year, Capital Expenditures of the Borrower
and its Subsidiaries in the ordinary course of business not exceeding
the amount set forth below opposite such fiscal year:
Fiscal Year Capital Expenditures
----------- --------------------
2004 $ 6,500,000
2005 8,500,000
2006 8,500,000
2007 9,500,000
2008 11,000,000
2009 13,000,000
2010 14,000,000
2011 16,000,000
; provided, that (i) 100% of any such amount not so expended in the
fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this clause (a) during any fiscal year
shall be deemed made, first, in respect of amounts carried over from
the prior fiscal year pursuant to subclause (i) above and, second, in
respect of amounts permitted for such fiscal year as provided above;
(b) in addition to the amounts permitted by clause (a) above,
Capital Expenditures of the Borrower and its Subsidiaries in the
ordinary course of business not exceeding an aggregate of $2,000,000 in
the aggregate from the Closing Date; and
(c) Capital Expenditures permitted pursuant to Section 7.8.
7.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting all or a material part of a business
unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of
business;
86
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of Holdings, the Borrower
or its Subsidiaries in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses)
in an aggregate amount for Holdings, the Borrower and its Subsidiaries
not to exceed $500,000 at any one time outstanding;
(e) investments made by the Borrower or any of its
Subsidiaries with the proceeds of any Reinvestment Deferred Amount;
(f) investments by Holdings, the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such
investment, is a Wholly Owned Subsidiary Guarantor; and
(g) acquisitions by the Borrower or any of its Subsidiaries of
the Capital Stock of, or assets of, entities engaged in similar lines
of business as the Borrower and its Subsidiaries on the Closing Date,
provided that (i) the aggregate purchase price for all such
acquisitions occurring after the Closing Date shall not exceed
$65,000,000, (ii) the aggregate purchase price for all such
acquisitions (excluding, in the fiscal year of the Borrower ending on
December 31, 2004, the aggregate purchase price for the Specified
Acquisitions) shall not exceed $15,000,000 in any fiscal year of the
Borrower, (iii) no Default or Event of Default shall have occurred or
be continuing after giving effect to any such acquisition, (iv) no
Indebtedness shall be assumed by the Borrower or any of its
Subsidiaries in connection with any such acquisition except to the
extent otherwise permitted pursuant to this Agreement and (v) the
Borrower shall be in pro forma compliance with the covenants set forth
in Section 7.1 after giving effect to any such acquisition;
(h) investments existing on the Closing Date and listed on
Schedule 7.8;
(i) investments and advances made by the Borrower in Holdings
to the extent permitted by Section 7.6(b), (c) or (d); and
(j) other investments in an aggregate amount not to exceed $5
million at any one time outstanding.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any payment, prepayment, repurchase,
redemption or defeasance of or otherwise defease or segregate funds with respect
to the Senior Subordinated Notes, the Holdings Discount Notes, the Existing
Senior Subordinated Notes or the Existing Holding Discount Debentures (other
than scheduled interest payments required to be made in cash), except (i) in
connection with the issuance of any refinancing Indebtedness permitted by
Section 7.2(g)(ii) or Section 7.2(h)(ii) or from the proceeds of a substantially
concurrent issuance of new common equity of Holdings and (ii) so long as (A) no
proceeds of Revolving Extensions of Credit or Incremental Revolving Extensions
of Credit are used to make such payment, prepayment, repurchase, redemption,
defeasance or segregation of funds, except in aggregate
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amount not to exceed the portion of the Optional Payment Amount which has been
applied to the prepayment of Revolving Credit Loans pursuant to Section 2.18(d)
and (B) after giving pro forma effect to such payment, prepayment, repurchase,
redemption, defeasance or segregation of funds, (I) the Consolidated Senior
Leverage Ratio of the Borrower is less than 2.00 to 1, (II) the Borrower is in
pro forma compliance with the financial covenants set forth in Section 7.1 and
(III) no Default or Event of Default shall have occurred and be continuing, in
an aggregate amount since the Closing Date for the Senior Subordinated Notes,
the Holdings Discount Debentures and any refinancing Indebtedness permitted by
Section 7.2(g)(ii) and Section 7.2(h)(ii) not in excess of the Optional Payment
Amount;
(b) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of the Senior Subordinated Notes, the Holdings Discount Notes, the
Existing Senior Subordinated Notes or the Existing Holdings Discount Debentures
or any refinancing Indebtedness permitted by Section 7.2(g)(ii) or Section
7.2(h)(ii) (other than any such amendment, modification, waiver or other change
which (i) would extend the maturity or reduce the amount of any payment of
principal thereof or which would reduce the rate or extend the date for payment
of interest thereon and (ii) does not involve the payment of a consent fee);
(c) designate any Indebtedness other than the Obligations as
"Designated Senior Indebtedness" for the purposes of the Senior Subordinated
Note Indenture or any refinancing Indebtedness permitted by Section 7.2(g)(ii)
or Section 7.2(h)(ii) or the Existing Senior Subordinated Note Indenture; or
(d) amend its certificate of incorporation in any manner
determined by the Administrative Agent to be adverse to the Lenders without the
prior written consent of the Required Lenders.
Notwithstanding anything to the contrary contained in this
Agreement, prior to June 30, 2004, (i) the Borrower may optionally redeem the
Existing Senior Subordinated Notes in accordance with the terms thereof and (ii)
Holdings may optionally redeem the Existing Holdings Discount Debentures in
accordance with the terms thereof, and in each case, make all required payments
to the holders thereof in accordance with such redemption.
7.10 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Wholly Owned Subsidiary Guarantor) unless such transaction
is (a) otherwise permitted under this Agreement, (b) in the ordinary course of
business of Holdings, the Borrower or such Subsidiary, as the case may be, and
(c) upon fair and reasonable terms no less favorable to Holdings, the Borrower
or such Subsidiary, as the case may be, than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate; provided that
Holdings and its Subsidiaries may consummate the transactions required to be
consummated on the Closing Date pursuant to the Merger Agreement.
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by SuperHoldings,
Holdings, the Borrower or any of their
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respective Subsidiaries of real or personal property owned by Holdings, the
Borrower or any of their respective Subsidiaries on the Closing Date which has
been or is to be sold or transferred by SuperHoldings, Holdings, the Borrower or
such Subsidiary to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental
obligations of SuperHoldings, Holdings, the Borrower or such Subsidiary.
Notwithstanding the foregoing, the Borrower or any its Subsidiaries may enter
into any such arrangement described in the immediately preceding sentence with
respect to any property acquired by the Borrower or such Subsidiary after the
Closing Date to the extent otherwise permitted pursuant to this Agreement,
provided that such arrangement is entered into within 90 days after such
property is acquired by the Borrower or such Subsidiary.
7.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than March 31 or change the
Borrower's method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement which prohibits or limits the
ability of SuperHoldings, Holdings, the Borrower or any of their respective
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its Property or revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any guarantor, its obligations under the
Guarantee and Collateral Agreement, other than (a) this Agreement and the other
Loan Documents, (b) the Holdings Discount Notes Indenture and the Senior
Subordinated Note Indenture or any refinancing thereof permitted by Section
7.2(g) or Section 7.2(h) and (c) any agreements governing any purchase money
Liens or Capital Lease Obligations otherwise permitted hereby (in which case,
any prohibition or limitation shall only be effective against the assets
financed thereby).
7.14 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) pay
dividends or make any other distributions in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any
other Subsidiary of the Borrower, (b) make loans or advances to the Borrower or
any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents, the Holdings Discount Notes Indenture or the Senior
Subordinated Note Indenture or any refinancing thereof permitted by Section
7.2(g) or Section 7.2(h) and (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement which has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
which are related, ancillary or complementary thereto.
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7.16 Merger Agreement. Amend, modify, waive or supplement the
Merger Agreement in a manner which is materially adverse to the Lenders without
the consent of the Administrative Agent.
7.17 Limitation on Activities of Holdings and SuperHoldings.
(a) In the case of Holdings, notwithstanding anything to the contrary in this
Agreement or any other Loan Document, (i) conduct, transact or otherwise engage
in, or commit to conduct, transact or otherwise engage in, any business or
operations other than those incidental to its ownership of the Capital Stock of
the Borrower, (ii) incur, create, assume or suffer to exist any Indebtedness or
other liabilities or financial obligations, except (A) nonconsensual obligations
imposed by operation of law, (B) pursuant to the Loan Documents to which it is a
party, (C) obligations with respect to its Capital Stock and (D) the Holdings
Discount Notes or any refinancing thereof permitted by Section 7.2(h)(ii) or the
Existing Holdings Discount Debentures, (iii) own, lease, manage or otherwise
operate any properties or assets (including cash (other than cash received from
the Borrower in accordance with Section 7.6 pending application in the manner
contemplated by said Section) and cash equivalents) other than the ownership of
shares of Capital Stock of the Borrower or (iv) own the Capital Stock of any
Subsidiary (other than the Borrower and its Subsidiaries). Notwithstanding the
foregoing, Holdings may refinance the Holdings Discount Notes to the extent
permitted by Sections 7.2 and 7.9.
(b) In the case of SuperHoldings, notwithstanding anything to
the contrary in this Agreement or any other Loan Document, (i) conduct, transact
or otherwise engage in, or commit to conduct, transact or otherwise engage in,
any business or operations other than those incidental to its ownership of the
Capital Stock of Holdings, (ii) incur, create, assume or suffer to exist any
Indebtedness or other liabilities or financial obligations, except (A)
nonconsensual obligations imposed by operation of law, (B) pursuant to the Loan
Documents to which it is a party and (C) obligations with respect to its Capital
Stock and (iii) own, lease, manage or otherwise operate any properties or assets
(including cash (other than cash received from Holdings in accordance with
Section 7.6 pending application in the manner contemplated by said Section) and
cash equivalents) other than the ownership of shares of Capital Stock of
Holdings or (iv) own the Capital Stock of any Subsidiary (other than Holdings
and its Subsidiaries).
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement furnished
by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made; or
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(c) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to Holdings and the Borrower only), Section 6.7(a)
or Section 7; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries shall (i) default in making any payment of any
principal of any Indebtedness (including, without limitation, any
Guarantee Obligation, but excluding the Loans) on the scheduled or
original due date with respect thereto; or (ii) default in making any
payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case
of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $2,500,000; or
(f) (i) SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or Holdings, the Borrower or any of
their respective Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against
SuperHoldings, Holdings, the Borrower or any of their respective
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against SuperHoldings, Holdings, the Borrower
or any of their respective Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been
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vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) SuperHoldings, Holdings, the Borrower
or any of their respective Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) SuperHoldings, Holdings, the Borrower or any of
their respective Subsidiaries shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(h) One or more judgments or decrees shall be entered against
SuperHoldings, Holdings, the Borrower or any of their respective
Subsidiaries involving in the aggregate a liability (not paid or fully
covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $2,500,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason,
to be in full force and effect, or any Loan Party or any Affiliate of
any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect
and priority purported to be created thereby; or
(j) (i) Any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended)
other than the Primary Investors (A) shall have acquired beneficial
ownership of a greater percentage of SuperHoldings' voting common stock
than is then held by the Primary Investors or (B) shall obtain the
power (whether or not exercised) to elect a majority of the Borrower's,
Holding's or SuperHoldings's directors (for purposes of this clause
(i), and clause (ii)(B) below, any shares of voting stock that are
required to be voted for a nominee of any Primary Investor shall be
deemed to be held by such Primary Investor for purposes of determining
the
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voting power held by any Person); or (ii) (A) the board of directors of
the Borrower, Holdings or SuperHoldings shall not consist of a majority
of Continuing Directors; as used in this paragraph "Continuing
Directors" shall mean the directors the Borrower, Holdings or
SuperHoldings, as the case may be, on the Closing Date and each other
director, if such other director's nomination for election to the board
of directors of the Borrower, Holdings or SuperHoldings is recommended
by a majority of the then Continuing Directors or (B) the Primary
Investors shall cease to be able to elect a majority of the board of
directors of (x) SuperHoldings, (y) through SuperHoldings, Holdings, or
(z) through Holdings, the Borrower; or (iii) the Primary Investors
shall cease to own legally and beneficially at least 51% of each
outstanding class of Capital Stock having ordinary voting power in the
election of directors of SuperHoldings; or (iv) prior to the merger
contemplated by Section 7.4(d), SuperHoldings shall cease to own
legally and beneficially 90% of each class of Capital Stock of
Holdings, free of Liens (other than Liens created by the Security
Documents); or (v) Holdings shall cease to own legally and beneficially
100% of each class of Capital Stock of the Borrower, free of Liens
(other than Liens created by the Security Documents); or (vi) a "change
of control" as defined in the Senior Subordinated Note Indenture or the
Holdings Discount Notes Indenture shall occur; or
(k) The Senior Subordinated Notes, any refinancing thereof
pursuant to Section 7.2(g)(ii) or the guarantees thereof shall cease,
for any reason, to be validly subordinated to the Obligations or the
obligations of the Guarantors under the Loan Documents, as the case may
be, as provided in the Senior Subordinated Note Indenture or any other
applicable documentation, or any Loan Party shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
Holdings or SuperHoldings, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Majority Revolving Credit
Facility Lenders, the Administrative Agent may, or upon the request of the
Majority Revolving Credit Facility Lenders, the Administrative Agent shall, by
notice to the Borrower declare the Revolving Credit Commitments to be terminated
forthwith, whereupon the Revolving Credit Commitments shall immediately
terminate; (ii) with the consent of the Majority Incremental Revolving Credit
Facility Lenders, the Administrative Agent may, or upon the request of the
Majority Incremental Revolving Credit Facility Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Incremental Revolving Credit
Commitments to be terminated forthwith, whereupon the Incremental Revolving
Credit Commitments shall immediately terminate; and (iii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due
93
and payable forthwith, whereupon the same shall immediately become due and
payable. With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to
this paragraph, the Borrower shall at such time deposit in a cash collateral
account opened by the Administrative Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. Amounts held in such
cash collateral account shall be applied by the Administrative Agent to the
payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other obligations of the Borrower
hereunder and under the other Loan Documents. After all such Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations shall
have been satisfied and all other obligations of the Borrower hereunder and
under the other Loan Documents shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrower (or such
other Person as may be lawfully entitled thereto). Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived by SuperHoldings, Holdings and the Borrower.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall have no duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document
94
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
any Loan Party a party thereto to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the Loan
Parties), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender, Holdings or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or, if
so specified by this Agreement, all Lenders); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and
95
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon any
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall have no duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any
affiliate of a Loan Party which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by Holdings or the
Borrower and without limiting the obligation of Holdings or the Borrower to do
so), ratably according to their respective Aggregate Exposure Percentages in
effect on the date on which indemnification is sought under this Section 9.7
(or, if indemnification is sought after the date upon which the Commitments
shall have terminated and the Loans shall have been paid in full, ratably in
accordance with such Aggregate Exposure Percentages immediately prior to such
date), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
which are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent's gross negligence or willful
misconduct. The agreements in this Section 9.7 shall survive the payment of the
Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other
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Loan Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall (unless an Event of
Default under Section 8(a) or Section 8(f) with respect to the Borrower shall
have occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Agent's resignation as 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 Agent under this Agreement and
the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.
9.11 Co-Documentation Agents and Syndication Agent. Neither
the Co-Documentation Agents nor the Syndication Agent shall have any duties or
responsibilities hereunder in its capacity as such.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(with the written consent of the Required Lenders) the Administrative Agent and
each Loan Party party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders, or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest, fee or letter of credit commission payable hereunder or extend the
scheduled date of any payment thereof, extend the duration of any Interest
Period beyond six months, or increase the amount or extend the expiration date
of any Lender's Revolving Credit Commitment or Incremental Revolving Credit
Commitment, in
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each case without the consent of each Lender directly affected thereby; (ii)
amend, modify or waive any provision of this Section 10.1 or reduce any
percentage specified in the definition of Required Lenders or Required
Prepayment Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release Holdings or, while
SuperHoldings remains in existence, SuperHoldings or all or substantially all of
the Subsidiary Guarantors from their obligations under the Guarantee and
Collateral Agreement, in each case without the written consent of all Lenders;
(iii) reduce the percentage specified in the definition of Majority Facility
Lenders without the written consent of all Lenders under each affected Facility;
(iv) amend, modify or waive any provision of Section 9 without the written
consent of the Administrative Agent; (v) amend, modify or waive any provision of
Section 3 without the written consent of the Issuing Lender; (vii) amend, modify
or waive any provision of Section 2.6 or 2.7 or increase or decrease the amount
of Swing Line Commitment without the written consent of the Swing Line Lender;
(viii) amend or modify the definition of "Borrowing Base", "Eligible Accounts
Receivable", "Eligible Inventory" or "Over Advance Amount", in each case without
the consent of the Majority Revolving Credit Lenders, or (ix) amend, modify or
waive any provision of Sections 2.18(a), (b), (c) or (d) without the written
consent of each Lender adversely affected thereby or, with respect to Sections
2.18(e), (f) or (g) without the written consent of the Majority Facility Lenders
in respect of each Facility adversely affected thereby. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Loan Parties, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received by a responsible officer of the addressee, addressed as follows in the
case of SuperHoldings, Holdings, the Borrower and the Administrative Agent, and
as set forth in an administrative questionnaire delivered to the Administrative
Agent in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto:
SuperHoldings and NBC Acquisition Corp.
Holdings: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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The Borrower: Nebraska Book Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
The Administrative Agent: JPMorgan Chase Bank
Bank Loans and Agency Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable documented
out-of-pocket costs and expenses incurred in connection with the preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents
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prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees, disbursements and other charges of
counsel to the Administrative Agent (with such counsel to include no more than
one local counsel in each applicable jurisdiction so long as such counsel are
engaged with the Borrower's prior written consent), (b) to pay or reimburse each
Lender and the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees, disbursements and
other charges of one counsel (and the allocated fees and expenses of in-house
counsel) to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any
and all recording and filing fees or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent and their respective officers,
directors, employees, affiliates, agents and controlling persons (each, an
"indemnitee") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of Holdings, the Borrower any of
their respective Subsidiaries or any of the Properties and the reasonable fees,
disbursements and other charges of one counsel (and the allocated fees and
expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided, that the Borrower shall have no obligation
hereunder to any indemnitee with respect to indemnified liabilities (i) to the
extent such indemnified liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such indemnitee or (ii) arising from a
lawsuit or administrative proceeding against such indemnitee if the Borrower was
not given notice of such lawsuit or administrative proceeding and an opportunity
to participate in the defense thereof at its own expense. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries to so waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any indemnitee. The agreements in this Section
shall survive repayment of the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Lender that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section.
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(b) (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees (each, an
"Assignee") all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it) with the prior written consent (such consent not to be unreasonably
delayed or withheld) of:
(A) the Borrower, provided that no consent of the
Borrower shall be required for an assignment to a Lender, an Affiliate
of a Lender, an Approved Fund (as defined below) or, if an Event of
Default has occurred and is continuing, any other Person; and
(B) the Administrative Agent, provided that no
consent of the Administrative Agent shall be required for an assignment
of all or any portion of a Term Loan to a Lender, an Affiliate of a
Lender or an Approved Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender,
an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender's Commitments or Loans
under any Facility, the amount of the Commitments or Loans of the
assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than
$5,000,000 (or, in the case of Term Facility, $1,000,000 or, in the
case of the Incremental Revolving Credit Facility, $1,000,000) unless
each of the Borrower and the Administrative Agent otherwise consent,
provided that (1) no such consent of the Borrower shall be required if
an Event of Default under Section 8(a) or (f) has occurred and is
continuing and (2) such amounts shall be aggregated in respect of each
prospective Lender and its Affiliates or Approved Funds, if any;
(B) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500 (treating
multiple or simultaneous assignments by or to two or more Approved
Funds or two or more funds that are engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in
the ordinary course of business that are managed by the same investment
advisor or Affiliated advisors as a single assignment); and
(C) the Assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an administrative questionnaire.
For the purposes of this Section 10.6, "Approved Fund" means
any Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender; provided that, for purposes of
proviso (2) of clause (b)(ii)(A) above, in connection with an assignment to a
prospective Lender not previously a
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Lender, the term "Lender" as it is used in clauses (a), (b) and (c) of this
paragraph shall mean such prospective Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.19, 2.20, 2.21 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent, the Issuing
Lender and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the Assignee's
completed administrative questionnaire (unless the Assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans owing to it); provided that (A) such Lender's obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such
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agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 10.1 and (2) directly affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.19, 2.20 and 2.21 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.7(b)
as though it were a Lender, provided such Participant shall be subject to
Section 10.7(a) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.19 or 2.20 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. Any Participant that is a Non-U.S.
Lender shall not be entitled to the benefits of Section 2.20 unless such
Participant complies with Section 2.20(d).
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such Lender
as a party hereto.
(e) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may
assign any or all of the Loans it may have funded hereunder to its designating
Lender without the consent of the Borrower or the Administrative Agent and
without regard to the limitations set forth in Section 10.6(b). Each of
Holdings, the Borrower, each Lender and the Administrative Agent hereby confirms
that it will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement Obligations
owing to it, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to
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or collateral received by any other Lender, if any, in respect of such other
Lender's Loans or the Reimbursement Obligations owing to such other Lender, or
interest thereon, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender's
Loan and/or of the Reimbursement Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to
SuperHoldings, Holdings or the Borrower, any such notice being expressly waived
by SuperHoldings, Holdings and the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by SuperHoldings,
Holdings or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender, any Affiliate
thereof or any branch or agency thereof to or for the credit or the account of
SuperHoldings, Holdings or the Borrower. Each Lender agrees promptly to notify
SuperHoldings, Holdings, the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of SuperHoldings, Holdings, the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
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GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of
SuperHoldings, Holdings and the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to SuperHoldings, Holdings or the Borrower, as the case may be
at its address set forth in Section 10.2 or at such other address of
which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 10.12 any special, exemplary, punitive or
consequential damages.
10.13 Acknowledgements. Each of SuperHoldings, Holdings and
the Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to SuperHoldings, Holdings or the
Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between Administrative
Agent and Lenders, on one hand, and SuperHoldings, Holdings and the
Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among SuperHoldings, Holdings,
the Borrower and the Lenders.
105
10.14 WAIVERS OF JURY TRIAL. SUPERHOLDINGS, HOLDINGS, THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. The Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement that is designated by such Loan Party
as confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any Lender, (b) to
any Participant or Assignee (each, a "Transferee") or prospective Transferee
which agrees to comply with the provisions of this Section, (c) to the
employees, directors, agents, attorneys, accountants and other professional
advisors of such Lender or its affiliates, (d) upon the request or demand of any
Governmental Authority having jurisdiction over the Administrative Agent or such
Lender, (e) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(f) if requested or required to do so in connection with any litigation or
similar proceeding, (g) which has been publicly disclosed other than in breach
of this Section 10.15, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document or
(j) to any direct or indirect contractual counterparty in swap agreements or
such contractual counterparty's professional advisor (so long as such
contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section).
10.16 Effect of Amendment and Restatement of the Existing
Credit Agreement. (a) This Agreement shall be deemed to be an amendment to and
restatement of the Existing Credit Agreement and the Existing Credit Agreement
as amended and restated hereby shall remain in full force and effect and is
hereby ratified and confirmed in all respects. All extensions of credit under
the Existing Credit Agreement on the Closing Date shall remain outstanding
following the Closing Date and shall be continued under this Agreement, as
amended in the manner set forth herein. All references to the Existing Credit
Agreement in any other agreement or document shall, on and after the Closing
Date, be deemed to refer to the Existing Credit Agreement as amended and
restated hereby. The Borrower agrees, acknowledges and affirms that (i) each of
the Security Documents to which it is a party shall remain in full force and
effect and shall constitute security for all extensions of credit pursuant to
the Existing Credit Agreement as amended and restated hereby and (ii) any
reference to the Existing Credit Agreement appearing in any such Security
Document shall on and after the Closing Date be deemed to refer to the Existing
Credit Agreement as amended and restated hereby.
(b) On the Closing Date, each Exiting Lender shall cease to be
a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
NBC HOLDINGS CORP.
By: _______________________________________
Name:
Title:
NBC ACQUISITION CORP.
By: _______________________________________
Name:
Title:
NEBRASKA BOOK COMPANY, INC.
By: _______________________________________
Name:
Title:
JPMORGAN CHASE BANK,
as Administrative Agent and as a Lender
By: _______________________________________
Name:
Title:
ANNEX A
PRICING GRID FOR REVOLVING CREDIT LOANS, INCREMENTAL REVOLVING
CREDIT LOANS AND SWING LINE LOANS
Consolidated Applicable Margin for Eurodollar Applicable Margin for
Leverage Ratio Loans Base Rate Loans
-------------- -------------------------------- ---------------------
>4.0 to 1.0 2.75% 1.75%
< or = 4.0 to 1.0 but 2.50% 1.50%
>3.5 to 1.0
< or = 3.5 to 1.0 but 2.25% 1.25%
>3.0 to 1.0
< or = 3.0 to 1.0 2.00% 1.00%
Changes in the Applicable Margin with respect to Revolving Credit Loans,
Incremental Revolving Credit Loans and Swing Line Loans resulting from changes
in the Consolidated Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to Section 6.1 (but in any event not later than the 45th day after the
end of each of the first three quarterly periods of each fiscal year or the 90th
day after the end of each fiscal year, as the case may be) and shall remain in
effect until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Consolidated Leverage Ratio as at the end of the fiscal period that would have
been covered thereby shall for the purposes of this definition be deemed to be
greater than 4.0 to 1. In addition, at all times while an Event of Default shall
have occurred and be continuing, the Consolidated Leverage Ratio shall for the
purposes of this definition be deemed to be greater than 4.0 to 1. Each
determination of the Consolidated Leverage Ratio pursuant to this definition
shall be made with respect to the period of four consecutive fiscal quarters of
the Borrower ending at the end of the period covered by the relevant financial
statements.
SCHEDULE 1.1A
COMMITMENTS
[posted separately]