REVOLVING CREDIT
AGREEMENT
Dated as of October 31, 2005
among
ICON HEALTH & FITNESS, INC.,
as Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
BANK OF AMERICA, N.A.,
as Administrative Agent, Issuing Lender and Cash Management Bank,
GMAC COMMERCIAL FINANCE , LLC,
as Documentation Agent,
and
THE CIT GROUP/BUSINESS CREDIT, INC. and ▇▇▇▇▇ FARGO FOOTHILL, LLC,
as Co-Syndication Agents
with
BANC OF AMERICA SECURITIES LLC
as Lead Arranger and Book Runner
1. DEFINITIONS AND RULES OF INTERPRETATION 1
1.1. Definitions 1
1.2. Rules of Interpretation 30
2. THE REVOLVING CREDIT FACILITY 31
2.1. Commitment to Lend 31
2.2. Commitment Fee 32
2.3. Reduction of Total Commitment 32
2.4. The Revolving Credit Notes 32
2.5. Interest on Revolving Credit Loans 33
2.6. Requests for Revolving Credit Loans 33
2.6.1. General 33
2.6.2. Swing Line 33
2.7. Conversion Options 34
2.7.1. Conversion to Different Type of Revolving Credit Loan 34
2.7.2. Continuation of Type of Revolving Credit Loan 34
2.7.3. LIBOR Rate Loans 35
2.8. Funds for Revolving Credit Loan 35
2.8.1. Funding Procedures 35
2.8.2. Advances by Administrative Agent 35
2.9. Change in Borrowing Base 36
2.10. Settlements 36
2.10.1. General 36
2.10.2. Failure to Make Funds Available 36
2.10.3. No Effect on Other Lenders 37
2.11. Repayments of Revolving Credit Loans Prior to Event of Default 37
2.11.1. Credit for Funds Received in Concentration Account 37
2.11.2. Application of Payments Prior to Event of Default 38
2.12. Repayments of Revolving Credit Loans After Event of Default 39
2.13. Fixed Asset Availability Maximum Amount Amortization 39
2.14. Administrative Agent Advances 39
3. REPAYMENT OF THE REVOLVING CREDIT LOANS 40
3.1. Maturity 40
3.2. Mandatory Repayments of Revolving Credit Loans 40
3.2.1. Excess Amounts 40
3.2.2. Other Events 40
3.3. Optional Repayments of Revolving Credit Loans 41
4. LETTERS OF CREDIT 41
4.1. Letter of Credit Commitments 41
4.1.1. Commitment to Issue Letters of Credit 42
4.1.2. Letter of Credit Applications 42
4.1.3. Terms of Letters of Credit 42
4.1.4. Reimbursement Obligations of Lenders 43
4.1.5. Participations of Lenders 43
4.2. Reimbursement Obligation of the Borrower 43
4.3. Letter of Credit Payments 44
4.4. Obligations Absolute 44
4.5. Reliance by Issuer 45
4.6. Letter of Credit Fee 45
5. CERTAIN GENERAL PROVISIONS 45
5.1. Fees 45
5.2. Funds for Payments 46
5.2.1. Payments to Administrative Agent 46
5.2.2. No Offset, etc 46
5.2.3. Non-U.S 46
5.3. Computations 47
5.4. Interest Limitation 47
5.5. Inability to Determine LIBOR Rate 47
5.6. Illegality 48
5.7. Additional Costs, etc 48
5.8. Capital Adequacy 49
5.9. Certificate 50
5.10. Indemnity 50
5.11. Mitigation of Obligations; Replacement of Lenders 50
5.12. Interest After Default 52
5.13. Collateral Security and Guaranty Documents 52
6. REPRESENTATIONS AND WARRANTIES 52
6.1. Corporate Authority, Etc 52
6.1.1. Existence, Good Standing 52
6.1.2. Authorization 53
6.1.3. Delivery 53
6.1.4. Enforceability 53
6.2. Financial Statements; Projections 54
6.3. Solvency 54
6.4. No Material Adverse Change; Distributions 55
6.5. Absence of Mortgages and Liens 55
6.6. Franchises, Patents, Copyrights, etc 55
6.7. Litigation 55
6.8. No Materially Adverse Contracts, etc 55
6.9. Compliance with Other Instruments, Laws, etc 55
6.10. Tax Status 55
6.11. No Default or Event of Default 56
6.12. Holding Company and Investment Company Acts 56
6.13. Employee Benefit Plans 56
6.13.1. In General 56
6.13.2. Terminability of Welfare Plans 56
6.13.3. Guaranteed Pension Plans 56
6.13.4. Multiemployer Plans 57
6.14. Regulations U and X 57
6.15. True Copies of Governing Documents 57
6.16. Fiscal Year 57
6.17. Perfection of Security Interest 57
6.18. Subsidiaries, etc 58
6.19. Environmental Compliance 58
6.20. Bank Accounts 59
6.21. Labor Contracts 59
6.22. Disclosure 59
6.23. Title to Properties 60
6.24. Certain Transactions 60
6.25. Foreign Assets Control Regulations, Etc 60
6.26. Subordinated Debt Documents 60
7. AFFIRMATIVE COVENANTS OF THE CREDIT PARTIES 60
7.1. Punctual Payment 61
7.2. Maintenance of Office 61
7.3. Records and Accounts 61
7.4. Financial Statements, Certificates and Information 61
7.5. Notices 63
7.5.1. Defaults 63
7.5.2. Material Adverse Changes 63
7.5.3. Notice of Litigation and Judgments 63
7.5.4. Notification of Claim against Collateral 64
7.5.5. Notices Concerning Inventory Collateral 64
7.5.6. Notification of Additional Intellectual Property Rights 64
7.5.7. Environmental Events 64
7.6. Legal Existence; Maintenance of Properties 64
7.7. Insurance 65
7.8. Taxes 65
7.9. Compliance with Laws, Contracts, Licenses, and Permits 65
7.10. Employee Benefit Plans 66
7.11. Use of Proceeds 66
7.12. Certain Changes 66
7.13. Conduct of Business 66
7.14. Further Assurances 67
7.15. Inspection of Properties and Books, etc 67
7.15.1. General 67
7.15.2. Collateral Reports 67
7.15.3. Appraisals 67
7.15.4. Communications with Accountants 68
7.15.5. Environmental Assessments 68
7.16. Additional Mortgaged Property 68
7.17. Bank Accounts 68
7.17.1. General 68
7.17.2. Acknowledgment of Application 69
8. NEGATIVE COVENANTS OF THE CREDIT PARTIES 69
8.1. Investments 69
8.2. Restrictions on Indebtedness 70
8.3. Restrictions on Liens 72
8.3.1. Permitted Liens 72
8.3.2. Restrictions on Negative Pledges and Upstream Limitations 73
8.4. Restricted Payments 74
8.5. Merger, Consolidation and Disposition of Assets 74
8.5.1. Mergers and Acquisitions 74
8.5.2. Disposition of Assets 74
8.6. Sale and Leaseback 75
8.7. Change of Fiscal Year 75
8.8. Employee Benefit Plans 75
8.9. Compliance With Environmental Laws 75
8.10. Change in Terms of Governing Documents 76
8.11. Creation of Subsidiaries 76
8.12. Transactions with Affiliates 76
8.13. Agency Account 77
8.14. Cancellation of Indebtedness 77
8.15. Subordinated Debt; CS First Boston Debt 77
8.16. Back Bay Loan 77
8.17. No Speculative Transactions 78
8.18. Changes Relating to Certain Agreements 78
8.19. Credit Parties other than the Borrower 78
9. FINANCIAL COVENANT OF THE CREDIT PARTIES 78
10. CLOSING CONDITIONS 78
10.1. Loan Documents 78
10.2. Certified Copies of Governing Documents 79
10.3. Corporate or Other Action 79
10.4. Incumbency Certificate 79
10.5. Validity of Liens 79
10.6. Perfection Certificates and Collateral Search Results 79
10.7. Certificates of Insurance 79
10.8. Agency Account Agreements 80
10.9. Borrowing Base Report and Collateral Update Certificates 80
10.10. Accounts Receivable Aging Report 80
10.11. Inventory Appraisal 80
10.12. Payment of Closing Fees 80
10.13. Payoff Letter 80
10.14. Opinions of Counsel 80
10.15. Title Insurance 81
10.16. Hazardous Waste Assessments 81
10.17. Solvency Certificate 81
10.18. No Material Adverse Change 81
10.19. Landlord Waivers 81
10.20. Collateral Examinations/Appraisals 81
10.21. Financial Statement and Projections 81
10.22. Back Bay Intercreditor Agreement; Back Bay Loan Documents 81
10.23. Subordinated Debt 82
11. CONDITIONS TO ALL BORROWINGS 82
11.1. Representations True; No Default or Event of Default 82
11.2. No Legal Impediment 82
11.3. Governmental Regulation 82
11.4. Proceedings and Documents 82
11.5. Payment of Fees 82
11.6. Exchange Limitations 83
11.7. Validity of Liens 83
11.8. Indenture Borrowing Limitations 83
12. EVENTS OF DEFAULT; ACCELERATION; ETC 83
12.1. Events of Default and Acceleration 83
12.2. Termination of Commitments 87
12.3. Remedies 87
12.4. Distribution of Collateral Proceeds 87
13. SETOFF 88
14. THE AGENT 89
14.1. Authorization 89
14.2. Quebec Appointment 90
14.3. Employees and Administrative Agents 90
14.4. No Liability 91
14.5. No Representations 91
14.5.1. General 91
14.5.2. Closing Documentation, etc 91
14.6. Payments 91
14.6.1. Payments to Agent 92
14.6.2. Distribution by Administrative Agent 92
14.6.3. Delinquent Lenders 92
14.7. Holders of Letters of Credit Participation 92
14.8. Indemnity 93
14.9. Administrative Agent as Lender 93
14.10. Resignation; Removal 93
14.11. Notification of Defaults and Events of Default 93
14.12. Duties in the Case of Enforcement 93
14.13. Administrative Agent May File Proofs of Claim 94
15. EXPENSES 95
16. INDEMNIFICATION 95
17. SURVIVAL OF COVENANTS, ETC 96
18. ASSIGNMENT AND PARTICIPATION 97
18.1. General Conditions 97
18.2. Assignments 97
18.3. Register 98
18.4. New Notes 98
18.5. Participations 98
18.6. Payments to Participants 99
18.7. Assignee or Participant Affiliated with the Credit Parties 99
18.8. Miscellaneous Assignment Provisions 99
18.9. Special Purpose Funding Vehicle 100
19. NOTICES, ETC 100
20. GOVERNING LAW 101
21. HEADINGS 101
22. COUNTERPARTS 101
23. ENTIRE AGREEMENT, ETC 102
24. WAIVER OF JURY TRIAL 102
25. CONSENTS, AMENDMENTS, WAIVERS, ETC 102
26. SEVERABILITY 104
27. CONFIDENTIALITY 104
28. USA PATRIOT ACT 106
29. DESIGNATION OF PERMITTED LIENS 106
EXHIBITS AND SCHEDULES
Exhibit A Form of Loan Request
Exhibit B Form of Compliance Certificate
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Borrowing Base Report
Exhibit E Form of Indenture Borrowing Base Report
Exhibit F Form of Collateral Update Certificate
Exhibit G Form of Accounts Receivable/Loan Reconciliation Report
Exhibit H Form Revolving Credit Note
Schedule 1 Lenders, Commitment Percentages, Lending Offices
Schedule 1(a) Mortgaged Properties
Schedule 6.4 Distributions
Schedule 6.6 Intellectual Property
Schedule 6.7 Litigation
Schedule 6.8 Material Adverse Contracts
Schedule 6.13 Employment Matters
Schedule 6.18 Subsidiaries
Schedule 6.19 Environmental Matters
Schedule 6.20 Bank Accounts
Schedule 6.21 Labor Contracts
Schedule 6.24 Certain Transactions
Schedule 8.1 Certain Investments
Schedule 8.2(a) Existing Indebtedness
Schedule 8.3 Existing Liens
Schedule 8.4 Certain Affiliate Payments
Schedule 10.19 Landlord Waivers
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT (this Credit Agreement) is made as of
October 31, 2005, by and among ICON HEALTH & FITNESS, INC., a Delaware
corporation (the Borrower), the other Credit Parties party hereto, BANK OF
AMERICA, N.A. and the other lenders from time to time party hereto, and BANK OF
AMERICA N.A., as administrative agent for itself and the other Lenders (the
Administrative Agent), as Issuing Lender and as Cash Management Bank.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the meanings set forth
in this 1 or elsewhere in the provisions of this Credit Agreement referred to
below:
A Rated Bank See 8.1
Accounts Receivable. All rights of any Credit Party to payment for goods
sold, leased or otherwise marketed in the ordinary course of business and all
rights of any Credit Party to payment for services rendered in the ordinary
course of business and all sums of money or other proceeds due thereon pursuant
to transactions with account debtors, recorded on books of account in accordance
with GAAP.
Accounts Receivable/Loan Reconciliation Report. A certificate signed by
the senior financial officer (or another officer designated by such senior
financial officer) of the Borrower in substantially the form of Exhibit G
hereto.
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to 7.4(c).
Administrative Agent. Bank of America, N.A., acting as administrative
agent and , with respect to the Security Documents governed by English law, as
security trustee, for the Lenders, and each other Person appointed as the
successor of the Administrative Agent in accordance with 14.10.
Administrative Agent Advance. See 2.14.
Administrative Agents Fee. See 5.1.
Administrative Agents Office. The Administrative Agents office located
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as
the Administrative Agent may designate from time to time.
Administrative Agents Special Counsel. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, or such
other counsel as may be approved by the Administrative Agent.
Administrative Questionnaire. An Administrative Questionnaire in a form
supplied by the Administrative Agent.
Affiliate. With respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.
Agency Account Agreement: See 7.17.
Applicable Commitment Fee Margin. For each period commencing on an
Adjustment Date through the date immediately preceding the next Adjustment Date,
the Applicable Commitment Fee Margin applicable to the Commitment Fee shall be
the rate per annum corresponding to the Total Outstandings (as determined on
each Adjustment Date based upon the average Total Outstandings for the
immediately preceding Fiscal Quarter), as set forth in the table below.
Notwithstanding the foregoing, (a) during the period commencing on the
Closing Date through the date immediately preceding the first Adjustment Date to
occur after the Fiscal Quarter ended May 31, 2006, the Applicable Commitment Fee
Margin shall be the Applicable Commitment Fee Margin set forth in Level I of the
table below and (b) if the Borrower fails to deliver any Compliance Certificate
pursuant to 7.4(c) hereof, then, for the period commencing on the next
Adjustment Date to occur subsequent to such failure through the date immediately
following the date on which such Compliance Certificate is delivered, the
Applicable Commitment Fee Margin shall be the highest Applicable Commitment Fee
Margin set forth the table below.
Applicable Commitment
Level Total Outstandings Fee Margin
----- -------------------------------------------- ---------------------
I Total Outstandings < 33% of Total Commitment 0.35%
II Total Outstandings < 67% of Total Commitment
and Total Outstandings > 33% of Total Commitment 0.30%
III Total Outstandings > 67% of Total Commitment 0.25%
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date, the Applicable
Margin applicable to LIBOR Rate Loans and Base Rate Loans shall be the rate per
annum corresponding to the Excess Availability (as determined on each Adjustment
Date based upon the average Excess Availability for the immediately preceding
Fiscal Quarter), as set forth in Table I below. Notwithstanding the foregoing,
(a) in the event that Consolidated EBITDA is $50,000,000 or greater as at the
end of any two consecutive Fiscal Quarters occurring after the Closing Date
(measured for the four Fiscal Quarter period ending on each such Fiscal Quarter
end date), the Applicable Margin shall be determined by reference to Table II
below and (b) in the event that Consolidated EBITDA is $60,000,000 or greater
for any two consecutive Fiscal Quarters occurring after the Closing Date
(measured for the four Fiscal Quarter period ending on each such Fiscal
Quarter end date), the Applicable Margin shall be determined by reference to
Table III below; provided, however, in the event that Consolidated EBITDA as at
the end of any subsequent Fiscal Quarter after clause (a) or (b) is invoked
(measured for the four Fiscal Quarter period ending on such Fiscal Quarter end
date) (i) is less than $60,000,000 but greater than or equal to $50,000,000, the
Applicable Margin shall be determined by reference to Table II below or (ii) is
less than $50,000,000, the Applicable Margin shall be determined by reference to
Table I below.
Notwithstanding the foregoing, (a) during the period commencing on the
Closing Date through the date immediately preceding the first Adjustment Date to
occur after the Fiscal Quarter ended May 31, 2006, the Applicable Margin shall
be the Applicable Margin set forth in Level II of Table I below and (b) if the
Borrower fails to deliver any Compliance Certificate pursuant to 7.4(c) hereof,
then, for the period commencing on the next Adjustment Date to occur subsequent
to such failure through the date immediately following the date on which such
Compliance Certificate is delivered, the Applicable Margin shall be the highest
Applicable Margin set forth in Table I below.
TABLE I
Applicable Margin for Applicable Margin for
Level Excess Availability LIBOR Rate Loans Base Rate Loans
---- ------------------------------- ---------------- ----------------------
I < $25,000,000 3.00% 1.25%
II > $25,000,000 and < $50,000,000 2.75% 1.00%
III > $50,000,000 and < $75,000,000 2.50% 0.75%
IV > $75,000,000 and < $100,000,000 2.25% 0.50%
V > $100,000,000 2.00% 0.25%
TABLE II
Applicable Margin for Applicable Margin for
Level Excess Availability LIBOR Rate Loans Base Rate Loans
---- ------------------------------- ---------------- ----------------------
I < $25,000,000 2.75% 1.00%
II > $25,000,000 and < $50,000,000 2.50% 0.75%
III > $50,000,000 and < $75,000,000 2.25% 0.50%
IV > $75,000,000 and < $100,000,000 2.00% 0.25%
V > $100,000,000 1.75% 0.00%
TABLE III
Applicable Margin for Applicable Margin for
Level Excess Availability LIBOR Rate Loans Base Rate Loans
---- ------------------------------- ---------------- ----------------------
I < $25,000,000 2.50% 0.75%
II > $25,000,000 and < $50,000,000 2.25% 0.50%
III > $50,000,000 and < $75,000,000 2.00% 0.25%
IV > $75,000,000 and < $100,000,000 1.75% 0.00%
V > $100,000,000 1.50% 0.00%
Applicable Pension Legislation. At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to any Credit Party.
Appraised Value. The fair market value of any Real Estate determined by
the most recent appraisal performed by a qualified independent appraiser
approved by the Administrative Agent, in form and substance acceptable to the
Administrative Agent.
Approved Fund. Any Fund 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.
Arranger. Banc of America Securities LLC.
Assignment and Acceptance. An assignment and acceptance entered into by
a Lender and an Eligible Assignee (with the consent of any party whose consent
is required by 18.2), and accepted by the Administrative Agent, in substantially
the form of ExhibitC or any other form approved by the Administrative Agent.
Availability Reserve. $20,000,000.
Back Bay Agent. Back Bay Capital Funding LLC.
Back Bay Intercreditor Agreement. That certain Intercreditor Agreement,
dated as of the date hereof, among the Credit Parties, the Back Bay Agent and
the Administrative Agent.
Back Bay Loan. The Term Loan Debt as defined in the Back Bay
Intercreditor Agreement.
Back Bay Loan Agreement. The Term Loan Agreement, dated as of the date
hereof, by and among the Credit Parties, certain financial institutions party
thereto and the Back Bay Agent, as agent for such financial institutions.
Back Bay Loan Documents. The Loan Documents as defined in the Back Bay
Loan Agreement.
Bain Entities. Collectively, ▇▇▇▇ Capital Fund IV, L.P., ▇▇▇▇ Capital
Fund IV B, L.P., Bain Associates and BCIP Trust Associates, L.P., and funds or
trusts managed or controlled by ▇▇▇▇ Capital, Inc.
Balance Sheet Date. May 31, 2005.
Bank of America. Bank of America, N.A. and its successors and assigns.
Base Rate. For any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its prime rate. The prime rate is a rate set by Bank of America based upon
various factors including Bank of Americas costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in such rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of such
change.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
Bondholders. As defined in the Deed of Hypothec.
Bondholders Instrument. As defined in the Deed of Hypothec.
Bonds. Any bonds, mortgage bonds, debentures or other titles of
Indebtedness issued by ICON du Canada and secured under the Deed of Hypothec for
the purposes of Article 2692 of the Civil Code of Quebec and includes, without
limitation, the Initial Bonds.
Borrower. As defined in the preamble hereto.
Borrowing Base. As at any date of determination thereof, an amount in
Dollars equal to the result of the following:
(a) eighty-five percent (85%) of the net amount of Eligible Accounts
Receivable outstanding at such date; plus
(b) (i) ninety-five percent (95%) of the Net Orderly Liquidation Value of
Eligible Inventory at such date during the period of July 1 through November 30
of each calendar year and (ii) eighty-five percent (85%) of the Net Orderly
Liquidation Value of Eligible Inventory at such date during all other times;
plus
(c) in the sole and absolute discretion of Administrative Agent, up to
50% of the book value of Eligible In-Transit Inventory valued at the lower of
cost (determined on a first-in, first-out basis) or market, excluding individual
shipments (per vessel) with an aggregate book value of less than $250,000; plus
(d) Fixed Asset Availability; less
(e) the Availability Reserve; less
(f) other Reserves.
The Administrative Agent may, from time to time in the exercise of its
reasonable discretion and upon written notice to the Borrower, (x) reduce the
lending formula with respect to Eligible Accounts Receivable to the extent that
the Administrative Agent determines that: (i) the dilution in respect of the
Accounts Receivable for any period has increased in any material respect or may
be reasonably anticipated to increase in any material respect above historical
levels, or (ii) the general creditworthiness of account debtors or other
obligors of the Borrower or its domestic or Canadian Subsidiaries has declined
or (y) reduce the lending formula(s) with respect to Eligible Inventory to the
extent that the Administrative Agent determines that: (i) the number of days of
the turnover of the inventory of the Borrower or its domestic or Canadian
Subsidiaries for any period has changed in any material adverse respect, (ii)
the liquidation value of the Eligible Inventory, or any category thereof, has
decreased, or (iii) the nature and quality of the inventory of the Borrower or
its domestic or Canadian Subsidiaries has deteriorated in any material respect
or the mix of such inventory has changed materially. In determining whether to
reduce the lending formula(s), the Administrative Agent may consider events,
conditions, contingencies or risks which are also considered in determining
Eligible Accounts Receivable, Eligible Inventory or in establishing the
Reserves. For purposes of calculating the Dollar amount of any assets included
in the Borrowing Base which are denominated in Canadian Dollars, the Dollar
amount of such assets shall be calculated by reference to the spot rate for
exchange ofCanadian Dollars to Dollars, as quoted by the most recent edition of
The Wall Street Journal.
Borrowing Base Report. A report signed by the chief financial officer or
cash manager of the Borrower demonstrating calculation of the Borrowing Base in
the form of Exhibit D hereto.
Borrower Pledge Agreement. The Pledge Agreement of even date herewith
executed by the Borrower in favor of the Administrative Agent, on behalf of
itself and the Lenders, pledging all Capital Stock of its Subsidiaries.
Business Day. Any day on which commercial banking institutions in
Boston, Massachusetts, are open for the transaction of banking business and, in
the case of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
Canadian Dollars. Lawful money of Canada.
Capital Expenditures. With respect to the Credit Parties, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
the Credit Parties during any measuring period for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one year and that are required to be capitalized
under 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.
Capitalized Leases. Leases under which any Credit Party is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with GAAP.
Cash Management Bank. Bank of America and its successors and assigns, in
its capacity as the provider of cash management services to the Credit Parties.
Cash Management Obligations. All present and future liabilities,
obligations and Indebtedness of the Credit Parties owing to any Lender, the
Administrative Agent, the Cash Management Bank or any Affiliate of any of the
foregoing under or in connection with any cash management or related services or
products provided by any Lender, the Administrative Agent, the Cash Management
Bank or any Affiliate of any of the foregoing to or for the account of any
Credit Party, including, without limitation, liabilities, obligations or
Indebtedness in respect of automated clearing house and other fund transfers,
checks, money orders, drafts, instruments, funds, payments and other items and
forms of remittances paid, deposited or otherwise credited to any deposit,
disbursement or other account of any Credit Party; any credit card or similar
products offered to any Credit Party; any overdraft or other extension of credit
made to cover any funds transfer, check, draft, instrument or amount paid for
the account or benefit of any Credit Party, and all fees, charges, indemnities,
expenses and other amounts from time to time owing to any Lender, the
Administrative Agent, the Cash Management Bank or any Affiliate of any of the
foregoing in connection therewith (all whether accruing before or after the
commencement of any bankruptcy proceeding by or against any Credit Party and
regardless of whether allowed as a claim in any such proceeding).
Casualty Event. With respect to any property (including any interest in
property) of any Credit Party, any loss of, damage to, or condemnation or other
taking of, such property for which any Credit Party receives insurance proceeds,
proceeds of a condemnation award or other compensation.
Change of Control. Any event, transaction or occurrence as a result of
which (a) the Existing Holders shall cease to own, directly or indirectly, a
majority of the voting stock of Holdings, (b) the Existing Holders shall cease
to have or exercise the right, directly or indirectly, to designate at least a
majority of the members of the Board of Directors of Holdings, (c) the Existing
Holders and their Affiliates cease to own (directly or indirectly) and control
all of the economic and voting rights associated with ownership of at least
fifty-one percent (51%) of all classes of the outstanding Capital Stock of all
classes of Holdings on a fully diluted basis, (d) Holdings ceases to own and
control all of the economic and voting rights associated with all of the
outstanding Capital Stock of the Borrower, (e) the Borrower ceases to own and
control all of the economic and voting rights associated with all of the
outstanding Capital Stock of each of its Subsidiaries or (f) any Change of
Control (as such term is defined in the Subordinated Notes Documents or the
documents governing any other Indebtedness of any Credit Party) shall occur.
Closing Date. The first date on which the conditions set forth in 10 and
11 have been satisfied and any Loans are to be made or any Letters of Credit are
to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of any Credit
Party that are or are intended to be subject to the Liens created by the
Security Documents.
Collateral Assignment of Intercompany Notes. The Collateral Assignment
of Intercompany Notes made by each applicable Credit Party in favor of the
Administrative Agent, on behalf of itself and the Lenders.
Collateral Update Certificate. A certificate signed by the chief
financial officer or cash manager of the Borrower in substantially the form of
Exhibit F hereto.
Commitment. With respect to each Lender, (a) the amount set forth on
Schedule 1 hereto as the amount of such Lenders commitment (i) to make Revolving
Credit Loans to the Borrower and (ii) to participate in the issuance, extension
and renewal of Letters of Credit issued for the account of the Borrower, as the
same may be reduced from time to time; or (b) if such commitment is terminated
pursuant to the provisions hereof, zero.
Commitment Fee. See 2.2.
Commitment Percentage. With respect to each Lender, the percentage set
forth on Schedule 1 hereto as such Lenders percentage of the aggregate
Commitments of all of the Lenders.
Compliance Certificate. See 7.4(c).
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Credit Parties,
consolidated in accordance with GAAP.
Consolidated EBITDA. For any fiscal period, without duplication, an
amount equal to (a) consolidated net income of the Credit Parties for such
period, minus (b) the sum of (i) income tax credits, (ii) interest income, (iii)
gain from extraordinary items for such period, (iv) any aggregate net gain (but
not any aggregate net loss) during such period arising from the sale, exchange
or other disposition of capital assets by any Credit Party (including any fixed
assets, whether tangible or intangible, and all inventory sold in conjunction
with the disposition of fixed assets and all securities), and (v) any other
non-cash gains that have been added in determining consolidated net income, in
each case to the extent included in the calculation of consolidated net income
of the Credit Parties for such period in accordance with GAAP, but without
duplication, plus (c) the sum of (i) any provision for income taxes, (ii)
Consolidated Interest Expense, (iii) non-cash loss from extraordinary items for
such period, (iv) the amount of non-cash charges (including depreciation and
amortization) for such period, (v) amortized debt discount for such period, and
(vi) the amount of any deduction to consolidated net income as the result of any
grant to any members of the management of any Credit Party of any Capital Stock,
in each case to the extent included in the calculation of consolidated net
income of the Credit Parties for such period in accordance with GAAP, but
without duplication. For purposes of this definition, the following items shall
be excluded in determining consolidated net income of the Credit Parties: (1)
the income (or deficit) of any other Person (other than a Subsidiary) in which
any Credit Party has an ownership interest, except to the extent any such income
has actually been received by a Credit Party in the form of cash dividends or
distributions; (2) the undistributed earnings of any Subsidiary of any Credit
Party 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 or requirement of law applicable to such Subsidiary;
(3) any restoration to income of any extraordinary or contingency reserve,
except to the extent that such reserve reduced Consolidated EBITDA in such four
quarter period; (4) any write-up of any asset; (5) any net gain from the
collection of the proceeds of life insurance policies; (6) any net gain (but not
any aggregate loss) arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of the Credit Parties; (7) in
the case of a successor to any Credit Party by consolidation or merger or as a
transferee of its assets, any earnings of such successor prior to such
consolidation, merger or transfer of assets; and (8) any deferred credit
representing the excess of equity in any Subsidiary of any Credit Party at the
date of acquisition of such Subsidiary over the cost to such Credit Party of the
investment in such Subsidiary.
Consolidated Interest Expense. For any fiscal period, interest expense
(whether cash or non-cash) of the Credit Parties determined in accordance with
GAAP for the relevant period ended on such date, including interest expense with
respect to Indebtedness of any Credit Party and interest expense for the
relevant period that has been capitalized on the balance sheet of the Credit
Parties.
Control. The possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
Controlling and Controlled have meanings correlative thereto.
Control Letter. A letter agreement between the Administrative Agent and
(i) the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Credit Party, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the name
of any Credit Party, (iii) a futures commission merchant, as applicable, or
clearing house with respect to commodity accounts and commodity contracts held
by any Credit Party, whereby, among other things, the issuer, securities
intermediary or futures commission merchant disclaims any security interest in
the applicable financial assets, acknowledges the Lien of the Administrative
Agent, on behalf of itself and Lenders, on such financial assets, and agrees to
follow the instructions or entitlement orders of the Administrative Agent
without further consent by the affected Credit Party.
Conversion Request. A notice given by the Borrower to the Administrative
Agent of the Borrowers election to convert or continue a Loan in accordance with
2.7.
Copyright Mortgage. The Memorandum of Grant of Security Interest in
Copyrights, made by each applicable Credit Party in favor of the Administrative
Agent, on behalf of itself and the Lenders.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Credit Parties. Holdings, the Borrower and each of their respective
Subsidiaries.
CS First Boston. Credit Suisse First Boston Corporation, a Delaware
corporation.
CS First Boston Debt. Indebtedness of Holdings issued to CS First Boston
in the amount of $7,500,000 pursuant to (i) the Amended and Restated Note
Agreement, Dated as of September 27, 1999, and (ii) the 0% Convertible
Subordinated Note Due September 27, 2011, dated September 27, 1999, in the form
thereof delivered to the Administrative Agent on or prior to the Closing Date.
Deed of Hypothec. That certain Deed of Hypothec and Issue of Mortgage
Bonds dated the date hereof between ICON du Canada and the Administrative Agent,
acting as fond de pouvoir pursuant to Article 2629 of the Civil Code of Quebec,
to secure payment of the applicable Bond.
Default. See 12.1.
Default Rate. (a) When used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Margin applicable to the Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a LIBOR Rate Loan, the Default Rate
shall be an interest rate equal to the LIBOR Rate plus the Applicable Margin
applicable to such Loan plus 2% per annum and (b) when used with respect to
Letter of Credit Fees, a rate equal to the Applicable Margin applicable to
Revolving Loans bearing interest at the LIBOR Rate plus 2% per annum, in all
cases to the fullest extent permitted by applicable law.
Delinquent Lender. See 14.6.3.
Derivative Agreement. Any and all transactions, agreements or documents
now existing or hereafter entered into, which provide for an interest rate,
credit, commodity or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging any Credit Partys exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security or currency valuations or
commodity prices and not for speculative purposes.
Determined Value At the relevant time of reference thereto, the
appraised Net Orderly Liquidation Value of Eligible Machinery and Equipment
determined by the most recent appraisal thereof performed by a qualified
independent appraiser approved by the Administrative Agent, in form and
substance acceptable to the Administrative Agent. To the extent that any
Eligible Machinery and Equipment is encumbered by a Lien or encumbrance which is
a Permitted Lien not securing the Obligations, the amount of the Indebtedness
secured by such Lien or encumbrance shall be deducted from the value determined
in accordance with the immediately preceding sentence of this definition of
Determined Value.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Lender designated
as such in Schedule 1 hereto; thereafter, such other office of such Lender, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or is
to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with 2.7.
Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any contra accounts, credits, rebates, offsets,
holdbacks or other adjustments or commissions payable to third parties that are
adjustments to such Accounts Receivable) of the Borrower and its domestic and
Canadian Subsidiaries which the Administrative Agent, in its sole credit
judgment (not to be exercised unreasonably), deems to be an Eligible Account
Receivable. Without limiting the generality of the foregoing, no Account
Receivable shall be an Eligible Account Receivable if:
(i) it arises out of a sale made by the Borrower or such Subsidiary to a
Subsidiary or an Affiliate of the Borrower or such Subsidiary or to a Person
Controlled by an Affiliate of the Borrower or such Subsidiary (other than a
portfolio company of any of the ▇▇▇▇ Entities, CS First Boston or any of their
respective Affiliates); or
(ii) it is unpaid for more than sixty (60) days after the original due
date shown on the invoice; or
(iii) it is due and unpaid more than one hundred twenty (120) days after
the original invoice date; provided that the Administrative Agent may extend
such one hundred twenty (120) day limitation to one hundred fifty (150) days as
to Accounts Receivable owing by certain creditworthy account debtors as
determined by the Administrative Agent in its reasonable credit judgment; or
(iv) 50% or more of the Accounts Receivable from the account debtor are
not deemed Eligible Accounts Receivable; or
(v) any material covenant, representation or warranty contained in the
agreement with respect to such Account Receivable has been breached by the
Borrower or such Subsidiary; or
(vi) the account debtor is also the Borrowers or such Subsidiarys
creditor or supplier, or the account debtor has disputed liability with respect
to such Account Receivable, or the account debtor has made any claim with
respect to any other Account Receivable due from such account debtor to the
Borrower or such Subsidiary, or the Account Receivable otherwise is or may
become subject to any right of setoff by the account debtor; in each case, the
Account Receivable to be ineligible to the extent of such contra, dispute,
claim, or setoff; or
(vii) the account debtor has commenced a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or other insolvency,
reorganization or adjustment laws of any other jurisdiction, or made an
assignment for the benefit of creditors, or a decree or order for relief has
been entered by a court having jurisdiction in the premises in respect of the
account debtor in an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or other insolvency, reorganization or
adjustment laws of any other jurisdiction, or any other petition or other
application for relief under the federal bankruptcy laws or other insolvency,
reorganization or adjustment laws of any other jurisdiction has been filed
against the account debtor, or if the account debtor has failed, suspended
business, ceased to be solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs; or
(viii) (A) it arises from a sale to an account debtor outside the United
States or Canada (excluding the province of Newfoundland, the Northwest
Territories and the territory of Nunavut); provided that, in the Administrative
Agents sole discretion, Accounts Receivable owing from Regency in Australia and
New Zealand, RFE International in the United Kingdom and Sears Mexico in Mexico,
may be included as Eligible Accounts Receivable so long as they are payable in
Dollars, do not exceed an amount of $3,000,000 in the aggregate and notice and
other perfection requirements are met or (B) is denominated in a currency other
than Dollars or Canadian Dollars, unless, in each case, the sale is covered by
credit insurance or on letter of credit guaranty or acceptance terms, in each
case acceptable to the Administrative Agent in its sole discretion; or
(ix) it arises from a sale to the account debtor on a billandhold,
guaranteed sale, saleorreturn, saleonapproval, consignment or any other
repurchase or return basis; or
(x) the account debtor is the United States of America, any state located
therein or the Canadian government (Her Majesty in Right of Canada), any
province or territory located therein or, in each case, any department, agency
or instrumentality thereof, unless the Borrower or such Subsidiary assigns its
right to payment of such Account Receivable to the Administrative Agent, in a
manner satisfactory to the Administrative Agent, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C. 203 et seq., as amended), any
equivalent state law or the Financial Administration Act (Canada) or any
applicable provincial or territorial statute or municipal ordinance of
similar
purpose and effect, with respect to such obligation, as applicable; or
(xi) it is not at all times subject to the Administrative Agents duly
perfected, firstpriority security interest and no other Lien except a Permitted
Lien which is subordinate to the Administrative Agents Lien; or
(xii) the goods giving rise to such Account Receivable have not been
delivered to and accepted by the account debtor or the services giving rise to
such Account Receivable have not been performed by the Borrower or such
Subsidiary and accepted by the account debtor or the Account Receivable
otherwise does not represent a final sale (other than SAB-104 adjustments); or
(xiii) the Account Receivable is evidenced by chattel paper or an
instrument of any kind, or has been reduced to judgment; or
(xiv) the Borrower or such Subsidiary has made any agreement with the
account debtor for any deduction therefrom, except for discounts or allowances
which are made in the ordinary course of business for prompt payment and which
discounts or allowances are reflected in the calculation of the face value of
each invoice related to such Account Receivable; or
(xv) the Account Receivable is owing to Universal; or
(xvi) such Account Receivable is owing by a consumer and (A) two or more
installments with respect thereto remain unpaid for more than thirty (30) days
or (B) to the extent that the aggregate of those consumer Accounts Receivable
exceed $10,000,000.
Eligible Assignee. Any of (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved Fund and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and (ii) unless a Default or an Event
of Default has occurred and is continuing, the Borrower (each such approval not
to be unreasonably withheld or delayed).
Eligible Inventory. With respect to the Borrower and its domestic and
Canadian Subsidiaries, inventory owned by the Borrower or such Subsidiary which
the Administrative Agent, in its sole credit judgment (not to be exercised
unreasonably), deems to be Eligible Inventory. Without limiting the generality
of the foregoing, no inventory shall be Eligible Inventory if:
(i) it is not inventory that, in the Administrative Agents opinion, is
readily marketable in its current form; or
(ii) it is not in good and saleable condition; or
(iii) it is slowmoving, obsolete, defective or unmerchantable; or
(iv) it does not meet all standards imposed by any governmental agency or
authority, including, without limitation, the Fair Labor Standards Act; or
(v) it does not conform in all respects to the warranties and
representations set forth in this Credit Agreement; or
(vi) it is not at all times subject to the Administrative Agents duly
perfected, firstpriority security interest and no other Lien (including the
rights of a purchaser that has made progress payments and the rights of a surety
that has issued a bond to assure Borrowers or one of its domestic or Canadian
Subsidiarys. performance with respect to that inventory and the rights of unpaid
suppliers (other than another Credit Party) under Section 81.1 of the Bankruptcy
and Insolvency Act (Canada)) except a Permitted Lien which is subordinate to the
Administrative Agents Lien; or
(vii) it is in transit (except, in Administrative Agents discretion,
Eligible In-Transit Inventory); or
(viii) it is not located in the United States of America or Canada; or
(ix) it is held on consignment, or not otherwise owned by the Borrower or
such Subsidiary; or
(x) it has been shipped to a customer, regardless of whether such
shipment is on a consignment basis; or
(xi) it consists of supplies, packing materials, shipping materials or
work-in-process; or
(xii) it is not in the possession of the Borrower or such Subsidiary,
unless the Administrative Agent has received a waiver from the party in
possession of such inventory in form and substance satisfactory to the
Administrative Agent; or
(xiii) it bears a third partys trademark licensed by a Credit Party or
other proprietary right, unless the Administrative Agent determines that such
inventory could be sold pursuant to the exercise of remedies by the
Administrative Agent hereunder or under applicable law on terms satisfactory to
the Administrative Agent in its sole discretion.
Eligible In-Transit Inventory. All finished goods inventory owned by the
Borrower, and which finished goods inventory is in transit to Borrowers
facilities in North America with a freight carrier or shipping company which is
not an Affiliate of either the Borrower or the supplier and which finished goods
inventory (a) has been the subject of a transfer of title to Borrower, (b) is
fully insured, (c) is subject to a first priority security interest in and Lien
upon such goods in favor of the Administrative Agent (except for any possessory
Lien upon such goods in the possession of a freight carrier or shipping company
securing only the freight charges for the transportation of such goods to
Borrower), (d) with respect to which the Administrative Agent has been
designated as co-consignee on any ▇▇▇▇ of lading or document of title and (e) is
otherwise deemed to be Eligible Inventory hereunder.
Eligible Machinery and Equipment. Machinery and equipment (i) owned by
the Borrower and its domestic and Canadian Subsidiaries, (ii) located in the
United States of America or Canada, (iii) in which the Administrative Agent
shall have duly perfected, firstpriority security interest (and which shall not
be subject to any other Lien other than Permitted Liens which are subordinate to
the Administrative Agents Lien) and (iv) which are properly insured in
accordance with the provisions of this Credit Agreement.
Eligible Real Estate. With respect to the Borrower and its domestic and
Canadian Subsidiaries, Real Estate owned by the Borrower or such Subsidiary
which the Administrative Agent, in its sole credit judgment (not to be exercised
unreasonably), deems to be Eligible Real Estate. Without limiting the
generality of the foregoing, no Real Estate shall be Eligible Real Estate if:
(i) it is not located in the United States or Canada; or
(ii) it is not at all times subject to the Administrative Agents duly
perfected, firstpriority security interest and no other Lien except a Permitted
Lien which is subordinate to the Administrative Agents Lien; or
(iii) it has not been appraised by a third party appraiser reasonably
acceptable to the Administrative Agent; or
(iv) the Administrative Agent has not received an environmental site
assessment of such Real Estate reasonably acceptable to the Administrative
Agent.
Employee Benefit Plan. (i) Any employee benefit plan within the meaning
of 3(3) of ERISA maintained or contributed to by any Credit Party or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan and (ii)
with respect to any Canadian Subsidiary, any employee benefit program relating
to employees of such Canadian Subsidiary other than pension plans, but
including, without limitation, profit sharing, deferred compensation, incentive
severance, change of control, phantom stock, stock option, stock purchase, bonus
and health or insurance plans and arrangements (in each case, oral or written).
Employment Agreements. The Employment Agreement dated as of February 27,
2004 among Holdings, the Borrower and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the Employment
Agreement dated as of February 27, 2004 among Holdings, the Borrower and ▇▇▇▇
▇▇▇▇▇▇▇▇▇, as amended from time to time in accordance with the provisions of
this Credit Agreement.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
any Credit Party under 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of 4043 of ERISA and the regulations promulgated
thereunder as to which the requirement of notice has not been waived.
Eurocurrency Reserve Rate. For any day, the maximum rate (expressed as a
decimal) at which any bank subject thereto would be required to maintain
reserves under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor or similar regulations relating to such reserve
requirements) against Eurocurrency Liabilities (as that term is used in
Regulation D), if such liabilities were outstanding. The Eurocurrency Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in the Eurocurrency Reserve Rate.
European Subsidiaries. ICON Health & Fitness Italia SpA, ICON Health &
Fitness (Holdings) Limited, ICON Health & Fitness Limited, ICON Health & Fitness
France SAS and AICON Health & Fitness GmBH.
Excess Availability. As of any date of determination thereof, the
difference between (a) the lesser of (i) the Total Commitment at such time and
(ii) the Borrowing Base at such time, and (b) the Revolving Exposure at such
time.
Existing Credit Agreement. The Credit Agreement, as amended, dated as of
April 9, 2002, among the Borrower, the other credit parties signatory thereto,
the lenders signatory thereto, General Electric Capital Corporation, as
administrative agent, and the other parties thereto.
Existing Holders. Collectively, the ▇▇▇▇ Entities, CS First Boston,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇ Tsung, ▇▇▇-▇▇▇▇▇ Ko,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and Inverness/Phoenix Capital, LLC.
Event of Default. See 12.1.
Fee Letter. The fee letter, dated as the date hereof, among the
Borrower, the Administrative Agent and the Arranger.
Fees. Collectively, the Commitment Fee, the Letter of Credit Fees and
the Administrative Agents Fee.
Federal Funds Rate. For any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
Fiscal Month. Any of the monthly accounting periods of the Borrower.
Fiscal Quarter. Any of the quarterly accounting periods of the Borrower,
ending on or about August 31, November 30, February 28 and May 31 of each year;
provided, however that the first three Fiscal Quarters of each Fiscal Year end
on the Saturday nearest the dates set forth in this definition.
Fiscal Year. Any of the annual accounting periods of the Borrower ending
on May 31 of each year.
Fixed Asset Availability. As at any date of determination thereof, an
amount in Dollars equal to the lesser of:
(i) the Fixed Asset Maximum Availability Amount; and
(ii) the sum of (A) 80% of the Determined Value of Eligible Machinery
and Equipment and (B) 75% of the Appraised Value of Eligible Real Estate.
Fixed Asset Availability Maximum Amount. $13,000,000, which shall be
automatically and permanently reduced pursuant to 2.13.
Fixed Charge Coverage Ratio. As at any date of determination, the ratio
of (a) (i) Consolidated EBITDA for the Reference Period ending on such date of
determination minus (ii) the aggregate amount of all Non-Financed Capital
Expenditures made during such period minus (iii) the aggregate amount paid, or
required to be paid (without duplication), in cash in respect of the current
portion of all income taxes for such period to (b) the sum of (i) the aggregate
amount of Consolidated Interest Expense for such period, (ii) the aggregate
amount of regularly scheduled payments of principal in respect of Indebtedness
for borrowed money (including the principal component of any payments in respect
of Capitalized Leases and Synthetic Leases) paid or required to be paid during
such period and (iii) the aggregate amount of dividends and distributions
permitted to be paid by Holdings hereunder and actually paid in cash during such
period.
Free Motion. Free Motion Fitness, Inc., a Utah corporation.
Fund. Any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
GAAP. (i) When used in 9, whether directly or indirectly through
reference to a capitalized term used therein, means (A) principles that are
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect for the Fiscal Year
ended on the Balance Sheet Date, and (B) to the extent consistent with such
principles, the accounting practice of the Credit Parties reflected in the
Credit Parties financial statements for the year ended on the Balance Sheet
Date, and (ii) when used in general, other than as provided above, means
principles that are (A) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (B) consistently applied with past financial statements of the
Credit Parties adopting the same principles, provided that in each case referred
to in this definition of GAAP a certified public accountant would, insofar as
the use of such accounting principles is pertinent, be in a position to deliver
an unqualified opinion (other than qualifications regarding changes in GAAP and
as to normal year-end adjustments) as to financial statements in which such
principles have been properly applied.
Governing Documents. With respect to any Person, its certificate or
articles of incorporation, certificate of incorporation or change of name (if
any), certificate of formation, or, as the case may be, certificate of limited
partnership, its by-laws, memorandum and articles of association, operating
agreement or, as the case may be, partnership agreement or other constitutive
documents and all shareholder agreements, voting trusts and similar arrangements
applicable to any of its Capital Stock.
Governmental Authority. Any national, foreign, federal, state,
provincial, regional, local municipal or other government, or any department,
commission, board, bureau, agency, public authority or instrumentality thereof,
or any court or arbitrator.
Gross Availability. At any time, the lesser of (a) the Borrowing Base at
such time and (b) the Total Commitment at such time.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of 3(2) of ERISA maintained or contributed to by any Credit Party or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan, and with respect to any Canadian Subsidiary, all pension and retirement
plans relating to the current and former employees of such Subsidiary, whether
registered or unregistered, funded or unfunded and written or oral, and with
respect to such Subsidiary, all pension and retirement plans relating to the
current and former employees of such Subsidiary, whether registered or
unregistered, funded or unfunded and written or oral.
Guaranties. Collectively, the Holdings Guaranty, the Subsidiary
Guaranty, the ICON du Canada Guaranty, the ICON Fitness Holdings Guaranty and
any other guaranty executed by any Guarantor in favor of the Administrative
Agent and the Lenders in respect of the Obligations.
Guarantors. Holdings, ICON Fitness Holdings, ICON du Canada, ICON New
Brunswick, International Holdings, Universal, Free Motion, ICON IP, NordicTrack
and each other Person, if any, that executes a guaranty or other similar
agreement in favor of the Administrative Agent in connection with the
transactions contemplated by this Credit Agreement and the other Loan Documents.
Holdings. HF Holdings, Inc. a Delaware corporation.
Holdings Guaranty. The guaranty of even date herewith executed by
Holdings in favor of the Administrative Agent and the Lenders.
Holdings Pledge Agreement. The Pledge Agreement of even date herewith
executed by Holdings in favor of the Administrative Agent, on behalf of itself
and Lenders, pledging all of the Capital Stock of the Borrower.
ICON du Canada. ICON of Canada Inc./ICON du Canada Inc., a Quebec
company.
ICON du Canada Guaranty. The guaranty of even date herewith executed by
ICON du Canada in favor of the Administrative Agent and the Lenders, guarantying
the obligations of ICON New Brunswick under the Subsidiary Guaranty.
ICON du Canada Pledge Agreement. The Hypothec and Pledge of Bonds
between ICON du Canada and the Administrative Agent pursuant to which ICON du
Canada pledges the Bonds to the Administrative Agent and the Lenders.
ICON IP. ICON IP, Inc., a Delaware corporation.
ICON Fitness Holdings. ICON Health & Fitness (Holdings) Limited, a
company incorporated under the laws of the England and Wales.
ICON Fitness Holdings Guaranty. The guaranty dated on or about the date
hereof executed by ICON Fitness Holdings in favor of the Administrative Agent
and the Lenders.
ICON Fitness Holdings Pledge Agreements. The charge over shares granted
or to be granted by ICON Fitness Holdings in favor of the Administrative Agent,
on behalf of itself and the Lenders, charging 65% of the Capital Stock of each
European Subsidiary.
ICON New Brunswick. 510152 N.B. Ltd., a New Brunswick corporation.
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses,
(c) every reimbursement obligation of such Person with respect to
letters of credit, bankers acceptances, or similar facilities issued for the
account of such Person,
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business which are not overdue or which are being
contested in good faith),
(e) every obligation of such Person under any Capitalized Lease,
(f) every obligation of such Person under any Synthetic Lease,
(g) all sales by such Person of (i) accounts or general intangibles for
money due or to become due, (ii) chattel paper, instruments or documents
creating or evidencing a right to payment of money or (iii) other receivables
(collectively receivables), whether pursuant to a purchase facility or
otherwise, other than in connection with the disposition of the business
operations of such Person relating thereto or a disposition of defaulted
receivables for collection and not as a financing arrangement, and together with
any obligation of such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(h) every obligation of such Person (an equity related purchase
obligation) to purchase, redeem, retire or otherwise acquire for value any
shares of Capital Stock issued by such Person or any rights measured by the
value of such Capital Stock,
(i) every obligation of such Person under any Derivative Agreement,
(j) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent that such Person is liable therefor as a result of such Persons ownership
interest in or other relationship with such entity, except to the extent that
the terms of such Indebtedness provide that such Person is not liable therefor
and such terms are enforceable under applicable law, and
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise acting
as surety for, any obligation of a type described in any of clauses (a) through
(j) (the primary obligation) of another Person (the primary obligor), in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person (i) to purchase or pay (or advance or supply funds for
the purchase of) any security for the payment of such primary obligation, (ii)
to purchase property, securities or services for the purpose of assuring the
payment of such primary obligation, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such primary obligation.
The amount or principal amount of any Indebtedness at any time of
determination represented by (1) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (2) any
Capitalized Lease shall be the present value of the aggregate of the rentals
obligation under such Capitalized Lease payable over the term thereof that is
not subject to termination by the lessee, (3) any sale of receivables shall be
the amount of unrecovered capital or principal investment of the purchaser
(other than Holdings or any of its wholly-owned Subsidiaries) thereof, excluding
amounts representative of yield or interest earned on such investment, (4) any
Synthetic Lease shall be the stipulated loss value, termination value or other
equivalent amounts, (5) any Derivative Agreement shall be the maximum amount of
any termination or loss payment required to be paid by such Person if such
Derivative Agreement were, at the time of determination, to be terminated by
reason of any event of default or early termination event thereunder, whether or
not such event of default or early termination event has in fact occurred, (6)
any equity related purchase obligation shall be the maximum fixed redemption or
purchase price thereof inclusive of any accrued and unpaid dividends to be
comprised in such redemption or purchase price and (7) any guaranty or other
contingent liability referred to in clause (k) shall be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
guaranty or other contingent obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
Indenture Borrowing Base Report. A report signed by the chief financial
officer or cash manager of the Borrower demonstrating calculation of the
Borrowing Base (as defined in the Subordinated Indenture) as of the last day of
the most recently ended Fiscal Quarter and the amount of Indebtedness incurred
pursuant to Sections 4.09(b)(1) and 4.09(b)(13) of the Subordinated Indenture as
of the last day of such Fiscal Quarter in the form of Exhibit E-1 hereto.
Initial Bonds. The demand mortgage bonds in the amount of
Cdn.$600,000,000, each dated the date hereof issued by ICON du Canada in favor
of the Administrative Agent under the provisions of the Deed of Hypothec and
pledged pursuant to the Deed of Hypothec and the ICON du Canada Pledge
Agreement.
Interest Payment Date. (i) As to any Base Rate Loan, the first day of
each calendar month and the Maturity Date and (ii) as to any LIBOR Rate Loan,
the last day of each Interest Period applicable thereto; provided, however, that
if any Interest Period for a LIBOR Rate Loan exceeds three (3) months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates.
Interest Period. With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request or
as otherwise required by the terms of this Credit Agreement (A) for any Base
Rate Loan, the last day of each calendar month and (B) for any LIBOR Rate Loan,
1, 2, 3, or 6 months; and (ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Loan and ending on
the last day of one of the periods set forth above, as selected by the Borrower
in a Conversion Request; provided that all of the foregoing provisions relating
to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a Business Day, that 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;
(b) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) if the Borrower fails to give notice as provided in 2.7, the
Borrower shall be deemed to have requested a conversion of the affected LIBOR
Rate Loan to a Base Rate Loan and the continuance of all Base Rate Loans as Base
Rate Loans on the last day of the then current Interest Period with respect
thereto;
(d) any Interest Period relating to any LIBOR Rate Loan 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
(e) any Interest Period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity Date.
International Holdings. ICON International Holdings, Inc., a Delaware
corporation.
International Pledge Agreements. (a) A pledge agreement dated as of the
Closing Date, pledging to the Administrative Agent for the benefit of the
Lenders 65% of the Capital Stock of ICON du Canada and 100% of the Capital Stock
of ICON New Brunswick and (b) a charge over shares charging in favor of the
Administrative Agent for the benefit of the Lenders 100% of the Capital Stock of
ICON Fitness Holdings.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Issuing Lender. Bank of America.
Jumpking. Jumpking, Inc., a Utah corporation.
Lender or Lenders. Bank of America and the other lending institutions
listed on Schedule 1 hereto and any other person who becomes an assignee of any
rights and obligations of a Lender pursuant to 18 and, unless the context
otherwise requires, the Issuing Lender and the Cash Management Bank.
Lending Office. A Domestic Lending Office or a LIBOR Lending Office.
Letter of Credit. See 4.1.
Letter of Credit Application. With respect to any Letter of Credit
issued for the account of the Borrower hereunder, an application for such Letter
of Credit made to the Issuing Lender on its customary form.
Letter of Credit Fee. See 4.6.
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in U.S. dollar deposits) in London.
LIBOR Lending Office. Initially, the office of each Lender designated as
such by notice to the Borrower; thereafter, such other office of such Lender, if
any, that shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan,
the rate of interest equal to (i) the rate determined by the Administrative
Agent at which Dollar deposits for such Interest Period are offered based on
information presented on Page 3750 of the Dow ▇▇▇▇▇ Market Service (formerly
known as the Telerate Service) as of 11:00 a.m. London time on the second LIBOR
Business Day prior to the first day of such Interest Period, divided by (ii) a
number equal to 1.00 minus the Eurocurrency Reserve Rate. If the rate described
above does not appear on the Dow ▇▇▇▇▇ Market Service on any applicable interest
determination date, the LIBOR Rate shall be the rate (rounded upward, if
necessary, to the nearest one hundred-thousandth of a percentage point),
determined on the basis of the offered rates for deposits in Dollars for a
period of time comparable to such LIBOR Rate Loan which are offered by four
major banks in the London interbank market at approximately 11:00 a.m. London
time, on the second LIBOR Business Day prior to the first day of such Interest
Period as selected by the Administrative Agent. The principal London office of
each ofthe four major London banks will be requested to provide a quotation of
its Dollar deposit offered rate. If at least two such quotations are provided,
the rate for that date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in Dollars to leading
European banks for a period of time comparable to such Interest Period offered
by major banks in New York City at approximately 11:00 a.m. New York City time,
on the second LIBOR Business Day prior to the first day of such Interest
Period. In the event that the Administrative Agent is unable to obtain any such
quotation as provided above, it will be considered that LIBOR Rate pursuant to a
LIBOR Rate Loan cannot be determined.
LIBOR Rate Loans. Loans bearing interest calculated by reference to the
LIBOR Rate.
Liens. Any encumbrance, mortgage, deed of trust, assignment, attachment,
deposit arrangement, lien (statutory, judgment or otherwise), pledge,
hypothecation, charge, restriction or other security interest, security
agreement, or any interest of any kind securing any obligation of any entity or
person, whether such interest is based on common law, civil law, statute or
contract..
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Guaranties, the
Security Documents, the Back Bay Intercreditor Agreement, the Fee Letter, and
any other agreement between any Credit Party and/or the Administrative Agent
and/or any Lender relating to fee arrangements.
Loan Request. See 2.6.1.
Loans. The Revolving Credit Loans.
Management Agreements Each of the Management Agreements dated as of
September 24, 1999 among the Borrower, Holdings, and each of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, the Management Agreement dated as of September 24, 1999 among
the Borrower, Holdings and ▇▇▇▇ Capital, Inc. and Section 7.1(b) of Securities
Purchase Agreement dated as of September 24, 1999 between Holdings and CS First
Boston, each as amended from time to time in accordance with the provisions of
this Credit Agreement.
Maturity Date. October 31, 2010.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit issued
for the account of the Borrower, as such aggregate amount may be reduced from
time to time pursuant to the terms of such Letters of Credit.
Mortgaged Property. Any Real Estate which is subject to any Mortgage.
Mortgages. (a) The mortgage(s) and, if applicable, deed(s) of trust,
dated on or prior to the Closing Date, from any Credit Party to the
Administrative Agent with respect to the fee and, if applicable, leasehold
interests of such Credit Party in the properties listed on Schedule 1(a) hereto
and (b) any other deeds of mortgage, deeds of trust, or deeds of leasehold
mortgage executed and delivered to the Administrative Agent after the Closing
Date pursuant to 7.16 hereof, in each case, in form and substance satisfactory
to the Administrative Agent.
Multiemployer Plan. Any multiemployer plan within the meaning of 3(37)
of ERISA maintained or contributed to by any Credit Party or any ERISA
Affiliate.
Net Orderly Liquidation Value. With respect to any inventory, the net
appraised orderly liquidation value of such inventory, as determined from time
to time by the Administrative Agent by reference to the most recent appraisal of
the inventory, machinery and equipment, as applicable, of the Borrower performed
by an appraisal firm acceptable to the Administrative Agent.
Non-Financed Capital Expenditures. Capital Expenditures paid in cash and
not financed with Indebtedness for borrowed money; provided that Capital
Expenditures financed with the proceeds of Revolving Loans shall be deemed to
constitute Non-Financed Capital Expenditures for purposes of this Credit
Agreement.
Non-U.S. Lender. See 5.2.3.
NordicTrack. NordicTrack, Inc., a Utah corporation.
Obligations. All indebtedness, obligations and liabilities of the Credit
Parties to any of the Lenders, the Issuing Lender, the Administrative Agent, the
Cash Management Bank or any of their Affiliates, individually or collectively,
existing on the date of this Credit Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, arising or incurred under this Credit Agreement or any of
the other Loan Documents or any Derivative Agreement or in respect of any of the
Loans made, or any obligations under Derivative Agreements or Cash Management
Obligations or Reimbursement Obligations incurred or any of the Letter of Credit
Applications, Letters of Credit or other instruments at any time evidencing any
thereof.
Operating Account. See 2.6.2.
Outstanding or outstanding. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
Patent Agreement. The Patent Collateral Assignment and Security
Agreement, made in favor of the Administrative Agent, on behalf of itself and
the other Lenders, by each applicable Credit Party.
PBGC. The Pension Benefit Guaranty Corporation created by 4002 of ERISA
and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates referenced to and
defined in each of the Security Agreements.
Permitted Acquisition. The acquisition of any Person, business, or
specified group of assets (the Target) by any Credit Party, provided that, with
respect to any such acquisition, (1) the Administrative Agent and the Required
Lenders approve, in their sole discretion, such acquisition in writing in
advance or (2) each of the following conditions is met:
(a) immediately prior to and after giving effect to, such
acquisition, no Default or Event of Default shall then exist, and the Borrower
shall so certify;
(b) the Target is located in the United States or Canada;
(c) if applicable, the Borrower shall certify compliance with the
financial covenant contained in 9 on a pro forma basis after giving effect to
such acquisition;
(d) (i) the consideration therefor shall be paid in cash or by the
issuance of unsecured Indebtedness permitted hereby or assumption of unsecured
Indebtedness of the Target permitted hereby (provided that any Indebtedness so
assumed shall have been in existence prior to, and shall not have been incurred
in contemplation of, such acquisition, and shall not be secured by any assets of
the Target or any Credit Party), (ii) the aggregate consideration paid or to be
paid (in cash or by such issuance or assumption of Indebtedness) by the Credit
Parties in connection with any one such acquisition shall not exceed $5,000,000
and (iii) the aggregate consideration paid or to be paid (in cash or by such
issuance or assumption of indebtedness) by the Credit Parties in connection with
all such acquisitions made during any Fiscal Year shall not exceed $10,000,000;
(e) such acquisition shall have been approved by the board of
directors and shareholders, if required, of the Target;
(f) immediately prior to giving effect to such acquisition, Excess
Availability shall be no less than $55,000,000;
(g) at least thirty (30) days prior to the consummation of such
acquisition, the Borrower shall deliver to the Administrative Agent updated
versions of the most recent projections provided to the Administrative Agent
pursuant to the terms of this Credit Agreement, reflecting that Excess
Availability shall be $40,000,000 or greater for at least ninety (90) days after
the consummation of the acquisition;
(h) either (i) such acquisition is the acquisition of assets (and
assumption of liabilities) only (for use in substantially the same line of
business as the line of business of the Credit Parties) or (ii) such acquisition
involves the purchase of the Capital Stock or other equity interests of a Target
and each of the following conditions is met:
(A) such acquisition is the acquisition of one hundred percent (100%) of
the Capital Stock of such Target;
(B) such Target is in substantially the same line of business as the
Credit Parties;
(C) one of the Credit Parties is the survivor of any merger or
consolidation with such Target;
(D) not less than thirty (30) Business Days prior to such acquisition,
the Borrower shall (i) notify the Administrative Agent and the Lenders thereof,
identifying such Target, the proposed purchase price and terms of payment
thereof, and the proposed closing date for such acquisition, and (ii) provide to
the Administrative Agent (A) the most recent draft acquisition agreement
relating to such transaction and all related documents, instruments and
agreements and (B) all recent and historical financial information regarding
such Target available to the Credit Parties;
(E) contemporaneously with the occurrence of any such acquisition, the
Borrower shall (I) cause such Target to guaranty all of the Obligations
hereunder pursuant to a guaranty in form and substance satisfactory to the
Administrative Agent, which such guaranty shall be a Loan Document hereunder,
(II) cause such Target to grant to the Administrative Agent, for the benefit of
the Administrative Agent and the Lenders, a first priority perfected security
interest and lien upon all of its assets, (III) pledge or cause the applicable
Credit Party to pledge to the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, 100% of the Capital Stock of such Target
(limited, in the case of any Target that is a foreign Subsidiary that is a
controlled foreign corporation under Section 957 of the Internal Revenue Code,
to a pledge of 65% of the Capital Stock of each such Target to the extent the
pledge of any greater percentage would result in material adverse tax
consequences to the Borrower), and (IV) cause such Target to deliver to the
Lenders and the Administrative Agent (aa) evidence of proper corporate or other
authorization, and (bb) legal opinions with respect to each of the matters and
documents set forth in this clause (E), in each case, in form and substance
satisfactory to the Administrative Agent and the Lenders; and
(F) the Borrower shall provide to the Administrative Agent such
additional information relating to such Target and the proposed acquisition as
the Administrative Agent may reasonably request.
Permitted Liens. Liens permitted by 8.3 hereof.
Person. Any individual, corporation, limited liability company,
partnership, limited partnership, trust, unincorporated association, business,
or other legal entity, or any Governmental Authority.
Pledge Agreements. The Borrower Pledge Agreement, the Holdings Pledge
Agreement the International Pledge Agreements, the ICON Fitness Holdings Pledge
Agreements and any other pledge agreement or share charge granted by any Credit
Party (as required by this Credit Agreement or any other Loan Document).
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by any Credit Party.
Record. The grid attached to a Revolving Credit Note or the Loan Account
maintained by a Lender with respect to Revolving Credit Loans made by such
Lender.
Reference Period. As of any date of determination, the period of four
consecutive Fiscal Quarters ending on such date; provided that (a) for the
Fiscal Quarter ending on or about November 30, 2005, the Reference Period shall
be deemed to be such Fiscal Quarter then ended, (b) for the Fiscal Quarter
ending on or about February 28, 2006, the Reference Period shall be deemed to be
the two Fiscal Quarters then ended, and (c) for the Fiscal Quarter ending on or
about May 31, 2006, the Reference Period shall be deemed to be the three Fiscal
Quarters then ended.
Register. See 18.3.
Reimbursement Obligation. The Borrowers obligations to reimburse the
Administrative Agent and the Lenders on account of any drawing under any Letter
of Credit as provided in 4.2.
Related Parties. With respect to any specified Person, such Persons
Affiliates and the respective directors, and officers of such Person.
Replacement Lender. See 5.11.
Required Lenders. As of any date, Lenders, excluding Delinquent Lenders,
holding Loans and participating interests in the risks relating to Letters of
Credit constituting at least fifty-one percent (51%) of the outstanding Loans
and Letters of Credit; or, if no Loans or Letters of Credit are then
outstanding, Lenders, excluding Delinquent Lenders, whose Commitments constitute
at least fifty-one percent (51%)of the Total Commitment.
Reserves. As determined by the Administrative Agent in the exercise of
its reasonable discretion and upon written notice to the Borrower, such amounts
as the Administrative Agent may from time to time establish and revise (a) to
reflect (i) any Default or Event of Default or (ii) events, conditions,
contingencies or risks which do or may have a material adverse effect on the
business, assets, operations or financial condition of the Credit Parties (taken
as a whole), or the ability of the Borrower and the other Credit Parties to
fulfill their obligations under this Credit Agreement or the other Loan
Documents or (b) to reflect the belief of the Administrative Agent that any
Borrowing Base Report or other collateral report or financial information
furnished by or on behalf of any Credit Party to the Administrative Agent or any
of the Lenders is or may have been incomplete, inaccurate or misleading in any
material respect, (c) to reflect events, conditions, contingencies or risks
which would reasonably be expected to have a material adverse effect on the
value of the Collateral, taken as a whole, or the value of the security
interests and other rights of the Administrative Agent and the Lenders in the
Collateral (including the enforceability, perfection or priority thereof), (d)
in respect of any dilution of Accounts Receivable of the Borrower and its
domestic and Canadian Subsidiaries in excess of five percent (5%) on a trailing
twelve (12) month basis, (e) in respect of requirements under Section 2.6(b) of
the Back Bay Intercreditor Agreement, (f) in respect of any Derivative
Agreements or Cash Management Obligations, or (g) in respect of inventory held
at a location leased by the Borrower or any domestic or Canadian Subsidiary
where the Administrative Agent has not received a waiver from the lessor (and
any sublessor) of such property, in form and substance satisfactory to the
Administrative Agent. Reserves may include, but are not limited to: rent,
whether for personal or real property but only if a lessors or landlords waiver,
in a form acceptable to the Administrative Agent, has not been received by the
Administrative Agent from such lessor or landlord; customer credits; payables
based upon past due normal trade terms; gift certificates; frequent shopper
programs; layaways and customer deposits; taxes and other governmental charges
(including, without limitation, to the extent of any net liabilities of the
Credit Parties in respect of the Harmonized Sales Tax, the Quebec Sales Tax and
any other applicable sales tax) whether ad valorem, personal or real property or
otherwise and whether or not the tax claims therefor may have priority over the
Administrative Agents security interest in any of the Collateral; and any
customs, duty, freight or other out-of-pocket costs or expenses required or
advisable to land any inventory the purchase of which is supported by a Letter
of Credit.
Restricted Payment. With respect to any Credit Party (a) the declaration
or payment of any dividend or the incurrence of any liability to make any other
payment or distribution of cash or other property or assets in respect of
Capital Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Partys Capital Stock
or any other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt; (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Capital Stock of such
Credit Party now or hereafter outstanding; (e) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any shares of such Credit Partys Capital Stock or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (f) any payment, loan,
contribution, or other transfer of funds or other property to any holder of the
Capital Stock of such Credit Party other than payment of compensation in the
ordinary course to stockholders who are employees of such Credit Party; and (g)
any payment of management fees (or other fees of a similar nature) by such
Credit Party to any equity holder or Affiliate of such Credit Party.
Revolving Credit Loans. The revolving loans to be made by the Lenders to
the Borrower (including Swing Line Loans) pursuant to 2 hereof.
Revolving Credit Notes. See 2.4.
Revolving Exposure. At any time, the sum of the outstanding amount of
all Revolving Credit Loans plus the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations.
Security Agreement. The Security Agreement of even date herewith entered
into by and among the Administrative Agent, on behalf of itself and the Lenders,
and each Credit Party that is a signatory thereto.
Security Documents. The Guaranties, the Security Agreement, the
Copyright Agreement, the Patent Agreement, the Trademark Agreement, the Pledge
Agreements, the Mortgages, the Collateral Assignment of Intercompany Notes, the
U.K. Debenture, the Agency Account Agreements, the Bonds, the Deed of Hypothec,
the ICON du Canada Pledge Agreement and all other instruments and documents,
including without limitation Uniform Commercial Code and Personal Property
Security Act financing statements, and other equivalent registrations and
personal property security filings with respect to any other applicable
jurisdiction, control agreements and the like, required to be executed or
delivered pursuant to, or in connection with, this Credit Agreement or any other
Loan Document.
Senior Management. The chairman, president, chief financial officer,
chief executive officer, any vice president, the cash manager, the treasurer,
the controller, or the general counsel of the Borrower.
Settlement. With respect to any Swing Line Loans, the making or
receiving of payments, in immediately available funds, by the Lenders, to the
extent necessary to cause each Lenders actual share of the outstanding amount of
Revolving Credit Loans (after giving effect to any Loan Request) to be equal to
such Lenders Commitment Percentage of the outstanding amount of such Revolving
Credit Loans (after giving effect to any Loan Request), in any case where, prior
to such event or action, the actual share is not so equal.
Settlement Amount. See 2.10.1.
Settlement Date. (a) Friday of each week, or if a Friday is not a
Business Day, the Business Day immediately following such Friday, (b) at the
option of the Administrative Agent, on any Business Day following a day on which
the account officers of the Administrative Agent active upon the Borrowers
account become aware of the existence of an Event of Default, (c) the Business
Day immediately following any day on which the Administrative Agent gives
written notice to the Lenders to effect a Settlement, (d) the Maturity Date and
(e) on the third (3rd) Business Day following any date on which the Borrower
requests a conversion of a Swing Line Loan to a LIBOR Rate Loan.
Settling Lender. See 2.10.1.
Specified Required Lenders. As of any date, at least three (3) Lenders,
excluding Delinquent Lenders, holding Loans and participating interests in the
risks relating to Letters of Credit constituting at least fifty-one percent
(51%) of the outstanding Loans and Letters of Credit; or, if no Loans or Letters
of Credit are then outstanding, at least three (3) Lenders, excluding Delinquent
Lenders, whose Commitments constitute at least fifty-one percent (51%)of the
Total Commitment.
Stockholders Agreement. means the certain Stockholders Agreement among
the stockholders of Holdings dated as of September 24, 1999.
Subordinated Debt. The Indebtedness of the Borrower evidenced by the
Subordinated Notes and any other unsecured Indebtedness of any Credit Party that
is expressly subordinated and made junior to the payment and performance in full
of the Obligations, and evidenced as such by a subordination and intercreditor
agreement or by another written instrument containing subordination provisions
in form and substance approved by the Administrative Agent in writing.
Subordinated Debt Documents. The Subordinated Notes and the Subordinated
Indenture.
Subordinated Indenture. The Indenture between the Borrower and The Bank
of New York dated as of April 9, 2002, as from time to time amended.
Subordinated Notes. The 11.25% unsecured Subordinated Notes due 2012
issued by the Borrower in an aggregate original principal amount of
$155,000,000.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock. Unless otherwise specified, all
references herein to a Subsidiary or to Subsidiaries shall refer to a Subsidiary
or Subsidiaries of the Borrower.
Subsidiary Guarantors. The domestic and Canadian Subsidiaries of the
Borrower that have executed a Guaranty.
Subsidiary Guaranty. The guaranty granted or to be granted on or about
the date hereof executed by International Holdings, Universal, Free Motion, ICON
IP, NordicTrack and ICON New Brunswick, in favor of the Administrative Agent and
the Lenders.
Substituted Lender. See 5.11.
Swing Line Loans. See 2.6.2.
Synthetic Lease. Any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. or Canadian income tax purposes.
Title Insurance Company. (a) With respect to the Mortgaged Property
located in Utah, ▇▇▇▇▇▇▇ Title Guaranty Company and (b) with respect to the
Mortgaged Property located in Quebec, First Canadian Title.
Title Policy. In relation to each Mortgaged Property, an ALTA standard
form title insurance policy issued by the Title Insurance Company (with such
reinsurance or co-insurance as the Administrative Agent may require, any such
reinsurance to be with direct access endorsements) in such amount as may be
determined by the Administrative Agent insuring the priority of the Mortgage of
such Mortgaged Property and that a Credit Party holds marketable fee simple or
leasehold title to such Mortgaged Property, subject only to Permitted Liens and
which shall not contain exceptions for mechanics liens or persons in occupancy,
shall not insure over any matter except to the extent that any such affirmative
insurance is acceptable to the Administrative Agent in its sole discretion, and
shall contain such endorsements and affirmative insurance as the Administrative
Agent in its discretion may require, including but not limited to (a)
comprehensive endorsement, (b) variable rate of interest endorsement, (c)
usury endorsement, (d) revolving credit endorsement, (e) tie-in endorsement, (f)
doing business endorsement and (g) ALTA form 3.1 zoning endorsement.
Total Commitment. The sum of the Commitments of the Lenders, as in
effect from time to time. As of the Closing Date, the Total Commitment is
$250,000,000.
Total Outstandings. At any time, the sum of the outstanding amount of
all Revolving Loans (excluding Swing Line Loans) plus the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations.
Trademark Agreement. The Trademark Collateral Security and Pledge
Agreement, made in favor of the Administrative Agent, on behalf of itself and
the Lenders, by each applicable Credit Party.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or
LIBOR Rate Loan.
U.K. Debenture. The Debenture granted or to be granted on or about the
date hereof entered into by and among the Administrative Agent, on behalf of
itself and the Lenders, and ICON Fitness Holdings, which shall include, without
limitation, a charge over 65% of the Capital Stock of ICON Health & Fitness
Limited.
Universal. Universal Technical Services, a Utah corporation.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Administrative Agent and the Lenders on the
date specified in, and in accordance with, 4.3.
Versalite. Versalite Systems Co., Ltd., a British Virgin Islands
company.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
World Fitness, World Fitness Sales, a Cayman Islands corporation.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such document
or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) Unless otherwise expressly indicated, a reference to any law or
regulation includes any amendment or modification to such law or regulation.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting entity
to which they refer.
(f) The words include, includes and including are not limiting.
(g) All terms not specifically defined herein or by GAAP, which terms are
defined in the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, have the meanings assigned to them therein, with the term
instrument being that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular refers to that section of this Credit
Agreement unless otherwise indicated.
(i) The words herein, hereof, hereunder and words of like import shall
refer to this Credit Agreement as a whole and not to any particular section or
subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation of periods
of time from a specified date to a later specified date, the word from means
from and including, the words to and until each mean to but excluding, and the
word through means to and including.
(k) This Credit Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are, however, cumulative
and are to be performed in accordance with the terms thereof.
(l) This Credit Agreement and the other Loan Documents are the result of
negotiation among, and have been reviewed by counsel to, among others, the
Administrative Agent and the Borrower and are the product of discussions and
negotiations among all parties. Accordingly, this Credit Agreement and the
other Loan Documents are not intended to be construed against the Administrative
Agent or any of the Lenders merely on account of the Administrative Agents or
any Lenders involvement in the preparation of such documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Lenders severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Maturity Date upon notice by the
Borrower to the Administrative Agent given in accordance with 2.6, such sums as
are requested by the Borrower up to a maximum aggregate amount outstanding
(after giving effect to all amounts requested) at any one time equal to such
Lenders Commitment minus such Lenders Commitment Percentage of the sum of (a)
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations and (b) the
outstanding Swing Line Loans; provided that the Revolving Exposure (after giving
effect to all amounts requested) shall not at any time exceed the Gross
Availability. The Revolving Credit Loans shall be made pro rata in accordance
with each Lenders Commitment Percentage. Each request for a Revolving
Credit Loan hereunder shall constitute a representation and warranty by the
Borrower that the conditions set forth in 10 and 11, in the case of the initial
Revolving Credit Loans to be made on the Closing Date, and 11, in the case of
all other Revolving Credit Loans, have been satisfied on the date of such
request.
2.2. Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the accounts of the Lenders in accordance with their respective
Commitment Percentages a commitment fee (the Commitment Fee) calculated at the
rate per annum equal to the Applicable Commitment Fee Margin, as in effect from
time to time, on the average daily amount during each calendar month or portion
thereof from the date hereof to the Maturity Date by which the Total Commitment
exceeds the Total Outstandings during such calendar month. The Commitment Fee
shall be payable monthly in arrears on the first day of each calendar month for
the immediately preceding calendar month commencing on the first such date
following the date hereof, with a final payment on the Maturity Date or any
earlier date on which the Commitments shall terminate.
2.3. Reduction of Total Commitment. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days prior written
notice to the Administrative Agent to reduce by $5,000,000 or an integral
multiple of $1,000,000 in excess thereof or to terminate entirely the Total
Commitment in excess of the Revolving Exposure at such time, whereupon the
Commitments of the Lenders shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the
Borrower delivered pursuant to this 2.3, the Administrative Agent will notify
the Lenders of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrower shall pay to the Administrative Agent for
the respective accounts of such Lenders the full amount of any Commitment Fee
then accrued on the amount of the reduction. No reduction or termination of the
Commitments may be reinstated.
2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit H hereto (each a Revolving Credit Note), dated as of the Closing Date
(or such other date on which a Lender may become a party hereto in accordance
with 18 hereof) and completed with appropriate insertions. One Revolving Credit
Note shall be payable to the order of each Lender in a principal amount equal to
such Lenders Commitment or, if less, the outstanding amount of all Revolving
Credit Loans made by such Lender, plus interest accrued thereon, as set forth
below. The Borrower irrevocably authorizes each Lender to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal on such Lenders Revolving
Credit Note, an appropriate notation on such Lenders Revolving Credit Note
Record reflecting the making of such Revolving Credit Loan or
(as the case may be) the receipt of such payment. The outstanding amount of the
Revolving Credit Loans set forth on such Lenders Revolving Credit Note Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to such Lender, but the failure to record, or any error in so recording, any
such amount on such Lenders Revolving Credit Note Record shall not limit or
otherwise affect the obligations of the Borrower hereunder or under any
Revolving Credit Note to make payments of principal of or interest on any
Revolving Credit Note when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided
in 5.12,
(a) Each Revolving Credit Loan which is a Base Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and ending on
the last day of the Interest Period with respect thereto at the rate per annum
equal to the Base Rate plus the Applicable Margin with respect to Base Rate
Loans as in effect from time to time.
(b) Each Revolving Credit Loan which is a LIBOR Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and ending on
the last day of the Interest Period with respect thereto at the rate per annum
equal to the LIBOR Rate determined for such Interest Period plus the Applicable
Margin with respect to LIBOR Rate Loans as in effect from time to time.
The Borrower promises to pay interest on each Revolving Credit Loan in arrears
on each Interest Payment Date with respect thereto.
2.6. Requests for Revolving Credit Loans.
2.6.1. General. The Borrower shall give to the Administrative Agent
written notice in the form of Exhibit A hereto of each Revolving Credit Loan
requested hereunder (a Loan Request) no less than (a) 1:00 p.m. (Boston time) on
the same Business Day of the proposed Drawdown Date of any Base Rate Loan and
(b) three (3) Business Days prior to the proposed Drawdown Date of any LIBOR
Rate Loan. Each such notice shall specify (i) the principal amount of the
Revolving Credit Loan requested, (ii) the proposed Drawdown Date of such
Revolving Credit Loan, (iii) the Interest Period for such Revolving Credit Loan
and (iv) the Type of such Revolving Credit Loan. Promptly upon receipt of any
such notice, the Administrative Agent shall notify each of the Lenders thereof.
Each Loan Request shall be irrevocable and binding on the Borrower and shall
obligate the Borrower to accept the Revolving Credit Loan requested from the
Lenders on the proposed Drawdown Date. Each Loan Request with respect to a Base
Rate Loan shall be in a minimum aggregate amount of $500,000 or an integral
multiple of $100,000 in excess thereof and each Loan Request with respect to a
LIBOR Rate Loan shall be in a minimum aggregate amount of $1,000,000 or an
integral multiple of $100,000 in excess thereof.
2.6.2. Swing Line. Notwithstanding the notice and minimum amount
requirements set forth in 2.6.1 but otherwise in accordance with the terms and
conditions of this Credit Agreement, the Administrative Agent may, in its sole
discretion and without conferring with the Lenders, make Revolving Credit Loans
to the Borrower (a) by entry of credits to the Borrowers operating account No.
9427740498(the Operating Account) with the Cash Management Bank to cover checks
or other charges which the Borrower has drawn or made against such account or
(b) in an amount as otherwise requested by the Borrower; provided that the
maximum outstanding amount of advances made by the Administrative Agent pursuant
to this 2.6.2 (each a Swing Line Loan) shall not, at any time, exceed
$10,000,000. The Borrower hereby requests and authorizes the Administrative
Agent to make from time to time such Swing Line Loans by means of appropriate
entries of such credits sufficient to cover checks and other charges then
presented for payment from the Operating Account or as otherwise so requested.
The Borrower acknowledges and agrees that the making of the Swing Line Loans
shall, in each case, be subject in all respects to the provisions of this Credit
Agreement as if they were Revolving Credit Loans covered by a Loan Request
including, without limitation, the limitations set forth in 2.1 and the
requirements that the applicable provisions of 10 (in the case of Swing Line
Loans made on the Closing Date) and 11 be satisfied. All actions taken by the
Administrative Agent pursuant to the provisions of this 2.6.2 shall be
conclusive and binding on the Borrower and the Lenders absent the Administrative
Agents gross negligence or willful misconduct. Swing Line Loans made pursuant
to this 2.6.2 shall be Base Rate Loans until converted in accordance with the
provisions of this Credit Agreement and, prior to a Settlement, such interest
shall be for the account of the Administrative Agent.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan. The
Borrower may elect from time to time to convert any outstanding Revolving Credit
Loan to a Revolving Credit Loan of another Type, provided that (a) with respect
to any such conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrower
shall give the Administrative Agent at least three (3) Business Days prior
written notice of such election; (b) with respect to any such conversion of a
Base Rate Loan to a LIBOR Rate Loan, the Borrower shall give the Administrative
Agent at least three (3) Business Days prior written notice of such election;
(c) with respect to any such conversion of a LIBOR Rate Loan into a Base Rate
Loan, such conversion shall only be made on the last day of the Interest Period
with respect thereto and (d) no Revolving Credit Loan may be converted into, or
continued as, a LIBOR Rate Loan when any Default or Event of Default has
occurred and is continuing. Promptly upon the receipt of any such election, the
Administrative Agent shall notify the Lenders thereof. On the date on which
such conversion is being made, each Lender shall take such action as is
necessary to transfer its Commitment Percentage of such Revolving Credit Loans
to its Domestic Lending Office or its LIBOR Lending Office, as the case may be.
All or any part of outstanding Revolving Credit Loans of any Type may be
converted into a Revolving Credit Loan of another Type as provided herein,
provided that any partial conversion shall be in an aggregate principal amount
of $1,000,000 or a whole multiple of $100,000 in excess thereof. Each
Conversion Request relating to the conversion of a Revolving Credit Loan to a
LIBOR Rate Loan shall be irrevocable by the Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
Credit Loan of any Type may be continued as a Revolving Credit Loan of the same
Type upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in 2.7.1;
provided that no LIBOR Rate Loan may be continued as such when any Default or
Event of Default has occurred and is continuing, but shall be automatically
converted to a Base Rate Loan on the last day of the first Interest Period
relating thereto ending during the continuance of any Default or Event of
Default of which officers of the Administrative Agent active upon the Borrowers
account have actual knowledge. In the event that the Borrower fails to provide
any such notice with respect to the continuation of any LIBOR Rate Loan, then
such LIBOR Rate Loan shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto. The Administrative
Agent shall notify the Lenders thereof promptly when any such automatic
conversion contemplated by this 2.7 is scheduled to occur.
2.7.3. LIBOR Rate Loans. Any conversion to or from LIBOR Rate Loans
shall be in such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of all LIBOR Rate Loans
having the same Interest Period shall not be less than $1,000,000 or a whole
multiple of $100,000 in excess thereof. No more than seven (7) LIBOR Rate Loans
having different Interest Periods may be outstanding at any time.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures. Not later than 1:00 p.m. (Boston time) on
the proposed Drawdown Date of any Revolving Credit Loans, each of the Lenders
will make available to the Administrative Agent, at the Administrative Agents
Office, in immediately available funds, the amount of such Lenders Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon receipt
from such Lender of such amount, and upon receipt of the documents required by
10 and 11 and the satisfaction of the other conditions set forth therein, to the
extent applicable, the Administrative Agent will make available to the Borrower
the aggregate amount of such Revolving Credit Loans made available to the
Administrative Agent by such Lenders. The failure or refusal of any such Lender
to make available to the Administrative Agent at the aforesaid time and place on
any Drawdown Date the amount of its Commitment Percentage of the requested
Revolving Credit Loans shall not relieve any other Lender of its
several obligation hereunder to make available to the Administrative Agent the
amount of such other Lenders Commitment Percentage of any requested Revolving
Credit Loans.
2.8.2. Advances by Administrative Agent. The Administrative Agent may,
unless notified to the contrary by any Lender prior to a Drawdown Date, assume
that such Lender has made available to the Administrative Agent on such Drawdown
Date the amount of such Lenders Commitment Percentage of the Revolving Credit
Loans to be made on such Drawdown Date, and the Administrative Agent may (but it
shall not be required to), in reliance upon such assumption, make available to
the Borrower a corresponding amount. If any such Lender makes available to the
Administrative Agent such amount on a date after such Drawdown Date, such Lender
shall pay to the Administrative Agent on demand an amount equal to the product
of (a) the average computed for the period referred to in clause (c) below, of
the weighted average interest rate paid by the Administrative Agent for federal
funds acquired by the Administrative Agent during each day included in such
period, times (b) the amount of such Lenders Commitment
Percentage of such Revolving Credit Loans, times (c) a fraction, the numerator
of which is the number of days that elapse from and including such Drawdown Date
to the date on which the amount of such Lenders Commitment Percentage of such
Revolving Credit Loans shall become immediately available to the Administrative
Agent, and the denominator of which is 360. A statement of the Administrative
Agent submitted to such Lender with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the
Administrative Agent by such Lender. If the amount of such Lenders Commitment
Percentage of such Revolving Credit Loans is not made available to the
Administrative Agent by such Lender within three (3) Business Days following
such Drawdown Date, the Administrative Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon at the rate per annum
applicable to the Revolving Credit Loans made on such Drawdown Date.
2.9. Change in Borrowing Base. The Borrowing Base shall be determined
weekly (or at such other interval as may be specified pursuant to 7.4(e)) by the
Administrative Agent by reference to the Borrowing Base Report, collateral audit
reports, the Collateral Update Certificate, the Accounts Receivable/Loan
Reconciliation Report delivered to the Lenders and the Administrative Agent
pursuant to 7.4(d), any appraisals or reappraisals of Eligible Inventory,
Eligible Machinery and Equipment or Eligible Real Estate, respectively and/or
other information obtained by or provided to the Administrative Agent. The
Administrative Agent shall give to the Borrower written notice of any change in
the Borrowing Base determined by the Administrative Agent, which notice shall be
effective upon its receipt by the Borrower.
2.10. Settlements.
2.10.1. General. On each Settlement Date, the Administrative Agent
shall, not later than 1:00 p.m. (Boston time), give telephonic or facsimile
notice (a) to the Lenders and the Borrower of the respective outstanding amount
of Swing Line Loans made by the Administrative Agent on behalf of the Lenders
from the immediately preceding Settlement Date through the close of business on
the prior day and (b) to such Lenders of the amount (a Settlement Amount) that
each such Lender (a Settling Lender) shall pay to effect a Settlement of any
Swing Line Loan. A statement of the Administrative Agent submitted to such
Lenders and the Borrower or to the Lenders with respect to any amounts owing
under this 2.10 shall be prima facie evidence of the amount due and owing. Each
Settling Lender shall, not later than 2:00 p.m. (Boston time) on such Settlement
Date, effect a wire transfer of immediately available funds to the
Administrative Agent in the amount of the Settlement Amount for such Settling
Lender. All funds advanced by such Lender as a Settling Lender pursuant to this
2.10 shall for all purposes be treated as a Revolving Credit Loan made by such
Settling Lender to the Borrower and all funds received by such Lender pursuant
to this 2.10 shall for all purposes be treated as repayment of amounts owed with
respect to Revolving Credit Loans made by such Lender. In the event that any
bankruptcy, reorganization, liquidation, receivership or similar cases or
proceedings in which the Borrower is a debtor prevent a Settling Lender from
making any Revolving Credit Loan to effect a Settlement as contemplated hereby,
such Settling Lender will make such dispositions and arrangements with the other
Lenders with respect to such Revolving Credit Loans, either by way of purchase
of participations, distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Lenders share of the outstanding Revolving
Credit Loans being equal, as nearly as may be, to such Lenders
Commitment Percentage of the outstanding amount of the Revolving Credit Loans.
2.10.2. Failure to Make Funds Available. The Administrative Agent may,
unless notified to the contrary by any Settling Lender prior to a Settlement
Date, assume that such Settling Lender has made or will make available to the
Administrative Agent on such Settlement Date the amount of such Settling Lenders
Settlement Amount, and, if applicable, the Administrative Agent may (but it
shall not be required to), in reliance upon such assumption, make available to
the Borrower a corresponding amount. If any Settling Lender makes available to
the Administrative Agent such amount on a date after such Settlement Date, such
Settling Lender shall pay to the Administrative Agent on demand an amount equal
to the product of (a) the average computed for the period referred to in clause
(c) below, of the weighted average interest rate paid by the Administrative
Agent for federal funds acquired by the Administrative Agent during each day
included in such period, times (b) the amount of such Settlement
Amount, times (c) a fraction, the numerator of which is the number of days that
elapse from and including such Settlement Date to the date on which the amount
of such Settlement Amount shall become immediately available to the
Administrative Agent, and the denominator of which is 360. A statement of the
Administrative Agent submitted to such Settling Lender with respect to any
amounts owing under this 2.10.2 shall be prima facie evidence of the amount due
and owing to the Administrative Agent by such Settling Lender. If such Settling
Lenders Settlement Amount is not made available to the Administrative Agent by
such Settling Lender within three (3) Business Days following such Settlement
Date, the Administrative Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum applicable to
the Revolving Credit Loans as of such Settlement Date.
2.10.3. No Effect on Other Lenders. The failure or refusal of any
Settling Lender to make available to the Administrative Agent at the aforesaid
time and place on any Settlement Date the amount of such Settling Lenders
Settlement Amount shall not (a) relieve any other Settling Lender from its
several obligations hereunder to make available to the Administrative Agent the
amount of such other Settling Lenders Settlement Amount or (b) impose upon any
Lender, other than the Settling Lender so failing or refusing, any liability
with respect to such failure or refusal or otherwise increase the Commitment of
such other Lender.
2.11. Repayments of Revolving Credit Loans Prior to Event of Default.
2.11.1. Credit for Funds Received in Concentration Account. Prior to
the occurrence of an Event of Default as to which the account officers of the
Administrative Agent active upon the Borrowers account have actual knowledge,
(a) all funds and cash proceeds in the form of money, checks and like items
received in the Concentration Account (as defined in and as contemplated by
7.17) shall be credited to the Borrower, on the same Business Day on which the
Administrative Agent determines that good collected funds have been received,
and, prior to the receipt of good collected funds, on a provisional basis until
final receipt of good collected funds, and applied as contemplated by 2.11.2,
(b) all funds and cash proceeds in the form of a wire transfer received in the
Concentration Account as contemplated by 7.17 shall be credited on the same
Business Day as the Cash Management Banks receipt of such amounts in good
collected funds, and applied as contemplated by 2.11.2, and (c) all funds and
cash proceeds in the form of an automated clearing house transfer received in
the Concentration Account as contemplated by 7.17 shall be credited, on the next
Business Day following the Cash Management Banks receipt of such amounts in
good collected funds, and applied as contemplated by 2.11.2. For purposes of
the foregoing provisions of this 2.11.1, the Cash Management Bank shall not be
deemed to have received any such funds or cash proceeds on any day unless
received by the Cash Management Bank before 2:30 p.m. (Boston time) on such day.
The Borrower further acknowledges and agrees that any such provisional credits
or credits in respect of wire or automatic clearing house funds transfers shall
be subject to reversal if final collection in good funds of the related item is
not received by, or final settlement of the funds transfer is not made in favor
of, the Cash Management Banks in accordance with the Cash Management Banks
customary procedures and practices for collecting provisional items
or receiving settlement of funds transfers.
2.11.2. Application of Payments Prior to Event of Default.
(a) Prior to the occurrence of an Event of Default of which the account
officers of the Administrative Agent active on the Borrowers account have
knowledge, all funds transferred to the Concentration Account and for which the
Borrower has received credits shall be applied to the Obligations as follows:
(i) first, to pay amounts then due and payable under this Credit
Agreement, the Revolving Credit Notes and the other Loan Documents;
(ii) second, to repay Swing Line Loans made by the Administrative Agent
pursuant to 2.6.2 and for which Settlement has not then been made;
(iii) third, to repay other Revolving Credit Loans which are Base Rate
Loans;
(iv) fourth, to repay Revolving Credit Loans which are LIBOR Rate Loans;
and
(v) fifth, except as otherwise required by 4.2(b) and (c), to the
Operating Account.
(b) All prepayments of LIBOR Rate Loans prior to the end of an Interest
Period shall obligate the Borrower to pay any breakage costs associated with
such LIBOR Rate Loans in accordance with 5.10. Prior to the occurrence of an
Event of Default, the Borrower may elect to avoid such breakage costs by
providing to the Administrative Agent cash in an amount sufficient to cash
collateralize such LIBOR Rate Loans, but in no event shall the Borrower be
deemed to have paid such LIBOR Rate Loans until such cash has been paid to the
Administrative Agent for application to such LIBOR Rate Loans. Until such
application, the Administrative Agent may elect to cause such cash collateral to
be deposited into either (i) a cash collateral account pursuant to the terms of
a cash collateral agreement executed by the Borrower and the Administrative
Agent and in form and substance satisfactory to the Administrative Agent or (ii)
the Operating Account with appropriate instructions prohibiting the Borrowers
withdrawal of such funds so long as they remain cash collateral. In each such
case, the Borrower agrees to execute and deliver to the Administrative Agent
such instruments and documents, including Uniform Commercial Code and other
financing statements and agreements with any third party depository banks, as
the Administrative Agent may request.
(c) All prepayments of the Revolving Credit Loans pursuant to this 2.11.2
shall be allocated among the Lenders making such Revolving Credit Loans, in
proportion, as nearly as practicable, to the respective unpaid principal amount
of such Revolving Credit Loans outstanding, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion. Prior to any Settlement Date, however, all prepayments of the
Revolving Credit Loans shall be applied in accordance with this 2.11.2, first to
outstanding Revolving Credit Loans of the Administrative Agent.
2.12. Repayments of Revolving Credit Loans After Event of Default.
Following the occurrence and during the continuance of an Event of Default of
which the account officers of the Administrative Agent active on the Borrowers
account have knowledge, all funds transferred to the Concentration Account and
for which the Borrower has received credits shall be applied to the Obligations
in accordance with 12.4.
2.13. Fixed Asset Availability Maximum Amount Amortization. Commencing
on February 28, 2006, the Fixed Asset Availability Maximum Amount shall be
automatically and permanently reduced by an amount equal to $465,000 on the last
day of each of February, May, August and November of each year.
2.14. Administrative Agent Advances. Notwithstanding anything to the
contrary contained herein (including, without limitation, the borrowing
limitations set forth in 2.1), but subject to the limitations set forth in the
proviso contained in this 2.14, the Administrative Agent is hereby authorized by
the Borrower and the Lenders, from time to time at the request of the Borrower
but in the Administrative Agents sole discretion, (a) after the occurrence and
during the continuance of a Default or an Event of Default, or (b) at any time
that any of the other applicable conditions precedent set forth in 11 have not
been satisfied, to make Revolving Credit Loans to the Borrower on behalf of the
Lenders which the Administrative Agent, in its reasonable business judgment,
deems necessary or desirable (i) to preserve or protect the Collateral, or any
portion thereof, (ii) to enhance the likelihood of, or maximize the amount of,
repayment of the Revolving Credit Loans and other Obligations (other
than amounts in respect of Cash Management Obligations and Derivative
Agreements), or (iii) to pay any other amount chargeable to the Borrower
pursuant to the terms of this Agreement (other than amounts in respect of Cash
Management Obligations and Derivative Agreements), including, without
limitation, costs, fees and expenses as described in 15 (any of the advances
described in this 2.14 being hereinafter referred to as Administrative Agent
Advances); provided, that (w) the Administrative Agent Advances shall be due and
payable on the earlier of (1) demand by the Administrative Agent and (2) ninety
(90) days after the making thereof, (x) not more than four (4) Administrative
Agent Advances shall be made in any calendar year, (y) the Administrative Agent
shall not make any Administrative Agent Advance to the Borrower if (A) after
giving effect to such Administrative Agent Advance, the aggregate outstanding
principal amount of all Administrative Agent Advances would exceed five percent
(5%) of the Borrowing Base at such time or (B) the amount thereof would cause
the Revolving Exposure to exceed the Total Commitment. The Administrative Agent
Advances shall be repayable on demand and secured by the Collateral, shall
constitute Revolving Credit Loans and Obligations hereunder, and shall bear
interest at the rate applicable to Base Rate Loans. The Administrative Agent
shall notify each Lender and the Borrower in writing of each such Administrative
Agent Advance promptly following the making thereof, which notice shall include
a description of the purpose of such Administrative Agent Advance. Each Lender
irrevocably agrees to purchase from the Administrative Agent, upon demand, its
pro rata share (in accordance with its Commitment Percentage) of the amount of
the outstanding Administrative Agent Advances. Until such purchase, all
payments in respect of the Administrative Agent Advances shall be for the
account of the Administrative Agent.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity. The Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all of the
Revolving Credit Loans outstanding on such date, together with any and all
accrued and unpaid interest thereon.
3.2. Mandatory Repayments of Revolving Credit Loans.
3.2.1. Excess Amounts. If at any time the sum of the Revolving Exposure
exceeds the Gross Availability, then the Borrower shall immediately pay the
amount of such excess to the Administrative Agent for the respective accounts of
the Lenders for application: first, to any Swing Line Loans outstanding,
second, to any Unpaid Reimbursement Obligations; third, to all Revolving Credit
Loans advanced to the Borrower; and fourth, to provide to the Administrative
Agent cash collateral for Reimbursement Obligations as contemplated by 4.2(b)
and (c). Each payment of any Unpaid Reimbursement Obligation or prepayment of
Revolving Credit Loans shall be allocated among the Lenders, in proportion, as
nearly as practicable, to each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Lenders Revolving Note or loan
account (as the case may be) with adjustments to the extent practicable to
equalize any prior payments or repayments not exactly in proportion. In
addition, the Borrower shall repay the Revolving Credit Loans in accordance
with 3.2.2.
3.2.2. Other Events. Immediately upon receipt by any Credit Party of
net cash proceeds from any asset disposition (excluding dispositions of
inventory in the ordinary course of business), which, together with other asset
dispositions in a Fiscal Year results in net cash proceeds in excess of $400,000
in the aggregate during such Fiscal Year, the Borrower shall prepay the
Obligations in an amount equal to such proceeds. Notwithstanding the foregoing,
the proceeds of asset dispositions which are reinvested in Capital Expenditures
within 180 days after the date of receipt thereof need not be used to prepay the
Obligations. The Borrower shall report to the Administrative Agent in writing
its intention to reinvest such proceeds concurrently with each asset disposition
and shall also report the dates and amounts of such reinvestments concurrently
therewith. All prepayments made hereunder shall be applied in accordance with
3.2.2(d).
(b) If any Credit Party issues Capital Stock (other than issuances of
Capital Stock to employees of Holdings and its Subsidiaries), no later than the
first Business Day following the date of receipt of the net cash proceeds
thereof, the Borrower shall prepay the Obligations in an amount equal to all
such net cash proceeds. Any such prepayment shall be applied in accordance with
3.2.2(d).
(c) The Borrower shall prepay the Obligations in an amount equal to all
net cash proceeds received by any Credit Party from Casualty Events which have
not been utilized by such Credit Party within 180 days of receipt of such
proceeds to the repair or replacement of the property so damaged, destroyed or
taken; provided, however, if (i) the amount of such proceeds exceeds $10,000,000
or (ii) a Default or Event of Default has occurred and is continuing, the
Borrower shall immediately prepay the Obligations in an amount equal to such net
cash proceeds. Any such prepayment shall be applied in accordance with 3.2.2(d).
(d) All payments made pursuant to 3.2.2(a), (b) and (c) shall be applied
to the Obligations as follows: first, to any Unpaid Reimbursement Obligations;
second, to the Revolving Credit Loans; and third, to provide to the
Administrative Agent cash collateral for Reimbursement Obligations as
contemplated by 4.2(b) and (c), with (i) in the case of payments made pursuant
to 3.2.2(a) and (b), a permanent reduction in the Total Commitment in the event
that such permanent reduction is required pursuant to the terms of the
Subordinated Debt Documents in an amount equal to such payment and (ii) in the
case of payments made pursuant to 3.2.2(c), a permanent reduction in the Total
Commitment in an amount equal to such payment. Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Lenders, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid principal
amount of each
Lenders Revolving Credit Note, with adjustments to the extent practicable to
equalize any prior payments or repayments not exactly in proportion. The
provisions of this 3.2.2 shall not impair any restrictions set forth in the Loan
Documents with respect to the incurrence of Indebtedness or asset dispositions
by any Credit Party.
3.3. Optional Repayments of Revolving Credit Loans. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any LIBOR Rate Loans pursuant to this 3.3 may be made only on the last day of
the Interest Period relating thereto (unless breakage costs are paid by the
Borrower pursuant to 5.10 or cash collateral is provided in accordance with
2.11.2(b)). The Borrower shall provide to the Administrative Agent, no later
than 12:00 p.m. (Boston time) at least three (3) Business Days prior written
notice of any proposed prepayment pursuant to this 3.3, specifying the proposed
date of prepayment of any LIBOR Rate Loans and the principal amount to be
prepaid. Each such partial prepayment of the Revolving Credit Loans shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of prepayment and shall be applied, in the absence of instruction by the
Borrower, first to the principal of Base Rate Loans and second to the principal
of LIBOR Rate Loans. Each partial prepayment shall be allocated among the
Lenders, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each such Lenders Revolving Credit Note or loan account, as
the case may be, with adjustments to the extent practicable to equalize any
prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. Letter of Credit Commitments.
4.1.1. Commitment to Issue Letters of Credit. Subject to the terms and
conditions hereof and the execution and delivery by the Borrower of a letter of
credit application on the Issuing Lenders customary form (a Letter of Credit
Application), the Administrative Agent on behalf of the Lenders and in reliance
upon the agreement of such Lenders set forth in 4.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees to
cause the Issuing Lender to issue, extend and renew for the account of the
Borrower one or more standby or documentary letters of credit (each
individually, a Letter of Credit), in such form as may be requested from time to
time by the Borrower and agreed to by the Administrative Agent and the Issuing
Lender; provided, however, that after giving effect to such request, (i) the sum
of the aggregate Maximum Drawing Amount on all Letters of Credit and all Unpaid
Reimbursement Obligations shall not exceed $10,000,000 at any one time and (ii)
the Revolving Exposure shall not exceed the Gross Availability at such time.
4.1.2. Letter of Credit Applications. Each Letter of Credit Application
shall be completed to the satisfaction of the Administrative Agent and the
Issuing Lender. In the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of this Credit Agreement,
then the provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (a) provide for the
payment of sight drafts for honor thereunder when presented in accordance with
the terms thereof and when accompanied by the documents described therein, and
(b) have an expiry date no later than the date which is fourteen (14) days (or,
if the Letter of Credit is confirmed by a confirmer or otherwise provides for
one or more nominated persons, forty-five (45) days) prior to the Maturity Date.
Subject to clause (b) above, each Letter of Credit shall expire (without giving
effect to any extension thereof by reason of an interruption of business) at or
prior to the close of business 365 days, in the case of standby Letters of
Credit, or 180 days, in the case of documentary Letters of Credit, after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, 365 days or 180 days, as applicable, after such renewal
or extension) provided that the Issuing Lender may, in its sole and absolute
discretion, agree to issue any such standby Letter of Credit providing for
automatic extensions thereof to a date not later than 365 days beyond its
current expiration date; provided that any such automatic extension Letter of
Credit must permit the Issuing Lender to prevent any such extension at least
once in each twelve-month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof not later
than a day in each such twelve-month period to be agreed upon at the time such
Letter of Credit is issued. Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500
or any successor version thereto adopted by the Issuing Lender in the ordinary
course of its business as a letter of credit issuer and in effect at the time of
issuance of such Letter of Credit (the Uniform Customs) or, in the case of a
standby Letter of Credit, either the Uniform Customs or the International
Standby Practices (ISP98), International Chamber of Commerce Publication No.
590, or any successor code of standby letter of credit practices among banks
adopted by the Issuing Lender in the ordinary course of its business as a
standby letter of credit issuer and in effect at the time of issuance of such
Letter of Credit.
4.1.4. Reimbursement Obligations of Lenders. Each Lender severally
agrees that it shall be absolutely liable, without regard to the occurrence of
any Default or Event of Default or any other condition precedent whatsoever, to
the extent of such Lenders Commitment Percentage, to reimburse the
Administrative Agent on demand for the amount of each draft paid by the Issuing
Lender under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant to 4.2 (such agreement for a Lender being
called herein the Letter of Credit Participation of such Lender).
4.1.5. Participations of Lenders. Each such payment made by a Lender
shall, unless the applicable Reimbursement Obligation has been otherwise funded
as a Revolving Credit Loan bearing interest at the Base Rate pursuant to 4.2, be
treated as the purchase by such Lender of a participating interest in the
Borrowers Reimbursement Obligation under 4.2 in an amount equal to such payment.
To that extent, each Lender shall share in accordance with its participating
interest in any interest which accrues pursuant to 4.2.
4.2. Reimbursement Obligation of the Borrower. In order to induce the
Administrative Agent to cause the Issuing Lender to issue, extend and renew each
Letter of Credit and the Lenders to participate therein, the Borrower hereby
agrees to reimburse or pay to the Administrative Agent, for the account of the
Administrative Agent and/or the Issuing Lender or (as the case may be) the
Lenders, with respect to each Letter of Credit issued, extended or renewed by
the Issuing Lender hereunder,
(a) except as otherwise expressly provided in 4.2(b) and (c), on each
date that any draft presented under such Letter of Credit is honored by the
Issuing Lender, or the Issuing Lender or the Administrative Agent otherwise
makes a payment with respect thereto, (i) the amount paid by the Issuing Lender
or the Administrative Agent under or with respect to such Letter of Credit, and
(ii) the amount of any taxes, fees, charges or other costs and expenses
whatsoever incurred by the Issuing Lender or Administrative Agent or any Lender
in connection with any payment made by the Issuing Lender, Administrative Agent
or any Lender under, or with respect to, such Letter of Credit; provided that,
subject to the conditions to borrowing set forth herein, payment of each
Reimbursement Obligation by the Borrower under this 4.2(a) shall be made through
the automatic funding of a Revolving Credit Loan bearing interest at the Base
Rate applicable to Revolving Credit Loans in an amount equal to the amount of
such Reimbursement Obligation, and the Borrower hereby irrevocably authorizes
and directs the Administrative Agent and Issuing Lender to take such actions as
may be necessary to effectuate such automatic funding of any such Base Rate
Loans,
(b) upon the reduction (but not termination) of the Total Commitment to
an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Administrative Agent for the
benefit of the Lenders and the Administrative Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the acceleration of
the Reimbursement Obligations with respect to all Letters of Credit in
accordance with 12, an amount equal to the then Maximum Drawing Amount, which
amount shall be held by the Administrative Agent for the benefit of the Lenders
and the Administrative Agent as cash collateral for all Reimbursement
Obligations. Each such payment shall be made to the Administrative Agent at the
Administrative Agents Office in immediately available funds. Interest on any
and all amounts remaining unpaid by the Borrower under this 4.2 at any time from
the date such amounts become due and payable (whether as stated in this 4.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Administrative Agent on demand at the Default
Rate.
4.3. Letter of Credit Payments. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the
Administrative Agent shall notify the Borrower of the date and amount of the
draft presented or demand for payment and of the date and time when it expects
to pay such draft or honor such demand for payment. If the Borrower fails to
reimburse the Administrative Agent as provided in 4.2 on or before the date that
such draft is paid or other payment is made by the Issuing Lender or the
Administrative Agent or, as a result of the applicable borrowing limits
described therein being exceeded such Reimbursement Obligations are not
satisfied by the making of a Revolving Credit Loan bearing interest at the Base
Rate, the Administrative Agent may at any time thereafter notify the Lenders of
the amount of any such Unpaid Reimbursement Obligation. No later than 2:00 p.m.
(Boston time) on the Business Day next following the receipt of such notice,
each such Lender shall make available to the Administrative Agent, at the
Administrative Agents Office, in immediately available funds, such Lenders
Commitment Percentage of such Unpaid Reimbursement Obligation, together with an
amount equal to the product of (a) the average, computed for the period referred
to in clause (c) below, of the weighted average interest rate paid by the
Administrative Agent for federal funds acquired by the Administrative Agent
during each day included in such period, times (b) the amount equal to such
Lenders Commitment Percentage of such Unpaid Reimbursement Obligation, times (c)
a fraction, the numerator of which is the number of days that elapse from and
including the date the Issuing Lender or the Administrative Agent paid the draft
presented for honor or otherwise made payment to the date on which such Lenders
Commitment Percentage of such Unpaid Reimbursement Obligation, shall become
immediately available to the Administrative Agent, and the denominator of which
is 360. The responsibility of the Issuing Lender and the Administrative Agent
to the Borrower and the Lenders shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.
4.4. Obligations Absolute. The Borrowers obligations under this 4 shall
be absolute and unconditional under any and all circumstances and irrespective
of the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrower
may have or have had against the Issuing Lender or the Administrative Agent, any
Lender or any beneficiary of a Letter of Credit. The Borrower further agrees
with the Administrative Agent and the Lenders that none of the Issuing Lender,
the Administrative Agent and the Lenders shall be responsible for, and the
Borrowers Reimbursement Obligations under 4.2 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or any dispute between or among the
Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. None of the Issuing Lender, the
Administrative Agent and the Lenders shall 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. The
Borrower agrees that any action taken or omitted by the Issuing Lender, the
Administrative Agent or any Lender under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Borrower and shall not result in any liability on the part of
the Issuing Lender, the Administrative Agent or any Lender to the Borrower.
4.5. Reliance by Issuer. To the extent not inconsistent with 4.4, the
Issuing Lender and the Administrative Agent shall be entitled to rely, and shall
be fully protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by such Person 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, independent accountants and other experts selected
by the Issuing Lender or the Administrative Agent. Each of the Issuing Lender
and the Administrative Agent shall be fully justified in failing or refusing to
take any action under this Credit Agreement unless it shall first have received
such advice or concurrence of the Required Lenders as they reasonably deem
appropriate or it shall first be indemnified to its reasonable satisfaction by
the other 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
Issuing Lender and the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Credit Agreement
in accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and all future holders of the Revolving Credit Notes or of a Letter of
Credit Participation.
4.6. Letter of Credit Fee. The Borrower shall pay a fee (in each case,
a Letter of Credit Fee) to the Administrative Agent, in respect of each Letter
of Credit issued for the account of the Borrower, (a) in an amount equal to the
Applicable Margin per annum with respect to LIBOR Rate Loans that are Revolving
Loans on the available amount of each such Letter of Credit, which Letter of
Credit Fee shall be for the accounts of the Lenders in accordance with their
respective Commitment Percentages and (b) in an amount equal to one-quarter of
one percent (0.25%) per annum on the available amount of each such Letter of
Credit, which amount shall be for the account of the Administrative Agent or the
Issuing Lender as a fronting fee. The Letter of Credit Fee shall be paid monthly
in arrears on the first Business Day of each month for the immediately preceding
calendar month. In respect of each Letter of Credit issued for the account of
the Borrower, the Borrower shall also pay to the Administrative
Agent for the Issuing Lenders or the Administrative Agents own account, at such
other time or times as such charges are customarily made by the Issuing Lender
or the Administrative Agent, the Issuing Lenders and/or the Administrative
Agents customary issuance, amendment, negotiation, payment or document
examination and other administrative fees as in effect from time to time.
5. CERTAIN GENERAL PROVISIONS.
5.1. Fees. The Borrower shall pay to (a) the Administrative Agent, for
its own account, fees in the amounts and at the times specified in the Fee
Letter (the Administrative Agents Fee) and (b) the Administrative Agent, for the
pro rata accounts of the Lenders, such fees as shall have been separately agreed
upon in writing in the amounts and at the times referred to therein. Such fees
referred to in subsection (a) and (b) above shall be fully earned when paid and
shall not be refundable for any reason whatsoever.
5.2. Funds for Payments.
5.2.1. Payments to Administrative Agent. All payments of principal and
interest on Loans and all Reimbursement Obligations, Fees and any other amounts
due hereunder or under any of the other Loan Documents (unless the provisions of
this Credit Agreement require otherwise) shall be made on the due date thereof
to the Administrative Agent in Dollars for the respective accounts of the
Lenders and the Administrative Agent, at the Administrative Agents Office or at
such other place that the Administrative Agent may from time to time designate,
in each case no later than 12:00 noon (Boston, Massachusetts, time or other
local time at the place of payment) and in immediately available funds.
5.2.2. No Offset, etc.
All payments by any Credit Party hereunder and under any of the other
Loan Documents shall be made without recoupment, setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein unless
such Credit Party is compelled by law to make such deduction or withholding. If
any such obligation is imposed upon any Credit Party with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the Borrower
will pay to the Administrative Agent, for the account of the Lenders or (as the
case may be) the Administrative Agent, on the date on which such amount is due
and payable hereunder or under such other Loan Document, such additional amount
in Dollars as shall be necessary to enable the Lenders or the
Administrative Agent to receive the same net amount which the Lenders or the
Administrative Agent would have received on such due date had no such obligation
been imposed upon the Credit Parties. The Borrower will deliver promptly to the
Administrative Agent certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
5.2.3. Non-U.S. Lenders. Each Lender and the Administrative Agent that
is not a U.S. Person as defined in Section 7701(a)(30) of the Code for federal
income tax purposes (a Non-U.S. Lender) hereby agrees that, if and to the extent
it is legally able to do so, it shall, prior to the date on which it becomes a
Lender hereunder, deliver to the Borrower and the Administrative Agent, as
applicable, such certificates, documents or other evidence, as and when required
by the Code or Treasury Regulations issued pursuant thereto, including (a) in
the case of a Non-U.S. Lender that is a bank for purposes of Section
881(c)(3)(A) of the Code, two (2) duly completed copies of Internal Revenue
Service Form W-8BEN or Form W8ECI and any other certificate or statement of
exemption required by Treasury Regulations, or any subsequent versions thereof
or successors thereto, properly completed and duly executed by such Lender or
the Administrative Agent establishing that with respect to payments of
principal, interest or fees hereunder it is (i) not subject to United States
federal withholding tax under the Code because such payment is effectively
connected with the conduct by such Lender or Administrative Agent of a trade or
business in the United States or (ii) totally exempt from United States federal
withholding tax under a provision of an applicable tax treaty and (b) in the
case of a Non-U.S. Lender that is not a bank for purposes of Section
881(c)(3)(A) of the Code, a certificate in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower and to the effect that
(i) such Non-U.S. Lender is not a bank for purposes of Section 881(c)(3)(A) of
the Code, is not subject to regulatory or other legal requirements as a bank in
any jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental authority,
any application made to a rating agency or qualification for any exemption from
any tax, securities law or other legal requirements, (ii) is not a ten (10)
percent shareholder for purposes of Section 881(c)(3)(B) of the Code and (iii)
is not a controlled foreign corporation receiving interest from a related person
for purposes of Section 881(c)(3)(C) of the Code, together with a properly
completed I.R.S. Form W-8 or W-9, as applicable (or successor forms).
Each Lender agrees that it shall, promptly upon a change of its lending office
or the selection of any additional lending office, to the extent the forms
previously delivered by it pursuant to this section are no longer effective, and
promptly upon the Borrowers or the Administrative Agents reasonable request
after the occurrence of any other event (including the passage of time)
requiring the delivery of a Form W-8BEN, Form W8ECI, Form W-8 or W-9 in addition
to or in replacement of the forms previously delivered, deliver to the Borrower
and the Administrative Agent, as applicable, if and to the extent it is
properly entitled to do so, a properly completed and executed Form W-8BEN, Form
W8ECI, Form W-8 or W-9, as applicable (or any successor forms thereto).
5.3. Computations. All computations of interest on Loans, any Fees or
any other amount due hereunder shall, unless otherwise expressly provided
herein, be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term Interest
Period with respect to LIBOR Rate Loans, whenever a payment hereunder or under
any of the other Loan Documents becomes due on a day that is not a Business Day,
the due date for such payment shall be extended to the next succeeding Business
Day, and interest and fees shall accrue during such extension.
5.4. Interest Limitation. Notwithstanding any other term of this Credit
Agreement or any other document referred to herein or therein, the maximum
amount of interest which may be charged to or collected from any person liable
hereunder by the Lenders shall be absolutely limited to, and shall in no event
exceed, the maximum amount of interest which could lawfully be charged or
collected under applicable law (including, to the extent applicable, the
provisions of Section 5197 of the Revised Statutes of the United States of
America, as amended, 12 U.S.C. Section 85, as amended or the Criminal Code
(Canada), as amended), so that the maximum of all amounts constituting interest
under applicable law, howsoever computed, shall never exceed as to any Person
liable therefor such lawful maximum, and any term of this Credit Agreement or
any other document referred to herein or therein which could be construed as
providing for interest in excess of such lawful maximum shall be and hereby is
made expressly subject to and modified by the provisions of this paragraph.
5.5. Inability to Determine LIBOR Rate. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the
Administrative Agent shall determine or be notified by the Required Lenders that
(a) adequate and reasonable methods do not exist for ascertaining the LIBOR Rate
that would otherwise determine the rate of interest to be applicable to any
LIBOR Rate Loan during any Interest Period or (b) the LIBOR Rate determined or
to be determined for such Interest Period will not adequately and fairly reflect
the cost to the Lenders of making or maintaining their LIBOR Rate Loans during
such period, the Administrative Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Lenders) to the Borrower and the Lenders. In such event (i) any Loan Request or
Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (ii) each LIBOR
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan and (iii) the obligations of
the Lenders to make LIBOR Rate Loans shall be suspended until the Administrative
Agent or the Required Lenders determine that the circumstances giving rise to
such suspension no longer exist, whereupon the Administrative Agent or, as the
case may be, the Administrative Agent upon the instruction of the Required
Lenders, shall so notify the Borrower and the Lenders.
5.6. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Lender to (i) make or
maintain LIBOR Rate Loans, or (ii) perform its obligations in respect of any
LIBOR Rate Loan, such Lender shall forthwith give notice of such circumstances
to the Borrower and the other Lenders and thereupon (a) the commitment of such
Lender to make LIBOR Rate Loans or convert Loans of another Type to LIBOR Rate
Loans shall forthwith be suspended, and (b) such Lenders Loans then outstanding
as LIBOR Rate Loans if any such Loans exist, shall be converted automatically to
Base Rate Loans on the last day of each Interest Period applicable to such LIBOR
Rate Loans or within such earlier period as may be required by law. The
Borrower hereby agrees promptly to pay to the Administrative Agent for the
account of such Lender, upon demand by such Lender, any additional amounts
necessary to compensate such Lender for any costs incurred by such Lender in
making any conversion in accordance with this 5.6, including any interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its LIBOR Rate Loans hereunder.
5.7. Additional Costs, etc. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender, the Administrative Agent, the Issuing Lender or
the Cash Management Bank by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law), shall:
(a) subject any Lender, the Administrative Agent, the Issuing Lender or
the Cash Management Bank to any tax, levy, impost, duty, charge, fee, deduction
or withholding of any nature with respect to this Credit Agreement, the other
Loan Documents or any Letters of Credit, such Lenders Commitment or the Loans
(other than taxes based upon or measured by the income or profits of such Lender
or the Administrative Agent), or
(b) materially change the basis of taxation (except for changes in taxes
on income or profits) of payments to any Lender of the principal of or the
interest on any Loans or any other amounts payable to any Lender, the
Administrative Agent, the Issuing Lender or the Cash Management Bank under this
Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit issued by,
or commitments of an office of any Lender, the Administrative Agent, the Issuing
Lender or the Cash Management Bank, or
(d) impose on any Lender the Administrative Agent, the Issuing Lender or
the Cash Management Bank any other conditions or requirements with respect to
this Credit Agreement, the other Loan Documents or any Letters of Credit, the
Loans, such Lenders Commitment, or any class of loans, letters of credit or
commitments of which any of the Loans or such Lenders Commitment forms a part,
and the result of any of the foregoing is
(i) to increase the cost to any Lender or the Issuing Lender of making,
funding, issuing, renewing, extending or maintaining any of the Loans or such
Lenders Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Lender, the Issuing Lender or the
Administrative Agent hereunder on account of such Lenders Commitment, any Letter
of Credit or any of the Loans, or
(iii) to require such Lender, the Administrative Agent, the Issuing
Lender or the Cash Management Bank to make any payment or to forego any interest
or Reimbursement Obligation or other sum payable hereunder, the amount of which
payment or foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum receivable or deemed
received by such Lender, the Administrative Agent, the Issuing Lender or the
Cash Management Bank from the Borrower hereunder, then, and in each such case,
the Borrower will, upon demand made by such Lender or (as the case may be) the
Administrative Agent, the Issuing Lender or the Cash Management Bank, at any
time and from time to time and as often as the occasion therefor may arise, pay
to such Lender, the Administrative Agent, the Issuing Lender or the Cash
Management Bank such additional amounts as will be sufficient to compensate such
Lender, the Administrative Agent, the Issuing Lender or the Cash Management Bank
for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum upon presentation by such Lender or (as
the case may be) the Administrative Agent, the Issuing Lender or
the Cash Management Bank of a certificate in accordance with 5.9 hereof;
provided that the Borrower shall not be liable to any Lender, the Administrative
Agent, the Issuing Lender or the Cash Management Bank for such additional costs
incurred more than one hundred eighty (180) days prior to receipt by
the Borrower of such demand for payment from such Person.
5.8. Capital Adequacy. If after the date hereof any Lender, the
Administrative Agent or the Issuing Lender determines that (i) the adoption of
or change in any law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) regarding capital
requirements for banks or bank holding companies or any change in the
interpretation or application thereof by a court or governmental authority with
appropriate jurisdiction, or (ii) compliance by such Lender, the Administrative
Agent or the Issuing Lender or any corporation controlling such Lender, the
Administrative Agent or the Issuing Lender with any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) of any such entity regarding capital adequacy, has the effect of reducing
the return on such Lenders, the Administrative Agents or the Issuing Lenders
commitment with respect to any Loans to a level below that which such Lender,
the Administrative Agent or the Issuing Lender could have achieved but for such
adoption, change or compliance (taking into consideration such Lenders, the
Administrative Agents or Issuing Lenders then existing policies with respect to
capital adequacy and assuming full utilization of such entitys capital) by any
amount deemed by such Lender, the Administrative Agent or the Issuing Lender to
be material, then such Lender, the Administrative Agent or the Issuing Lender
may notify the Borrower of such fact upon presentation of a certificate in
accordance with 5.9 hereof. To the extent that the amount of such reduction in
the return on capital is not reflected in the Base Rate, the Borrower and such
Lender shall thereafter attempt to negotiate in good faith, within thirty (30)
days of the day on which the Borrower receive such notice, an adjustment to the
compensation payable hereunder which will adequately compensate such Lender in
light of these circumstances. If the Borrower and such Lender are unable to
agree to such adjustment within thirty (30) days of the date on which the
Borrower receives such notice, then commencing on the date of such notice (but
not earlier than the effective date of any such increased capital requirement),
the fees payable hereunder shall increase by an amount that will, in the
Administrative Agents, Issuing Lenders or such Lenders reasonable determination,
provide adequate compensation. Each Lender shall allocate such cost increases
among its customers in good faith and on an equitable basis. Notwithstanding
the foregoing, the Borrower shall not be liable to the Administrative Agent, any
Lender or the Issuing Lender for any such costs incurred more than one hundred
eighty (180) days prior to receipt by the Borrower of such demand for payment
from such Person.
5.9. Certificate. A certificate setting forth any additional amounts
payable pursuant to 5.7 or 5.8 and a brief explanation of such amounts which are
due, submitted by any Lender, the Administrative Agent, the Issuing Lender or
the Cash Management Bank to the Borrower, shall be prima facie evidence that
such amounts are due and owing.
5.10. Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from and against any loss, cost or expense that such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
payment of the principal amount of or any interest on any LIBOR Rate Loans as
and when due and payable, including any such loss or expense arising from
interest or fees payable by such Lender to banks of funds obtained by it in
order to maintain its LIBOR Rate Loans, (b) default by the Borrower in making a
borrowing or conversion after the Borrower has given (or are deemed to have
given) a Loan Request or a Conversion Request relating thereto in accordance
with 2.6 or 2.7 or (c) the making of any payment of a LIBOR Rate Loan or the
making of any conversion of any such Loan to a Base Rate Loan on a day that is
not the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by such Lender to lenders of funds obtained
by it in order to maintain any such Loans
5.11. Mitigation of Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under 5.7 or 5.8, or the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to 5.2.2, or if any Lender
gives a notice pursuant to 5.6, then such Lender shall use reasonable efforts to
designate a different Lending Office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to 5.2.2, 5.7
or 5.8, as the case may be, in the future, or eliminate the need for the notice
pursuant to 5.6, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Upon the happening of any of the events set forth in 5.2.2, 5.6,
5.7, or 5.8, or in the case of a Delinquent Lender, the Borrower may (provided
that at the time no Default or Event of Default exists or would result after
giving effect to the Borrowers action) require each such affected Lender under
5.2.2, 5.6, 5.7, or 5.8 and/or each Delinquent Lender (each such Lender being
called a Substituted Lender) to assign all of its Commitment to a Substituted
Lender subject to the following conditions:
(i) the Borrower shall have delivered to the Administrative Agent not
less than ten (10) Business Days prior to the exercise of its rights under this
5.11(b) a written commitment in form and substance satisfactory to the
Administrative Agent and each of the Lenders from a banking institution (the
Replacement Lender) reasonably acceptable to the Administrative Agent and each
of the remaining Lenders (other than the Substituted Lender) in which such
Replacement Lender agrees to become a Lender under this Credit Agreement, having
a Commitment in the amount of the Substituted Lenders Commitment Amount; and
(ii) the Borrower shall have paid to the Administrative Agent the
assignment fee specified in 18.2(d) and the amount owed to the Substituted
Lender pursuant to 5.2.2, 5.7 and/or 5.8;
(iii) the Substituted Lender shall have assigned, pursuant to 18 hereof
of this Credit Agreement the Commitment of such Substituted Lender to the
Replacement Lender and such Replacement Lender shall have become a Lender under
this Credit Agreement, having a Commitment in the amount of such Substituted
Lenders Commitment;
(iv) the Substituted Lender shall have received an amount equal to the
sum of its Commitment Percentage of Revolving Credit Loans, Unpaid Reimbursement
Obligations and accrued interest thereon, accrued fees and all other amounts
payable to it under the Loan Documents;
(v) such assignment does not conflict with applicable laws; and
(vi) in the case of any such assignment resulting from a claim for
compensation under 5.7 or 5.8 or payments required to be made pursuant to 5.2.2,
such assignment will result in a reduction in such compensation or payments
thereafter.
A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitles the Borrower to require such assignment and delegation
cease to apply.
5.12. Interest After Default. Immediately upon the occurrence and
during the continuance of an Event of Default, the Borrower shall pay interest
on the principal amount of all outstanding Obligations and Letter of Credit Fees
at a fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable laws.
5.13. Collateral Security and Guaranty Documents.
(a) Each Credit Party covenants and agrees that (a) pursuant to the terms
of the Security Documents, the Obligations shall be secured by a perfected first
priority security interest (subject only to Permitted Liens) in the Collateral
and (b) the Obligations shall also be guaranteed pursuant to the terms of the
Guaranties. Such security interest shall be granted to the Administrative Agent
for the benefit of the Lenders and the other holders of Obligations.
(b) If at any time any Credit Party grants any security interest to the
Back Bay Agent or any lender party to the Back Bay Loan Agreement, or any of
their respective successors, assigns and transferees, on any property of such
Credit Party or such other party, then such Credit Party or such other party, as
the case may be, shall simultaneously grant to the Administrative Agent a
security interest in such property, and such security interest shall be subject
to the Back Bay Intercreditor Agreement.
6. REPRESENTATIONS AND WARRANTIES.
Each Credit Party represents and warrants to the Lenders and the
Administrative Agent as follows:
6.1. Corporate Authority, Etc.
6.1.1. Existence, Good Standing.
(a) Each Credit Party (i) is a corporation (or similar business entity)
duly organized or incorporated (in the case of any Credit Party organized in
England and Wales), validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation, (ii) has taken all actions which, by
reason of its ownership of property or carrying on of business, are required to
be taken by it under the laws of any jurisdiction, wherein it owns property or
carries on business, except where the failure to do so would not materially and
adversely affect the Credit Parties (taken as a whole) and (iii) has all
corporate authority (or the equivalent company) power to own its property and
conduct its business as now conducted and as presently contemplated.
(b) Each Credit Party has adequate power and authority and has full legal
right to enter into each of the Loan Documents to which it is or is to become a
party, to perform, observe and comply with all of its agreements and obligations
under each of such documents, and to make all of the borrowings and obtain the
extensions of credit contemplated by this Credit Agreement.
6.1.2. Authorization. The execution and delivery by each Credit Party
of each of the Loan Documents executed and delivered on the Closing Date to
which, by the terms of such document, it is a party, the performance by each
Credit Party of all of its agreements and obligations under each of such
documents, and the making by the Borrower of all of the borrowings contemplated
by this Credit Agreement, are within the corporate (or the equivalent company)
authority of each Credit Party, as applicable, have been duly authorized by all
necessary corporate or other action on the part of such Credit Party, as
applicable, and do not and will not (i) except as otherwise expressly
contemplated by the Loan Documents, conflict with, or result in a breach of any
material term, condition or provision of, or constitute a default under or
result in the creation of any mortgage, lien, pledge, charge, security interest
or other encumbrance upon any of the property of such Credit Party, under any
agreement, trust deed, indenture, mortgage or other instrument to which such
Credit Party is a party or by which such Credit Party or any of its property is
bound, the consequences of which would have a material and adverse effect on the
financial condition, assets or operations of the Credit Parties (taken as a
whole), (ii) violate or contravene any provision of any law, regulation, order,
ruling or interpretation thereunder or any decree, order or judgment of any
court or governmental or regulatory authority, bureau, agency or official (all
as from time to time in effect and applicable to such Credit Party) except where
such violation or contravention would not materially and adversely affect the
financial condition, assets or operations of the Credit Parties (taken as a
whole), (iii) require any waivers, consents or approvals by any of the creditors
of such Credit Party which have not been obtained (except when failure to do so
would not materially and adversely affect the financial condition, assets or
operations of the Credit Parties, taken as a whole), (iv) in the case of such
Credit Party, require any consents or approvals by any shareholders or members
of such Credit Party, (except such as will be obtained on or prior to the
Closing Date and will be in full force and effect on and as of the Closing
Date), (v) require any approval, consent, order, authorization or license by, or
giving notice to, or taking any other action with respect to, any governmental
or regulatory authority or agency under any provision of any law applicable to
such Credit Party, except those actions which have been taken or will be taken
prior to the Closing Date and except where failure to take such actions would
not materially and adversely affect the financial condition, assets or
operations of the Credit Parties (taken as a whole), or (vi) conflict with any
provision of the Governing Documents of such Credit Party.
6.1.3. Delivery. Each Credit Party has duly executed and delivered each
of the Loan Documents to which it is a party and each of such documents is in
full force and effect.
6.1.4. Enforceability. The execution and delivery of this Credit
Agreement and the other Loan Documents to which any Credit Party is or is to
become a party will result in valid and legally binding obligations of such
Person enforceable against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors rights and except to the extent
that availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
6.2. Financial Statements; Projections. There has been furnished to
each of the Lenders a consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the Balance Sheet Date, and a consolidated
and consolidating statement of income and cash flow of the Borrower and its
Subsidiaries for the Fiscal Year then ended, and in the case of the consolidated
balance sheet, statement of income and cash flow, certified by
PriceWaterhouseCoopers, LLP. Such balance sheet and statement of income and cash
flow have been prepared in accordance with GAAP and fairly present the financial
condition of the Borrower and its Subsidiaries as at the close of business on
the date thereof and the results of operations for the Fiscal Year then ended.
There are no contingent liabilities of any Credit Party as of such date
involving material amounts, known to the officers of any Credit Party, required
to be disclosed in such balance sheet and the notes related thereto in
accordance with GAAP, which were not disclosed in such balance sheet and the
notes related thereto.
(b) There has been furnished to the Administrative Agent and each of the
Lenders an unaudited consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the close of such Fiscal Month ended
September 3, 2005 and unaudited consolidated and consolidating statements of
income and cash flow of the Credit Parties as of the close of such Fiscal Month,
in each case, certified by the Chief Financial Officer of the Borrower. Such
balance sheet and statements of income and cash flow have been prepared in
accordance with GAAP and fairly present the financial condition of the Borrower
and its Subsidiaries as at the close of business on the date thereof and the
results of operations subject to year end adjustments. There are no contingent
liabilities of any Credit Party as of such date involving material amounts,
known to the officers of any Credit Party, which were not disclosed in such
balance sheet and the notes related thereto.
(c) There has also been furnished to each of the Lenders projections for
the 2006, 2007, 2008, 2009 and 2010 Fiscal Years. To the knowledge of the
Credit Parties, as of the date hereof, no facts exist that (individually or in
the aggregate) would result in any material change in any of such projections
(taken as a whole). The projections are based upon reasonable estimates and
assumptions and reflect the reasonable estimates of the Credit Parties of the
results of operations and other information projected therein (it being
understood that such projections are not a guarantee of future performance).
6.3. Solvency. As of the Closing Date and after giving effect to the
Loans hereunder and the other transactions contemplated hereby:
(a) the aggregate value of the assets of the Credit Parties, on a
consolidated basis, at their present fair saleable value exceeds the total
amount of all the probable debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of the Credit Parties as
they become absolute and mature;
(b) the present fair saleable value of the assets of the Credit Parties,
on a consolidated basis, is not less than the amount that will be required to
pay the probable liability on their existing debts as they become absolute and
mature;
(c) the Credit Parties will not, on a consolidated basis, have an
unreasonably small capital with which to conduct their business operations as
heretofore conducted; and
(d) the Credit Parties do not, on a consolidated basis, intend to incur
debts or liabilities beyond their ability to pay such debts and liabilities as
they mature.
6.4. No Material Adverse Change; Distributions. Since the Balance Sheet
Date, there has occurred no material adverse change in the financial condition
or business of the Credit Parties. Since the Balance Sheet Date, no Credit
Party has made any Restricted Payment (other than Restricted Payments permitted
under 8.4).
6.5. Absence of Mortgages and Liens. Except with respect to Permitted
Liens, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry or other public office, that purports to cover, affect or give
notice of any present or possible future Lien on, or security interest in, any
of the material assets or property of the Credit Parties (taken as a whole) or
of any of the rights relating thereto.
6.6. Franchises, Patents, Copyrights, etc. Each Credit Party possesses
all franchises, patents, copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing, adequate for the conduct of its
business substantially as now conducted without known conflict with any rights
of others. Attached hereto as Schedule 6.6 is a true, correct and complete list
of all patents, patent applications, federally registered copyrights, trademarks
and trademark applications owned by any Credit Party as of the Closing Date.
6.7. Litigation. Except as set forth in Schedule 6.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending, or, to the
best knowledge of the Senior Management after all due investigation appropriate
under the circumstances, threatened against any Credit Party, before any court,
tribunal or administrative agency or board that would be likely to, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Credit Parties, taken as a whole,
or materially impair the right of the Credit Parties, taken as a whole, to carry
on business substantially as now conducted by them, or that questions the
validity of this Credit Agreement or any of the other Loan Documents.
6.8. No Materially Adverse Contracts, etc. Except as set forth on
Schedule 6.8, no Credit Party is subject to any charter, partnership or other
legal restriction, or any judgment, decree, order, law, statute, rule or
regulation that has or is expected in the future to have a material adverse
effect on the business, assets or financial condition of the Credit Parties,
taken as a whole. Except as listed on Schedule 6.8 hereto, no Credit Party is a
party to any contract or agreement that has or is expected, in the judgment of
any Credit Partys officers, to have any material adverse effect on the business
of the Credit Parties, taken as a whole.
6.9. Compliance with Other Instruments, Laws, etc. No Credit Party is
in violation of any provision of its Governing Documents, or any agreement or
instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could reasonably be
expected to materially and adversely affect the financial condition, properties
or business of the Credit Parties taken as a whole.
6.10. Tax Status. The Credit Parties (i) have made or filed all
national, federal, provincial and all material state, provincial and foreign
income and all other material tax returns, reports and declarations required by
any jurisdiction to which any of them is subject, (ii) have paid all material
taxes and other governmental assessments and charges imposed on them, except
those being contested in good faith and by appropriate proceedings and for which
the Credit Parties have set aside on their books reasonably adequate provisions
therefor (unless foreclosure or other enforcement action has been commenced in
respect thereof or any Lien has been filed or otherwise perfected therefor, in
which case such exception does not apply), and (iii) have set aside on their
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, except those being contested in good faith
and as to which adequate reserves are maintained, and the officers of the Credit
Parties know of no basis for any such claim.
6.11. No Default or Event of Default. No Default or Event of Default
has occurred and is continuing.
6.12. Holding Company and Investment Company Acts. No Credit Party is a
holding company, or a subsidiary company of a holding company, or an affiliate
of a holding company, as such terms are defined in the Public Utility Holding
Company Act of 1935; nor is it an investment company, or an affiliated company
or a principal underwriter of an investment company, as such terms are defined
in the Investment Company Act of 1940.
6.13. Employee Benefit Plans.
6.13.1. In General. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all material
respects with applicable law including without limitation the provisions of
ERISA and all Applicable Pension Legislation and, to the extent applicable, the
Code, including but not limited to the provisions thereunder respecting
prohibited transactions, other than as set forth on Schedule 6.13 attached
hereto. The Credit Parties have heretofore delivered to the Administrative Agent
the most recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under 103(d) of
ERISA, with respect to each Guaranteed Pension Plan.
6.13.2. Terminability of Welfare Plans. Under each Employee Benefit
Plan which is an employee welfare benefit plan within the meaning of 3(1) or
3(2)(B) of ERISA, no benefits are due unless the event giving rise to the
benefit entitlement occurs prior to plan termination (except as required by
Title I, Part 6 of ERISA). The Credit Parties or an ERISA Affiliate, as
appropriate, may terminate each such Plan at any time (or at any time subsequent
to the expiration of any applicable bargaining agreement) in the discretion of
the Credit Parties or such ERISA Affiliate without liability to any Person,
other than for benefits which have accrued prior to termination.
6.13.3. Guaranteed Pension Plans. Each contribution required to be made
to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien provisions
of 302(f) of ERISA, or otherwise, has been timely made. No waiver of an
accumulated funding deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan and none of the Credit
Parties nor any ERISA Affiliate is obligated to or has posted security in
connection with an amendment to a Guaranteed Pension Plan pursuant to 307 of
ERISA or 401(a)(29) of the Code. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by any Credit
Party or any ERISA Affiliate with respect to any Guaranteed Pension Plan and
there has not been any ERISA Reportable Event, or any other event or condition
which presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each Guaranteed Pension Plan (which
in each case occurred within twelve months of the date of this representation),
and on the actuarial methods and assumptions employed for that valuation, the
aggregate benefit liabilities of all such Guaranteed Pension Plans within the
meaning of 4001 of ERISA did not exceed the aggregate value of the assets of all
such Guaranteed Pension Plans. With respect to the Canadian Subsidiaries, all
pension plans are duly registered where required by, and are in compliance with
all applicable laws including the Income Tax Act (Canada) and there are no
actions, claims or proceedings pending or threatened (other than routine claims
for benefits) relating to any of the pension plans. All required employer and
employee contributions and premiums under the pension plans have been made, the
pension plans are fully funded on a going concern and solvency basis in
accordance with applicable laws and with the actuarial methods and assumptions
used in the most recent actuarial reports therefor, and there have been no
surplus withdrawals or contribution holidays except as permitted by law and the
terms of the pension plans.
6.13.4. Multiemployer Plans. None of the Credit Parties nor any ERISA
Affiliate has incurred any material liability (including secondary liability) to
any Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under 4201 of ERISA or as a result of a sale of assets
described in 4204 of ERISA. None of the Credit Parties nor any ERISA Affiliate
has been notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of 4241 or 4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan intends to
terminate or has been terminated under 4041A of ERISA.
6.14. Regulations U and X. The proceeds of the Loans and Letters of
Credit shall be used solely for the purposes specified in 7.11. No portion of
any Loan is to be used, and no portion of any Letter of Credit is to be
obtained, for the purpose of purchasing or carrying any margin security or
margin stock as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
6.15. True Copies of Governing Documents. As of the Closing Date, the
Credit Parties have furnished or caused to be furnished to each of the Lenders
true and complete copies of the Governing Documents (together with any
amendments thereto) of each Credit Party.
6.16. Fiscal Year. The Credit Parties have a fiscal year ending May 31
of each year.
6.17. Perfection of Security Interest. All filings, assignments,
pledges and deposits of documents or instruments have been made (or, in the case
of the U.K. Debenture and the International Pledge Agreement referred to in
paragraph (b) of International Pledge Agreements, will be made within 5 days of
the grant of such security) and all other actions have been taken that are
necessary or advisable, under applicable law, to establish and perfect the
Administrative Agents first-priority Lien and security interest in the
Collateral. The Collateral and the Administrative Agents rights with respect to
the Collateral are not subject to any setoff, claims, withholdings or other
defenses. Each Credit Party party to one of the Security Agreements is the
owner of its Collateral free from any Lien, except for Permitted Liens.
6.18. Subsidiaries, etc. Holdings does not have any Subsidiaries except
as set forth on Schedule 6.18 hereto.
6.19. Environmental Compliance. With respect to the past and present
condition and usage of the Real Estate and the operations conducted thereon:
(a) none of the Credit Parties or any operator of the Real Estate or any
operations thereon is in violation, or alleged violation, of any judgment,
decree, order, law, license, rule, permit or regulation pertaining to
environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended (CERCLA), the
Superfund Amendments and Reauthorization Act of 1986 (▇▇▇▇), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
other state, local or foreign or common law, statute, regulation, ordinance,
order, decree or any other binding requirement of any Governmental Authority
relating to health, safety or the environment (all of the foregoing,
collectively, the Environmental Laws), which violation could reasonably be
expected to have a material adverse effect on the business, assets, operations
or financial condition of the Credit Parties (taken as a whole), or the ability
of any Credit Party to fulfill its obligations under this Credit Agreement or
the other Loan Documents;
(b) except as set forth on Schedule 6.19 hereto, no Credit Party has
received notice from any third party including, without limitation, any
Governmental Authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency (EPA) as a potentially responsible
party under CERCLA with respect to a site listed on the National Priorities
List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste, as defined
by 42 U.S.C. 6903(5), any hazardous substances as defined by 42 U.S.C. 9601(14),
any pollutant or contaminant as defined by 42 U.S.C. 9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws (Hazardous Substances) which any one of them
has generated, transported or disposed of has been found at any site at which a
Governmental Authority has conducted or has ordered that any Credit Party
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative proceeding
(in each case, contingent or otherwise) arising out of any third partys
incurrence of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances;
(c) except as set forth on Schedule 6.19 attached hereto: (i) no portion
of the Real Estate is used for the handling, processing, storage or disposal of
Hazardous Substances except in material accordance with applicable Environmental
Laws; and, to the best of the Credit Parties knowledge, no underground tank or
other underground storage receptacle for Hazardous Substances is located on any
portion of the Real Estate; (ii) in the course of any activities conducted by
the Credit Parties or operators of its properties, no Hazardous Substances have
been generated or are being used on the Real Estate except in material
accordance with applicable Environmental Laws; (iii) there have been no releases
(i.e. any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Credit Parties, which releases could reasonably be expected to
have a material adverse effect on the value of any Real Estate or on the
business, assets, operations or financial condition of the Credit Parties (taken
as a whole), or the ability of any Credit Party to fulfill its obligations under
this Credit Agreement or the other Loan Documents; (iv) to the best of the
Credit Parties knowledge, there have been no releases on, upon, from or into any
real property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and which could
reasonably be expected to have a material adverse effect on the value of any of
the Real Estate or adjacent properties or the environment or on the business,
assets, operations or financial condition of Credit Parties (taken as a whole),
or the ability of any Credit Party to fulfill its obligations under this Credit
Agreement or the other Loan Documents; and (v) in addition, to the best of the
Credit Parties knowledge, any Hazardous Substances that have been
generated on any of the Real Estate have been transported offsite only by
carriers having an identification number issued by the EPA (or the equivalent
thereof in any foreign jurisdiction), treated or disposed of only by treatment
or disposal facilities maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have been and are, to the
best of the Credit Parties knowledge, operating in compliance with such permits
and applicable Environmental Laws;
(d) none of the Credit Parties, any Mortgaged Property or any of the
other Real Estate is subject to any applicable Environmental Law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any Governmental
Authority or the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set forth herein
and contemplated hereby, or as a condition to the recording of any Mortgage or
to the effectiveness of any other transactions contemplated hereby; and
(e) to the best of their knowledge after due inquiry, the Credit Parties
have furnished the Administrative Agents Special Counsel with copies of all
material environmental reports relating to the Credit Parties and their
properties and operations.
6.20. Bank Accounts. Schedule6.20 sets forth the account numbers and
location of all bank accounts of the Credit Parties.
6.21. Labor Contracts. Except as set forth on Schedule 6.21, none of
the Credit Parties is party to any collective bargaining agreement. There are
no material grievances, disputes or controversies with any union or other
organization of any Credit Partys employees, or threats of strikes or work
stoppages that could reasonably be expected to materially and adversely affect
the financial condition, properties or business of the Credit Parties taken as a
whole.
6.22. Disclosure. The information prepared or furnished by the Credit
Parties in connection with this Credit Agreement or any other Loan Document
taken as a whole does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained therein
or herein not misleading. There is no fact known to the Credit Parties which
could reasonably be expected to have a material adverse effect on the business,
assets, operations or financial condition of Credit Parties (taken as a whole),
or the ability of any Credit Party to fulfill its obligations under this Credit
Agreement or the other Loan Documents, exclusive of effects resulting from
changes in general economic conditions, legal standards or regulatory
conditions.
6.23. Title to Properties. The Credit Parties own all of the assets
reflected in the consolidated balance sheet of the Credit Parties delivered to
the Administrative Agent pursuant to 10.21, subject to no Liens, except
Permitted Liens.
6.24. Certain Transactions. Except for agreements listed on Schedule
6.24, services by individuals as employees, officers and directors and
transactions between the Borrower and Subsidiary Guarantors otherwise permitted
hereunder, no Credit Party is engaged in any transaction with any Affiliate,
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate, on terms more favorable to such Person than would have been
obtainable on an arms-length basis in the ordinary course of business.
6.25. Foreign Assets Control Regulations, Etc. None of the requesting
or borrowing of the Loans, the requesting or issuance, extension or renewal of
any Letters of Credit or the use of the proceeds of any thereof will violate the
Trading With the Enemy Act (50 U.S.C. 1 et seq., as amended) (the Trading With
the Enemy Act) or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the
Foreign Assets Control Regulations) or any enabling legislation or executive
order relating thereto (which for the avoidance of doubt shall include, but
shall not be limited to (a) Executive Order 13224 of September 21, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the Executive Order)
and (b) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56)). Furthermore, no Credit Party nor any Affiliate of a Credit Party (a)
is or will become a blocked person as described in the Executive Order, the
Trading With the Enemy Act or the Foreign Assets Control Regulations or (b)
engages or will engage in any dealings or transactions, or be otherwise
associated, with any such blocked person.
6.26. Subordinated Debt Documents. (a) No Credit Party is in violation
of any provision of the Subordinated Debt Documents, the Back Bay Loan Documents
or the CS First Boston Debt and (b) the Loans, the Back Bay Loan, the Loan
Documents, the Back Bay Loan Documents and the transactions contemplated hereby
and thereby do not violate and/or conflict with any provision of the
Subordinated Debt Documents, the Back Bay Loan Documents or the CS First Boston
Debt.
7. AFFIRMATIVE COVENANTS OF THE CREDIT PARTIES.
Each Credit Party covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation or Letter of Credit is outstanding or any Lender has
any obligation to make any Loans or the Administrative Agent has any obligation
to cause the Issuing Lender to issue, extend or renew any Letter of Credit:
7.1. Punctual Payment. Each Credit Party will duly and punctually pay
or cause to be paid when due all principal and interest on the Loans, all
Reimbursement Obligations, the Fees and all other Obligations and amounts
provided for in this Credit Agreement and the other Loan Documents to which it
is a party and will cause to be paid any amounts owing by any Credit Party, all
in accordance with the terms of this Credit Agreement and such other Loan
Documents.
7.2. Maintenance of Office. Each Credit Party will maintain its chief
executive office in the location identified in the Perfection Certificate
delivered by such Credit Party to the Administrative Agent, or at such other
place as the Borrower shall designate upon written notice to the Administrative
Agent, where notices, presentations and demands to or upon any Credit Party in
respect of the Loan Documents to which such Credit Party is a party may be given
or made.
7.3. Records and Accounts. Each Credit Party will (i) keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with, and all financial statements provided for
herein shall be prepared in accordance with GAAP consistently applied; (ii)
maintain adequate accounts and reserves for all taxes (including incomes taxes),
depreciation, depletion, obsolescence and amortization of its properties,
contingencies, and other reserves; and (iii) at all times, maintain independent
certified public accountants as the Credit Parties accountants which shall be
reasonably satisfactory to the Administrative Agent.
7.4. Financial Statements, Certificates and Information. The Credit
Parties will deliver to each of the Lenders:
(a) as soon as practicable, but in any event not later than ninety (90)
days after the end of each Fiscal Year, the consolidated and unaudited
consolidating balance sheet of the Borrower and its Subsidiaries, as at the end
of such year, and the related consolidated and consolidating statements of
income and retained earnings and consolidated and unaudited consolidating
statement of cash flow for such year, each setting forth in comparative form the
figures for the previous Fiscal Year and all such consolidated and consolidating
financial statements to be in reasonable detail, prepared in accordance with
GAAP consistently applied, and, with respect to the consolidated financial
statements, certified without qualification and without expression of
uncertainty as to the ability of the Borrower and its Subsidiaries to continue
as going concerns, by PricewaterhouseCoopers or by other independent certified
public accountants satisfactory to the Administrative Agent, together with (i) a
written statement from such accountants to the effect that, in making the
examination necessary to said certification, nothing has come to their attention
to cause them to believe that any Default or Event of Default has occurred or
specifying those Defaults or Events of Defaults that they have become aware of
(it being understood that such audit examination extended only to accounting
matters and that no special investigation was made with respect to the existence
of a Default or an Event of Default); provided that such accountants shall not
be liable to the Lenders for failure to obtain knowledge or become aware of any
Default or Event of Default; and (ii) a copy of their accountants management
letter (if any) for such Fiscal Year;
(b) as soon as practicable, but in any event within thirty-five (35) days
after the end of each Fiscal Month, unaudited monthly consolidated and
consolidating financial statements of the Credit Parties for such Fiscal Month
(i.e., the consolidated and consolidating balance sheet of the Credit Parties,
as at the end of such Fiscal Month, and the related consolidated and
consolidating statements of income and retained earnings and consolidated and
consolidating statement of cash flow for such month) and the unaudited
consolidated and consolidating financial statements of the Credit Parties for
the period commencing at the end of the previous Fiscal Year and ending with the
end of such Fiscal Month, each, prepared in accordance with GAAP consistently
applied, together with a certification by the principal financial or accounting
officer(s) of the Borrower that the information contained in such financial
statements fairly presents in all material respects the financial condition of
the Credit Parties (as a whole) on the date thereof (subject to year-end
adjustments);
(c) as soon as practicable, but in any event within forty-five (45) days
after the end of each Fiscal Quarter and, at the election of the Borrower,
together with the delivery of the audited financial statements referred to in
paragraph (a) above, a statement certified by the chief financial officer or
cash manager of the Borrower in substantially the form of Exhibit B hereto (a
Compliance Certificate) (i) setting forth in reasonable detail (A) the average
Excess Availability and Total Outstandings for such Fiscal Quarter and (B)
computations evidencing compliance with the covenant contained in 9 and (if
applicable) reconciliations to reflect changes in GAAP since the Balance Sheet
Date and (ii) stating that such officer has caused this Credit Agreement and the
other Loan Documents to be reviewed and has no knowledge of any Default or Event
of Default during such fiscal quarter or at the end of such year, or if such
officer has such knowledge, specifying each Default or Event of Default and
the nature thereof;
(d) as soon as available and in any event no later than within fifteen
(15) days after the end of each calendar month, (i) a Collateral Update
Certificate, (ii) an Accounts Receivable/Loan Reconciliation Report, (iii) a
summary of inventory by type and location, and (v) such other information
relating to the Collateral as the Administrative Agent shall reasonably request,
in each case, accompanied by such supporting detail and documentation as the
Administrative Agent shall reasonably request;
(e) as soon as available and in any event no later than 1:00 p.m. (Boston
time) on Wednesday of each week (or, if such Wednesday is not a Business Day, on
Thursday of such week) (or with greater frequency as the Administrative Agent
may request), (i) a Borrowing Base Report with respect to the Collateral of the
Borrower as of the close of business on the previous Saturday, together with
such other information relating to the Collateral as the Administrative Agent
shall reasonably request, and accompanied by such supporting detail and
documentation as the Administrative Agent shall reasonably request and (ii) an
accounts receivable aging report; provided that, from and after March 1, 2006,
so long as (A) the Borrower has demonstrated Consolidated EBITDA as of the end
of the most recently ended Fiscal Quarter (for the period of four Fiscal
Quarters then ending) of at least $35,000,000, and (B) Excess Availability is
not less than $50,000,000, the Borrower shall be entitled to deliver such
Borrowing Base Report and accounts receivable aging report not later than 1:00
p.m. (Boston time) on the fifteenth (15th) day of each month, with such
Borrowing Base Report to be calculated as of the last Business Day of the
preceding month (it being understood that, in the event that either of the
conditions set forth in clauses (A) and (B) of this proviso are not satisfied,
the Borrower shall be required to deliver weekly Borrowing Base Reports);
(f) as soon as available and in any event no later than five (5) Business
Days after the last day of each Fiscal Quarter (or with greater frequency to the
extent required under the terms of the Subordinated Debt Documents), an
Indenture Borrowing Base Report as of the last day of such Fiscal Quarter;
(g) not later than June 1 of each Fiscal Year, updated projections for
the Credit Parties for the following Fiscal Year on a monthly basis (such
projections to include consolidated balance sheets, consolidated statements of
cash flows, and consolidated and consolidating income statements, in each case
prepared on a month-by-month basis);
(h) promptly after the sending or filing thereof, copies of all reports
and registration statements which any Credit Party files with the Securities and
Exchange Commission or any national securities exchange (including, without
limitation, all 10-K, 10-Q and 8-K reports);
(i) promptly after delivery or receipt thereof, copies of all notices and
other communications delivered or received by any Credit Party in connection
with the Subordinated Debt Documents and the Back Bay Loan; and
(j) from time to time such other financial data and information
(including accountants management letters) as the Administrative Agent or any
Lender may reasonably request.
7.5. Notices.
7.5.1. Defaults. The Credit Parties will promptly notify the
Administrative Agent in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice to any Credit Party or take any
other action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation for borrowed money to which or with
respect to which such Credit Party is a party or obligor, whether as principal,
guarantor, surety or otherwise, the Credit Parties shall forthwith give written
notice thereof to the Administrative Agent, describing the notice or action and
the nature of the claimed default.
7.5.2. Material Adverse Changes. The Credit Parties shall disclose in
writing to the Administrative Agent, within five (5) Business Days of any member
of Senior Management becoming aware of it, any fact that materially and
adversely affects, or which would, in the judgment of Senior Management, in the
future materially and adversely affect the financial position, business,
operations, or affairs of the Credit Parties (taken as a whole) and, within ten
(10) Business Days of such time as the Credit Parties provide such disclosure to
the Lenders, the Credit Parties shall also deliver to the Administrative Agent
its proposal for addressing such material adverse effect.
7.5.3. Notice of Litigation and Judgments. The Credit Parties will give
notice to the Administrative Agent in writing within ten (10) days of Senior
Management becoming aware of any litigation or proceedings threatened in writing
or any pending litigation and proceedings affecting any Credit Party or to which
any Credit Party is or becomes a party involving (i) an uninsured claim against
any Credit Party that would reasonably be expected to result in damages of more
than $1,000,000 against the Credit Parties or have a material adverse effect on
the Credit Parties taken as a whole or (ii) any litigation proceeding against
Persons with which any Credit Party has a business relationship which is likely
to materially and adversely affect the business, financial condition, assets or
operations of the Credit Parties (taken as a whole) and stating the nature and
status of such litigation or proceedings. The Credit Parties will give notice
to the Administrative Agent, in writing, in form and detail
satisfactory to the Administrative Agent, within ten (10) days of any judgment
not covered by insurance, final or otherwise, against any Credit Party in an
amount in excess of $1,000,000.
7.5.4. Notification of Claim against Collateral. The Credit Parties
will, immediately upon becoming aware thereof, notify the Administrative Agent
and each of the Lenders in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or other
defenses in amounts greater than $100,000, or the Administrative Agents rights
with respect to the Collateral, are subject.
7.5.5. Notices Concerning Inventory Collateral. The Credit Parties
shall provide to the Administrative Agent prompt notice of (a) any physical
count of any Credit Partys inventory, together with a copy of the results
thereof certified by the Borrower, (b) any determination by the Credit Parties
that the aggregate inventory levels of the Credit Parties are not adequate to
meet the sales projections of the Credit Parties, and (c) any failure of any
Credit Party to pay rent at any leased location where inventory is located,
which failure continues for more than ten (10) days following the day on which
such payment rent is due and payable.
7.5.6. Notification of Additional Intellectual Property Rights. Within
ten (10) days of the end of each Fiscal Quarter, the Credit Parties will notify
the Administrative Agent in writing of any patents, patent applications, patent
application disclosures filed with any patent office during such Fiscal Quarter,
registered copyrights or mask works registered during such Fiscal Quarter,
applications for registration of copyrights or mask works filed during such
Fiscal Quarter and trademark and service ▇▇▇▇ registrations during such Fiscal
Quarter, trademark and service ▇▇▇▇ registration applications filed during such
Fiscal Quarter, all of the foregoing whether a foreign or United States right,
to the extent not listed on Schedule 6.6.
7.5.7. Environmental Events. The Credit Parties will promptly give
notice to the Administrative Agent and each of the Lenders (a) of any violation
of any Environmental Law that any Credit Party reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any Governmental Authority and (b)
upon Senior Management becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any agency of potential
environmental liability, of any Governmental Authority that, in the case of
clauses (a) or (b) above, could reasonably be expected to have a material and
adverse affect on the financial position, business, operations, or affairs of
the Credit Parties (taken as a whole).
7.6. Legal Existence; Maintenance of Properties. Except as permitted
by 8.5, each Credit Party will do all things necessary to (i) maintain in full
force and effect its legal existence and good standing (or due incorporation and
valid existence in the case of any Credit Party incorporated in England and
Wales) under the laws of its jurisdiction of organization or incorporation, (ii)
maintain its qualification to do business in each state or other jurisdiction in
which the failure to do so would have a material adverse effect on the
condition, financial or otherwise, of the Credit Parties (taken as a whole), and
(iii) maintain all of its rights and franchises, except where the failure to
maintain such right or franchise would not have a material adverse effect on the
conduct of the business of the Credit Parties, taken as a whole.
(b) Each Credit Party (i) will cause all of its properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (ii) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Credit Parties may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (iii) will continue to
engage primarily in the businesses now conducted by them and in related or
complementary businesses; provided that nothing in this 7.6(b) shall prevent any
Credit Party from discontinuing the operation and maintenance of any of its
properties if such discontinuance is, in the judgment of the Credit Parties,
desirable in the conduct of its or their business and that do not in the
aggregate materially adversely affect the business of the Credit Parties on
consolidated basis.
7.7. Insurance. Each Credit Party will maintain with financially sound
and reputable insurers insurance with respect to its properties and business
against such casualties and contingencies as shall be in accordance with the
general practices of businesses engaged in similar activities in similar
geographic areas and in amounts, containing such terms, in such forms and for
such periods as may be reasonable and prudent and in accordance with the terms
of the Security Documents. Each Credit Party will maintain insurance, in form,
substance and amounts satisfactory to the Administrative Agent, on the Mortgaged
Properties in accordance with the terms of the Mortgages.
7.8. Taxes. Each Credit Party will (a) duly pay and discharge, or cause
to be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges imposed upon it and its real
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or supplies that
if unpaid might by law become a Lien or charge upon any of its property;
provided that any such tax, assessment, charge, levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and such Credit Party shall have set aside on its books
adequate reserves with respect thereto; and provided further that the Credit
Parties will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose or otherwise enforce
any Lien that may have attached as security therefor, (b) will withhold from
each payment to be made to any of its past or present employees, officers or
directors, and to any non-resident of the country in which it is a resident, the
amount of all taxes and all other deductions required to be withheld therefrom
and pay the same to the proper tax or other receiving officers within the time
required under any applicable law and (c) collect from all Persons the amount of
all taxes required to be collected from them and remit the same to the proper
tax or other receiving officers within the time required under any applicable
law.
7.9. Compliance with Laws, Contracts, Licenses, and Permits. Each of
the Credit Parties will comply with (i) the applicable laws and regulations
wherever its business is conducted, including all environmental laws, (ii) the
provisions of its Governing Documents, (iii) all agreements and instruments by
which it or any of its properties may be bound and (iv) all applicable decrees,
orders, and judgments, provided, that in each case, such compliance shall be
required by this Credit Agreement only where noncompliance with 7.9(i)-(iv)
would have a material adverse effect on the business, assets, operations or
financial condition of the Credit Parties (taken as a whole), or the ability of
any Credit Party to fulfill its obligations under this Credit Agreement or the
other Loan Documents. If any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any government or any
central bank or other fiscal or monetary authority shall become necessary or
required in order that any Credit Party may fulfill any of its obligations
hereunder or any of the other Loan Documents to which such Credit Party is a
party, each Credit Party will promptly take or cause to be taken all reasonable
steps within the power of such Credit Party to obtain such authorization,
consent, approval, permit or license, and upon request of the Administrative
Agent, to furnish the Administrative Agent and the Lenders with evidence
thereof.
7.10. Employee Benefit Plans. Each Credit Party will (i) promptly upon
filing (if required by applicable law) the same with the Department of Labor or
Internal Revenue Service upon request of the Administrative Agent, furnish to
the Administrative Agent a copy of the most recent actuarial statement required
to be submitted under 103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and (ii)
promptly upon receipt or dispatch, furnish to the Administrative Agent any
notice, report or demand sent or received in respect of a Guaranteed Pension
Plan under 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan, under 4041A, 4202, 4219, 4242, or 4245 of
ERISA. TheCredit Parties will also, in respect of each Guaranteed Pension Plan
which is required to be registered with the Financial Services Commission of
Ontario, Canada or the Regie des Rentes du Quebec (i) upon request of the
Administrative Agent, furnish the Administrative Agent with a copy of the most
recent actuarial report and annual report required to be filed with the
Financial Services Commission of Ontario, Canada, the Regie des Rentes du Quebec
or the Canada Revenue Agency and (ii) promptly upon receipt or dispatch, furnish
to the Administrative Agent any notice, report or demand sent or received in
respect of such Guaranteed Pension Plan.
7.11. Use of Proceeds. The proceeds of the Loans and Letters of Credit
shall be used solely for (i) the repayment in full of all amounts owing under
the Existing Credit Agreement, (ii) the issuance of standby and commercial
letters of credit and (iii) for working capital and general corporate purposes,
subject to the restrictions set forth in this Credit Agreement.
7.12. Certain Changes. Each Credit Party shall notify the
Administrative Agent, in writing, not less than thirty (30) days prior (i) to
any change in its chief executive office, its name or the type of its
organization, (ii) the acquisition of any Real Estate pursuant to 7.16 or (iii)
the acquisition of any asset in any jurisdiction other than those jurisdictions
located in the United States of America or those jurisdictions specified on such
Credit Partys Perfection Certificate.
7.13. Conduct of Business. Except as permitted by 8.5, each Credit
Party will continue to engage primarily in the businesses engaged in by such
Credit Party on the Closing Date, or such businesses as are reasonably related
or complementary to the businesses engaged in by such Credit Party on the
Closing Date.
7.14. Further Assurances. Each Credit Party will cooperate with the
Lenders and the Administrative Agent and execute such further instruments and
documents as the Lenders or the Administrative Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
7.15. Inspection of Properties and Books, etc.
7.15.1. General.
Each Credit Party shall permit the Lenders, through the Administrative
Agent or any of the Lenders other designated representatives, at the Borrowers
expense, to visit and inspect any of the properties of any Credit Party, to
examine the books of account of such Credit Party (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and accounts of
such Credit Party with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals and with prior or
contemporaneous notice as the Administrative Agent or any Lender may reasonably
request. The Administrative Agent may at the Borrowers expense, participate in
or observe any physical count of any inventory of any Credit Party which
constitutes a part of the Collateral.
7.15.2. Collateral Reports.
Upon the request of the Administrative Agent or the Required Lenders,
which requests may be made no more than three times annually (or with such other
frequency as the Administrative Agent shall request upon the occurrence and
continuation of a Default or an Event of Default), the Credit Parties will
obtain and deliver to the Administrative Agent and Lenders, or, if the
Administrative Agent so elects, will cooperate with the Administrative Agent in
the Administrative Agents obtaining, a report of an independent collateral
auditor satisfactory to the Administrative Agent (which may be affiliated with
one of the Lenders) with respect to the Accounts Receivable and inventory
components included in the Borrowing Base, which report shall indicate whether
or not the information set forth in the Borrowing Base Reports most recently
delivered is accurate and complete in all material respects based upon a review
by such auditors of the Accounts Receivable (including verification with respect
to the amount, aging, identity and credit of the respective account debtors and
the billing practices of the Credit Parties) and inventory (including
verification as to the value, location and respective types). All such
collateral value reports shall be conducted and made at the expense of the
Borrower.
7.15.3. Appraisals.
At the request of the Administrative Agent or the Required Lenders, which
requests may be made no more frequently than annually (or with such other
frequency as the Administrative Agent shall request upon the occurrence and
continuation of a Default or an Event of Default) the Credit Parties will obtain
and deliver to the Administrative Agent and the Lenders appraisal reports in
form and substance and from appraisers satisfactory to the Administrative Agent,
stating the then current fair market, Net Orderly Liquidation and forced
liquidation values of all or any portion of the inventory, equipment machinery
or Real Estate owned by the Credit Parties. Each such appraisal shall be
conducted and made at the expense of the Borrower.
7.15.4. Communications with Accountants.
Each Credit Party authorizes the Administrative Agent and, if accompanied
by the Administrative Agent, the Lenders to communicate directly with such
Credit Partys independent certified public accountants and authorizes such
accountants to disclose to the Administrative Agent and the Lenders any and all
financial statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of such Credit Party or, provided that in
each case the Administrative Agent notifies the Credit Parties in advance that
such communications will occur. At the request of the Administrative Agent,
each Credit Party shall deliver a letter addressed to such accountants
authorizing them to communicate directly with the Administrative Agent and the
Lenders.
7.15.5. Environmental Assessments. Upon the occurrence and continuation
of an Event of Default, the Administrative Agent may, for the purpose of
assessing and ensuring the value of any Mortgaged Property, obtain one or more
environmental assessments or audits of such Mortgaged Property prepared by a
hydrogeologist, an independent engineer or other qualified consultant or expert
approved by the Administrative Agent to evaluate or confirm (a) whether any
Hazardous Materials are present in the soil or water at such Mortgaged Property
and (b) whether the use and operation of such Mortgaged Property complies with
all Environmental Laws. Environmental assessments may include without
limitation detailed visual inspections of such Mortgaged Property including any
and all storage areas, storage tanks, drains, dry ▇▇▇▇▇ and leaching areas, and
the taking of soil samples, surface water samples and ground water samples, as
well as such other investigations or analyses as the Administrative Agent deems
appropriate. All such environmental assessments shall be conducted and made at
the expense of the Borrower.
7.16. Additional Mortgaged Property.
Any Credit Party which acquires or leases any new parcel of Real Estate
after the Closing Date shall promptly provide notice thereof to the
Administrative Agent and, upon request of the Administrative Agent, each Credit
Party shall forthwith (but in any event within thirty (30) days following any
such request therefor) deliver to the Administrative Agent for the benefit of
the Lenders a fully executed mortgage or deed of trust over any or all such
parcels of Real Estate acquired or leased by such Credit Party after the Closing
Date, each of which shall be in form and substance satisfactory to the
Administrative Agent and shall be deemed to be a Security Document hereunder,
together with such title insurance policies, surveys, environmental site
assessments, evidences of insurance with the Administrative Agent named as loss
payee and additional insured, legal opinions and other documents and
certificates with respect to such Real Estate as the Administrative Agent may
reasonably request. Each Credit Party further agrees that, following the taking
of such actions with respect to such Real Estate, the Administrative Agent shall
have, for the benefit of the Lenders, a valid and enforceable first priority
mortgage or deed of trust over such Real Estate, free and clear of all defects
and encumbrances except for Permitted Liens.
7.17. Bank Accounts.
7.17.1. General.
(a) Each Credit Party will maintain its principal accounts for operation,
administration, cash management and other deposit accounts for the conduct of
such Credit Partys business with the Cash Management Bank.
(b) On or prior to the Closing Date, the Credit Parties will (a)
establish, and maintain so long as any Obligations or Commitments are
outstanding, a depository account (the Concentration Account) under the control
of the Administrative Agent for the benefit of the Lenders and the
Administrative Agent, in the name of the Borrower, (b) instruct all account
debtors and other obligors, pursuant to notices of assignment and instruction
letters in form and substance satisfactory to the Administrative Agent, to remit
all cash proceeds of Accounts Receivable to local depository accounts (Local
Accounts) or concentration depository accounts (Interim Concentration Accounts)
with financial institutions which have entered into agency account agreements
and, if applicable, lock box agreements (collectively, Agency Account
Agreements) in form and substance satisfactory to the Administrative Agent, or
the Concentration Account, (c) direct all depository institutions with Local
Accounts to cause all funds held in each such Local Account to be transferred no
less frequently than once each day to, and only to, an Interim Concentration
Account or the Concentration Account, (d) direct all depository institutions
with Interim Concentration Accounts to cause all funds of the Credit Parties
held in such Interim Concentration Accounts to be transferred daily to, and only
to, the Concentration Account, and (e) at all times ensure that immediately upon
any Credit Partys receipt of any funds constituting or cash proceeds of any
Collateral, all such amounts shall have been deposited in a Local Account, an
Interim Concentration Account or the Concentration Account.
7.17.2. Acknowledgment of Application. Each Credit Party hereby agrees
that all amounts received by the Administrative Agent in the Concentration
Account will be applied in accordance with 2.11 or 2.12 as applicable.
8. NEGATIVE COVENANTS OF THE CREDIT PARTIES.
Each Credit Party covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation or Letter of Credit is outstanding or any Lender has
any obligation to make any Loans or the Administrative Agent has any obligations
to cause the Issuing Lender to issue, extend or renew any Letter of Credit:
8.1. Investments. None of the Credit Parties will make any Investment
in any Person, except for Investments which consist of:
(a) Investments comprised of notes payable, or stock or other securities
issued by account debtors to such Credit Parties pursuant to negotiated
agreements with respect to settlement of such account debtors accounts in the
ordinary course of business;
(b) Investments in its Subsidiaries as of the Closing Date;
(c) Investments consisting of intercompany loans by the Borrower to any
Subsidiary Guarantor (provided, however that in the case of ICON New Brunswick,
such intercompany loans may only be reloaned to ICON du Canada) in accordance
with 8.2;
(d) Investments by the Borrower after the Closing Date in International
Holdings not to exceed $25,000 per year;
(e) Investments consisting of the Guaranties;
(f) so long as no Default or Event of Default has occurred and is
continuing and there is no outstanding Loan balance, Investments by the
Borrower, subject to Control Letters in favor of the Administrative Agent for
the benefit of Lenders in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof; (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poors
Ratings Group or Moodys Investors Service, Inc.; (iii) certificates of deposit
maturing no more than one year from the date of creation thereof issued by
commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of A or better by a nationally
recognized rating agency (an A Rated Bank); (iv) time deposits maturing no more
than 30 days from the date of creation thereof with A Rated Banks; and (v)
mutual funds that invest solely in one or more of the investments described in
clauses (i) through (iv) above;
(g) Investments in European Subsidiaries permitted under 8.2;
(h) Investments consisting of loans to its respective employees on an
arm's-length basis in the ordinary course of business consistent with past
practices for travel expenses, relocation costs and similar purposes up to a
maximum of $1,200,000 in the aggregate at any one time outstanding; and
(i) Investments consisting of loans to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
existing as of the Closing Date and listed on Schedule 8.1.
8.2. Restrictions on Indebtedness. The Credit Parties will not incur,
assume, guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
(a) Indebtedness secured by purchase money security interests and
Capitalized Leases permitted in 8.3;
(b) Indebtedness of the Credit Parties consisting of the Obligations
under the Loan Documents;
(c) Indebtedness of the Credit Parties consisting of the Back Bay Loan;
provided that the principal amount thereof does not exceed $40,000,000;
(d) Indebtedness of the Credit Parties in respect of the Subordinated
Debt;
(e) Indebtedness of any Credit Party outstanding as of date hereof and
reflected on Schedule 8.2(c) hereto and any refinancing thereof or amendments or
modifications thereof that do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same) and that are otherwise on terms and conditions no less favorable to any
Credit Party, the Administrative Agent or any Lender, as determined by the
Administrative Agent in its reasonable discretion, than the terms of the
Indebtedness being refinanced, amended or modified;
(f) Indebtedness in respect of Derivative Agreements specifically
permitted under 8.17;
(g) Indebtedness (i) of the Borrowers European Subsidiaries and any
guarantees thereof provided by a Credit Party consisting of local working
capital facilities and/or factoring arrangements provided by Bank of America or
any of its Affiliates; provided that the principal amount of such Indebtedness
will reduce the amount of credit extensions available hereunder; and (ii) of the
Borrowers European Subsidiaries to third parties consisting of local working
capital facilities and/or factoring arrangements, provided that the principal
amount of such Indebtedness outstanding at any one time will not exceed
$750,000;
(h) Indebtedness of the Borrowers European Subsidiaries to the Borrower
(including the transfer of inventory for which Borrower has not been paid) (i)
outstanding on the Closing Date in an aggregate amount not in excess of
$32,000,000 (excluding accrued interest and fess on such advances) and (ii) made
after the Closing Date in an aggregate amount not to exceed $5,000,000
(excluding accrued interest and fees on such advances); provided that, such
Indebtedness is evidenced by an intercompany note in form and substance
satisfactory to the Administrative Agent and such note is pledged to the
Administrative Agent under the Collateral Assignment of Intercompany Notes as
security for the Obligations;
(i) other unsecured Indebtedness not to exceed $1,000,000 in the
aggregate at any time outstanding;
(j) Indebtedness consisting of intercompany loans and advances made by
the Borrower to Subsidiary Guarantors (provided, however, that (i) in the case
of ICON New Brunswick, such intercompany loans are for the sole purpose of
reloaning the proceeds thereof to ICON du Canada, and (ii) in the case of ICON
IP, subject to 8.19, such intercompany loans do not exceed the amount necessary
for ICON IP to conduct its business in the ordinary course as presently
conducted by ICON IP as of the Closing Date) in an amount not to exceed
$20,000,000 in the aggregate (provided that, such intercompany loans to Canadian
Subsidiaries shall not exceed $10,000,000 in the aggregate); and provided
further, that: (A) each Subsidiary Guarantor shall have executed and delivered
to the Borrower, on the Closing Date, a demand note (an "Intercompany Note") to
evidence any such intercompany Indebtedness owing by such Subsidiary Guarantor
to the Borrower, which Intercompany Notes shall be in form and substance
satisfactory to the Administrative Agent and shall be pledged and delivered to
the Administrative Agent as additional collateral security for the Obligations
pursuant to the Collateral Assignment of Intercompany Notes; (B) the Borrower
shall record all intercompany transactions on its books and records in a manner
reasonably satisfactory to the Administrative Agent; (C) the obligations of each
Subsidiary Guarantor under such Intercompany Notes shall be subordinated to the
Obligations of such Subsidiary Guarantor as a Guarantor in a manner satisfactory
to the Administrative Agent; and (D) with the exception of an amount not to
exceed $500,000 in each Fiscal Year, the amount of any royalty or license fee
received by ICON IP from the Borrower or any Subsidiary of the Borrower shall
promptly be loaned back to the Borrower or such Subsidiary of the Borrower,
which intercompany loan shall be evidenced by Intercompany Notes and shall be
subordinated to the Obligations of the Borrower or such Subsidiary of the
Borrower as a Guarantor in a manner satisfactory to the Administrative Agent;
(k) Indebtedness incurred by Holdings in respect of the CS First Boston
Debt;
(l) Indebtedness consisting of a guaranties by the Borrower in connection
with guarantying certain lease financing obtained by certain of the Borrowers
commercial equipment customers relating to certain equipment manufactured by
NordicTrack or Free Motion in an aggregate amount not to exceed $15,000,000 at
any time; and
(m) Indebtedness secured by Liens permitted under 8.3.1(j).
8.3. Restrictions on Liens.
8.3.1. Permitted Liens. The Credit Parties will not (i) create or incur
or suffer to be created or incurred or to exist any Lien upon any of their
respective property or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; (ii) transfer any of such
property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (iii) acquire, or
agree or have an option to acquire, any property or assets upon conditional sale
or other title retention or purchase money security agreement, device or
arrangement; (iv) suffer to exist for a period of more than thirty (30) days
after the same shall have been incurred any Indebtedness or claim or demand
against it that if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; or (v)
sell, assign, pledge or otherwise transfer any receivables as defined in clause
(g) of the definition of the term Indebtedness, with or without recourse;
provided that any Credit Party may create or incur or suffer to be created or
incurred or to exist:
(a) so long as no foreclosure or other enforcement action has been
commenced, pledges, security interests, Liens and other encumbrances arising
from attachments or similar proceedings, pending litigation, judgments or taxes
or assessments or government charges not yet delinquent in any such event whose
validity or amount is being contested in good faith by appropriate proceedings
and for which adequate reserves have been established and are maintained in
accordance with GAAP, or taxes and assessments which are not due and delinquent;
(b) Liens of carriers, warehousemen, mechanics and materialmen and other
like Liens and Liens imposed by law, created in the ordinary course of business,
for amounts not yet due or which are being contested in good faith by
appropriate proceedings and as to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(c) pledges or deposits made in connection with workers compensation,
employee benefit plans, unemployment or other insurance, old age pensions, or
other Social Security benefits, and good faith deposits in connection with
tenders, contracts, bids, statutory obligations or leases to which it is a party
or deposits to secure, or in lieu of, surety, penalty or appeal bonds,
performance bonds, letters of credit and other similar obligations or arising as
a result of progress payments under government contracts or contracts with
public utilities;
(d) such minor defects, irregularities, encumbrances, easements, rights
of way, and clouds on title as normally exist with respect to similar properties
which do not materially interfere with the present or proposed use of the
applicable property;
(e) landlords Liens under leases for rent which is not delinquent;
(f) Liens in favor of the Administrative Agent, any of the Lenders or the
Issuing Lender securing any of the Obligations, including Liens on cash
collateral;
(g) Liens granted to the Back Bay Agent under the Back Bay Loan Documents
to secure the Back Bay Loan and subject to the Back Bay Intercreditor Agreement;
(h) Liens in existence on the date hereof and listed on Schedule 8.3;
(i) Liens created after the date hereof by conditional sale or other
title retention agreements (including Capitalized Leases) or in connection with
purchase money Indebtedness with respect to equipment and fixtures acquired by
any Credit Party, involving the incurrence of an aggregate amount of purchase
money Indebtedness and obligations with respect to Capitalized Leases of not
more than $6,000,000 outstanding at any one time for all such Liens (provided
that such Liens attach only to the assets subject to such purchase money debt
and such Indebtedness is incurred within one hundred twenty (120) days following
such purchase and does not exceed 100% of the purchase price of the subject
assets); and
(j) other Liens securing other Indebtedness not exceeding $250,000 in the
aggregate at any time outstanding, so long as such Liens do not attach to any
accounts or inventory.
8.3.2. Restrictions on Negative Pledges and Upstream Limitations. The
Credit Parties will not (a) enter into or permit to exist any arrangement or
agreement (excluding the Credit Agreement and the other Loan Documents and the
Back Bay Loan Documents) which directly or indirectly prohibits any Credit Party
from creating, assuming or incurring any Lien upon its properties, revenues or
assets whether now owned or hereafter acquired, or (b) enter into any agreement,
contract or arrangement (excluding the Credit Agreement and the other Loan
Documents and the Back Bay Loan Agreement) restricting the ability of any
Subsidiary of any Credit Party to pay or make dividends or distributions in cash
or kind to any Credit Party, to make loans, advances or other payments of
whatsoever nature to any Credit Party, or to make transfers or distributions of
all or any part of its assets to any Credit Party in each case other than
customary anti-assignment provisions contained in leases and licensing
agreements entered into by any Credit Party in the ordinary course of its
business, but only if such anti-assignment provisions do not impair the
perfection or enforceability of the security interests granted to the
Administrative Agent.
8.4. Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) the making of intercompany loans and advances between the
Borrower and its domestic and Canadian Subsidiaries that are Subsidiary
Guarantors, to the extent permitted by 8.2; (b) dividends and distributions by
Subsidiaries of the Borrower paid directly or indirectly to the Borrower; (c)
employee loans permitted under 8.1; (d) payments of principal and interest of
Intercompany Notes issued in accordance with 8.2; (e) scheduled payments of
interest with respect to Subordinated Notes, provided that no Payment Blockage
Period (as defined in the Subordinated Notes Documents) is in effect at the time
any payment otherwise permitted under this clause (e) is to be made; (f)
payments of management fees pursuant to the Management Agreements, not to exceed
$900,000 in the aggregate in any Fiscal Year or $225,000 in the aggregate in any
Fiscal Quarter (plus an amount not in excess of $225,000 consisting of accrued
and unpaid management fees as of the Closing Date) to all of ▇▇▇▇ Capital, Inc.
and CS First Boston; provided, however, that (1) no such management fees shall
be paid so long as any Event of Default has occurred and is continuing or would
result therefrom and (2) management fees shall be payable in four equal
quarterly installments sixty (60) days after the end of each Fiscal Quarter; (g)
payments to Holdings necessary to enable Holdings: (1) to satisfy its federal,
state and local income tax obligations that are the result of consolidated net
income of the Borrower and its Subsidiaries being attributed to Holdings; (2) to
pay the fees and expenses necessary to maintain Holdings' corporate existence
and good standing; (3) to pay accounting fees attributable to the Borrower and
its Subsidiaries; and (4) to buy back the Holdings' stock of any employee who
has died or whose employment with the Borrower or its Subsidiaries has otherwise
terminated, such repurchase payments not to exceed $500,000 in the
aggregate in any Fiscal Year in cash payments; and (h) bonuses and other
payments (including the forgiveness of Indebtedness) to Affiliates of the
Borrower as set forth on Schedule 8.4 hereto.
8.5. Merger, Consolidation and Disposition of Assets.
8.5.1. Mergers and Acquisitions. None of the Credit Parties will become
a party to any merger or consolidation, or agree to or effect any asset
acquisition or stock acquisition (other than the acquisition of assets in the
ordinary course of business consistent with past practices) except for (i) the
merger or consolidation of one or more of the Subsidiaries of the Borrower
(other than ICON IP and International Holdings) with and into the Borrower
(provided that the Borrower shall be the surviving entity), (ii) Permitted
Acquisitions and (iii) acquisitions of assets in the ordinary course of business
consistent with past practices.
8.5.2. Disposition of Assets. No Credit Party shall dissolve, liquidate
or sell, transfer, convey, assign or otherwise dispose of any of its properties
or other assets, including the Capital Stock of any of its Subsidiaries (whether
in a public or a private offering or otherwise) or any of its Accounts
Receivable, other than (a) the sale of inventory in the ordinary course of
business, (b) the sale, transfer, conveyance or other disposition for cash by a
Credit Party of (i) equipment or fixtures that are obsolete or no longer used or
useful in such Credit Party's business and having a value not exceeding $500,000
in the aggregate in any Fiscal Year and (ii) other equipment and fixtures having
a value not exceeding $1,000,000 in the aggregate in any Fiscal Year, (c)
non-recourse sales of consumer Accounts Receivable on terms approved in advance
in writing by the Administrative Agent, (d) non-recourse sales not to exceed
$10,000,000 in any 12-month period of Accounts Receivable owing by account
debtors that are in bankruptcy, or whose Accounts Receivable are excluded from
Eligible Accounts Receivable for reasons related to the account debtor's
creditworthiness, on terms approved in advance in writing by the Administrative
Agent, (e) sale-leasebacks permitted under 8.6, (f) licenses of intellectual
property in the ordinary course of business and (g) the dissolution and
liquidation of Jumpking, Versalite and World Fitness. Without limiting the
generality of the foregoing, no Credit Party will sell any of its patents or
trademarks or license any of its patents or trademarks to third parties under
licenses that restrict the ability of the Credit Party (or the Administrative
Agent) to sell or license the subject patent or trademark or impair the security
interests granted to the Administrative Agent. With respect to any disposition
of assets or other properties permitted pursuant to clause (b) above, the
Administrative Agent agrees on reasonable prior written notice to release its
Lien on such assets or other properties in order to permit the applicable Credit
Party to effect such disposition and shall execute and deliver to the Borrower,
at the Borrower's expense, appropriate UCC-3 termination statements and other
releases as reasonably requested by the Borrower.
8.6. Sale and Leaseback. No Credit Party shall engage in any
sale-leaseback, Synthetic Lease or similar transaction involving any of its
assets, except sale-leaseback transactions with respect to items of equipment
(other than computer equipment and software) on terms reasonably satisfactory to
the Administrative Agent in amounts not to exceed $2,000,000 in the aggregate in
any Fiscal Year.
8.7. Change of Fiscal Year. The Credit Parties will not at any time
change their Fiscal Year.
8.8. Employee Benefit Plans. None of the Credit Parties or any ERISA
Affiliate will:
(a) engage in any prohibited transaction within the meaning of 406 of
ERISA or 4975 of the Code which could result in a material liability for the
Credit Parties; or
(b) permit any Guaranteed Pension Plan to incur an accumulated funding
deficiency, as such term is defined in 302 of ERISA, whether or not such
deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent which,
or terminate any Guaranteed Pension Plan in a manner which, could result in the
imposition of a lien or encumbrance on the assets of the Credit Parties pursuant
to 302(f) or 4068 of ERISA.
8.9. Compliance With Environmental Laws. The Credit Parties will not
(a) use any of the Real Estate or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances, (b) cause or permit to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances, (c) generate any Hazardous
Substances on any of the Real Estate, (d) conduct any activity at any Real
Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (e) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law, unless, in each case, such violation, use, condition,
generation or activity could not reasonably be expected to have a material
adverse effect on the value of such Real Estate or the business, assets,
operations or financial condition of the Credit Parties (taken as a whole), or
the ability of any Credit Party to fulfill its obligations under this Credit
Agreement or the other Loan Documents.
8.10. Change in Terms of Governing Documents.
The Credit Parties shall not effect or permit any change in or amendment
to any Governing Document of any Credit Party which could reasonably be expected
to adversely affect the Lenders.
8.11. Creation of Subsidiaries. None of the Credit Parties shall create
or permit to exist any Subsidiary unless (a) one hundred percent (100%) of the
Capital Stock or other equity interests of such Subsidiary are owned by a Credit
Party, (b) prior to the formation of such Subsidiary, the Borrower shall notify
the Administrative Agent and the Lenders thereof in writing, and (c) within ten
(10) Business Days of the formation of such Subsidiary, the Credit Parties
shall, (i) take all steps as may be necessary or advisable in the opinion of the
Administrative Agent to pledge to the Administrative Agent, for the benefit of
the Lenders and the Agent, on a perfected, first-priority basis, all of the
Capital Stock of such Subsidiary (limited, in the case of any foreign Subsidiary
that is a controlled foreign corporation under Section 957 of the Internal
Revenue Code, to a pledge of 65% of the Capital Stock of each such Subsidiary to
the extent the pledge of any greater percentage would result in
material adverse tax consequences to the Borrower) pursuant to a pledge
agreement in form and substance satisfactory to the Administrative Agent, which
such pledge agreement shall be a Pledge Agreement and a Security Document
hereunder, (ii) cause any such Subsidiary to guaranty all of the Obligations
hereunder pursuant to a guaranty in form and substance satisfactory to the
Administrative Agent, which such guaranty shall be a Guaranty and a Security
Document hereunder, (iii) cause any such Subsidiary to take all steps as may be
necessary or advisable in the opinion of the Administrative Agent to grant to
the Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, a first priority, perfected security interest in substantially all of its
assets as collateral security for such guaranty, pursuant to security documents,
mortgages, pledges and other documents in form and substance satisfactory to the
Administrative Agent, each of which documents shall be Security Documents
hereunder, and (iv) deliver to the Administrative Agent all such evidence of
corporate or other authorization, legal opinions (including local counsel
opinions where applicable) and other documentation as the Administrative Agent
may request.
8.12. Transactions with Affiliates.
(a) Except as otherwise permitted in this 8.12 and 8.4(f), the Credit
Parties will not engage in any transaction with any Affiliate (other than (a)
for services by individuals as employees, officers and directors and (b)
transactions between the Borrower and Subsidiary Guarantors otherwise permitted
hereunder), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate, on terms more favorable to such Person than would have been
obtainable on an arms-length basis in the ordinary course of business.
(b) The Credit Parties shall not pay compensation as salaries or
otherwise in excess of $3,600,000 in the aggregate per year and $900,000 in the
aggregate per Fiscal Quarter (plus an amount not in excess of $891,000
consisting of accrued and unpaid management fees as of the Closing Date) to
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇; provided, however, that no such compensation
shall be paid so long as any Event of Default has occurred and is continuing or
would result therefrom.
8.13. Agency Account. The Credit Parties will not (a) establish any
bank accounts other than those listed on Schedule6.20, without the
Administrative Agents prior written consent, (b) violate directly or indirectly
any Agency Account Agreement or other bank agency or lock box agreement in favor
of the Administrative Agent for the benefit of the Lenders and the Agent with
respect to such account, (c) deposit into any of the payroll accounts listed on
Schedule6.20 any amounts in excess of amounts necessary to pay current payroll
obligations from such accounts (other than balances not in excess of $150,000 in
accordance with the Credit Parties usual practices), or (d) cause the aggregate
balance maintained in all deposit accounts (other than payroll accounts referred
to in clause (c)) which are not subject to an Agency Account Agreement in favor
of the Administrative Agent to exceed $350,000.
8.14. Cancellation of Indebtedness. No Credit Party shall cancel any
claim or debt owing to it, except in the ordinary course of its business
consistent with past practices.
8.15. Subordinated Debt; CS First Boston Debt. The Credit Parties will
not amend, supplement or otherwise modify the terms of any of the Subordinated
Debt or prepay, redeem or repurchase any of the Subordinated Debt. The Credit
Parties will not amend, supplement or otherwise modify the terms of any of the
CS First Boston Debt or prepay, redeem or repurchase, or pay any cash interest
with respect to, any of the CS First Boston Debt.
8.16. Back Bay Loan. The Credit Parties shall not, without the prior
written consent of the Specified Required Lenders, prepay, redeem or repurchase
all or any portion of the Back Bay Loan, increase the fees, interest or other
compensation in respect thereto, or make principal payments thereon prior to
scheduled maturity thereof (as in effect of the date hereof), other than
prepayments in an aggregate amount not to exceed $15,000,000; so long as (a) the
Fixed Charged Coverage Ratio as at the end of the Fiscal Quarter most recently
ended prior to such prepayment is equal to or greater than 1.10:1.00, (b) Excess
Availability prior to, and after giving effect to, such prepayment, shall not be
less than $50,000,000 (after giving effect to the payment of accounts payable in
the ordinary course of business) and (c) prior to the such prepayment, the
Borrower shall deliver to the Administrative Agent updated versions of the most
recent projections provided to the Administrative Agent pursuant to the
terms of this Credit Agreement, reflecting that Excess Availability shall be
$40,000,000 or greater for at least twelve (12) months following such prepayment
(assuming payment of accounts payable in the ordinary course of business).
8.17. No Speculative Transactions. No Credit Party shall engage in any
transaction involving commodity options, futures contracts or similar
transactions, except in connection with Derivative Agreements entered into
solely to hedge against fluctuations in the prices of commodities owned or
purchased by it and the values of foreign currencies receivable or payable by it
and interest swaps, caps or collars.
8.18. Changes Relating to Certain Agreements. No Credit Party shall (a)
change or amend the terms of the Management Agreements, the Employment
Agreements or the Stockholders Agreement, except changes or amendments that do
not adversely affect the rights or interests of Lenders or (b) change or amend
the terms of the Back Bay Loan Agreement unless such change or amendment is
permitted under the Back Bay Intercreditor Agreement.
8.19. Credit Parties other than the Borrower. Holdings shall not engage
in any trade or business, or own any assets (other than the Capital Stock of the
Borrower) or incur any Indebtedness (other than the Obligations, the Back Bay
Loan and the CS First Boston Debt). ICON New Brunswick shall not engage in any
trade or business, or own any assets (other than a Local Account) or incur any
Indebtedness (other than guarantees of the Obligations, the Back Bay Loan and
the Subordinated Notes). International Holdings shall not engage in any trade or
business or incur any Indebtedness (other than guarantees of the Obligations,
the Back Bay Loan and the Subordinated Notes) or own any assets (other than the
Capital Stock of the European Subsidiaries, Canadian Subsidiaries, Versalite and
World Fitness). ICON IP shall not engage in any trade or business, own any
assets or incur any Indebtedness (other than guarantees of the Obligations, the
Back Bay Loan and the Subordinated Notes), unless, in each case, such trade,
business, ownership of assets or incurrence of Indebtedness consists
of owning intellectual property and intercompany transactions related thereto.
Jumpking, Versalite and World Fitness shall not engage in any trade or business,
own any assets or incur any Indebtedness.
9. FINANCIAL COVENANT OF THE CREDIT PARTIES.
Each Credit Party covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation or Letter of Credit is outstanding or any Lender has
any obligation to make any Loans or the Administrative Agent has any obligation
to cause the Issuing Lender to issue, extend or renew any Letters of Credit, and
based on the financial statements of the Credit Parties delivered in accordance
with the terms hereof: at any time during any Fiscal Quarter during which any
of: (a) the result of (i) the Borrowing Base, minus (ii) the Revolving Exposure
is less than $15,000,000, or (b) Excess Availability is less than $10,000,000 or
(c) the result of (i) the Borrowing Base, minus (ii) the Revolving Exposure is
less than ten percent (10%) of the Borrowing Base, the Credit Parties shall not
permit the Fixed Charge Coverage Ratio, determined as of the end of the most
recently ended Fiscal Quarter, to be less than 1:1.
10. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Loans and of the
Administrative Agent to cause the Issuing Lender to issue any initial Letter of
Credit shall be subject to the satisfaction of the following conditions
precedent on or prior to November 1, 2005, in each case, in form and substance
satisfactory to the Administrative Agent and the Lenders:
10.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed copy of each such
document.
10.2. Certified Copies of Governing Documents. Each of the Lenders
shall have received from the Credit Parties a copy, certified by a duly
authorized officer of such Person or other appropriate Person to be true and
complete on the Closing Date, of each of its Governing Documents as in effect on
such date of certification.
10.3. Corporate or Other Action. All corporate (or other) action
necessary for the valid execution, delivery and performance by each of the
Credit Parties of this Credit Agreement and the other Loan Documents to which it
is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Lenders shall have been provided to each of
the Lenders. The Articles of Association of each of ICON Health & Fitness
(Holdings) Limited, ICON Health & Fitness Limited shall have been amended to
provide that the directors thereof may not refuse a request to register a
transfer of shares on enforcement of the applicable Security Documents.
10.4. Incumbency Certificate. The Administrative Agent shall have
received from each Credit Party an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of such Credit Party, and
giving the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of each such Person, each of
the Loan Documents and to which such Credit Party is or is to become a party;
and (b) in the case of the Borrower, to make Loan Requests and Conversion
Requests and to apply for Letters of Credit.
10.5. Validity of Liens. The Security Documents shall be effective to
create in favor of the Administrative Agent a legal, valid and enforceable first
priority perfected security interest in and Lien upon the Collateral. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Administrative Agent to protect and preserve
such security interests shall have been duly effected (or, in the case of the
U.K. Debenture and the International Pledge Agreement referred to in paragraph
(b) of International Pledge Agreements, will be made within 5 days of the grant
of such security). The Administrative Agent shall have received evidence
thereof in form and substance satisfactory to the Administrative Agent.
10.6. Perfection Certificates and Collateral Search Results. The
Administrative Agent shall have received from each of the Credit Parties, a
completed and fully executed Perfection Certificate and the results of UCC and
intellectual property searches (and the equivalent thereof in all applicable
foreign jurisdictions) with respect to the Collateral, indicating no Liens other
than Permitted Liens and otherwise in form and substance reasonably satisfactory
to the Administrative Agent.
10.7. Certificates of Insurance. The Administrative Agent shall have
received (a) a certificate of insurance from an independent insurance broker
dated as of the Closing Date, naming the Administrative Agent as loss payee
and/or additional insured, as applicable, identifying insurers, types of
insurance, insurance limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions of the Security Agreements
and (b) certified copies of all policies evidencing such insurance (or
certificates therefore signed by the insurer or an agent authorized to bind the
insurer).
10.8. Agency Account Agreements. The Credit Parties shall have
established the Concentration Account, and the Administrative Agent shall have
received an Agency Account Agreement executed by the Cash Management Bank (in
its capacity as the depository bank with respect to the Concentration Account)
and, to the extent required by 8.13, each depository institution with which any
Credit Party maintains a Local Account or Interim Concentration Account.
10.9. Borrowing Base Report and Collateral Update Certificates. The
Administrative Agent shall have received an executed Borrowing Base Report,
which Borrowing Base Report shall demonstrate Excess Availability of not less
than $50,000,000 (prior to the application of the Availability Reserve and after
giving effect to the payment of all sums and expenses, the issuance of all
Letters of Credit and the funding of all Loans to be paid, issued or funded on
the Closing Date) and a Collateral Update Certificate, in each case, in form and
substance satisfactory to the Administrative Agent.
10.10. Accounts Receivable Aging Report. The Administrative Agent shall
have received from the Borrower the most recent Accounts Receivable aging report
of the Borrower dated as of a date which shall be no more than fifteen (15) days
prior to the Closing Date and the Borrower shall have notified the
Administrative Agent in writing on the Closing Date of any material deviation
from the Accounts Receivable values reflected in such Accounts Receivable aging
report and shall have provided the Administrative Agent with such supplementary
documentation as the Administrative Agent may reasonably request.
10.11. Inventory Appraisal. The Agent shall have received and be
satisfied with the results of an appraisal of the inventory, machinery,
equipment and Real Estate of the Borrower and its domestic and Canadian
Subsidiaries.
10.12. Payment of Closing Fees. The Borrower shall have paid to the
Administrative Agent the fees required to be paid by it on the Closing Date.
10.13. Payoff Letter. The Administrative Agent shall have received a
copy of the payoff letter from General Electric Capital Corporation (GECC),
indicating the amount of the loan obligations of the Credit Parties under the
Existing Credit Agreement to be discharged on the Closing Date and an
acknowledgment by GECC that the commitments have been terminated and upon
receipt of such funds, it will authorize the filing of all termination
statements and take such other actions as may be necessary to discharge any and
all mortgages, deeds of trust and security interests granted by the Credit
Parties in favor of GECC.
10.14. Opinions of Counsel. Each of the Lenders and the Administrative
Agent shall have received a favorable legal opinion addressed to the Lenders and
the Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Lenders and the Administrative Agent, from:
(a) Weil, Gotshal & ▇▇▇▇▇▇ LLP, special counsel to the Credit Parties;
(b) ▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇.▇., special Utah counsel to the Credit Parties;
(c) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, special New Brunswick counsel to the Credit Parties;
(d) Holmested & Associates, special Quebec counsel to the Credit Parties;
and
(e) Cobbetts Solicitors, special English counsel to certain Credit
Parties.
10.15. Title Insurance. The Administrative Agent shall have received a
Title Policy covering each Mortgaged Property (or commitments to issue such
policies, with all conditions to issuance of the Title Policy deleted by an
authorized agent of the Title Insurance Company) together with proof of payment
of all fees and premiums for such policies, from the Title Insurance Company and
in amounts satisfactory to the Administrative Agent, insuring the interest of
the Administrative Agent and each of the Lenders as mortgagee under the
Mortgages.
10.16. Hazardous Waste Assessments. The Administrative Agent shall have
received hazardous waste site assessments from environmental engineers and in
form and substance satisfactory to the Administrative Agent, covering all Real
Estate and all other real property in respect of which any Credit Party may have
material liability, whether contingent or otherwise, for dumping or disposal of
Hazardous Substances.
10.17. Solvency Certificate. The Administrative Agent shall have
received an officers certificate of Holdings and the Borrower dated as of the
Closing Date as to the solvency of the Credit Parties following the consummation
of the transactions contemplated herein and in form and substance satisfactory
to the Lenders.
10.18. No Material Adverse Change. Since the Balance Sheet Date, as
determined by the Administrative Agent, there has occurred no material adverse
change in the financial condition, business, assets, liabilities or business
prospects of the Credit Parties, taken as a whole.
10.19. Landlord Waivers. The Administrative Agent shall have received
landlord waivers, each in form and substance satisfactory to the Administrative
Agent, relating to each of the leased properties listed on Schedule 10.19
hereto.
10.20. Collateral Examinations/Appraisals. The Administrative Agent
shall have received the results of collateral examinations and appraisals
performed with respect to the Collateral, each in form and substance
satisfactory to the Administrative Agent.
10.21. Financial Statement and Projections. The Administrative Agent
shall have received the financial statements and projections referred to in 6.2,
each in form and substance satisfactory to the Administrative Agent.
10.22. Back Bay Intercreditor Agreement; Back Bay Loan Documents. (a)
The Back Bay Intercreditor Agreement shall have been duly executed and delivered
by the respective parties thereto, shall be in full force and effect and shall
be in form and substance satisfactory to each of the Administrative Agent, (b)
the Administrative Agent shall have received certified copies of the Back Bay
Loan Documents and (c) the Administrative Agent shall have received evidence
that the Credit Parties have received $40,000,000 in proceeds of the Back Bay
Loan.
10.23. Subordinated Debt. The Administrative Agent shall have received
a certified copy of the Subordinated Debt Documents, together with written
confirmation of the notice address for the trustee thereunder.
11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Loan, and of the
Administrative Agent to cause the Issuing Lender to issue, extend or renew any
Letter of Credit, in each case whether on or after the Closing Date, shall also
be subject to the satisfaction of the following conditions precedent:
11.1. Representations True; No Default or Event of Default. Each of the
representations and warranties of any Credit Party contained in this Credit
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Credit Agreement shall be true as of the
date as of which they were made and shall also be true at and as of the time of
the making of such Loan or the issuance, extension or renewal of such Letter of
Credit, with the same effect as if made at and as of that time (except to the
extent of changes resulting from transactions contemplated or permitted by this
Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing, and no condition shall exist on such date which
constitutes an Event of Default.
11.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Administrative Agent would make it illegal for the
Issuing Lender to issue, extend or renew such Letter of Credit.
11.3. Governmental Regulation. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
11.4. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Lenders and to the Administrative Agent and the Administrative
Agents Special Counsel, and the Lenders, the Administrative Agent and such
counsel shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.
11.5. Payment of Fees. The Borrower shall have complied with their
obligations to pay all Fees, Reimbursement Obligations and each other amount
arising hereunder at any time subsequent to the Closing Date and becoming due
and payable on or before the Drawdown Date of such Loan or the date of the
issuance of such Letter of Credit.
11.6. Exchange Limitations. There exists no reason whatsoever,
including, without limitation, by reason of the application of any so-called
currency exchange laws, rules or regulations (as in effect at the time of any
proposed borrowings hereunder) which could reasonably be expected to interfere
with the Borrower satisfying any of its Obligations in full at such time as such
Obligations become due and payable pursuant to the terms hereof.
11.7. Validity of Liens. The Security Documents shall be effective to
create in favor of the Administrative Agent a legal, valid and enforceable first
priority perfected security interest in and Lien upon the Collateral. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Administrative Agent to protect and preserve
such security interests shall have been duly effected. The Administrative Agent
shall have received evidence thereof in form and substance satisfactory to the
Administrative Agent.
11.8. Indenture Borrowing Limitations. After giving effect to the
making of such Loan or issuance, extension or renewal of any Letter of Credit,
the aggregate amount of all Indebtedness of the Credit Parties incurred pursuant
to Sections 4.09(b)(1) and 4.09(b)(13) of the Subordinated Indenture, including,
without limitation, the Revolving Credit Loans, the Letters of Credit and the
Back Bay Loan, shall not exceed the amount permitted to be incurred at such time
pursuant to such Sections 4.09(b)(1) and 4.09(b)(13).
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. Events of Default and Acceleration. If any of the following
events (Events of Default or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, Defaults) shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans or any
Reimbursement Obligation when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans, the Fees,
or other sums due hereunder or under any of the other Loan Documents, when the
same shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment and such
failure shall continue for three (3) days after written notice of such failure
has been given to the Borrower by the Administrative Agent;
(c) any Credit Party shall fail to comply with any of its covenants
contained in 7.1, 7.4, 7.5, 7.6, 7.7, 7.10, 7.11, 7.12, 7.13, 7.15, 7.16, 7.17,
8 or, if applicable, 9;
(d) any Credit Party shall fail to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other than
those specified elsewhere in this 12.1) for thirty (30) days after written
notice of such failure has been given to the Borrower by the Administrative
Agent;
(e) any representation or warranty of any Credit Party in this Credit
Agreement or any of the other Loan Documents or in any other document or
instrument delivered pursuant to or in connection with this Credit Agreement
shall prove to have been false in any material respect upon the date when made
or deemed to have been made or repeated other than inadvertent immaterial errors
not exceeding $750,000 in the aggregate in any Borrowing Base Report and errors
that have the effect of understating the Borrowing Base;
(f) any Credit Party shall make an assignment for the benefit of
creditors, or shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of such Credit Party or of any substantial
part of the assets of any Credit Party or shall commence any case or other
proceeding relating to any Credit Party under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application (including a bankruptcy application) shall be filed or
any such case or other proceeding shall be commenced against any Credit Party
and such Credit Party shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition or application shall not have been
dismissed or stayed within sixty (60) days following the filing thereof; or a
receiver, trustee or other similar official shall be appointed for any Canadian
Subsidiary or for any substantial part of the assets any Canadian Subsidiary;
(g) a decree or order (including a bankruptcy order) is entered
appointing any such trustee, custodian, liquidator or receiver or adjudicating
any Credit Party bankrupt or insolvent, or approving a petition or a bankruptcy
application in any such case or other proceeding, or a decree or order
(including a bankruptcy order) for relief is entered in respect of any Credit
Party in an involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(h) there shall remain in force, undischarged, unsatisfied, unbonded and
unstayed, for more than sixty (60) days, whether or not consecutive, any final
judgment against any Credit Party (considered collectively) that exceeds in the
aggregate $1,000,000, which are not covered by insurance policies as to which
coverage has been accepted;
(i) (A) any Credit Party or any ERISA Affiliate (considered collectively)
incurs any liability to the PBGC or a Guaranteed Pension Plan pursuant to Title
IV of ERISA in an aggregate amount exceeding $1,000,000, or any Credit Party or
any ERISA Affiliate (considered collectively) is assessed withdrawal liability
pursuant to Title IV of ERISA by a Multiemployer Plan requiring aggregate annual
payments exceeding $1,000,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to make a
required installment or other payment (within the meaning of 302(f)(1) of
ERISA), provided that the Administrative Agent determines in its reasonable
discretion that such event (x) could be expected to result in liability of the
Credit Parties to the PBGC or such Guaranteed Pension Plan in an aggregate
amount exceeding $1,000,000 and (y) could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC, for the appointment by
the appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan or for the imposition of a lien in favor of such
Guaranteed Pension Plan; or (ii) the appointment by a United States District
Court of a trustee to administer such Guaranteed Pension Plan; or (iii) the
institution by the PBGC of proceedings to terminate such Guaranteed Pension
Plan, (B) a Canadian Subsidiary terminates any Guaranteed Pension Plan
applicable to it, (C) any event occurs providing grounds to terminate or wind-up
a Guaranteed Pension Plan applicable to any Canadian Borrower Subsidiary in
whole or in part by order of any applicable pension regulatory authority or (D)
any event or condition occurs or exists which would require the appointment by
the applicable regulator of a trustee or similar Person to administer a
Guaranteed Pension applicable to any Canadian Subsidiary;
(j) any Credit Party shall fail to pay at maturity, or within any
applicable period of grace, any obligation for Indebtedness in excess of
$500,000, or fail to observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound, evidencing or securing
Indebtedness in excess of $500,000 for such period of time as would permit
(assuming the lapse of time and/or giving of appropriate notice if required and
assuming such breach has not been cured within the applicable grace period
thereunder) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof;
(k) if any of the Loan Documents shall be cancelled, terminated, revoked
or rescinded or the Administrative Agents security interests, mortgages or liens
in all or a material portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents and the
Back Bay Intercreditor Agreement, in each case otherwise than in accordance with
the terms thereof or with the express prior written agreement, consent or
approval of the Lenders, or any action at law, suit or in equity or other legal
proceeding to cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of any Credit Party or any of their respective equity
holders, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
(l) if any material covenant, agreement or obligation of any Credit Party
contained in or evidenced by the Loan Documents shall cease to be legal, valid,
binding, or enforceable in accordance with the terms thereof other than as a
result of a default or waiver thereof by the Administrative Agent;
(m) a Change of Control shall occur;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, expropriation, act of God or public enemy,
or other casualty, which in any such case causes, for more than fifteen (15)
consecutive days, the cessation or substantial curtailment of revenue producing
activities at any facility of any Credit Party if such event or circumstance is
not covered by business interruption insurance and would have a material adverse
effect on the business, assets, operation or financial condition of the Credit
Parties (taken as a whole), or the ability of any Credit Party to fulfill its
obligations under the Credit Agreement or the other Loan Documents;
(o) any Credit Party shall be enjoined, restrained or in any way
prevented by the order of any Governmental Authority from conducting any part of
their business and such order shall continue in effect for more than thirty (30)
days unless such order would not have a material adverse effect on the business,
assets, operation or financial condition of the Credit Parties (taken as a
whole), or the ability of any Credit Party to fulfill its obligations under this
Credit Agreement or the other Loan Documents;
(p) there shall occur the loss, suspension or revocation of, or failure
to renew, any license or permit now held or hereafter acquired by any Credit
Party if such loss, suspension, revocation or failure to renew would have a
material adverse effect on the business, assets, operation or financial
condition of the Credit Parties (taken as a whole), or the ability of any Credit
Party to fulfill its obligations under this Credit Agreement or the other Loan
Documents;
(q) (i) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt, the
Subordinated Debt shall be prepaid, redeemed or repurchased in whole or in part
or an offer to prepay, redeem or repurchase the Subordinated Debt in whole or in
part shall be required to be made or (ii) any Credit Party shall fail to observe
or perform any material term, covenant or agreement contained in any
Subordinated Debt Document as would permit (assuming the lapse of time and/or
giving of appropriate notice if required and assuming such breach has not been
cured within the applicable grace period thereunder) the holders thereof to
accelerate the maturity thereof;
(r) any event of default under the Back Bay Loan Agreement shall occur or
the holders of all or any part of the Back Bay Loan shall accelerate the
maturity of the Back Bay Loan;
(s) the Obligations shall cease for any reason to rank senior in right of
payment to any Subordinated Debt;
(t) the subordination provisions in the Back Bay Intercreditor Agreement
shall cease, in whole or in part, to be effective or cease to be legally valid,
binding and enforceable against the holders of the Back Bay Loan; or
(u) any Credit Party shall be indicted for a state or federal crime, or
any civil or criminal action shall otherwise have been brought against any
Credit Party, a punishment for which in any such case could include the
forfeiture of any assets of any Credit Party included in the Borrowing Base or
any assets of any Credit Party not included in the Borrowing Base but having a
fair market value in excess of $1,000,000;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice in writing to the Borrower, declare all amounts owing with respect to
this Credit Agreement and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by each Credit Party; provided that in
the event of any Event of Default specified in 12.1(f) or 12.1(g), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Administrative Agent or any Lender.
12.2. Termination of Commitments. If any one or more of the Events of
Default specified in 12.1(f) or 12.1(g) shall occur, any unused portion of the
credit hereunder shall forthwith terminate and each of the Lenders shall be
relieved of all further obligations to make Loans to the Borrower, and the
Administrative Agent shall be relieved of all further obligations to cause the
Issuing Lender to issue, extend or renew Letters of Credit. If any other Event
of Default shall have occurred and be continuing, the Administrative Agent may
and, upon the request of the Required Lenders, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Lenders shall be relieved of all further obligations to make
Loans and the Administrative Agent shall be relieved of all further obligations
to cause the Issuing Lender to issue, extend or renew Letters of
Credit. No termination of the credit hereunder shall relieve any Credit Party
of any of the Obligations. No termination of the credit hereunder shall relieve
the Lenders of their obligation to fund their participations in the Letters of
Credit as otherwise set out in this Credit Agreement.
12.3. Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to 12.1, each Lender, if owed any
amount with respect to the Loans or the Reimbursement Obligations, may proceed
to protect and enforce its rights by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. No remedy herein conferred upon any
Lender or the Administrative Agent or the purchaser of any Letter of Credit is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
12.4. Distribution of Collateral Proceeds. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Administrative Agent or any Lender, as the case may be, receives any monies in
connection with the enforcement of any of the Security Documents, or otherwise
with respect to the realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement
of the Administrative Agent and the Issuing Lender for or in respect of all
amounts in respect of Administrative Agent Advances and all fees, indemnities,
costs, expenses, disbursements and other amounts (including charges and
disbursements of counsel to the Administrative Agent and the Issuing Lender) and
losses payable to the Administrative Agent and the Issuing Lender or incurred or
sustained by the Administrative Agent and the Issuing Lender in their capacity
as such, including, without limitation, in connection with the collection of
such monies by the Administrative Agent and the Issuing Lender, for the
exercise, protection or enforcement by the Administrative Agent and the Issuing
Lender of all or any of the rights, remedies, powers and privileges of the
Administrative Agent and the Issuing Lender under this Credit Agreement or any
of the other Loan Documents or in respect of the Collateral or in support of any
provision of adequate indemnity to the Administrative Agent and the Issuing
Lender against any taxes or Liens which by law shall have, or may have, priority
over the rights of the Administrative Agent and the Issuing Lender to such
monies;
(b) Second, to the payment of that portion of the Obligations
constituting fees, indemnities, costs, expenses, disbursements and other amounts
(including charges and disbursements of counsel to the Lenders but excluding
principal, interest, Cash Management Obligations and Obligations arising under
Derivative Agreements) payable to the Lenders (including amounts payable under
5.7), ratably among them in proportion to the amounts described in this clause
Second payable to them;
(c) Third, to the payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and other Obligations, ratably among
the Lenders in proportion to the respective amounts described in this clause
Third payable to them;
(d) Fourth, ratably (i) to the payment of that portion of the Obligations
constituting unpaid principal of the Loans, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth payable to
them and (ii) to the Administrative Agent for the account of the Issuing Lender,
to cash collateralize the Reimbursement Obligations;
(e) Fifth, pari passu to all Cash Management Obligations and Obligations
in respect of Derivative Agreements owing to any Lender, the Administrative
Agent, the Cash Management Bank or any Affiliate thereof, ratably among such
Persons;
(f) Sixth, to all other Obligations in such order or preference as the
Required Lenders may determine; provided, however, that (i) distributions shall
be made with respect to each type of Obligation owing to the Lenders among the
Lenders pro rata, and (ii) the Administrative Agent may in its discretion make
proper allowance to take into account any Obligations not then due and payable;
(g) Seventh, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Lenders and the Administrative Agent of
all of the Obligations, to the payment of any obligations required to be paid
pursuant to 9-608(a)(1)(C) or 9 615(a)(3) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(h) Eighth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
13. SETOFF.
Regardless of the adequacy of any collateral, if any of the Obligations
are due and payable and have not been paid or any Event of Default shall have
occurred, any deposits or other sums credited by or due from any of the Lenders
to any Credit Party and any securities or other property of any Credit Party in
the possession of such Lender or any of its Affiliates may, at any time, without
demand or notice (any such notice being expressly waived by each Credit Party),
in whole or in part, be applied to or set off by such Lender against the payment
of Obligations and any and all other liabilities or obligations, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of any Credit Party to such Lender regardless of the adequacy
of any other collateral securing the Loan. Each of the Lenders agrees with each
other Lender that (i) if an amount to be set off is to be applied to
Indebtedness of any Credit Party to such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by the
Revolving Credit Note of such Lender or constituting Reimbursement Obligations
owed to such Lender, and (ii) if such Lender shall receive from any Credit Party
or any other source, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Revolving Credit Notes in the name of, or constituting Reimbursement
Obligations, such Lender by proceedings against a Credit Party at law or in
equity or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or otherwise, and shall retain and apply to
the payment of its Revolving Credit Note, or the Reimbursement Obligations owed
to such Lender any amount in excess of its ratable portion of the payments
received by all of the Lenders with respect to the debt evidenced by the
Revolving Credit Notes corresponding to, and Reimbursement Obligations owed to,
all of the Lenders, such Lender will make such disposition and arrangements with
the other Lenders with respect to such excess, either by way of distribution,
pro tanto assignment of claims, subrogation or otherwise as shall result in each
Lender receiving in respect of the debt evidenced by the Revolving Credit Note
in its name or Reimbursement Obligations owed it, its proportionate payment as
contemplated by this Credit Agreement; provided that if all or any part of such
excess payment is thereafter recovered from such Lender, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest. ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY CREDIT PARTY ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
14. THE AGENT.
14.1. Authorization.
(a) The Administrative Agent is authorized to take such action on behalf
of each of the Lenders and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents delegated to the
Administrative Agent, together with such powers as are reasonably incident
thereto, including the authority, without the necessity of any notice to or
further consent of the Lenders, from time to time to take any action with
respect to any Collateral or the Security Documents which may be necessary to
perfect, maintain perfected or insure the priority of the security interest in
and liens upon the Collateral granted pursuant to the Security Documents, and,
provided that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Administrative Agent.
(b) The relationship between the Administrative Agent and each of the
Lenders is that of an independent contractor. The use of the term
Administrative Agent is for convenience only and is used to describe, as a form
of convention, the independent contractual relationship between the
Administrative Agent and each of the Lenders. Nothing contained in this Credit
Agreement nor the other Loan Documents shall be construed to create an agency,
trust or other fiduciary relationship between the Administrative Agent and any
of the Lenders.
(c) As an independent contractor empowered by the Lenders to exercise
certain rights and perform certain duties and responsibilities hereunder and
under the other Loan Documents, the Administrative Agent is nevertheless a
representative of the Lenders, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the Lenders
and the Administrative Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Administrative Agent as secured party, mortgagee or the like
on all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority or
enforcement of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Lenders and the Administrative Agent.
(d) The Administrative Agent is authorized and directed to consent to any
sale or other disposition of Collateral permitted to be sold or disposed of
hereunder, and to release its Liens on such Collateral, and the Administrative
Agent is authorized to rely on a certification from the Borrower that such sale
or disposition is permitted hereunder.
(e) The Administrative Agent is authorized and directed to execute and
deliver the Back Bay Intercreditor Agreement on behalf of the Lenders and to act
in accordance with the provisions thereof. Each of the Lenders agrees to be
bound by the provisions thereof.
(f) Each Lender appoints the Administrative Agent to act as its
agent and security trustee under and in accordance with the Security Documents
..
14.2. Quebec Appointment. Each Lender, or its representative duly
authorized on its behalf, hereby appoints the Administrative Agent as its fond
de pouvoir to take, receive and hold on behalf of, and for the benefit of, each
of the Bondholders, all rights and hypothecs created hereby as continuing
security for the payment of the Bonds from time to time issued and outstanding
from time to time under the Deed of Hypothec, and to exercise any and all powers
and rights and to perform any and all duties conferred upon it under the Deed of
Hypothec or by Bondholders' Instrument. Each party hereto agrees that,
notwithstanding Section 32 of An Act Respecting Special Powers of Legal Persons
(Quebec), the Administrative Agent shall also be entitled to act as Bondholder
and to acquire and/or be the pledgee of any Bond or other titles of indebtedness
to be issued under any such Deed of Hypothec.
14.3. Employees and Administrative Agents. The Administrative Agent may
exercise its powers and execute its duties by or through employees or agents and
shall be entitled to take, and to rely on, advice of counsel concerning all
matters pertaining to its rights and duties under this Credit Agreement and the
other Loan Documents. The Administrative Agent may utilize the services of such
Persons as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.
14.4. No Liability. Neither the Administrative Agent (in its capacity
as Administrative Agent, lender of the swing line loans and/or Cash Management
Bank) nor any of its shareholders, directors, officers or employees nor any
other Person assisting them in their duties nor any agent or employee thereof,
shall be liable to any Lender for any waiver, consent or approval given or any
action taken, or omitted to be taken, in good faith by it or them hereunder or
under any of the other Loan Documents, or in connection herewith or therewith,
or be responsible for the consequences of any oversight or error of judgment
whatsoever, except that the Administrative Agent or such other Person, as the
case may be, may be liable for losses due to its willful misconduct or gross
negligence.
14.5. No Representations.
14.5.1. General. The Administrative Agent shall not be responsible for
the execution or validity or enforceability of this Credit Agreement, the
Letters of Credit, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for any of the Loan
Documents, or for the value of any such collateral security or for the validity,
enforceability, or collectibility of any such amounts owing with respect to any
of the Loan Documents, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of any
Credit Party, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for any of the Loan Documents or to inspect any of the properties,
books or records of any Credit Party. The Administrative Agent shall not be
bound to ascertain whether any notice, consent, waiver or request delivered to
it by any Credit Party shall have been duly authorized or is true, accurate and
complete. The Administrative Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the credit worthiness or financial
conditions of any Credit Party. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
14.5.2. Closing Documentation, etc. For purposes of determining
compliance with the conditions set forth in 10, each Lender that has executed
this Credit Agreement shall be deemed to have consented to, approved or
accepted, or to be satisfied with, each document and matter either sent, or made
available, by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be to be consent to or
approved by or acceptable or satisfactory to such Lender, unless an officer of
the Administrative Agent active upon the Borrowers account shall have received
notice from such Lender not less than one (1) Business Day prior to the Closing
Date specifying such Lenders objection thereto and such objection shall not have
been withdrawn by notice to the Administrative Agent to such effect on or prior
to the Closing Date.
14.6. Payments.
14.6.1. Payments to Agent. A payment by the Borrower to the
Administrative Agent hereunder or under any of the other Loan Documents for the
account of any Lender shall constitute a payment to such Lender. The
Administrative Agent agrees promptly to distribute to each Lender such Lenders
pro rata share of payments received by the Administrative Agent for the account
of such Lender except as otherwise expressly provided herein or in any of the
other Loan Documents.
14.6.2. Distribution by Administrative Agent. If in the opinion of the
Administrative Agent the distribution of any amount received by it in such
capacity hereunder or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Administrative
Agent its proportionate share of the amount so adjudged to be repaid or shall
pay over the same in such manner and to such Persons as shall be determined by
such court.
14.6.3. Delinquent Lenders. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Lender that fails (i) to make available to the Administrative Agent its pro rata
share of any Loan or to purchase any Letter of Credit Participation in
accordance with the terms of this Credit Agreement or (ii) to comply with the
provisions of 13 with respect to making dispositions and arrangements with the
other Lenders, where such Lenders share of any payment received, whether by
setoff or otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Lenders, in each case as, when and to the full extent
required by the provisions of this Credit Agreement, shall be deemed delinquent
(a Delinquent Lender) and shall be deemed a Delinquent Lender until such time as
such delinquency is satisfied. A Delinquent Lender shall be deemed to have
assigned any and all payments due to it from the Borrower, whether on account of
outstanding Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining applicable non-delinquent Lenders for application
to, and reduction of, their respective pro rata shares of all outstanding Loans
and Unpaid Reimbursement Obligations. The Delinquent Lender hereby authorizes
the Administrative Agent to distribute such payments to the applicable
non-delinquent Lenders in proportion to their respective pro rata shares of all
outstanding Loans and Unpaid Reimbursement Obligations. A Delinquent Lender
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Loans and Unpaid
Reimbursement Obligations of the non-delinquent Lenders, the Lenders respective
pro rata shares of all outstanding Loans and Unpaid Reimbursement Obligations
have returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
14.7. Holders of Letters of Credit Participation. The Administrative
Agent may deem and treat the purchaser of any Letter of Credit Participation as
the absolute owner or purchaser thereof for all purposes hereof until it shall
have been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
14.8. Indemnity. The Lenders ratably agree hereby to indemnify and hold
harmless the Administrative Agent, the Issuing Lender and the Arranger (to the
extent not indemnified by the Credit Parties and without limiting the obligation
of the Credit Parties to do so) from and against any and all claims, actions and
suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Administrative Agent, the Issuing Lender
and/or the Arranger has not been reimbursed by the Borrower as required by 15),
and liabilities of every nature and character arising out of or related to this
Credit Agreement or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Administrative Agents, the
Issuing Lenders or the Arrangers actions taken hereunder or thereunder, except
to the extent that any of the same shall be directly caused by the
Administrative Agents, the Issuing Lenders or the Arrangers willful
misconduct or gross negligence.
14.9. Administrative Agent as Lender. In its individual capacity, Bank
of America shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment and the Loans made by it and as the
purchaser of any Letter of Credit Participation, as it would have were it not
also the Administrative Agent.
14.10. Resignation; Removal. The Administrative Agent may resign at any
time by giving sixty (60) days prior written notice thereof to the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Administrative Agent. Unless a Default or Event of
Default shall have occurred and be continuing, such successor Administrative
Agent shall be reasonably acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within sixty (60) days after the retiring
Administrative Agents giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a financial institution having a rating of
not less than A or its equivalent by Standard & Poors Corporation. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agents resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Administrative Agent.
14.11. Notification of Defaults and Events of Default. Each Lender
hereby agrees that, upon learning of the existence of a Default or Event of
Default, it shall promptly notify the Administrative Agent thereof; provided
that no Lender shall be liable for failure to deliver such notice. The
Administrative Agent hereby agrees that upon receipt of any notice under this
14.11 or 7.5 it shall promptly notify the other Lenders thereof.
14.12. Duties in the Case of Enforcement. In case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Administrative Agent shall, if (a)
so requested by the Required Lenders and (b) the Lenders have provided to the
Administrative Agent such additional indemnities and assurances against expenses
and liabilities as the Administrative Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral. The Required Lenders may direct the Administrative Agent in
writing as to the method and the extent of any such sale or other disposition,
the Lenders hereby agreeing to indemnify and hold the Administrative Agent,
harmless from all liabilities incurred in respect of all actions
taken or omitted in accordance with such directions, provided that the
Administrative Agent need not comply with any such direction to the extent that
the Administrative Agent reasonably believes the Administrative Agents
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction.
14.13. Administrative Agent May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial, administrative or like proceeding or any assignment for the benefit of
creditors relative to any Credit Party, the Administrative Agent (irrespective
of whether the principal of any Loan, Reimbursement Obligation or Unpaid
Reimbursement Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding, under any such assignment or otherwise:
(i) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, Reimbursement Obligations or
Unpaid Reimbursement Obligations and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent under
2.2, 4.6, 5.1 and 15) allowed in such proceeding or under any such assignment;
and
(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
(b) Any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such proceeding or under any such assignment is
hereby authorized by each Lender to make such payments to the Administrative
Agent and, in the event that the Administrative Agent shall consent to the
making of such payments directly to the Lenders, nevertheless to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under 2.2, 4.6, 5.1
and 15).
(c) Nothing contained herein shall authorize the Administrative Agent to
consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
owed to such Lender or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding or under any such assignment.
15. EXPENSES.
The Borrower agrees to pay (i) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (ii) any taxes (including any
interest and penalties in respect thereto) payable by the Administrative Agent,
the Issuing Lender, the Arranger, the Cash Management Bank or any of the Lenders
(other than taxes based upon the Administrative Agents, Issuing Lenders, Cash
Management Banks or any Lenders net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrower hereby agreeing
to indemnify the Administrative Agent, the Issuing Lender, the Arranger, the
Cash Management Bank and each Lender with respect thereto), (iii) the fees,
expenses and disbursements of the Administrative Agents Special Counsel or any
local counsel to the Administrative Agent incurred in connection with the
preparation, administration or interpretation of the Loan Documents and other
instruments mentioned herein, the syndication hereof, amendments, modifications,
approvals, consents or waivers hereto or hereunder, and proposed amendments,
modifications, approvals, consents or waivers hereto or hereunder, (iv) the
fees, expenses and disbursements of the Administrative Agent and the Arranger
incurred by the Administrative Agent and the Arranger in connection with the
preparation and syndication of the Loan Documents and other instruments
mentioned herein, including, without limitation, collateral examination,
appraisal expenses and environmental audits, (v) the fees, expenses and
disbursements of the Administrative Agent and the Arranger incurred by the
Administrative Agent and the Arranger in connection with the administration or
interpretation of the Loan Documents and other instruments mentioned herein,
including, without limitation, collateral examination, appraisal expenses and
environmental audits, inspections, testing and reports, (vi) all out-of-pocket
expenses (including without limitation reasonable attorneys fees and costs and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by the Issuing Lender, the Arranger,
the Cash Management Bank, the Administrative Agent or any Lender in connection
with (A) the enforcement of or preservation of rights under any of the Loan
Documents against any Credit Party or the administration thereof after the
occurrence of a Default or Event of Default, and (B) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Lenders, the Issuing Lenders, the Arrangers, the Cash Management Banks or the
Administrative Agents relationship with any Credit Party, (vii) any fees, costs,
expenses and bank charges, including bank charges for returned checks, incurred
by the Administrative Agent, the Issuing Lender, the Arranger the Cash
Management Bank or any of their Affiliates in establishing, maintaining or
handling of any accounts for the collection of any of the Collateral, (viii) all
fees, expenses and disbursements of the Issuing Lender, the Arranger, the Cash
Management Bank or the Administrative Agent incurred in connection with UCC
searches, UCC filings, intellectual property searches, intellectual property
filings, mortgage recordings and other personal and real property searches and
filings and (ix) all title insurance premiums and surveyor, engineering,
appraisal and examination charges. The Borrower and each of the Guarantors
authorizes the Administrative Agent, the Issuing Lender, the Arranger, the Cash
Management Bank and the Lenders to debit any account maintained by such Persons
with the Administrative Agent, the Issuing Lender, the Arranger, the Cash
Management Bank, the Lenders, or any of their Affiliates, in payment of amounts
due hereunder. The covenants of this 15 shall survive payment or satisfaction
of all other Obligations.
16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Administrative
Agent, the Issuing Lender, the Arranger, the Cash Management Bank and the
Lenders, together with each of their Related Parties, from and against any and
all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(i) any actual or proposed use by the Borrower or any other Credit Party of the
proceeds of any of the Loans or Letters of Credit, (ii) the reversal or
withdrawal of any provisional credits granted by the Administrative Agent, the
Arranger, the Issuing Lender, the Cash Management Bank or any of their
Affiliates upon the transfer of funds from bank agency or lock box accounts or
in connection with the provisional honoring of checks or other items, (iii) any
Credit Party entering into or performing this Credit Agreement or any of the
other Loan Documents, (iv) any actual or alleged infringement of any patent,
copyright, trademark, service ▇▇▇▇ or similar right of any Credit Party
comprised in the Collateral, or (v) with respect to the Credit Parties and their
respective properties and assets, the violation of any environmental law, the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding,
provided, however, that the Borrower shall not be liable to the Administrative
Agent, the Arranger, the Issuing Lender, the Cash Management Bank, any Lender or
any of their Related Parties for any of the foregoing to the extent that they
arise from such Persons gross negligence, breach of contract or willful
misconduct. In litigation, or the preparation therefor, the Lenders, the
Issuing Lender, the Arranger, the Cash Management Bank and the Administrative
Agent shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this 16 are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment in satisfaction of such
obligations which ispermissible under applicable law. The covenants contained in
this 16 shall survive payment or satisfaction in full of all other Obligations.
17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
any of the other Loan Documents or in any documents or other papers delivered by
or on behalf of any Credit Party pursuant hereto shall be deemed to have been
relied upon by the Lenders and the Administrative Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and shall survive the
making by the Lenders of any of the Loans and the issuance, extension or renewal
of any Letters of Credit, as herein contemplated, and shall continue in full
force and effect so long as any Letter of Credit or any amount due under this
Credit Agreement or any of the other Loan Documents remains outstanding or any
Lender has any obligation to make any Loans or the Administrative Agent has any
obligation to issue, extend or renew any Letter of Credit, and for such further
time as may be otherwise expressly specified in this Credit Agreement. All
statements contained in any certificate or other paper delivered to
any Lender or the Administrative Agent at any time by or on behalf any Credit
Party pursuant hereto or in connection with the transactions contemplated hereby
shall constitute representations and warranties by such Credit Party hereunder.
18. ASSIGNMENT AND PARTICIPATION.
18.1. General Conditions. The provisions of this Credit Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Credit Party
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (a) to an
Eligible Assignee in accordance with the provisions of 18.2, (b) by way of
participation in accordance with the provisions of 18.5 or (c) by way of pledge
or assignment of a security interest subject to the restrictions of 18.8 (and
any other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Credit Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in 18.5 and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Credit Agreement or
any of the other Loan Documents.
18.2. Assignments. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Credit Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that:
(a) except in the cases of an assignment of the entire remaining amount
of the assigning Lenders Commitment and the Loans at the time owing to it or of
an assignment to a Lender or a Lender Affiliate, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) or, if
the Commitment is not then in effect, the principal outstanding balance of the
Loan of the assigning Lender subject to each such assignment (determined as of
the date on which the Assignment and Acceptance with respect to such assignment
is delivered to the Administrative Agent) shall not be less than $10,000,000
unless each of the Administrative Agent and, so long as no Default or Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed);
(b) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lenders rights and obligations under
this Credit Agreement with respect to the Loan or the Commitment assigned, it
being understood that non-pro rata assignments of or among any of the
Commitments, the Revolving Credit Loans and the Reimbursement Obligations are
not permitted;
(c) any assignment of a Commitment must be approved by the Administrative
Agent and the Issuing Lender (whether or not the proposed assignee is itself a
Lender with a commitment or would otherwise qualify as an Eligible Assignee),
such approvals not to be unreasonably withheld or delayed; and
(d) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to 18.3, from and after the effective date specified in each Assignment
and Acceptance, the Eligible Assignee thereunder shall be a party to this Credit
Agreement and, to the extent of the interest assigned by such Assignment and
Acceptance have the rights and obligations of a Lender under this Credit
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Credit Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lenders rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of (i) 5.2.2, 5.7, 5.8, and 5.10 with
respect to facts and circumstances occurring prior to the effective date of such
assignment and (ii) 16 notwithstanding such assignment. Any assignment or
transfer by a Lender of rights or obligations under this Credit Agreement that
does not comply with this paragraph shall be treated for purposes of this Credit
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with 18.5
18.3. Register. The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at the Administrative Agents
Office a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the Register). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Credit Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
18.4. New Notes. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Revolving Credit
Note subject to such assignment, the Administrative Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Lenders (other than the assigning Lender).
Within five (5) Business Days after receipt of such notice, the Borrower, at its
own expense, shall execute and deliver to the Administrative Agent, in exchange
for each surrendered Revolving Credit Note, a new Revolving Credit Note to the
order of such Assignee in an amount equal to the amount assumed by such Assignee
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained some portion of its obligations hereunder, a new Revolving Credit Note
to the order of the assigning Lender in an amount equal to the amount retained
by it hereunder. Such new Revolving Credit Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Revolving
Credit Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the assigned
Revolving Credit Notes.
18.5. Participations. Any Lender may at any time, without the consent
of, or notice to, any Credit Party or the Administrative Agent, sell
participations to any Person (other than a natural person) (each, a Participant)
in all or a portion of such Lenders rights and/or obligations under this Credit
Agreement (including all or a portion of its Commitment and/or the Loans owing
to it); provided that (a)such Lenders obligations under this Credit 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 Credit
Parties and the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lenders rights
and obligations under this Credit Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Credit Agreement and to
approve any amendment, modification or waiver of any provision of this Credit
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver that would reduce the principal of or the interest rate
on any Loans, extend the term or increase the amount of the Commitment of such
Lender as it relates to such Participant, reduce the amount of any Commitment
Fee or Letter of Credit Fees to which such Participant is entitled or extend any
regularly scheduled payment date for principal or interest. Subject to 18.6,
the Credit Parties agree that each Participant shall be entitled to the benefits
of 5.2.2, 5.7, 5.8 and 5.10 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to 18.2. To the extent permitted
by law, each Participant also shall be entitled to the benefits of 13 as though
it were a Lender, provided such Participant agrees to be subject to 13 as though
it were a Lender.
18.6. Payments to Participants. A Participant shall not be entitled to
receive any greater payment under 5.2.2, 5.7 and 5.8 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant.
18.7. Assignee or Participant Affiliated with the Credit Parties. If
any assignee Lender is an Affiliate any Credit Party, then any such assignee
Lender shall have no right to vote as a Lender hereunder or under any of the
other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Administrative Agent
pursuant to 12.1 or 12.2, and the determination of the Required Lenders shall
for all purposes of this Credit Agreement and the other Loan Documents be made
without regard to such assignee Lenders interest in any of the Loans or
Reimbursement Obligations. If any Lender sells a participating interest in any
of the Loans or Reimbursement Obligations to a Participant, and such Participant
is a Credit Party or an Affiliate of a Credit Party, then such transferor Lender
shall promptly notify the Administrative Agent of the sale of such
participation. A transferor Lender shall have no right to vote as a Lender
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the
Administrative Agent pursuant to 12.1 or 12.2 to the extent that such
participation is beneficially owned by a Credit Party or any Affiliate of a
Credit Party, and the determination of the Required Lenders shall for all
purposes of this Credit Agreement and the other Loan Documents be made without
regard to the interest of such transferor Lender in the Loans or Reimbursement
Obligations to the extent of such participation.
18.8. Miscellaneous Assignment Provisions. A Lender may at any time
grant a security interest in all or any portion of its rights under this Credit
Agreement to secure obligations of such Lender, including without limitation (a)
any pledge or assignment to secure obligations to any of the twelve Federal
Reserve Banks organized under 4 of the Federal Reserve Act, 12 U.S.C. 341 and
(b) with respect to any Lender that is a Fund, to any lender or any trustee for,
or any other representative of, holders of obligations owed or securities issued
by such Fund as security for such obligations or securities or any institutional
custodian for such Fund or for such lender; provided that no such grant shall
release such Lender from any of its obligations hereunder, provide any voting
rights hereunder to the secured party thereof, substitute any such secured party
for such Lender as a party hereto or affect any rights or obligations of any
Credit Party or the Administrative Agent hereunder.
18.9. Special Purpose Funding Vehicle. Notwithstanding anything to the
contrary contained in this 18, any Lender (a Granting Lender) may grant to a
special purpose funding vehicle (an SPC) of such Granting Lender, identified as
such in writing from time to time delivered by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Credit Agreement, provided that (a)
nothing herein shall constitute a commitment to make any Loan by any SPC, (b)
the Granting Banks obligations under this Credit Agreement shall remain
unchanged, (c) the Granting Lender shall retain the sole right to enforce this
Credit Agreement and to approve any amendment, modification or waiver of any
provision of this Credit Agreement and (d) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Loan, the
Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Loan were made by the
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable
for any expense reimbursement, indemnity or similar payment obligation under
this Credit Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Credit Agreement) that,
prior to the date that is one year and one day after the later of (i) the
payment in full of all outstanding senior indebtedness of any SPC and (ii) the
Maturity Date, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of
the United States of America or any State thereof. In addition, notwithstanding
anything to the contrary contained in this 18.9, any SPC may (A) with notice to,
but (except as specified below) without the prior written consent of, the Credit
Parties or the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to its Granting
Lender or to any financial institutions (consented to by the Administrative
Agent and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower, which consents shall not be unreasonably withheld or
delayed) providing liquidity and/or credit facilities to or for the account of
such SPC to fund the Loans made by such SPC or to support the securities (if
any) issued by such SPC to fund such Loans and (B) disclose on a confidential
basis any non-public information relating to its Loans (other than financial
statements referred to in 6.2 or 7.4) to any rating agency, commercial paper
dealer or provider of a surety, guarantee or credit or liquidity enhancement to
such SPC. In no event shall the Borrower be obligated to pay to an SPC that has
made a Loan any greater amount than the Borrower would have been obligated to
pay under this Credit Agreement if the Granting Lender had made such Loan. An
amendment to this 18.9 without the written consent of an SPC shall be
ineffective insofar as it alters the rights and obligations of such SPC.
19. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or any Letter of Credit Applications shall be in writing and
shall be (i) delivered in hand, (ii) mailed by United States registered or
certified first class mail, postage prepaid, (iii) sent by overnight courier, or
(iv) sent by telegraph, telecopy, facsimile or telex and confirmed by delivery
via courier or postal service, addressed as follows:
(a) if to any Credit Party, c/o ICON Health & Fitness, Inc., ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: S. ▇▇▇▇ ▇▇▇▇, or at such other address
as shall last have furnished in writing to the Person giving the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or such other address for notice as the
Administrative Agent shall last have furnished in writing to the Person giving
the notice; and
(c) if to any Lender, at such Lenders address for its Domestic Lending
Office set forth on Schedule1 hereto, or such other address for notice as such
Lender shall have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
20. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH CREDIT
PARTY AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON SUCH CREDIT PARTIES BY MAIL AT THE ADDRESS SPECIFIED IN 19.
EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN
AN INCONVENIENT COURT.
21. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
22. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought. Delivery by facsimile by any of the
parties hereto of an executed counterpart hereof or of any amendment or waiver
hereto shall be as effective as an original executed counterpart hereof or of
such amendment or waiver and shall be considered a representation that an
original executed counterpart hereof or such amendment or waiver, as the case
may be, will be delivered.
23. ENTIRE AGREEMENT, ETC.
The Loan Documents are intended by the parties as the final, complete and
exclusive statement of the transactions evidenced by the Loan Documents. All
prior or contemporaneous promises, agreements and understandings, whether oral
or written, are deemed to be superseded by the Loan Documents, and no party is
relying on any promise, agreement or understanding not set forth in the Loan
Documents.
24. WAIVER OF JURY TRIAL.
EACH PARTY HERETO MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM BASED HEREON ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE
ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES THAT
IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by law, each
party hereto hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each Credit Party (i) certifies that no representative, agent
or attorney of any Lender or the Administrative Agent has represented, expressly
or otherwise, that such Lender or the Administrative Agent would not, in the
event of litigation, seek to enforce the foregoing waivers and (ii) acknowledges
that this waiver constitutes a material inducement for the Administrative Agent
and the Lenders to execute this Credit Agreement and make the Loans.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement to
be given by all of the Lenders may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by any Credit
Party of any terms of this Credit Agreement, the other Loan Documents or such
other instrument or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Required Lenders.
Notwithstanding the foregoing, no amendment, modification or waiver shall:
(a) without the written consent of each Credit Party and each Lender
directly affected thereby:
(i) reduce or forgive the principal amount of any Loans or Reimbursement
Obligations, or reduce the rate of interest on the Loans or the amount of the
Commitment Fee or Letter of Credit Fees (other than interest accruing pursuant
to 5.12 following the effective date of any waiver by the Required Lenders of
the Default or Event of Default relating thereto;
(ii) increase the amount of such Lenders Commitment or extend the
expiration date of such Lenders Commitment;
(iii) postpone or extend the Loan Maturity Date or any other regularly
scheduled dates for payments of principal of, or interest on, the Loans or
Reimbursement Obligations or any fees or other amounts payable to such Lender or
waive any Event of Default relating thereto (it being understood that (A) a
waiver of the application of the Default Rate, (B) any vote to rescind any
acceleration made pursuant to 12.1 of amounts owing with respect to the Loans
and other Obligations and (C) any modifications of the provisions relating to
amounts or timing of prepayments of Loans and other Obligations shall require
only the approval of the Required Lenders); or
(iv) release any Credit Party from any Obligations consisting of
principal, interest, fees, reimbursement obligations, expenses, or indemnities,
release all or substantially all of the Collateral or release all or
substantially all of the Guarantors from their guaranty obligations under the
Guaranties (excluding, if a Credit Party becomes a debtor under the federal
Bankruptcy Code, the release of cash collateral, as defined in Section 363(a) of
the federal Bankruptcy Code pursuant to a cash collateral stipulation with the
debtor approved by the Required Lenders);
(b) without the written consent of all of the Lenders, (i) amend or waive
this 25 or the definition of Required Lenders, (ii) amend the definition of
Borrowing Base or any of the components thereof in a manner which would result
in a greater amount of credit being available to the Borrower, or (iii) amend or
waive 12.4;
(c) without the written consent of the Administrative Agent, amend or
waive 2.6.2, 4, 14, the amount or time of payment of the Administrative Agents
Fee or any Letter of Credit Fees payable for the Administrative Agents or the
Issuing Lenders account or any other provision applicable to the Administrative
Agent or the Issuing Lender;
(d) without the written consent of the Cash Management Bank, amend or
waive any provision applicable to the Cash Management Bank;
(e) without the written consent of the Issuing Lender, amend or waive 4
or any other provision applicable to the Issuing Lender;
(f) in the event of any change in the Person acting as the Administrative
Agent, the Issuing Lender or the Cash Management Bank hereunder, without the
written consent of the Person formerly acting as Administrative Agent, Issuing
Lender or Cash Management Bank, amend or waive any provision of this Credit
Agreement accruing to the benefit of such Person in respect of all actions taken
or omitted to be taken by either of them prior to such change; or
(g) without the written consent of the Specified Required Lenders,
amend or waive 8.16.
No waiver shall extend to or affect any obligation not expressly waived
or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Administrative Agent or any Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon any Credit Party shall entitle any Credit Party to
other or further notice or demand in similar or other circumstances.
Notwithstanding anything to the contrary contained herein, the Administrative
Agent and the Arranger, together with the Borrower, shall have the sole
authority to amend or modify any provision of the Fee Letter.
26. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction. The
parties agree that they will negotiate in good faith to replace any provision
hereof so held invalid or unenforceable with a valid provision which is as
similar as possible to the invalid or unenforceable provision.
27. CONFIDENTIALITY.
Each of the Administrative Agent, the Lenders and the Issuing Lender
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its and
its Affiliates respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Credit Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Article 27, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Credit Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to any Credit Party and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Article 30 or (y) becomes available
to the Administrative Agent, any Lender, the Issuing Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Credit Parties.
For purposes of this Section, Information means all information received
from the Credit Parties relating to the Credit Parties or any of their
respective businesses, other than any such information that is available to the
Administrative Agent, any Lender or the Issuing Lender on a nonconfidential
basis prior to disclosure by a Credit Party. Any Person required to maintain
the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Each of the Administrative Agent, the Lenders and the Issuing Lender
acknowledges that (a) the Information may include material non-public
information concerning the Credit Parties, as the case may be, (b) it has
developed compliance procedures regarding the use of material non-public
information and (c) it will handle such material non-public information in
accordance with applicable Law, including Federal and state securities Laws.
Each Credit Party hereby acknowledges that (a) the Administrative Agent
and/or the Arranger will make available to the Lenders and the Issuing Lender
materials and/or information provided by or on behalf of such Credit Party
hereunder (collectively, Borrower Materials) by posting the Borrower Materials
on IntraLinks or another similar electronic system (the Platform) and (b)
certain of the Lenders may be public-side Lenders (i.e., Lenders that do not
wish to receive material non-public information with respect to any the Credit
Parties or their securities) (each, a Public Lender). Each Credit Party hereby
agrees that (w) all Borrower Materials that are to be made available to Public
Lenders shall be clearly and conspicuously marked PUBLIC which, at a minimum,
shall mean that the word PUBLIC shall appear prominently on the first page
thereof; (x) by marking Borrower Materials PUBLIC, each Credit Party shall be
deemed to have authorized the Administrative Agent, the Arranger, the
Issuing Lender and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to such Credit Party
or its securities for purposes of United States Federal and state securities
laws (provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in this Article 30 ); (y) all
Borrower Materials marked PUBLIC are permitted to be made available through a
portion of the Platform designated Public Investor; and (z) the Administrative
Agent and the Arranger shall be entitled to treat any Borrower Materials that
are not marked PUBLIC as being suitable only for posting on a portion of the
Platform not designated Public Investor.
Notwithstanding the foregoing, with the prior written consent of the
Borrower (which approval shall not be unreasonably withheld) the Administrative
Agent may issue a "tombstone" notice of the establishment of the credit facility
contemplated by this Credit Agreement and may make reference to the Borrower or
any other Credit Party (and may utilize any logo or other distinctive symbol
associated with the Borrower or any other Credit Party) in connection with any
advertising, promotion, or marketing undertaken by the Administrative Agent.
28. USA PATRIOT ACT.
Each Lender hereby notifies the Credit Parties that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the Act), it is required to obtain, verify and record
information that identifies each Credit Party, which information includes the
name and address of each Credit Party and other information that will allow such
Lender to identify each Credit Party in accordance with the Act.
29. DESIGNATION OF PERMITTED LIENS.
The designation of a Lien as a Permitted Lien is not, and shall not be
deemed to be, an acknowledgment by the Administrative Agent or the Lenders to
any Person that the Lien shall have priority over any Lien of the Administrative
Agent granted in any Loan Document.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
ICON HEALTH & FITNESS, INC.
By: /s/ S. ▇▇▇▇ ▇▇▇▇
Name: S. ▇▇▇▇ ▇▇▇▇
Title: Chief Financial and Accounting Officer
HF HOLDINGS, INC.
By: /s/ S. ▇▇▇▇ ▇▇▇▇
Name: S. ▇▇▇▇ ▇▇▇▇
Title: Chief Financial and Accounting Officer
ICON INTERNATIONAL HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
UNIVERSAL TECHNICAL SERVICES
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
FREE MOTION FITNESS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
ICON IP, INC.
By: /s/ S. ▇▇▇▇ ▇▇▇▇
Name: S. ▇▇▇▇ ▇▇▇▇
Title: President
NORDICTRACK, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
510152 N.B. LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
ICON DU CANADA INC./ICON OF CANADA INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
BANK OF AMERICA, N.A. individually and as Administrative Agent, Issuing Lender
and Cash Management Bank
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
GMAC COMMERCIAL FINANCE, LLC individually and as documentation agent
By:
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT, INC. individually and as co-syndication agent
By:
Name:
Title:
▇▇▇▇▇ FARGO FOOTHILL, LLC individually and as co-syndication agent
By:
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, A DIVISION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL SERVICES
INC.
By:
Name:
Title:
LASALLE BUSINESS CREDIT, LLC
By:
Name:
Title: