Exhibit 10.1
EXECUTION COPY
FIRST LIEN
CREDIT AGREEMENT
dated as of
April 1, 2005
among
KRISPY KREME DOUGHNUT CORPORATION
KRISPY KREME DOUGHNUTS, INC.
The SUBSIDIARY GUARANTORS Party Hereto
The LENDERS Party Hereto
CREDIT SUISSE FIRST BOSTON
as Administrative Agent and Issuing Lender
and
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as Collateral Agent, Issuing Lender and Swingline Lender
Arranged by
CREDIT SUISSE FIRST BOSTON
as Sole Bookrunner and Sole Lead Arranger
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as Syndication Agent
and
SILVER POINT FINANCE, LLC
as Co-Arranger and Documentation Agent
______________
$75,000,000
______________
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...........................................1
SECTION 1.02. Terms Generally........................................25
SECTION 1.03. Accounting Terms; GAAP; Historical Financial
Calculations.........................................25
SECTION 1.04. Classification of Loans and Borrowings.................26
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments........................................26
SECTION 2.02. Loans and Borrowings...................................26
SECTION 2.03. Requests for Syndicated Borrowings.....................27
SECTION 2.04. Swingline Loans........................................28
SECTION 2.05. Letters of Credit......................................29
SECTION 2.06. Funding of Borrowings..................................33
SECTION 2.07. Interest Elections.....................................34
SECTION 2.08. Termination and Reduction of the Commitments...........35
SECTION 2.09. Repayment of Loans; Evidence of Debt...................36
SECTION 2.10. Prepayment of Loans....................................37
SECTION 2.11. Fees...................................................39
SECTION 2.12. Interest...............................................40
SECTION 2.13. Alternate Rate of Interest.............................41
SECTION 2.14. Increased Costs........................................42
SECTION 2.15. Break Funding Payments.................................43
SECTION 2.16. Taxes..................................................43
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.............................................45
SECTION 2.18. Mitigation Obligations; Replacement of Lenders.........47
ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee..........................................48
SECTION 3.02. Obligations Unconditional..............................49
SECTION 3.03. Reinstatement..........................................49
SECTION 3.04. Subrogation............................................50
SECTION 3.05. Remedies...............................................50
SECTION 3.06. Instrument for the Payment of Money....................50
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SECTION 3.07. Continuing Guarantee...................................50
SECTION 3.08. Rights of Contribution.................................50
SECTION 3.09. General Limitation on Guarantee Obligations............51
SECTION 3.10. No Reliance............................................51
SECTION 3.11. Release of Subsidiary Guarantors.......................52
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Organization; Powers...................................52
SECTION 4.02. Authorization; Enforceability..........................52
SECTION 4.03. Governmental Approvals; No Conflicts...................52
SECTION 4.04. Financial Condition; No Material Adverse Change........53
SECTION 4.05. Properties.............................................53
SECTION 4.06. Litigation.............................................53
SECTION 4.07. Environmental Matters..................................54
SECTION 4.08. Compliance with Laws and Agreements....................55
SECTION 4.09. Investment and Holding Company Status..................55
SECTION 4.10. Taxes..................................................55
SECTION 4.11. ERISA..................................................55
SECTION 4.12. Disclosure.............................................55
SECTION 4.13. Use of Credit..........................................56
SECTION 4.14. Material Agreements and Liens..........................56
SECTION 4.15. Montana ▇▇▇▇▇..........................................56
SECTION 4.16. Subsidiaries and Investments...........................56
SECTION 4.17. Real Property..........................................57
SECTION 4.18. Solvency...............................................58
SECTION 4.19. Labor Matters..........................................58
ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date.........................................58
SECTION 5.02. Each Credit Event......................................62
ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.01. Financial Statements and Other Information.............62
SECTION 6.02. Notices of Material Events.............................66
SECTION 6.03. Existence; Conduct of Business.........................67
SECTION 6.04. Payment of Obligations.................................67
SECTION 6.05. Maintenance of Properties; Insurance...................67
SECTION 6.06. Books and Records; Inspection Rights...................68
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SECTION 6.07. Compliance with Laws...................................68
SECTION 6.08. Use of Proceeds and Letters of Credit..................69
SECTION 6.09. Hedging Agreements.....................................70
SECTION 6.10. Certain Obligations Respecting Subsidiaries; Further
Assurances...........................................70
SECTION 6.11. Ownership of the Borrower..............................72
SECTION 6.12. Collection of Accounts and Payments; Creation of
Depositary Account...................................72
SECTION 6.13. Ratings................................................72
SECTION 6.14. Separateness...........................................72
SECTION 6.15. Pledge of Equity Interests in Consolidated Joint
Ventures.............................................72
SECTION 6.16. Post Closing Appraisals................................73
SECTION 6.17. Post Closing Mortgages.................................73
SECTION 6.18. Post Closing Environmental Surveys.....................74
SECTION 6.19. Issuance of Subsidiary Stock Certificate...............74
ARTICLE VII
NEGATIVE COVENANTS
SECTION 7.01. Indebtedness...........................................75
SECTION 7.02. Liens..................................................76
SECTION 7.03. Fundamental Changes....................................77
SECTION 7.04. Lines of Business......................................79
SECTION 7.05. Investments............................................79
SECTION 7.06. Restricted Payments....................................80
SECTION 7.07. Transactions with Affiliates...........................81
SECTION 7.08. Restrictive Agreements.................................81
SECTION 7.09. Certain Financial Covenants............................82
SECTION 7.10. Sale-Leasebacks; Synthetic Leases......................83
SECTION 7.11. Parent Guarantor as Holding Company....................83
SECTION 7.12. Limitations on Voluntary Prepayments of Certain
Other Indebtedness...................................84
SECTION 7.13. Modifications of Certain Documents.....................84
SECTION 7.14. Change in Fiscal Year; Accounting Policies; Capital
Stock................................................84
SECTION 7.15. No New Bank Accounts Without Prior Written Notice......84
ARTICLE VIII
EVENTS OF DEFAULT
ARTICLE IX
THE ADMINISTRATIVE AGENT, COLLATERAL AGENT,
LENDERS AND ARRANGER
ARTICLE X
MISCELLANEOUS
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SECTION 10.01. Notices; Electronic Communications.....................90
SECTION 10.02. Waivers; Amendments....................................91
SECTION 10.03. Expenses; Indemnity; Damage Waiver.....................93
SECTION 10.04. Successors and Assigns.................................95
SECTION 10.05. Survival...............................................97
SECTION 10.06. Counterparts; Integration; Effectiveness...............97
SECTION 10.07. Severability...........................................98
SECTION 10.08. Right of Setoff........................................98
SECTION 10.09. Governing Law; Jurisdiction; Etc.......................98
SECTION 10.10. WAIVER OF JURY TRIAL...................................99
SECTION 10.11. Headings...............................................99
SECTION 10.12. Treatment of Certain Information; Confidentiality......99
SECTION 10.13. USA PATRIOT Act........................................100
SCHEDULE I - Commitments
SCHEDULE II - Material Agreements and Liens
SCHEDULE III - Restrictive Agreements
SCHEDULE IV - Litigation
SCHEDULE V - Environmental Matters
SCHEDULE VI - Subsidiaries and Investments
SCHEDULE VII - Real Property
SCHEDULE VIII - Labor Matters
SCHEDULE IX - Specified Contingent Obligations
SCHEDULE X - Transactions with Affiliates
SCHEDULE XI - Certain Real Property
SCHEDULE XII Borrowing Base Pro Forma Components
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Security Agreement
EXHIBIT D - Form of Guarantee Assumption Agreement
EXHIBIT E - Form of Intercreditor Agreement
EXHIBIT F - Form of Concentration Account Control Agreement
EXHIBIT G - Form of Investment Account Control Agreement
EXHIBIT H - Form of Request for Loan
EXHIBIT I - Form of Interest Election Request
EXHIBIT J - Form of Subordination, Non-Disturbance and
Attornment Agreement
EXHIBIT K - Form of Promissory Note
FIRST LIEN CREDIT AGREEMENT dated as of April 1, 2005, among KRISPY KREME
DOUGHNUT CORPORATION, a North Carolina corporation (the "Borrower"), KRISPY
KREME DOUGHNUTS, INC., a North Carolina corporation (the "Parent Guarantor"),
the SUBSIDIARY GUARANTORS (as defined below), the LENDERS (as defined below),
CREDIT SUISSE FIRST BOSTON, as Administrative Agent and Issuing Lender, and
▇▇▇▇▇ FARGO FOOTHILL, INC., as Collateral Agent, Issuing Lender and Swingline
Lender.
Each of the Parent Guarantor and the Borrower has requested that the
Lenders extend credit to the Borrower, under the guarantee of the Guarantors (as
defined below), in an aggregate principal or face amount not exceeding
$75,000,000, to finance the operations of the Borrower and the Guarantors and
for other purposes. The Lenders are prepared to extend such credit upon the
terms and conditions hereof, and, accordingly, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined ▇▇▇▇▇.▇▇ used in this Agreement, the following terms
have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, means that such
Loan, or the Loans constituting such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
"Acceptable Appraisal" means with respect to any land, buildings,
improvements, fixtures and other equipment, an appraisal of the value thereof
(as determined on any reasonable basis) performed by an MAI-designated member of
the Appraisal Institute according to MAI standards.
"Adjusted LIBO Rate" means, for the Interest Period for any Eurodollar
Borrowing, an interest rate per annum equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate for such Interest
Period.
"Administrative Agent" means CSFB, in its capacity as administrative agent
for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified 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.
"Affiliated Parties" means the Parent Guarantor and its Subsidiaries.
"Agents" means the Administrative Agent and the Collateral Agent.
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"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate for such day plus 1/2 of 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, as the case may be.
"Applicable Margin" means: (a) with respect to any ABR Loan, 1.75% per
annum; and (b) with respect to any Eurodollar Loan, 2.75% per annum.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the total Commitments represented by such Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Arranger" means CSFB.
"Asset Prepayment Event" means a Disposition or a Casualty Event.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the first
Business Day after the Effective Date to but excluding the earlier of the
Commitment Termination Date and the date of termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrower" has the meaning assigned to such term in the recital of parties
hereto.
"Borrowing" means (a) all Syndicated ABR Loans made, converted or continued
on the same date, (b) all Eurodollar Loans that have the same Interest Period or
(c) a Swingline Loan.
"Borrowing Base" means, as at any date, (x) the aggregate amount of
Consolidated EBITDA for the most recent twelve consecutive month period just
ended for which financial statements pursuant to Section 6.01(a), (b) or (c)
have been, or should have been, delivered times (y) 1.5. On the Effective Date
the Borrowing Base shall be computed using monthly Consolidated EBITDA amounts
set forth below and the amounts set forth below shall continue to be utilized to
compute twelve month Consolidated EBITDA for Borrowing Base purposes only
notwithstanding any restatement of Consolidated EBITDA for such month that
occurs in the future. Until a month set forth below is eliminated from the
calculation of twelve month Consolidated EBITDA by passage of time and the
delivery of a calculation of Consolidated EBITDA for such month pursuant to
Section 6.01, the Consolidated EBITDA amount for such month shall be deemed for
Borrowing Base purposes to be as set forth on Schedule XII.
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"Borrowing Base Certificate" means a certificate of a Financial Officer of
the Borrower, substantially in the form of Exhibit B and appropriately
completed.
"Business Day" means any day (a) that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed and (b) if such day relates to a borrowing of, a payment or
prepayment of principal of or interest on, a continuation or conversion of or
into, or the Interest Period for, a Eurodollar Borrowing, or to a notice by the
Borrower with respect to any such borrowing, payment, prepayment, continuation,
conversion, or Interest Period, that is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures" means, for any period, expenditures (including the
aggregate amount of Capital Lease Obligations incurred during such period) made
by any member of the Financial Test Group to acquire or construct fixed assets,
plant and equipment (including renewals, improvements and replacements, but
excluding repairs) during such period computed in accordance with GAAP.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Casualty Event" means, with respect to any property of any Person, any
loss of or damage to, or any condemnation or other taking of, such property for
which such Person or any of its Included Subsidiaries receives insurance
proceeds, or proceeds of a condemnation award or other compensation.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 USC ss. 9601 et seq.), as amended from time to time,
and any regulations promulgated with respect thereto and any state or local
counterparts thereto.
"Change in Control" means (a) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of the voting stock of the
Parent Guarantor; or (b) as of any date a majority of the Board of Directors of
the Parent Guarantor consists of individuals who were not either (i) directors
of the Parent Guarantor as of the corresponding date of the previous year, (ii)
selected or nominated to become directors by the Board of Directors of the
Parent Guarantor of which a majority consisted of individuals described in
clause (i), or (iii) selected or nominated to become directors by the Board of
Directors of the Parent Guarantor of which a majority consisted of individuals
described in clause (i) and individuals described in clause (ii).
"Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or
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(c) compliance by any Lender or the Issuing Lender (or, for purposes of Section
2.14(b), by any lending office of such Lender or by such Lender's or the Issuing
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, means that such
Loan, or the Loans constituting such Borrowing, are Syndicated Loans or
Swingline Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" has the meaning assigned to such term in the Intercreditor
Agreement.
"Collateral Account" has the meaning assigned to such term in Section 4.01
of the Security Agreement.
"Collateral Agent" means ▇▇▇▇▇ Fargo Foothill, Inc., a California
corporation, in its capacity as collateral agent for the Administrative Agent
and the Lenders under the Security Documents.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Syndicated Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.08
or 2.10 or (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 10.04. The initial amount of each Lender's
Commitment is set forth on Schedule I, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
The initial aggregate amount of the Lenders' Commitments is $75,000,000.
"Commitment Termination Date" means the third anniversary of the date
hereof.
"Concentration Account Bank" means each bank at which a Concentration
Account or a Depositary Account is maintained.
"Concentration Account Control Agreement" means a Control Agreement
substantially in the form of Exhibit F among the Borrower, the Collateral Agent
and a Concentration Account Bank or such other form as may be reasonably
acceptable to the Collateral Agent.
"Concentration Accounts" means (a) account number 2000014820290 maintained
at Wachovia Bank, National Association, (b) account number 5118565578 and
account number ▇▇▇▇▇▇▇▇▇▇ maintained at Branch Banking & Trust and (c) any other
account that the Administrative Agent agrees, at the request of the Borrower, to
designate as a "Concentration Account"; provided that any such account shall be
deemed to be a "Concentration Account" only if it is held in the name of the
Borrower and, pursuant to a Concentration Account Control Agreement, controlled
by the Shared Lien Collateral Agent. Any such account shall cease to be a
"Concentration Account" if the Borrower and the Administrative Agent shall so
agree.
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"Consolidated EBITDA" means the sum of the following, calculated on a
consolidated basis in accordance with GAAP for the Financial Test Group, for the
relevant fiscal period: Consolidated Net Income plus, (i) to the extent deducted
in determining Consolidated Net Income, (a) Depreciation and Amortization, (b)
Consolidated Interest Expense less Consolidated Interest Income, (c) income tax
expense, (d) extraordinary (it being understood that for the purposes of this
clause (d), "extraordinary" shall not mean extraordinary as determined in
accordance with GAAP) professional fees and expenses (including legal fees and
Kroll fees (including any success fee, the cash portion of which was permitted
by Section 7.07(g))), (e) store closure costs, and (f) costs, fees and expenses
incurred in connection with the shareholder litigations, SEC investigation and
the other Disclosed Matters (including settlement and judgment costs), (g) the
aggregate amount of all other non-cash charges reducing Consolidated Net Income
(excluding any non-cash charge that results in an accrual of a reserve for cash
charges in any future period) for such period and (h) fees and expenses incurred
in connection with the Transactions (including (x) in connection with the
delivery of the Mortgages and environmental reports following the Effective Date
and the termination of the Hedging Agreement with Wachovia Bank, National
Association and (y) the fees and expenses of Wachovia Bank National Association
and the fees of the lenders party to the Existing Credit Agreement in connection
with the waivers and consents obtained from such parties) less (ii) the
aggregate amount of all non-cash items increasing Consolidated Net Income (other
than the accrual of revenue or recording of receivables in the ordinary course
of business) for such period.
"Consolidated Interest Coverage Ratio" means, for any Test Period, the
ratio of (a) Consolidated EBITDA for such Test Period to (b) Consolidated
Interest Expense less Consolidated Interest Income for such Test Period.
"Consolidated Interest Expense" means, for any period, interest, whether
expensed or capitalized, in respect of Indebtedness of any member of the
Financial Test Group outstanding during such period; provided that Consolidated
Interest Expense shall (i) exclude the write-off of deferred financing charges
as a result of the Transactions and the amortization of deferred financing
charges arising from the Transactions and (ii) be calculated after giving effect
to Hedging Agreements (including associated costs), but excluding unrealized
gains and losses with respect to Hedging Agreements.
"Consolidated Interest Income" means, for any period, interest income of
any member of the Financial Test Group during such period.
"Consolidated Joint Venture" means any Consolidated Subsidiary that is (a)
not a Wholly Owned Subsidiary and (b) engaged in Krispy Kreme franchisee or
doughnut and bakery store operations. On the date hereof Freedom Rings, LLC; New
England Dough LLC; KremeKo Inc. and Glazed Investments, LLC constitute all of
the Consolidated Joint Ventures.
"Consolidated Leverage Ratio" means, for any Test Period, the ratio of (a)
Consolidated Total Debt on the last day of such Test Period to (b) Consolidated
EBITDA for such Test Period.
"Consolidated Net Income" means, for any period, the Net Income of the
Financial Test Group determined on a consolidated basis in accordance with GAAP,
but (without
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duplication), excluding, but only to the extent otherwise included in the
calculation of Net Income, (i) the income (or deficit) of any Person accrued
prior to the date it became a Subsidiary of the Parent Guarantor or is merged
into or consolidated with the Parent Guarantor or any of its Subsidiaries, (ii)
the income (or deficit) of any Person (other than members of the Financial Test
Group that are Obligors) in which the Parent Guarantor or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by a member of the Financial Test Group in the form
of cash dividends or cash distributions, (iii) the undistributed positive
earnings of any Subsidiary of the Parent Guarantor 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 contract or agreement binding
on such Subsidiary (other than under any Loan Document), any constitutive
document of such Subsidiary or any law, regulation or other legal restriction
applicable to such Subsidiary, (iv) unrealized gains and losses with respect to
obligations under Hedging Agreements for such period and (v) gains and losses
from the early extinguishment of Indebtedness.
"Consolidated Subsidiary" means a Subsidiary, the accounts of which are
customarily consolidated with those of the Parent Guarantor in accordance with
GAAP for the purpose of reporting to stockholders of the Parent Guarantor or, in
the case of a Subsidiary acquired after the Effective Date, the accounts of
which would, in accordance with GAAP, be so consolidated for that purpose.
"Consolidated Total Debt" means at any date the aggregate principal amount
of all Indebtedness of the Financial Test Group (excluding obligations of the
Financial Test Group with respect to Hedging Agreements), determined on a
consolidated basis in accordance with GAAP as of such date.
"Control" means 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.
"Covered Property Value" means, on any date, the sum of the Median Desktop
Analysis Values for all Real Property listed in the Desktop Analysis where both
(a) such Real Property is covered by Mortgages that have been duly recorded and
in respect of each of which the Agents and the Lenders have received a legal
opinion satisfactory in form and substance to the Administrative Agent in its
reasonable judgment (provided that a legal opinion substantially in the form of
the legal opinions addressing certain real estate matters delivered pursuant to
Section 5.01(b) on the Effective Date, with such modifications as are necessary
for the relevant jurisdictions, shall be deemed to be satisfactory in form and
substance to the Administrative Agent) and (b) the Shared Lien Collateral Agent
has received title insurance commitments for such Real Property and Mortgages,
for 115% of the Median Desktop Analysis Value of such Real Property,
satisfactory in form and substance to the Administrative Agent in its reasonable
judgment, and the Borrower has caused the removal of any Liens on such Real
Property identified in such title insurance commitments to the extent that such
Liens are not permitted by Section 7.02, unless such Liens are otherwise
acceptable to the Administrative Agent, in its sole discretion. In the event
that any such title insurance commitment contains a legal description of any
Real Property that is different from the legal description set forth in a
recorded Mortgage for
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such property, clause (a) of this definition shall not be deemed satisfied with
respect to such property unless and until a new Mortgage or amendment to the
applicable recorded Mortgage has been duly recorded reflecting the legal
description contained in such title insurance commitment.
"Credited Institutions" means (a) CSFB in its capacities as sole bookrunner
and sole lead arranger for the financing contemplated hereby, (b) Silver Point
Finance, LLC in its capacities as co-arranger and documentation agent for the
financing contemplated hereby and (c) WFF in its capacity as syndication agent
for the financing contemplated hereby.
"CSFB" means Credit Suisse First Boston, acting through one or more of its
branches, and any Affiliate thereof.
"Debt Incurrence" means the incurrence by any member of the Financial Test
Group after the Effective Date of any Indebtedness, other than Indebtedness
incurred as permitted by any of paragraphs (a) through (l) of Section 7.01.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Depositary Account" has the meaning assigned to such term in Section
6.12(b).
"Depositary Effective Date" has the meaning assigned to such term in
Section 6.12(b).
"Depreciation and Amortization" means for any period the sum of all
depreciation and amortization expense of the Financial Test Group for such
period, as determined in accordance with GAAP.
"Desktop Analysis" means that certain Desktop Analysis of Real Properties
performed by Keen Consultants, LLC dated March 18, 2005 and furnished to the
Lenders prior to the date hereof.
"Disclosed Matters" means the actions, suits, investigations and
proceedings disclosed in Schedule IV and the environmental matters disclosed in
Schedule V.
"Disposition" means any sale, assignment, transfer or other disposition of
any property (whether now owned or hereafter acquired) by any member of the
Financial Test Group to any other Person excluding any sale, assignment,
transfer or other disposition of any property permitted by Section 7.03 (other
than pursuant to clauses (d), (f) or (g) thereof).
"Dollars" or "$" refers to lawful money of the United States of America.
"Domestic Subsidiaries" means all Subsidiaries other than Foreign
Subsidiaries.
"Effective Date" means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02).
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"Environmental Claim" means any claim, action, suit or notice by or from
any Person as a result of or in connection with any violation of or liability
under any Environmental Law.
"Environmental Laws" means all laws (including all common law), rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices
or binding agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to pollution, the environment, health and safety
(as relating to exposure to Hazardous Materials), and the preservation or
reclamation of natural resources, including without limitation any of the
foregoing relating to the management, use, disposal, arrangement for disposal,
Release or threatened Release of any Hazardous Materials.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities, and including any Lien filed against any property
covered by the Mortgages thereunder in favor of any governmental entity),
resulting from or based upon (a) a violation of any Environmental Law, (b)
arising under any Environmental Law with respect to (i) the generation, use,
handling, transportation, storage, treatment, arrangement for disposal or
disposal of any Hazardous Materials, (ii) exposure to any Hazardous Materials,
or (iii) the Release or threatened Release of any Hazardous Materials or (c) any
contract, agreement or other consensual arrangement pursuant to which liability
under any Environmental Law is assumed or imposed with respect to any of the
foregoing.
"Equity Issuance" means (a) any issuance or sale by the Parent Guarantor or
any of its Subsidiaries after the Effective Date of (i) any of its capital
stock, (ii) any warrants or options (other than convertible Indebtedness)
exercisable in respect of its capital stock (other than any warrants or options
issued to directors, officers or employees of the Parent Guarantor or any of its
Subsidiaries pursuant to employee benefit plans established in the ordinary
course of business and any capital stock of the Parent Guarantor or any of its
Subsidiaries issued upon the exercise of such warrants or options) or (iii) any
other security or instrument representing an equity interest (or the right to
obtain any equity interest) in the Parent Guarantor or any of is Subsidiaries or
(b) the receipt by the Parent Guarantor or any of its Subsidiaries after the
Effective Date of any capital contribution (whether or not evidenced by any
equity security issued by the recipient of such contribution). The term "Equity
Issuance" shall not include any such issuance or sale to the Parent Guarantor or
any of its Subsidiaries or the receipt of any capital contribution from the
Parent Guarantor or any of its Subsidiaries.
"Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any shareholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
-9-
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower and/or the Parent Guarantor, is treated as a
single employer under Section 414(b) or (c) of the Code, or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Parent Guarantor or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Parent Guarantor or any its ERISA Affiliates from
the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Parent Guarantor, the Borrower or any of their ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Parent Guarantor,
the Borrower or any their ERISA Affiliates of any notice, or the receipt by any
Multiemployer Plan from the Parent Guarantor, the Borrower or any their ERISA
Affiliates of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, means that
such Loan, or the Loans constituting such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VIII.
"Excluded Real Property" means real property interests of the Obligors in
the property identified in Schedule VII as Excluded Real Property.
"Excluded Taxes" means, with respect to the Administrative Agent, the
Collateral Agent, the Issuing Lender, any Lender or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
(a) taxes measured by net income, net profits or overall gross receipts, capital
or net worth (including, without limitation, branch profits or similar taxes) by
the United States of America, or by any jurisdiction, that are imposed solely as
a result of (I) the Administrative Agent, the Collateral Agent, the Issuing
Lender or any Lender (as the case may be) being or having been organized or
resident in, having or having had an office in, or doing or having done business
in such jurisdiction (other than a business that is or was deemed to arise
solely by reason of the Transactions) and (II) the Borrower being organized or
resident, maintaining an office or conducting business in such jurisdiction) and
(b) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.18(b)), any withholding tax that is
imposed pursuant to a law in effect at the time such Foreign Lender becomes a
party to this Agreement except to the extent that such Foreign Lender's assignor
(if any) was entitled, at the time of assignment, to receive additional amounts
from the Borrower with respect to such withholding tax pursuant to Section
2.16(a) or is
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attributable to such Foreign Lender's failure or inability (other than as a
result of a Change in Law after such Lender becomes a party to this Agreement)
to comply with Section 2.16(e).
"Existing Credit Agreement" means the Credit Agreement dated as of October
31, 2003, as amended, among the Borrower, the lenders party thereto, Wachovia
Bank, National Association, as administrative agent, and the syndication agent
and the co-documentation agents referred to therein.
"Federal Funds Effective Rate" means, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it.
"Financial Officer" means, with respect to any Obligor, the chief financial
officer, principal accounting officer, treasurer or controller of such Obligor.
"Financial Test Group" means the Parent Guarantor and the Consolidated
Subsidiaries, but excluding the Consolidated Joint Ventures. In determining the
Financial Test Group for any date or period of time, only entities that are
members of the Financial Test Group as of such date or during such period of
time, as the case may be, shall be included.
"First Lien Secured Obligations" means, collectively, (i) the Obligations
and (ii) all obligations of the Obligors to make payments under Hedging
Agreements relating to interest with any or all of the Administrative Agent, the
Issuing Lender, the Arranger, any Lender or any Affiliate of the Administrative
Agent, the Issuing Lender, the Arranger or any Lender, whether direct or
indirect, absolute or contingent. For purposes hereof, it is understood that any
First Lien Secured Obligations to any Person arising under an agreement entered
into at a time such Person (or an Affiliate thereof) is party hereto as the
Administrative Agent, the Issuing Lender or a Lender shall continue to
constitute First Lien Secured Obligations, notwithstanding that such Person (or
its Affiliate) has ceased to be the Administrative Agent, the Issuing Lender or
a Lender, as the case may be, party hereto (by assigning all of its Commitment,
Revolving Credit Exposure and other interests herein, or otherwise) at the time
a claim is to be made in respect of such First Lien Secured Obligations.
"Fiscal Quarter" means a fiscal quarter of the Parent Guarantor.
"Fiscal Year" means a fiscal year of the Parent Guarantor.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the laws
of a jurisdiction outside the United States of America.
-11-
"GAAP" means generally accepted accounting principles in the United States
of America.
"Governmental Authority" means the government of the United States of
America, or of any other nation, or any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Guarantee Assumption Agreement" means a Guarantee Assumption Agreement
substantially in the form of Exhibit D by an entity that, pursuant to Section
6.10(a) is required to become a "Subsidiary Guarantor" hereunder in favor of the
Administrative Agent.
"Guarantors" means the Parent Guarantor and the Subsidiary Guarantors.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to or with
respect to which liability is imposed under any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement. The
amount of any Indebtedness or Other Pari Passu Obligations arising from
obligations of any Person under any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that such
Person would be required to pay if such Hedging Agreement were terminated at
such time.
"Immaterial Subsidiary" means (x) any Subsidiary of Borrower that owns
assets constituting no more than 2.5% of the book value of the assets of the
Parent Guarantor and its Consolidated Subsidiaries, taken as a whole; provided
that any Subsidiary that, when such
-12-
Subsidiary's assets are aggregated with those of all other Immaterial
Subsidiaries as to which (i) any event described in clause (h), (i), (j), (k),
(l) or (m) of Article VIII has occurred and is continuing or (ii) their
Guarantees are being or have been released in accordance with Section
10.02(b)(viii), would collectively own aggregate assets constituting more than
5.0% of the book value of the assets of the Parent Guarantor and its
Consolidated Subsidiaries, taken as a whole, shall not be considered an
Immaterial Subsidiary and (y) any Prohibited Subsidiary.
"Inactive Company" means any Person that conducts no business activity
(other than any unwinding or liquidation activities), has no income and has
assets with a value that does not exceed $1,000 (or, in the case of Montana
▇▇▇▇▇ and its Subsidiaries, cash in an aggregate amount not exceeding $100,000
to the extent that such cash is to be used for costs and expenses relating to
Montana ▇▇▇▇▇ or its Subsidiaries' unwinding).
"Included Subsidiaries" means all Consolidated Subsidiaries, except that no
Consolidated Joint Venture other than Freedom Rings, LLC shall be an Included
Subsidiary.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, giving effect to any limitations upon such Person's
liability for such Indebtedness of others as may be set forth in such Guarantee,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances, (k) all Redeemable
Preferred Stock of such Person (in the event that such Person is a corporation),
(l) all obligations of such Person with respect to Hedging Agreements, (m) all
obligations which are payable prior to the Commitment Termination Date in
respect of unsecured structured settlements of Disclosed Matters or other
actions, suits, proceedings or governmental enforcement actions arising in
connection with the historical financial statements of Parent Guarantor and its
Consolidated Subsidiaries under review (as the date hereof) by the Special
Committee of the Board of Directors of the Parent Guarantor, and (n) all
obligations of such Person to purchase securities or other property prior to the
Commitment Termination Date arising out of or in connection with the sale of the
same or substantially similar securities or property. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
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"Indemnified Taxes" means Taxes imposed on or incurred by any Agent, the
Issuing Lender or any Lender with respect to any payment under any Loan Document
other than Excluded Taxes.
"Intellectual Property" has the meaning given to such term in the Security
Agreement.
"Intercreditor Agreement" means a Collateral Agency and Intercreditor
Agreement substantially in the form of Exhibit E among the Obligors, the
Collateral Agent, and CSFB as collateral agent under the Second Lien Loan
Documents, and CSFB, as paying agent for the Lenders under the Second Lien
Documents.
"Interest Election Request" means a request by the Borrower to convert or
continue a Syndicated Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any Syndicated ABR Loan,
each Quarterly Date, (b) with respect to any Eurodollar Loan, the last day of
each Interest Period therefor and, in the case of any Interest Period of more
than three months' duration, each day prior to the last day of such Interest
Period that occurs at three-month intervals after the first day of such Interest
Period and (c) with respect to any Swingline Loan, the first Business Day of
each calendar month.
"Interest Period" means, for any Eurodollar Loan or Borrowing, the period
commencing on the date of such Loan or Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as specified in the applicable Request for Loan or Interest Election
Request; provided, that (i) if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day, and (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Loan initially shall be the date on which such
Loan is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Loan, and the date of a Syndicated Borrowing
comprising Loans that have been converted or continued shall be the effective
date of the most recent conversion or continuation of such Loans.
"Investment" means any investment in any Person, whether by means of: (a)
the acquisition (whether for cash, property, services or securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities of any other Person or any agreement to
make any such acquisition (including any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale); (b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person), but excluding any such
advance, loan or extension of credit having a term not exceeding 90 days
-14-
arising in connection with the sale of inventory or supplies by such Person in
the ordinary course of business; (c) the entering into of any Guarantee of, or
other contingent obligation with respect to, Indebtedness or other liability of
any other Person and (without duplication) any amount committed to be advanced,
lent or extended to such Person; provided that the making of any payment in
accordance with the terms of any Guarantee or other contingent obligation
permitted under this Agreement shall not be considered an Investment; (d) the
entering into of any Hedging Agreement; (e) any purchase or other acquisition of
Indebtedness or the assets of such Person or (f) any capital contribution to
such Person; (g) any other direct or indirect investment in such Person,
including any acquisition by way of a merger or consolidation, and any
arrangement pursuant to which the investor incurs Indebtedness of the type
referred to in clause (g) of the definition of "Indebtedness" in respect of such
Person. The amount of any Investment shall be the amount actually invested, less
any return of capital, without adjustment for subsequent increases or decreases
in the market value of such Investment.
"Investment Account" means any account that the Administrative Agent
agrees, at the request of the Borrower, to designate as an "Investment Account";
provided that any such account shall be deemed to be an "Investment Account"
only if it is held in the name of the Borrower and, pursuant to the Investment
Account Control Agreement, controlled by the Shared Lien Collateral Agent. Any
such account shall cease to be an "Investment Account" if the Borrower and the
Administrative Agent shall so agree.
"Investment Account Control Agreement" means a Control Agreement
substantially in the form of Exhibit G among the Borrower, the Shared Lien
Collateral Agent and an Investment Account Intermediary or such other form as
may be reasonably acceptable to the Shared Lien Collateral Agent.
"Investment Account Intermediary" means a securities intermediary at which
an Investment Account is maintained.
"Issuing Lender" means CSFB or WFF, as applicable, in their respective
capacities as the issuer of Letters of Credit hereunder, and their successors in
such capacity as provided in Section 2.05(j).
"Joint Venture" means (i) any entity in which the Parent Guarantor, the
Borrower or any of their Subsidiaries has made any Investment that would be, in
conformity with GAAP, set forth opposite the caption "Investment in
unconsolidated joint ventures" (or any like caption) on a consolidated balance
sheet of the Financial Test Group and (ii) any Consolidated Joint Venture.
"Kroll" means ▇▇▇▇▇ Zolfo ▇▇▇▇▇▇ LLC.
"LC Disbursement" means a payment made by the Issuing Lender pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such
-15-
time. The LC Exposure of any Lender at any time shall be its Applicable
Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule I and any other Person that
shall have become a party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance. Unless the context otherwise requires, the term "Lenders"
includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Letter of Credit Documents" means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such obligations, each as the
same may be modified and supplemented and in effect from time to time.
"LIBO Rate" means, with respect to any LIBOR Borrowing for any Interest
Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of the relevant Interest Period by reference to the
British Bankers' Association Interest Settlement Rates for deposits in Dollars
(as set forth by the Bloomberg Information Service or any successor thereto or
any other service selected by the Administrative Agent which has been nominated
by the British Bankers' Association as an authorized information vendor for the
purpose of displaying such rates) for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition, the "LIBO Rate" shall be the
interest rate per annum determined by the Administrative Agent to be the average
of the rates per annum at which deposits in Dollars are offered for such
relevant Interest Period to major banks in the London interbank market in
London, England by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Liquidity Trigger Event" shall be deemed to have occurred and be
continuing on any date if the Net Liquidity on such date is less than
$20,000,000.
"Loan Documents" means, collectively, this Agreement, the Letter of Credit
Documents, the Intercreditor Agreement and the Security Documents and each other
agreement or written undertaking delivered to the Administrative Agent, the
Collateral Agent, the Issuing Lender or any other Lender, acting in such
capacities, in furtherance or pursuant to any of the foregoing.
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"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Majority-Owned Joint Venture" means each Joint Venture in which the Parent
Guarantor and/or one of its Included Subsidiaries owns not less than 50% of the
capital stock, including Freedom Rings, LLC; New England Dough LLC; and Glazed
Investments, LLC.
"Margin Stock" means "margin stock" within the meaning of Regulations T, U
and X of the Board.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Financial Test Group taken as a whole, (b) the ability of any Obligor to
perform any of its obligations under this Agreement or any of the other Loan
Documents to which it is a party or (c) the rights of or benefits available to
the Lenders under this Agreement or any of the other Loan Documents.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit) of the Borrower, the Parent Guarantor or any Subsidiary
Guarantor in an aggregate principal amount exceeding $1,000,000.
"Median Desktop Analysis Value" means, for any Real Property listed in the
Desktop Analysis, the average of the high and low appraised values for such Real
Property set forth in such Desktop Analysis.
"Modified Financial Statements" means, with respect to any period, the
consolidated balance sheet and related statements of operations, stockholders'
equity (if applicable) and cash flows of the Financial Test Group as of the end
of and for such period, in each case in substantially similar form, scope and
detail as the Projections.
"Montana ▇▇▇▇▇" means Montana ▇▇▇▇▇ Bread Co., Inc., a Delaware
corporation.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Services, Inc.
"Mortgage" means an instrument of Mortgage or Deed of Trust, Assignment of
Rents, Security Agreement and Fixture Filing or other similar instrument,
satisfactory in form and substance to the Collateral Agent and the
Administrative Agent, executed by an Obligor in favor of the Collateral Agent
for the benefit of the Claimholders (as defined in the Intercreditor Agreement),
granting a mortgage over the respective properties identified therein to secure
the obligations of such Obligor under the Loan Documents and the Second Lien
Loan Documents to which it is a party.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Available Proceeds" means:
(a) in the case of any Disposition, the aggregate amount of all cash
payments received by the Parent Guarantor and/or any of its Included
Subsidiaries directly or
-17-
indirectly in connection with such Disposition; provided that (i) Net
Available Proceeds shall be net of (x) the amount of any legal, title and
recording tax expenses, commissions and other fees and expenses paid by the
Parent Guarantor and/or any of its Included Subsidiaries in connection with
such Disposition, (y) any federal, state, foreign and local income or other
taxes estimated to be payable by the Parent Guarantor and/or any of its
Included Subsidiaries as a result of such Disposition, and (z) reserves set
aside on its books with respect thereto in accordance with GAAP and (ii)
Net Available Proceeds shall be net of any repayments by the Parent
Guarantor and/or any of its Included Subsidiaries of Indebtedness
(including interest and any premiums or penalties), other than any
Indebtedness under the Second Lien Loan Documents (to which such netting
shall not apply), to the extent that such Indebtedness is secured by a Lien
on the property that is the subject of such Disposition;
(b) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received
by the Parent Guarantor and/or any of its Included Subsidiaries in respect
of such Casualty Event net of (i) reasonable expenses incurred by the
Parent Guarantor and/or any of its Included Subsidiaries in connection
therewith, (ii) contractually required repayments of Indebtedness
(including interest and any premiums or penalties), other than any
Indebtedness under the Second Lien Loan Documents (to which such netting
shall not apply), to the extent secured by a Lien on such property and any
income and transfer taxes payable by the Parent Guarantor and/or any of its
Included Subsidiaries in respect of such Casualty Event and (iii) reserves
set aside on its books with respect thereto in accordance with GAAP;
(c) in the case of any Equity Issuance, the aggregate amount of all
cash received by any member of the Financial Test Group (either directly or
through a distribution by any Consolidated Joint Venture) in respect of
such Equity Issuance net of customary fees, commissions and other expenses
including reserves set aside on its books with respect thereto in
accordance with GAAP incurred by the Parent Guarantor and/or any of its
Subsidiaries in connection therewith (it being understood that proceeds of
Equity Issuances by Consolidated Joint Ventures shall not constitute Net
Available Proceeds except to the extent any such proceeds are distributed
to and actually received by the Parent Guarantor or any of its Subsidiaries
(other than Consolidated Joint Ventures)); and
(d) in the case of any Debt Incurrence, the aggregate amount of all
cash received by the Parent Guarantor and/or any of its Included
Subsidiaries in respect of such Debt Incurrence net of customary fees,
commissions and other expenses including reserves set aside on its books
with respect thereto in accordance with GAAP incurred by the Parent
Guarantor and/or any of its Subsidiaries in connection therewith.
"Net Income" means, as applied to any Person for any period, the aggregate
amount of net income of such Person, after taxes, for such period, as determined
in accordance with GAAP.
"Net Liquidity" means, on any date, the result of the following calculation
on such date: (a) an amount equal to the lesser of the Borrowing Base and the
aggregate amount of
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the Lenders' Commitments plus (b) the aggregate amount of the "Tranche A Funding
Amounts" (as defined in the Second Lien Credit Agreement) minus (c) the
aggregate amount of the Revolving Credit Exposures of all of the Lenders minus
(d) the aggregate amount of the "Tranche A Exposures" (as defined in the Second
Lien Credit Agreement) of all of the Second Lien Lenders minus (e) the aggregate
amount of Specified Contingent Obligations (as set forth on the most recently
delivered Borrowing Base Certificate or as otherwise calculated by the
Administrative Agent as of the date such Borrowing Base Certificate should have
been delivered) plus (f) the aggregate cash balances of the Concentration
Accounts and the Depositary Account (i) determined at 1:30 p.m., New York City
time, on such date or if such date is not a Business Day, at 1:30 p.m., New York
City time, on the Business Day next occurring (in each case, after giving effect
to any prepayments that the Borrower is required to make pursuant to Section
2.10(b)(iii)) and (ii) not subject to any Lien other than (x) the Liens created
by the Loan Documents and the Second Lien Loan Documents and (y) set-off rights.
"Obligations" means, collectively, the obligations of the Obligors to pay
the principal of and interest on the Loans, reimbursement obligations with
respect to LC Disbursements and all fees, indemnification payments and other
amounts whatsoever, whether direct or indirect, absolute or contingent, now or
hereafter from time to time owing to the Lenders, the Issuing Lender, the
Administrative Agent, the Collateral Agent or any of them under the Loan
Documents.
"Obligors" means the Borrower and the Guarantors.
"Other Pari Passu Obligations" means, as at any date, the aggregate
outstanding amount of all net obligations of any Obligor owing on such date to
any Lender, the Arranger, or any Affiliate of any Lender or the Arranger in
respect of any Hedging Agreement to the extent that such obligations are secured
pursuant to the Security Documents.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"Parent Guarantor" has the meaning assigned to such term in the recital of
parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes, assessments or other governmental
charges that are not yet due, payable or delinquent or are being contested
in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's and other like Liens imposed by law, arising in the ordinary
course of business
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and securing obligations that are not overdue by more than 30 days or are
being contested in compliance with Section 6.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) cash deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment Liens in respect of judgments that do not constitute an
Event of Default under clause (o) of Article VIII;
(f) easements, zoning and other restrictions, rights-of-way, covenants
and encroachments, Liens in favor of any landlord and similar encumbrances
on real property imposed by law or arising in the ordinary course of
business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the
ordinary conduct of business of the Parent Guarantor or any of its Included
Subsidiaries;
(g) Liens constituting leasehold interests made by the Parent
Guarantor or any of its Included Subsidiaries as lessor entered into in the
ordinary course of business;
(h) any right, title and interest of a landlord (including with
respect to association dues, maintenance fees and other similar items)
under any lease pursuant to which the Parent Guarantor or any of its
Included Subsidiaries has a leasehold interest in any property or assets
and any Liens that have been placed by such landlord on property over which
the Parent Guarantor or any of its Included Subsidiaries has any real
property interest; and
(i) restrictions on pledges or transfers of capital stock imposed by
partnership agreements, shareholders' agreements, limited liability company
agreements, joint venture agreements and similar agreements in existence on
the Effective Date or similar restrictions in amendments or restatements
thereof which are no more onerous than those included in such agreements on
the Effective Date;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
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(b) marketable direct obligations issued by any State of the United
States of America or any political subdivision of any such State or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or ▇▇▇▇▇'▇;
(c) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from ▇▇▇▇▇'▇;
(d) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than
$500,000,000;
(e) fully collateralized repurchase agreements with a term of not more
than 90 days for securities described in clause (a) of this definition and
entered into with a financial institution satisfying the criteria described
in clause (d) of this definition; and
(f) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (a) through
(e) above.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Phase I" has the meaning set forth in Section 5.01(m)(ii).
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Parent Guarantor, the
Borrower or any of their ERISA Affiliates is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum announced from time to
time by CSFB as its prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective from and including the
date such change is announced as being effective.
"Principal Facilities" means the mixing facility of the Borrower located in
Effingham, Illinois and the mixing facility and manufacturing plant of the
Borrower, each located in Winston-Salem, North Carolina.
"Prohibited Subsidiary" means, at the time of determination, a Consolidated
Joint Venture that is prohibited by its organizational documents or any
agreement governing its Indebtedness from becoming an Obligor hereunder;
provided that Freedom Rings, LLC shall not be a Prohibited Subsidiary.
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"Projections" means the financial projections of the Borrower and its
Consolidated Subsidiaries dated March 31, 2005 heretofore delivered by the
Borrower to the Administrative Agent.
"Property Designated For Sale" means real property and improvements
specifically designated as such and itemized on Schedule VII.
"Quarterly Dates" means the last Business Day of January, April, July and
October in each year, the first of which shall be the first such day after the
date hereof.
"Real Property" has the meaning set forth in Section 4.17.
"Redeemable Preferred Stock" of any Person means any preferred stock issued
by such Person which is at any time prior to the date falling six months after
the Commitment Termination Date either (i) mandatorily redeemable (by sinking
fund or similar payments or otherwise) or (ii) redeemable at the option of the
holder thereof.
"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata.
"Request for Loan" means an executed request for loan substantially in the
form of Exhibit H hereto with all blanks completed by the Borrower.
"Required Lenders" means, at any time, two or more Lenders having Revolving
Credit Exposures and unused Commitments representing more than 50% of the sum of
the total Revolving Credit Exposures and unused Commitments at such time,
provided that if at any point in time there is only one Lender, then such Lender
shall be deemed to be the Required Lenders.
"Restatement Date" means the date on which the Parent Guarantor furnishes
to the Lenders (i) the audited consolidated balance sheet and related statements
of operations, stockholders' equity and cash flows of the Parent Guarantor and
its Consolidated Subsidiaries as of the end of and for all Fiscal Years
currently under review by the Special Committee of the Board of Directors of the
Parent Guarantor (including without limitation its 2004 and 2005 Fiscal Years),
reported on by PriceWaterhouseCoopers LLP or other independent public
accountants of recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Parent Guarantor and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied as of the end of
and for such Fiscal Year and (ii) the unaudited consolidated balance sheet and
related statements of
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operations, stockholders' equity and cash flows of the Parent Guarantor and its
Consolidated Subsidiaries as of the end of and for its first and second Fiscal
Quarters for its 2006 Fiscal Year.
"Restricted Payment" means (a) any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of the Parent Guarantor or any of its Subsidiaries, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Parent Guarantor or any of its Subsidiaries or any option, warrant or other
right to acquire any such shares of capital stock of the Parent Guarantor or any
of its Subsidiaries or (b) any payment made by the Parent Guarantor or any of
its Subsidiaries to purchase, redeem, retire or otherwise acquire for value, or
set apart any money for a sinking, defeasance or other analogous fund for the
purchase, redemption, retirement or other acquisition of, or make any voluntary
payment or prepayment of the principal of or interest on, or any other amount
owing in respect of, any Subordinated Indebtedness, except for regularly
scheduled payments, prepayments or redemptions of principal and interest in
respect thereof required pursuant to the instruments evidencing such
Indebtedness.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Syndicated Loans
and its LC Exposure and Swingline Exposure at such time.
"S&P" means Standard & Poor's Ratings Services, a Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Second Lien Credit Agreement" means the Second Lien Credit Agreement dated
as of the date hereof between the Obligors, the Second Lien Lenders, CSFB as
administrative agent and paying agent for the Second Lien Lenders and CSFB as
collateral agent for such "Lenders" and CSFB as fronting bank, including any
replacement thereof entered into in connection with one or more refinancings
thereof permitted by the Intercreditor Agreement.
"Second Lien Lenders" means the Persons referred as "Lenders" in the Second
Lien Credit Agreement.
"Second Lien Loan Documents" means the "Loan Documents" referred to in the
Second Lien Credit Agreement.
"Security Agreement" means a Security Agreement substantially in the form
of Exhibit C among the Borrower, the Parent Guarantor, the Subsidiary Guarantors
and the Collateral Agent, as the same shall be modified and supplemented and in
effect from time to time.
"Security Documents" means the Security Agreement, the Mortgages and all
Uniform Commercial Code financing statements permitted by the Security
Agreement, the Mortgages to be filed with respect to the security interests in
personal property and fixtures created pursuant to the Security Agreement or the
Mortgages, the Concentration Account Control Agreements, any Investment Account
Control Agreement and all other agreements entered into to confer upon the
Shared Lien Collateral Agent or the Collateral Agent control over
-23-
deposit accounts or securities accounts for purposes of the Uniform Commercial
Code and any other agreement, document, instrument or other writing providing
collateral for the Obligations whether now or hereafter in existence.
"Shared Lien Collateral Agent" has the meaning assigned to such term in the
Intercreditor Agreement.
"Specified Contingent Obligations" means the obligations listed on Schedule
IX, together with all other obligations of a similar nature binding on any
Obligor and all obligations of a similar nature that replace or supplement a
Specified Contingent Obligation in connection with a transaction that results in
a net reduction of Specified Contingent Obligations, from time to time
outstanding. The amount of any Specified Contingent Obligation shall be the
maximum amount that the Obligors upon which such Specified Contingent Obligation
is binding could be required to pay thereunder.
"Statutory Reserve Rate" means, for the Interest Period for any Eurodollar
Borrowing, a fraction (expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one minus the arithmetic
mean, taken over each day in such Interest Period, of the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board to which
the Administrative Agent is subject for eurocurrency funding (currently referred
to as "Eurocurrency liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subordinated Indebtedness" means Indebtedness (a) for which the Parent
Guarantor is directly and primarily liable, (b) in respect of which none of its
Subsidiaries is contingently or otherwise obligated and (c) that is subordinated
to the obligations of the Parent Guarantor hereunder (including in respect of
its Guarantee under Article III) on terms, and pursuant to documentation
containing other terms (including interest, amortization, covenants and events
of default), in form and substance satisfactory to the Required Lenders.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless otherwise specified,
"Subsidiary" means a Subsidiary of the Parent Guarantor. Notwithstanding
anything contained
-24-
herein to the contrary, neither Montana ▇▇▇▇▇ nor any of its Subsidiaries shall
be deemed to be a Subsidiary of the Parent Guarantor so long as Montana ▇▇▇▇▇ or
such Subsidiary, as the case may be, is an Inactive Company.
"Subsidiary Guarantor" means each of the Subsidiaries of the Borrower
identified under the caption "GUARANTORS" on the signature pages hereto and each
Subsidiary of the Borrower that becomes a "Subsidiary Guarantor" after the date
hereof pursuant to Section 6.10(a).
"Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
"Swingline Lender" means WFF, in its capacity as lender of Swingline Loans
hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Syndicated", when used in reference to any Loan or Borrowing, means that
such Loan, or the Loans constituting such Borrowing, are made pursuant to
Section 2.01.
"Synthetic Lease" means any synthetic lease, tax retention operating lease,
or off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but which is classified as an
operating lease pursuant to GAAP.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Test Period" means, on any date of determination, the period of four
consecutive Fiscal Quarters (taken as one accounting period) ending with the
latest Fiscal Quarter or the Fiscal Year for which financial statements pursuant
to Section 6.01(a) or (b) have been, or should have been, delivered, as modified
pursuant to Section 1.03.
"Transactions" means the execution, delivery and performance by each
Obligor of this Agreement, the other Loan Documents and the Second Lien Loan
Documents to which such Obligor is intended to be a party, the borrowing of
Loans hereunder and loans under the Second Lien Loan Documents, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder and the
issuance of letters of credit thereunder.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans constituting such Borrowing,
is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of capital
stock or other ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by the Parent Guarantor.
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"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
"WFF" means ▇▇▇▇▇ Fargo Foothill, Inc., a California corporation.
SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights. Any reference to
"Issuing Lender" shall mean any one, or all, of the Issuing Lenders, as
applicable.
SECTION 1.03. Accounting Terms; GAAP; Historical Financial Calculations.
Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. Except as may be otherwise expressly set forth herein, all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall be prepared, and all calculations made
for purposes of determining compliance with Section 7.09 shall be made, as if
the Consolidated Joint Ventures were carried as equity investments by the
relevant members of the Financial Test Group. Notwithstanding anything contained
herein to the contrary: (a) (i) each calculation of a financial matter hereunder
that is otherwise to be made for any period of four Fiscal Quarters that
includes a portion of the Fiscal Year ending 2005 shall instead be made solely
by reference to the portion of such period comprised of Fiscal Quarters in the
Fiscal Year ending 2006 (the "2006 Fiscal Quarters") and (ii) for purposes of
completing such calculation, the result obtained for the 2006 Fiscal Quarters
shall be multiplied by a fraction the numerator of which is four and the
denominator of which is
-26-
the number of 2006 Fiscal Quarters and (b) the financial statements,
certificates, reports and calculations referred to in the preceding sentence
shall not be required to be prepared or made in accordance with GAAP, but such
deviation from GAAP shall be solely in respect of the treatment of Consolidated
Joint Ventures as equity investments as provided above.
SECTION 1.04. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g. a "Syndicated
Loan"), by Type (e.g. an "ABR Loan") or by Class and Type (e.g. a "Syndicated
ABR Loan"). Borrowings may also be classified and referred to by Class (e.g. a
"Syndicated Borrowing"), by Type (e.g. an "ABR Borrowing") or by Class and Type
(e.g. a "Syndicated ABR Borrowing").
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Syndicated Loans to the Borrower from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender's Revolving Credit Exposure exceeding
such Lender's Commitment or (b) the total Revolving Credit Exposures exceeding
the lesser of the total Commitments and the Borrowing Base then in effect.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Syndicated Loans.
SECTION 2.02. Loans and Borrowings.
(a) Obligations of Lenders. Each Syndicated Loan shall be made as part of a
Borrowing consisting of Loans of the same Type made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Type of Loans. Subject to Section 2.13, each Syndicated Borrowing shall
be constituted entirely of ABR Loans or of Eurodollar Loans as the Borrower may
request in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each
Lender at its option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.
(c) Minimum Amounts; Limitation on Number of Borrowings. Each Eurodollar
Borrowing shall be in an aggregate amount of $1,000,000 or a larger multiple of
$1,000,000. Each Syndicated ABR Borrowing shall be in an aggregate amount equal
to $1,000,000 or a larger multiple of $1,000,000; provided that a Syndicated ABR
Borrowing may be in any lesser aggregate amount that is equal to the entire
unused then available balance of
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the lesser of the total Commitments and the Borrowing Base then in effect. Each
Swingline Loan shall be in an amount equal to $500,000 or a larger multiple of
$250,000; provided that a Swingline ABR Borrowing may be in a lesser amount (i)
that is equal to entire unused then available balance of the lesser of the total
Commitments and the Borrowing Base then in effect, or (ii) as may be requested
by the Borrower at any time that the Borrower is required to prepay Loans
pursuant to Section 2.10(b)(iii). Borrowings of more than one Class and Type may
be outstanding at the same time; provided that there shall not at any time be
more than a total of six Eurodollar Borrowings outstanding.
(d) Limitations on Interest Periods. Notwithstanding any other provision of
this Agreement, the Borrower shall not be entitled to request (or to elect to
convert to or continue as a Eurodollar Borrowing) any Borrowing if the Interest
Period requested therefor would end after the Commitment Termination Date.
SECTION 2.03. Requests for Syndicated Borrowings.
(a) Notice by the Borrower. To request a Syndicated Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone
(i) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of the proposed
Borrowing or (ii) in the case of a Syndicated ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing; provided that any such notice of a Syndicated ABR
Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(f) may be given not later than 10:00 a.m., New
York City time, on the date of the proposed Borrowing. Each such telephonic
request for a Loan shall be irrevocable and shall be confirmed promptly by
hand delivery or telecopy to the Administrative Agent of a Request for Loan
signed by the Borrower.
(b) Content of Request for Loans. Each telephonic request for a Loan
and written Request for Loan shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of
the term "Interest Period" and permitted under Section 2.02(d); and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.06.
(c) Notice by the Administrative Agent to the Lenders. Promptly
following receipt of a Request for Loan in accordance with this Section,
the Administrative Agent shall advise each Lender of the details thereof
and of the amount of such Lender's Loan to be made as part of the requested
Borrowing.
(d) Failure to Elect. If no election as to the Type of a Syndicated
Borrowing is specified, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period is
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specified with respect to any requested Eurodollar Borrowing, then the Interest
Period shall be one month.
SECTION 2.04. Swingline Loans.
(a) Agreement to Make Swingline Loans. Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $7,500,000
or (ii) the total Revolving Credit Exposures exceeding the lesser of the total
Commitments and the Borrowing Base then in effect; provided that the Swingline
Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.
(b) Notice of Swingline Loans by the Borrower. To request a Swingline Loan,
the Borrower shall notify the Swingline Lender of such request by telephone
(confirmed by telecopy of a Request for Loan to the Swingline Lender with an
information copy to the Administrative Agent), not later than 12:00 noon, New
York City time, on the day of a proposed Swingline Loan. Each such notice shall
be irrevocable and shall specify the requested date (which shall be a Business
Day) and the amount of the requested Swingline Loan. The Swingline Lender shall
make such Swingline Loan available to the Borrower by wire transfer to a
Concentration Account designated by the Borrower (or, in the case of a Swingline
Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.05(f), by remittance to the Issuing Lender) by 3:00 p.m. New York City
time, on the requested date of such Swingline Loan.
(c) Participation by Lenders in Swingline Loans. The Swingline Lender may
by written notice given to the Administrative Agent not later than 10:00 a.m.,
New York City time, on any Business Day require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding. Such notice to the Administrative Agent shall specify the aggregate
amount of Swingline Loans in which Lenders will participate. Promptly upon
receipt of such notice, the Administrative Agent will give notice thereof to
each Lender, specifying in such notice such Lender's Applicable Percentage of
such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above in this paragraph, to pay to
the Administrative Agent, for the account of the Swingline Lender, such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Lenders. The Administrative Agent shall
notify the Borrower of any participations in any
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Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from the
Borrower (or other party on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Lender, as their interests may
appear. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Borrower of any default in the payment thereof.
Notwithstanding the foregoing, a Lender shall not have any obligation to acquire
a participation in a Swingline Loan pursuant to this paragraph if a Default
shall have occurred and be continuing at the time such Swingline Loan was made
and such Lender shall have notified the Swingline Lender in writing, at least
one Business Day prior to the time such Swingline Loan was made, that such
Default has occurred and that such Lender will not acquire participations in
Swingline Loans made while such Default is continuing.
SECTION 2.05. Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, in
addition to the Loans provided for in Section 2.01, the Borrower may request
that an Issuing Lender issue, and such Issuing Lender shall issue, at any time
and from time to time during the period commencing on the Effective Date and
ending on the date that is 30 days prior to the Commitment Termination Date,
Letters of Credit for its own account in such form as is acceptable to the
Issuing Lender in its reasonable determination (including, without limitation,
"auto-renewal" letters of credit); provided that the Issuing Lender shall not be
under any obligation to issue any Letter of Credit if the issuance of such
Letter of Credit would violate one or more policies of the Issuing Lender
generally applicable to the issuance of letters of credit. All Letters of Credit
issued hereunder by either Issuing Lender shall be issued for the account of the
Borrower as the named account party thereon, provided that Letters of Credit
may, in addition to showing the Borrower as account party, show any Guarantor as
a favoree under such Letter of Credit. Letters of Credit issued hereunder shall
constitute utilization of the Commitments.
(b) Notice of Issuance, Amendment, Renewal or Extension. To request the
issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by such Issuing Lender) to the Issuing Lender selected by Borrower and
to the Administrative Agent (not later than 11:00 a.m. on the fourth Business
Day preceding the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (d) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If requested
by the Issuing Lender, the Borrower also shall submit a letter of credit
application on the Issuing Lender's standard form in connection with any request
for a Letter of Credit. In the event of any inconsistency between the
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terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Lender relating to any Letter
of Credit, the terms and conditions of this Agreement shall control. Each
Issuing Lender shall promptly notify the Administrative Agent of any Letters of
Credit issued, amended, renewed or extended by it hereunder and shall deliver a
report (in form and substance reasonably acceptable to the Administrative Agent)
on the last Business Day of each month after the Effective Date detailing such
Issuing Lender's letter of credit activity under this Agreement; provided that
if the last Business Day of such month coincides with the end of a Fiscal
Quarter, such report shall be delivered five Business Days prior to the last day
of such Fiscal Quarter, and each Issuing Lender shall promptly provide an update
report to the Administrative Agent of any letter of credit activity under this
Agreement during such five Business Day period.
(c) Limitations on Amounts. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension,
the total Revolving Credit Exposures shall not exceed the lesser of the total
Commitments and the Borrowing Base then in effect.
(d) Expiration Date. Each Letter of Credit shall expire (or provide that
the Issuing Lender shall have the option to refuse to renew such Letter of
Credit) at or prior to the close of business on the earlier of (i) the date
twelve months after the date of the issuance of such Letter of Credit (or, in
the case of any renewal or extension thereof, twelve months after the
then-current expiration date of such Letter of Credit, so long as such renewal
or extension occurs within three months of such then-current expiration date)
and (ii) the date that is five Business Days prior to the Commitment Termination
Date.
(e) Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) by the Issuing Lender, and
without any further action on the part of the Issuing Lender or the Lenders, the
Issuing Lender hereby grants to each Lender, and each Lender hereby acquires
from the Issuing Lender, a participation in such Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments.
In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Lender, such Lender's Applicable Percentage of each
LC Disbursement made by the Issuing Lender promptly upon the request of the
Issuing Lender at any time from the time of such LC Disbursement until such LC
Disbursement is reimbursed by the Borrower or at any time after any
reimbursement payment is required to be refunded to the Borrower for any reason.
Such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Each such payment shall be made in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to
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the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Issuing Lender the amounts so received by it from the
Lenders. Promptly following receipt by the Administrative Agent of any payment
from the Borrower pursuant to the next following paragraph, the Administrative
Agent shall distribute such payment to the Issuing Lender or, to the extent that
the Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Lender, then to such Lenders and the Issuing Lender as their interests
may appear. Any payment made by a Lender pursuant to this paragraph to reimburse
the Issuing Lender for any LC Disbursement shall not constitute a Loan and shall
not relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f) Reimbursement. If the Issuing Lender shall make any LC Disbursement in
respect of a Letter of Credit, then either (x) the Borrower shall directly
reimburse the Issuing Lender in respect of such LC Disbursement by paying to the
Administrative Agent for the account of the Issuing Lender an amount equal to
such LC Disbursement no later than 1:00 p.m., New York City time, on the
Business Day following the day that the LC Disbursement is made (the "Conversion
Date") or (y) if such LC Disbursement is not directly reimbursed prior to the
applicable Conversion Date, then upon the occurrence of the applicable
Conversion Date, the Borrower shall be irrevocably deemed to have requested that
the Lenders make Syndicated ABR Loans in the amount of their respective
Applicable Percentages for the purpose of repaying such LC Disbursement,
provided that if Borrower is not eligible to request a Syndicated ABR Loan, each
Lender shall perform its participation obligations in favor of the Issuing
Lender pursuant to Section 2.05(e) of this Agreement.
(g) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Lender under a Letter of Credit against
presentation of a draft or other document that does not comply strictly with the
terms of such Letter of Credit, and (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Lender, nor
any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
by the Issuing Lender or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Lender; provided that the foregoing
shall not be construed to excuse the Issuing Lender from liability to the
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted
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by applicable law) suffered by the Borrower that are caused by the Issuing
Lender's gross negligence or willful misconduct when determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that:
(i) the Issuing Lender may accept documents that appear on their face
to be in substantial compliance with the terms of a Letter of Credit
without responsibility for further investigation, regardless of any notice
or information to the contrary, and may make payment upon presentation of
documents that appear on their face to be in substantial compliance with
the terms of such Letter of Credit;
(ii) the Issuing Lender shall have the right, in its sole discretion,
to decline to accept such documents and to make such payment if such
documents are not in strict compliance with the terms of such Letter of
Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Issuing Lender when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof
(and the parties hereto hereby waive, to the extent permitted by applicable
law, any standard of care inconsistent with the foregoing).
(h) Disbursement Procedures. The Issuing Lender shall, within a reasonable
time following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Lender
shall promptly after such examination notify the Administrative Agent and the
Borrower by telephone (confirmed by telecopy) of such demand for payment and
whether the Issuing Lender has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing Lender and the
Lenders with respect to any such LC Disbursement.
(i) Interim Interest. If the Issuing Lender shall make any LC Disbursement,
then, unless the Borrower shall reimburse (including through a Borrowing of
Syndicated ABR Loans) such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to Syndicated ABR Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (f) of
this Section, then Section 2.12(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Lender, except that
interest accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Lender shall be for the
account of such Lender to the extent of such payment.
(j) Replacement of the Issuing Lender. The Issuing Lender may be replaced
at any time by written agreement between the Borrower, the Administrative Agent,
the replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Lender. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for account of the replaced
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Issuing Lender pursuant to Section 2.11(b). From and after the effective date of
any such replacement, (i) the successor Issuing Lender shall have all the rights
and obligations of the replaced Issuing Lender under this Agreement with respect
to Letters of Credit to be issued thereafter and (ii) references herein to the
term "Issuing Lender" shall be deemed to refer to such successor or to any
previous Issuing Lender, or to such successor and all previous Issuing Lenders,
as the context shall require. After the replacement of an Issuing Lender
hereunder, the replaced Issuing Lender shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Lender under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.
(k) Cash Collateralization. If either (i) an Event of Default shall occur
and be continuing and the Borrower receives notice from the Administrative Agent
or the Required Lenders (or, if the maturity of the Loans has been accelerated,
Lenders with LC Exposure representing more than 50% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, or (ii) the
Borrower shall be required to provide cover for LC Exposure pursuant to Section
2.10(b), the Borrower shall immediately deposit into the Collateral Account an
amount in cash equal to, in the case of an Event of Default, 105% of the LC
Exposure as of such date plus any accrued and unpaid interest thereon and, in
the case of cover pursuant to Section 2.10(b), the amount required under Section
2.10(b), as the case may be; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in
clause (h) or (i) of Article VIII. Such deposit shall be held by the
Administrative Agent in the Collateral Account as collateral in the first
instance for the LC Exposure under this Agreement and thereafter for the payment
of the other First Lien Secured Obligations.
SECTION 2.06. Funding of Borrowings.
(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
provided that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by promptly
transferring by wire transfer the amounts so received, in like funds, to a
Concentration Account of the Borrower designated by the Borrower in the
applicable Request for Loan; provided that Syndicated ABR Borrowings made to
finance the reimbursement of an LC Disbursement as provided in Section 2.05(f)
shall be remitted by the Administrative Agent to the Issuing Lender.
(b) Presumption by the Administrative Agent. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative
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Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or
(ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If
such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections.
(a) Elections by the Borrower for Syndicated Borrowings. The Loans
constituting each Syndicated Borrowing initially shall be of the Type
specified in the applicable Request for Loan and, in the case of a
Eurodollar Borrowing, shall have the Interest Period specified in such
Request for Loan. Thereafter, the Borrower may elect to convert such
Borrowing to a Borrowing of a different Type or to continue such Borrowing
as a Borrowing of the same Type and, in the case of a Eurodollar Borrowing,
may elect the Interest Period therefor, all as provided in this Section.
The Borrower may elect different options with respect to different portions
of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans constituting such
Borrowing, and the Loans constituting each such portion shall be considered
a separate Borrowing. This Section shall not apply to Swingline Borrowings,
which may not be converted or continued.
(b) Notice of Elections. To make an election pursuant to this Section,
the Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Request for Loan would be required under
Section 2.03 if the Borrower were requesting a Syndicated Borrowing of the
Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Interest Election Request
substantially in the form of Exhibit I and signed by the Borrower.
(c) Content of Interest Election Requests. Each telephonic and written
Interest Election Request shall specify the following information in
compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) of this paragraph shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period" and permitted under Section 2.02(d).
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(d) Notice by the Administrative Agent to the Lenders. Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender's
portion of each resulting Borrowing.
(e) Failure to Elect; Events of Default. If the Borrower fails to
deliver a timely and complete Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period therefor,
then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to a Syndicated ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as
an Event of Default is continuing (i) no outstanding Syndicated Borrowing
may be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to a Syndicated ABR
Borrowing at the end of the Interest Period therefor.
SECTION 2.08. Termination and Reduction of the Commitments.
(a) Scheduled Termination. Unless previously terminated, the Commitments
shall terminate on the Commitment Termination Date.
(b) Voluntary Termination or Reduction. The Borrower may at any time
terminate, or from time to time reduce, the Commitments; provided that (i) each
reduction of the Commitments pursuant to this Section shall be in an amount that
is $1,000,000 or a larger multiple of $1,000,000 (or, if less, the entire
remaining aggregate amount of Commitments) and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Syndicated Loans in accordance with Section 2.10, the total
Revolving Credit Exposures would exceed the total Commitments or, unless the
Borrower is terminating the Commitments in their entirety, the Net Liquidity
would be less than $20,000,000.
(c) Notice of Voluntary Termination or Reduction. The Borrower shall notify
the Administrative Agent of any election to terminate or reduce the Commitments
under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Commitments delivered by the
Borrower may state that such notice is conditioned upon the issuance of
securities or the effectiveness of other credit facilities, in which case such
notice may be revoked by the Borrower (by notice to the Administrative Agent on
or prior to the specified effective date) if such condition is not satisfied.
(d) Effect of Termination or Reduction. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective Commitments. Upon
any reduction of the Commitments pursuant to this Section 2.08 prior to the
first anniversary of the Effective Date, the Borrower shall pay to each Lender a
redeployment fee in an amount equal to 1% of the amount of such reduction
applied to such Lender's Commitment.
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SECTION 2.09. Repayment of Loans; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises to pay the
Loans as follows:
(i) to the Administrative Agent for account of the Lenders the outstanding
principal amount of the Syndicated Loans on the Commitment Termination Date, and
(ii) to the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earlier of (a) the Commitment Termination Date or (b) the
date of demand for repayment by the Swingline Lender of such Swingline Loan;
provided that on each date that a Syndicated Borrowing is made, the Borrower
shall, to the extent of the proceeds of such Syndicated Borrowing, repay all
Swingline Loans then outstanding.
(b) Manner of Payment. Prior to any repayment or prepayment of any
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be paid and shall notify the Swingline Lender or Administrative Agent, as
applicable, by telephone (confirmed by telecopy to the Administrative Agent and
if applicable the Swingline Lender) of such selection in accordance with Section
2.10(c); provided that each repayment of Borrowings shall be applied to repay
any outstanding ABR Borrowings before any other Borrowings. If the Borrower
fails to make a timely selection of the Borrowing or Borrowings to be repaid or
prepaid, such payment shall be applied, first, to pay any outstanding ABR
Borrowings and, second, to other Borrowings in the order of the remaining
duration of their respective Interest Periods (the Borrowing with the shortest
remaining Interest Period to be repaid first). Each payment of a Syndicated
Borrowing shall be applied ratably to the Loans included in such Borrowing.
(c) Maintenance of Records by Lenders. Each Lender shall maintain in
accordance with its usual practice records evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(d) Maintenance of Records by the Administrative Agent. The Administrative
Agent shall maintain records in which it shall record (i) the amount of each
Loan made hereunder, the Class and Type thereof and each Interest Period
therefor, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for account of
the Lenders and each Lender's share thereof.
(e) Effect of Entries. The entries made in the records maintained pursuant
to paragraph (c) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such records or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(f) Promissory Notes. Any Lender may request that Loans made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver
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to such Lender a promissory note payable to such Lender (or, if requested by
such Lender, to such Lender and its registered assigns) and in substantially the
same form as Exhibit K.
SECTION 2.10. Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part,
subject to the requirements of this Section.
(b) Mandatory Prepayments. The Borrower will prepay the Loans and/or
provide cover for LC Exposure as specified in Section 2.05(k) as follows:
(i) Casualty Events. Upon the receipt by the Parent Guarantor or
any of its Included Subsidiaries of the proceeds of insurance,
condemnation award or other compensation in respect of any Casualty
Event affecting any property of the Parent Guarantor or any of its
Subsidiaries, the Borrower shall prepay the Loans and/or provide cover
for LC Exposure as specified in Section 2.05(k) in an aggregate
amount, if any, equal to 100% of the Net Available Proceeds of such
Casualty Event, such prepayment and/or cash cover to be effected in
each case in the manner and to the extent specified in clause (vii) of
this paragraph.
(ii) Equity Issuance. Upon any Equity Issuance, the Borrower
shall prepay the Loans and/or provide cover for LC Exposure as
specified in Section 2.05(k) in an aggregate amount equal to 50% of
the Net Available Proceeds thereof, such prepayment and/or cash cover
to be effected in each case in the manner and to the extent specified
in clause (vii) of this paragraph; provided that, if after giving
effect to such Equity Issuance, the Net Liquidity exceeds $10,000,000,
then (x) the Borrower shall offer to apply an amount equal to 25% of
such Net Available Proceeds under Section 2.10(b) of the Second Lien
Credit Agreement and (y) the amount of such proceeds to be applied as
required by this paragraph (ii) shall be equal to (I) the amount of
such Net Available Proceeds so offered, but not accepted, under the
Second Lien Credit Agreement plus (II) 25% of such Net Available
Proceeds.
(iii) Cash Sweep. On each Business Day on which a Liquidity
Trigger Event shall have occurred and be continuing, the Borrower
shall prepay the principal of the Loans and interest on the amount of
such principal so prepaid to the extent required by Section 2.12(d)
and/or provide cover for LC Exposure as specified in Section 2.05(k)
in an aggregate amount (for both such principal and interest)
necessary to make such payments and provide such cover but not more
than the excess of (x) the amount of the cash balances then on deposit
in the Depositary Account (or, prior to the Depositary Effective Date,
the Concentration Accounts) at 1:30 p.m., New York City time, on such
Business Day over (y) the amount of interest and fees payable by the
Borrower under the Second Lien Credit Agreement on the next day
scheduled for payment of such interest and fees, such prepayment
and/or cash cover to be effected in each case in the manner and to the
extent specified in clause (vii) of this paragraph.
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(iv) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Required Lenders pursuant to
Section 7.03 to any Disposition not otherwise permitted hereunder, in
the event that the Net Available Proceeds of any Disposition (herein,
the "Current Disposition"), and of all such prior Dispositions (in
each case including, for avoidance of doubt, Properties Designated for
Sale) as to which a prepayment has not yet been made under this
paragraph, shall exceed $1,000,000 then, on the same day the Current
Disposition occurs, the Borrower will deliver to the Lenders a
statement, certified by a Financial Officer of the Borrower, in form
and detail satisfactory to the Administrative Agent, of the amount of
the Net Available Proceeds of the Current Disposition and of all such
prior Dispositions and will prepay the Loans and/or provide cover for
LC Exposure as specified in Section 2.05(k) in an aggregate amount
equal to 100% of the Net Available Proceeds of the Current Disposition
and such prior Dispositions, such prepayment and/or cash cover to be
effected in each case in the manner and to the extent specified in
clause (vii) of this paragraph.
(v) Debt Incurrence. Upon any Debt Incurrence, the Borrower shall
prepay the Loans and/or provide cover for LC Exposure as specified in
Section 2.05(k) in an aggregate amount equal to 100% of the Net
Available Proceeds thereof, such prepayment and/or cash cover to be
effected in each case in the manner and to the extent specified in
clause (vii) of this paragraph.
(vi) Borrowing Base. On each Business Day on which the aggregate
Revolving Credit Exposure of all Lenders exceeds the Borrowing Base,
the Borrower shall prepay the principal of the Loans and/or provide
cover for LC Exposure as specified in Section 2.05(k) in an aggregate
amount equal to the amount of such excess, such prepayment and/or cash
cover to be effected in each case in the manner and to the extent
specified in clause (vii) of this paragraph.
(vii) Application. Prepayments and/or cash cover pursuant to this
paragraph shall be applied, first, to prepay Swingline Loans, second,
to prepay Syndicated Loans and, third, to provide cover for LC
Exposure as specified in Section 2.05(k). Notwithstanding the
foregoing provisions of this Section 2.10: (x) provided that no Event
of Default has occurred and is continuing and, if after giving effect
to the Asset Prepayment Event, the Net Liquidity exceeds $25,000,000,
the Borrower may, at its option, offer to apply all or any portion of
the Net Available Proceeds from such Asset Prepayment Event under
Section 2.10(b) of the Second Lien Credit Agreement, in which case the
amount of such Net Available Proceeds to be applied as required by
this Section 2.10 shall be equal to the amount of such Net Available
Proceeds not so offered (or offered, but not accepted) and (y) after
the prepayment in full of the Loans under this Section 2.10, the
Borrower may, at its option, offer to apply all or any portion of the
remaining Net Available Proceeds from the relevant event under Section
2.10(b) of the Second Lien Credit Agreement, in which case the amount
of such Net Available Proceeds to be applied to provide cover for LC
Exposure as required by this Section 2.10 shall be equal to the amount
of such Net Available Proceeds not so offered (or offered, but not
accepted). It is acknowledged and agreed that the Commitments are not
required to be reduced by reason of any event requiring a prepayment
under this Section 2.10.
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(c) Notices, Etc. The Borrower shall notify the Administrative Agent
(and, in the case of prepayment of a Swingline Loan, the Swingline Lender)
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the
case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of prepayment, (ii)
in the case of prepayment of a Syndicated ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of
prepayment or (iii) in the case of prepayment of a Swingline Loan, not
later than 12:00 noon, New York City time, on the date of prepayment;
provided that notice of a prepayment pursuant to Section 2.10(b)(iii) shall
be delivered substantially simultaneously with such prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and, in
the case of a mandatory prepayment, a reasonably detailed calculation of
the amount of such prepayment; provided that, if a notice of prepayment is
given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.08, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.08. Promptly following receipt of any such notice relating to a
Syndicated Borrowing, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in
an amount that would be permitted in the case of a Borrowing of the same
Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Syndicated
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12 and shall be made in the manner specified
in Section 2.09(b).
SECTION 2.11. Fees.
(a) Commitment Fee. The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a commitment fee, which shall accrue at a rate
per annum equal to 1/2 of 1% on the average daily unused amount of the
Commitment of such Lender during the period from and including the date hereof
to but excluding the earlier of the date such Commitment terminates and the
Commitment Termination Date. Accrued commitment fees shall be payable on each
Quarterly Date and on the earlier of the date the Commitments terminate and the
Commitment Termination Date. All commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees, the Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Syndicated Loans and LC Exposure of such Lender (and
the Swingline Exposure of such Lender shall be disregarded for such purpose).
(b) Letter of Credit Fees. The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at a rate
per annum equal to the Applicable Margin applicable to interest on Eurodollar
Loans on the average daily amount of such Lender's LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date on
which such Lender's Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Lender a fronting fee,
which shall accrue at the rate or rates per annum separately agreed upon between
the Borrower and the Issuing Lender on the
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average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Lender's standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees accrued through but
excluding each Quarterly Date shall be payable on such Quarterly Date; provided
that all such fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing
Lender pursuant to this paragraph shall be payable within 10 days after demand.
All participation fees and fronting fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) Administrative Agent and Collateral Agent Fees. The Borrower agrees to
pay to the Administrative Agent and the Collateral Agent, for their own
accounts, fees payable in the amounts and at the times separately agreed upon
between the Borrower and each of the Collateral Agent or the Administrative
Agent.
(d) Payment of Fees. All fees payable hereunder shall be paid on the dates
due, in immediately available funds, to the Administrative Agent (or to the
Issuing Lender, in the case of fees payable to it) for distribution, in the case
of commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.12. Interest.
(a) ABR Loans. The Loans constituting each ABR Borrowing (including each
Swingline Loan) shall bear interest at a rate per annum equal to the Alternate
Base Rate plus the Applicable Margin.
(b) Eurodollar Loans. The Loans constituting each Eurodollar Borrowing
shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period for such Borrowing plus the Applicable Margin.
(c) Default Interest. Notwithstanding the foregoing, if all or a portion of
(i) the principal amount of any Loan, (ii) any interest payable thereon or (iii)
any fee or other amount payable by any Obligor hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum which is, in the case of overdue
principal or interest, the rate that would otherwise be applicable to such Loan
plus 2% or, in the case of overdue fees or other amounts, the Alternate Base
Rate plus Applicable Margin for ABR Loans plus 2%, in each case from the date of
such non-payment until such amount is paid in full (both before and after
judgment). In addition, upon the occurrence and during the continuance of any
other Event of Default (other than an Event of Default described in the
immediately preceding sentence), the Required Lenders may elect that the
principal of and, to the extent permitted by law, due, owing and unpaid interest
on the Loans and any other amounts owing or accruing hereunder or under the
other Loan Documents shall bear interest, in each case from the date the
Required Lenders shall so elect until such Event of
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Default has been cured or waived by the Required Lenders (provided that accrual
at the rate provided for hereunder shall commence automatically upon the
occurrence of an Event of Default of the type described in clauses (l) or (m) of
Article VIII), after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of or interest on any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.
(d) Payment of Interest. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of a Syndicated ABR Loan or
Swingline Loan prior to the Commitment Termination Date), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Borrowing prior to the end of the Interest Period therefor, accrued
interest on such Borrowing shall be payable on the effective date of such
conversion.
(e) Computation. All interest hereunder shall be computed on the basis of a
year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR
Loans based on the Prime Rate), and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of
the Interest Period for any Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
respective Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Syndicated Borrowing to, or
the continuation of any Syndicated Borrowing as, a Eurodollar Borrowing shall be
ineffective and such Syndicated Borrowing (unless prepaid) shall be continued
as, or converted to, a Syndicated ABR Borrowing and (ii) if any Request for Loan
requests a Eurodollar Borrowing, such Borrowing shall be made as a Syndicated
ABR Borrowing.
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SECTION 2.14. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for account of, or
credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or the Issuing Lender; or
(ii) impose on any Lender or the Issuing Lender or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Lender of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Lender, as the case may be, for such additional costs incurred or reduction
suffered.
(b) Capital Requirements. If any Lender or the Issuing Lender determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's or the Issuing Lender's
capital or on the capital of such Lender's or the Issuing Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Lender, to a level below that which such Lender or
the Issuing Lender or such Lender's or the Issuing Lender's holding company
could have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Lender's policies and the policies of such Lender's or
the Issuing Lender's holding company with respect to capital adequacy), then
from time to time the Borrower will pay to such Lender or the Issuing Lender, as
the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Lender or such Lender's or the Issuing Lender's holding
company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender or the Issuing
Lender setting forth the amount or amounts necessary to compensate such Lender
or the Issuing Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender or
the Issuing Lender, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or the
Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender's or the Issuing Lender's right to demand
such compensation; provided that the Borrower shall not be required to
compensate a Lender or the Issuing Lender pursuant to this Section for
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any increased costs or reductions incurred more than six months prior to the
date that such Lender or the Issuing Lender, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender's or the Issuing Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
(e) Application to Taxes. Notwithstanding anything to the contrary in this
Section 2.14, this Section 2.14 shall not apply to Taxes which shall be governed
exclusively by Section 2.16 hereof.
SECTION 2.15. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period therefor (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of an Interest
Period therefor, (c) the failure to borrow, convert, continue or prepay any
Syndicated Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice is permitted to be revocable under Section
2.10(c) and is revoked in accordance herewith), or (d) the assignment as a
result of a request by the Borrower pursuant to Section 2.18(b) of any
Eurodollar Loan other than on the last day of an Interest Period therefor, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, the
loss to any Lender attributable to any such event may, at the option of such
Lender, be deemed to include an amount determined by such Lender to be equal to
the excess, if any, of (i) the amount of interest that such Lender would pay for
a deposit equal to the principal amount of such Loan for the period from the
date of such payment, conversion, failure or assignment to the last day of the
then current Interest Period for such Loan (or, in the case of a failure to
borrow, convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the Adjusted LIBO Rate for such Interest
Period, over (ii) the amount of interest that such Lender would earn on such
principal amount for such period if such Lender were to invest such principal
amount for such period at the interest rate that would be bid by such Lender (or
an Affiliate of such Lender) for Dollar deposits from other banks in the
eurodollar market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.16. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Lender (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the
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Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) Payment of Other Taxes by the Borrower. In addition, the Borrower shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, the Collateral Agent, each Lender and the Issuing Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent, the Collateral Agent, such Lender or the
Issuing Lender, as the case may be, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority; provided that if the Borrower reasonably
believes that such Taxes or Other Taxes were not correctly or legally asserted,
the Administrative Agent, the Collateral Agent or such Lender, as the case may
be, will use reasonable efforts to cooperate with the Borrower (at the
Borrower's expense) to obtain a refund of such Taxes or Other Taxes (in cash or
as an offset against another existing tax liability), the benefit of which
refund shall be returned to the Borrower to the extent provided in Section
2.16(f). The Administrative Agent, the Collateral Agent or any Lender agree to
promptly notify the Borrower of any claim under this Section 2.16(c) of which
they become aware; provided that any failure to provide such notice shall in no
way impair the rights of such party to demand and receive compensation under
this Section 2.16(c). A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Lender, or by the Collateral Agent, shall be conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of any withholding tax that is an Indemnified Tax, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate. In addition, each Foreign
Lender agrees that from time to time, when a lapse in time or change in
circumstances renders the previous documentation obsolete or inaccurate in any
material respect, it will, to the extent legally able to do so (but only upon
request of the Borrower, unless such event relates solely to changed
circumstances relating solely to such Foreign Lender), deliver to the Borrower
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be continued to be made without withholding or
at a reduced rate, or notify the Borrower and the Administrative Agent that it
is unable to do so.
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(f) Treatment of Certain Refunds. If the Administrative Agent or a Lender
(or an assignee) determines in its sole discretion that it has actually received
the benefit of a refund (in cash or as an offset against another existing tax
liability) of any Indemnified Taxes or Other Taxes as to which it has been
indemnified by Borrower or with respect to which Borrower has paid additional
amounts pursuant to this Section 2.16, it shall pay over such refund to Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by Borrower under this Section 2.16 with respect to the Indemnified Taxes or the
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender (or assignee) as determined in the
Administrative Agent's or such Lender's reasonable discretion and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, however, that Borrower upon the request
of the Administrative Agent or such Lender (or assignee), agrees to repay the
amount paid over to Borrower to the Administrative Agent or such Lender (or
assignee) in the event that the Administrative Agent or such Lender (or
assignee) is required to repay such refund to such Governmental Authority.
Nothing contained in this Section 2.16(f) shall require the Administrative Agent
or any Lender (or assignee) to make available its tax returns to Borrower or any
other person. For avoidance of doubt, nothing in this Section 2.16(f) is
intended to, nor shall anything in this Section 2.16(f) be construed to, require
the Administrative Agent or any Lender to alter or supplement any policy,
procedure or system with respect to the identification, tracking and allocation
of tax refunds and neither the Administrative Agent nor any Lender shall have
any liability to the Borrower or any Guarantor by reason of its
non-identification of any such refund.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Payments by the Obligors. Each Obligor shall make each payment required
to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or under Section 2.14, 2.15 or 2.16, or
otherwise) or under any other Loan Document (except to the extent otherwise
provided therein) prior to 12:00 noon, New York City time, on the date when due,
in immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, except as otherwise expressly provided in the
relevant Loan Document and except payments to be made directly to the Issuing
Lender as expressly provided herein and payments pursuant to Sections 2.14,
2.15, 2.16 and 10.03, which shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder or under any other Loan Document (except to the extent otherwise
provided therein) shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time insufficient funds
are received by and available to the Administrative Agent to pay fully all
amounts of principal,
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unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, to pay interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, to pay principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i)
each Syndicated Borrowing shall be made from the Lenders, each payment of
commitment fee under Section 2.11 shall be made for account of the Lenders, and
each termination or reduction of the amount of the Commitments under Section
2.08 shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (ii) each Syndicated
Borrowing shall be allocated pro rata among the Lenders according to the amounts
of their respective Commitments (in the case of the making of Syndicated Loans)
or their respective Loans that are to be included in such Borrowing (in the case
of conversions and continuations of Loans); (iii) each payment or prepayment of
principal of Syndicated Loans by the Borrower shall be made for account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
the Syndicated Loans held by them; and (iv) each payment of interest on
Syndicated Loans by the Borrower shall be made for account of the Lenders pro
rata in accordance with the amounts of interest on such Loans then due and
payable to the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Syndicated Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Syndicated Loans and
participations in LC Disbursements and Swingline Loans and accrued interest
thereon then due than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Syndicated Loans and participations in LC Disbursements
and Swingline Loans of other Lenders to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Syndicated Loans and participations in LC Disbursements and Swingline Loans;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by any Obligor pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Parent Guarantor or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). Each Obligor
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Obligor rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Obligor in the amount of such participation.
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(e) Presumptions of Payment. Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for account of the Lenders or the Issuing Lender
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the Issuing Lender, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Lender, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.
(f) Certain Deductions by the Administrative Agent. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.04(c),
2.05(e), 2.06(b) or 2.17(e), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for account of such Lender to
satisfy such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.14, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.16, 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 Section 2.14 or 2.16, as the case may be, in the future and (ii) 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) Replacement of Lenders. If any Lender requests compensation under
Section 2.14, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for account of any Lender pursuant to
Section 2.16, or if any Lender defaults in its obligation to fund Loans
hereunder, or any Lender does not consent to a proposed amendment, modification
or waiver of this Agreement or any other Loan Document requested by the Borrower
which requires the consent of all of the Lenders to become effective (and which
is approved by at least the Required Lenders), the Borrower may, at its sole
expense and effort (including with respect to the processing and recordation fee
referred to in Section 10.04(b)), upon notice to such Lender and the
Administrative Agent, require such Lender to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all of its interests, rights and obligations under this
Agreement to an assignee reasonably acceptable to the Borrower, such acceptance
not to be unreasonably withheld or delayed, that shall assume such assigned
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
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written consent of the Administrative Agent (and, if a Commitment is being
assigned, the Issuing Lender and the Swingline Lender), which consent or
consents, as the case may be, shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder (including any amounts payable under Section 2.14 and Section
2.16), plus a prepayment premium, if any, that would otherwise have been payable
to such Lender assuming such Lender would have been voluntarily prepaid in full
by the Borrower pursuant to Section 2.08(d), from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts), (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.14 or payments required
to be made pursuant to Section 2.16, such assignment will result in a reduction
in such compensation or payments and (iv) such assignment shall not conflict
with any law, rule or regulation or order of any court or other Governmental
Authority having jurisdiction. In connection with any such replacement, if the
replaced Lender does not execute and deliver to the Administrative Agent a duly
completed Assignment and Acceptance reflecting such replacement within five
Business Days of the date on which the replacement Lender executes and delivers
such Assignment and Acceptance to the replaced Lender, then such replaced Lender
shall be deemed to have executed and delivered such Assignment and Acceptance. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee. The Guarantors hereby jointly and severally
guarantee to each Lender, the Administrative Agent, the Collateral Agent and
their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest on the Loans made by the Lenders to the Borrower and all other
amounts from time to time owing to the Lenders, the Administrative Agent or the
Collateral Agent by the Borrower under this Agreement and by any Obligor under
any of the other Loan Documents, and all obligations of any Obligor to the
Administrative Agent, the Arranger or any Lender (or any Affiliate of the
Administrative Agent, the Arranger or any Lender) in respect of any Hedging
Agreement, in each case strictly in accordance with the terms thereof (such
obligations being herein collectively called the "Guaranteed Obligations"). The
Guarantors hereby further jointly and severally agree that if the Borrower shall
fail to pay in full when due (whether at stated maturity, by acceleration or
otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay
the same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.
For purposes hereof, it is understood that any Guaranteed Obligations to
any Person arising under an agreement entered into at a time such Person (or an
Affiliate thereof) is party hereto as the Administrative Agent or a Lender shall
continue to constitute Guaranteed
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Obligations, notwithstanding that such Person (or its Affiliate) has ceased to
be the Administrative Agent or a Lender, as the case may be, party hereto (by
assigning all of its Commitment, Revolving Credit Exposure and other interests
herein, or otherwise) at the time a claim is to be made in respect of such
Guaranteed Obligations.
SECTION 3.02. Obligations Unconditional. The obligations of the Guarantors
under Section 3.01 are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of the Borrower under this Agreement or any other agreement
or instrument referred to herein, or any substitution, release or exchange of
any other guarantee of or security for any of the Guaranteed Obligations, and,
to the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section that the obligations of the Guarantors hereunder shall be absolute and
unconditional, joint and several, under any and all circumstances. Without
limiting the generality of the foregoing, it is agreed that the occurrence of
any one or more of the following shall not alter or impair the liability of the
Guarantors hereunder, which shall remain absolute and unconditional as described
above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein shall be
done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or any other agreement or instrument referred to herein shall be waived or
any other guarantee of any of the Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or otherwise
dealt with;
(iv) any Lien or security interest granted to, or in favor of, the
Collateral Agent, the Administrative Agent or any Lender or Lenders as
security for any of the Guaranteed Obligations shall fail to be perfected;
or
(v) any amount of Guaranteed Obligations shall not be allowed as a
post-petition claim in any case of which the Borrower or any of its
properties is the subject under any bankruptcy, insolvency, receivership or
similar law.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent, the Collateral Agent or any Lender exhaust any right, power or remedy or
proceed against the Borrower under this Agreement or any other agreement or
instrument referred to herein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
SECTION 3.03. Reinstatement. The obligations of the Guarantors under this
Article shall be automatically reinstated if and to the extent that for any
reason any payment
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by or on behalf of the Borrower in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Guarantors jointly and severally agree that
they will indemnify the Administrative Agent, the Collateral Agent and each
Lender on demand for all reasonable costs and expenses (including fees of
counsel) incurred by the Administrative Agent, the Collateral Agent or such
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
SECTION 3.04. Subrogation. The Guarantors hereby jointly and severally
agree that until the payment and satisfaction in full of all Guaranteed
Obligations and the expiration and termination of the Commitments of the Lenders
under this Agreement they shall not exercise any right or remedy arising by
reason of any performance by them of their guarantee in Section 3.01, whether by
subrogation or otherwise, against the Borrower or any other guarantor of any of
the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
SECTION 3.05. Remedies. The Guarantors jointly and severally agree that, as
between the Guarantors and the Lenders, the obligations of the Borrower under
this Agreement may be declared to be forthwith due and payable as provided in
Article VIII (and shall be deemed to have become automatically due and payable
in the circumstances provided in Article VIII) for purposes of Section 3.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Guarantors for purposes of Section 3.01.
SECTION 3.06. Instrument for the Payment of Money. Each Guarantor hereby
acknowledges that the guarantee in this Article constitutes an instrument for
the payment of money, and consents and agrees that any Lender, the Collateral
Agent or the Administrative Agent, at its sole option, in the event of a dispute
by such Guarantor in the payment of any moneys due hereunder, shall have the
right to proceed by motion for summary judgment in lieu of complaint pursuant to
N.Y. Civ. Prac. L&R ss. 3213.
SECTION 3.07. Continuing Guarantee. The guarantee in this Article is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
SECTION 3.08. Rights of Contribution. The Subsidiary Guarantors hereby
agree, as between themselves, that if any Subsidiary Guarantor shall become an
Excess Funding Guarantor (as defined below) by reason of the payment by such
Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
next sentence), pay to such Excess Funding Guarantor an amount equal to such
Subsidiary Guarantor's Pro Rata Share (as defined below and determined, for this
purpose, without reference to the properties, debts and liabilities of such
Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of
such Guaranteed Obligations.
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The payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor
under this Section shall be subordinate and subject in right of payment to the
prior payment in full of the obligations of such Subsidiary Guarantor under the
other provisions of this Article and such Excess Funding Guarantor shall not
exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations.
For purposes of this Section, (i) "Excess Funding Guarantor" means, in
respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an
amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii)
"Excess Payment" means, in respect of any Guaranteed Obligations, the amount
paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such
Guaranteed Obligations and (iii) "Pro Rata Share" means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate present fair saleable value of all properties of such Subsidiary
Guarantor (excluding any shares of stock of any other Subsidiary Guarantor)
exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of such Subsidiary Guarantor hereunder and any
obligations of any other Subsidiary Guarantor that have been Guaranteed by such
Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable
value of all properties of all of the Subsidiary Guarantors exceeds the amount
of all the debts and liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities, but excluding the obligations of the Borrower and
the Subsidiary Guarantors hereunder and under the other Loan Documents) of all
of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary
Guarantor that is a party hereto on the Effective Date, as of the Effective
Date, and (B) with respect to any other Subsidiary Guarantor, as of the date
such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
SECTION 3.09. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state or federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 3.01 would otherwise, taking into account the provisions of Section
3.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 3.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Lender, the Administrative Agent, the
Collateral Agent or any other Person, be automatically limited and reduced to
the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.
SECTION 3.10. No Reliance. Each Guarantor represents and warrants that, in
executing and delivering this Agreement, such Guarantor has (a) without reliance
on any Lender or either Agent, or on any information received from any Lender or
either Agent, and based upon such documents and information it deems
appropriate, made an independent investigation of the transactions contemplated
hereby and the Borrower, the Borrower's business, assets, operations, prospects
and condition, financial or otherwise, and any circumstances which may bear upon
such transactions, the Borrower or the obligations and risks undertaken herein
with respect to the Guaranteed Obligations; (b) adequate means to obtain from
the Borrower on a continuing basis information concerning the Borrower; (c) full
and complete
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access to the Loan Documents and any other documents executed in connection with
the Loan Documents; and (d) not relied and will not rely upon any
representations or warranties of any Lender, the Arranger or either Agent or any
acts heretofore or hereafter taken by any Lender, the Arranger or either Agent
(including but not limited to any review by any Lender, the Arranger or either
Agent of the affairs of the Borrower).
SECTION 3.11. Release of Subsidiary Guarantors. The obligations of a
Subsidiary Guarantor under this Agreement and the other Loan Documents shall be
automatically released upon any sale or disposition of such Subsidiary Guarantor
(whether by way of sale of capital stock or assets, lease, transfer, merger,
consolidation or otherwise) to any Person other than the Parent Guarantor or a
Subsidiary in a transaction that complies with Section 7.03 and, upon request of
the Borrower, the Administrative Agent shall, at the Borrower's expense, execute
and deliver such instruments and releases as may be reasonably necessary in
order to evidence the release of such Subsidiary Guarantor under the Loan
Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and the Parent Guarantor represents and warrants to
the Lenders that:
SECTION 4.01. Organization; Powers. Each of the Parent Guarantor and its
Included Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite
corporate or other organizational power and authority to carry on its business
as now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 4.02. Authorization; Enforceability. The Transactions are within
each Obligor's power and authority and have been duly authorized by all
necessary action. This Agreement has been duly executed and delivered by each
Obligor and constitutes, and each of the other Loan Documents to which it is a
party when executed and delivered by such Obligor will constitute, a legal,
valid and binding obligation of such Obligor, enforceable against each Obligor
in accordance with its terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 4.03. Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except for (i) such as have been
obtained or made and are in full force and effect and (ii) filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(b) will not violate any applicable law or regulation or the
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charter, by-laws or other organizational documents of the Parent Guarantor or
any of its Subsidiaries or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon the Parent Guarantor or any of its Subsidiaries or
assets, or give rise to a right thereunder to require any payment to be made by
any such Person, and (d) except for the Liens created pursuant to the Loan
Documents and the Second Lien Loan Documents, will not result in the creation or
imposition of any Lien on any asset of the Parent Guarantor or any of its
Subsidiaries, except, in each case, as could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.04. Financial Condition; No Material Adverse Change.
(a) Financial Condition. The Projections are a good faith presentation of
the information contained therein and based on reasonable assumptions and
estimates.
(b) No Material Adverse Change. Since January 30, 2005, except for: (i) the
Disclosed Matters; (ii) the results or outcome of the investigation by the
Special Committee of the Board of Directors of the Parent Guarantor ongoing on
the date hereof concerning certain matters described in the Parent Guarantor's
Form 8-K dated October 8, 2004; and (iii) any action, suit, proceeding, inquiry
or investigation or any action of a Governmental Authority concerning the
matters referred to in clause (ii) or the historical financial statements of the
Parent Guarantor and its Consolidated Subsidiaries, there has been no material
adverse change in the business, assets, operations, prospects or condition,
financial or otherwise, of the Parent Guarantor and its Included Subsidiaries,
taken as a whole.
SECTION 4.05. Properties.
(a) Property Generally. Each of the Parent Guarantor and its Included
Subsidiaries has good title to, or valid leasehold interests in (other than with
respect to the leased properties located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, NC),
all its real and personal property material to its business, subject only to
Liens permitted by Section 7.02 and except for minor defects in title that do
not interfere with its ability to conduct its business as currently conducted or
to utilize such properties for their intended purposes.
(b) Intellectual Property. Each of the Parent Guarantor and its Included
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business,
and the use thereof by the Parent Guarantor and its Included Subsidiaries does
not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.06. Litigation.
(a) Actions, Suits and Proceedings. There are no actions, suits,
investigations or proceedings by or before any arbitrator or Governmental
Authority now pending against or, to the knowledge of the Borrower or the Parent
Guarantor, threatened against or affecting the Parent Guarantor or any of its
Included Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
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expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than any present or future actions, suits, investigations,
proceedings or governmental actions encompassed by the exceptions set forth in
Section 4.04(b)) or (ii) that involve this Agreement or the Transactions.
(b) Disclosed Matters. Since the date of this Agreement, there has been no
change in the status of the Disclosed Matters (other than those identified with
an "*" on Schedule IV) that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.
SECTION 4.07. Environmental Matters.
(a) Neither the Parent Guarantor nor any of its Subsidiaries (i) currently
has any Environmental Liability which would reasonably be expected to have a
Material Adverse Effect, (ii) has received notice that it is in non-compliance
with or has a liability or potential liability under any Environmental Laws
(except for any non-compliance or other Environmental Liabilities which would
not reasonably be expected to have a Material Adverse Effect) or (iii) or has
been designated as a potentially responsible party under CERCLA or under any
state statute similar to CERCLA, and none of the Real Property or assets of the
Parent Guarantor or any of its Subsidiaries located in the United States and
owned, leased or operated by the Parent Guarantor or any of its Subsidiaries has
been identified on the current or, to the Borrower's and the Parent Guarantor's
actual knowledge any proposed, (x) National Priorities List under 40 C.F.R.
Section 300, (y) CERCLIS list or (z) any similar list arising from a state
statute similar to CERCLA.
(b) Except as set forth in Schedule V, no Hazardous Materials have been
arranged for disposal, generated, stored, disposed of, managed, Released or
otherwise handled at, or shipped or transported to or from any of the Real
Property of the Parent Guarantor or any of its Subsidiaries or are otherwise
present at, on, in or under any of the Real Property, or to the best of the
Borrower's and the Parent Guarantor's actual knowledge, at or from any adjacent
site or facility in a manner that would reasonably be expected to affect the
Real Property of the Parent Guarantor or any of its Subsidiaries, except for (i)
Hazardous Materials, such as cleaning chemicals, pesticides and other materials
used, produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, managed, or otherwise handled in the ordinary course of business in
compliance with Environmental Laws or (ii) any such disposal, generation,
storage, arrangement for disposal, disposal, management, Release, handling,
shipment, transport or presence that would not reasonably be expected to have a
Material Adverse Effect.
(c) Each of the Parent Guarantor and its Subsidiaries (i) are in compliance
with all applicable Environmental Laws in connection with the operation of its
respective facilities, businesses and other assets and properties, and there are
no unresolved notices of violation or non-compliance with respect thereto, and
(ii) have obtained and maintain in full force and effect all material permits,
licenses, certificates and approvals required for their respective facilities
and operations under any Environmental Laws and comply with all such permits,
licenses, certificates and approvals, except in the case of (i) and (ii) above
for any non-compliance or failure to obtain or maintain in full force and effect
that would not reasonably be expected to have a Material Adverse Effect.
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SECTION 4.08. Compliance with Laws and Agreements. Except as to matters
covered by Section 4.07 (which shall be governed by such Section), each of the
Parent Guarantor and its Included Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except (i) with respect to periodic filings required to be made by
the Parent Guarantor with the Securities and Exchange Commission on or prior to
the Restatement Date, (ii) with respect to the Disclosed Matters and (iii) where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 4.09. Investment and Holding Company Status. Neither the Parent
Guarantor nor any of its Included Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 4.10. Taxes. Each of the Parent Guarantor and its Included
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which such Person has set aside on its books
adequate reserves to the extent required by GAAP or (b) to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 4.11. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan by more than an amount that would have a
Material Adverse Effect, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such underfunded Plans by an amount that would
have a Material Adverse Effect.
SECTION 4.12. Disclosure. As of the Effective Date, the Borrower and the
Parent Guarantor have disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which it or any of its respective Included
Subsidiaries are subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. As of the Effective Date, the written reports, financial
statements, certificates and other written information furnished by or on behalf
of the Obligors to the Lenders on or prior to the Effective Date in connection
with the negotiation of this Agreement and the other Loan Documents or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished on or prior to the Effective Date), when taken as a whole, do not
contain any material misstatement of fact or omit to state any material fact
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necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that (a) with respect to
projected financial information, the Borrower and the Parent Guarantor represent
only that such information was prepared in good faith and based upon assumptions
believed to be reasonable at the time, (b) the Borrower and the Parent Guarantor
make no representation or warranty, as to any financial information pertaining
to dates or periods falling prior to its Fiscal Year ending 2006 and (c) the
Borrower and the Parent Guarantor make no representation or warranty as to any
financial information for any period of Fiscal Year 2006 delivered prior to the
Restatement Date except as set forth in Section 6.01.
SECTION 4.13. Use of Credit. Neither the Parent Guarantor nor any of its
Included Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying Margin Stock, and no
part of the proceeds of any extension of credit hereunder will be used to buy or
carry any Margin Stock.
SECTION 4.14. Material Agreements and Liens.
(a) Material Agreements. Part A of Schedule II is a complete and correct
list of each credit agreement, loan agreement, indenture, purchase agreement,
guarantee, letter of credit or other arrangement providing for or otherwise
relating to any Indebtedness or any extension of credit (or commitment for any
extension of credit) to, or guarantee by, the Parent Guarantor or any of its
Included Subsidiaries outstanding on the date hereof the aggregate principal or
face amount of which equals or exceeds (or may equal or exceed) $250,000, and
the aggregate principal or face amount outstanding or that may become
outstanding under each such arrangement is correctly described in Part A of
Schedule II.
(b) Liens. Part B of Schedule II is a complete and correct list of each
Lien securing Indebtedness of any Person outstanding on the date hereof the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $100,000, and covering any property of the Parent Guarantor or any of
its Included Subsidiaries and the property covered by each such Lien is
correctly summarized in Part B of Schedule II.
SECTION 4.15. Montana ▇▇▇▇▇. Montana ▇▇▇▇▇ and all of its Subsidiaries are
Inactive Companies.
SECTION 4.16. Subsidiaries and Investments.
(a) Subsidiaries. Set forth in Part A of Schedule VI is a complete and
correct list of all of the Subsidiaries of the Parent Guarantor as of the date
hereof, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in
such Subsidiary and (iii) the nature of the ownership interests held by each
such Person and the percentage of ownership of such Subsidiary represented by
such ownership interests. Except as disclosed in Part A of Schedule VI, (x) the
Parent Guarantor and each of its Subsidiaries owns, free and clear of Liens
(other than Liens created pursuant to the Security Documents or otherwise
permitted pursuant to Section 7.02), and has the unencumbered right to vote, all
outstanding ownership interests in each Person shown to be held by it in Part A
of
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Schedule VI, (y) all of the issued and outstanding capital stock of each such
Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with respect to
such Person.
(b) Investments. Set forth in Part B of Schedule VI is a complete and
correct list of each Investment (other than Investments disclosed in Part A of
Schedule VI and other than Investments of the types referred to in clauses (b),
(c), (d), (e), (f), (g) and (m) of Section 7.05) held by the Parent Guarantor or
any of its Included Subsidiaries in any Person on the date hereof (other than
Investments, the aggregate outstanding amount of which do not exceed $100,000)
and, for each such Investment, (x) the identity of the Person or Persons holding
such Investment and (y) the nature of such Investment. Except as disclosed in
Part B of Schedule VI, each of the Parent Guarantor and its Subsidiaries owns,
free and clear of all Liens (other than Liens created pursuant to the Security
Documents or otherwise permitted pursuant to Section 7.02), all such
Investments.
(c) Restrictions on Included Subsidiaries. Except as disclosed on Schedule
III, none of the Included Subsidiaries of the Parent Guarantor is, on the date
hereof, subject to any indenture, agreement, instrument or other arrangement of
the type described in Section 7.08.
SECTION 4.17. Real Property. Set forth on Schedule VII is a true, correct
and complete list, as of the date hereof, of all of the owned and leased real
property interests held by each Obligor ("Real Property"), indicating in each
case whether the respective property is owned or leased, the identity of the
owner or lessee and the location of the respective property. Except as set forth
on Schedule VII hereto, each Obligor has good, sufficient and legal title to all
of the owned Collateral (as defined in the Security Agreement) (and any other
material properties and assets, if any) indicated on such Schedule as being
owned by it and will have good, sufficient and legal title of all after-acquired
Collateral (as defined in the Security Agreement) (and any other after-acquired
material properties and assets, if any), in each case, free and clear of all
Liens except for the Permitted Encumbrances and minor defects in title that do
not interfere with its ability to conduct its business as currently conducted or
to utilize such properties for its intended purposes. Each Obligor has valid
leasehold interests in the real property and personal property leased by such
Obligor (other than with respect to the leased properties located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, NC), subject to Permitted Encumbrances and minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for its intended purposes.
The Collateral Agent has, as of the Effective Date, a valid, and upon the filing
or other recordation of Uniform Commercial Code financing statements and other
documents delivered by the Obligors to the Collateral Agent on the Effective
Date, perfected Liens on the Collateral, subject only to Permitted Encumbrances
(provided, (x) solely with respect to Copyrights and Patents (as such terms are
defined in the Security Agreement), of and to the extent that such priority and
perfection may be achieved by the filing of Uniform Commercial Code financing
statements and appropriate documents with the United States Copyright Office and
the United States Patent and Trademark Office, (y) solely with respect to real
property, to the extent that such priority and perfection is achieved by
delivering and recording a Mortgage in the appropriate county filing office and
(z) solely with respect to fixtures, to the extent that such fixtures are
affixed to real property covered by a duly recorded Mortgage or duly filed
Uniform Commercial Code fixture filing), securing the payment
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of the First Lien Secured Obligations, and such Liens are entitled to all of the
rights, priorities and benefits afforded by the Uniform Commercial Code or other
applicable law as enacted in any relevant jurisdiction which relates to
perfected Liens. For avoidance of doubt, the proviso contained in the
immediately preceding sentence does not limit any representation or warranty
made in any Mortgage. No Mortgage encumbers any portion of Real Property which
is located in an area that has been identified as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968, except as set forth on Schedule VII.
SECTION 4.18. Solvency. As of the date hereof, after giving effect on a pro
forma basis to the extensions of credit hereunder and to the other transactions
contemplated hereby, (i) the aggregate value of all properties of the Parent
Guarantor and its Included Subsidiaries at their present fair saleable value
(i.e., the amount that may be realized within a reasonable time, considered to
be six to eighteen months, either through collection or sale at the regular
market value, conceiving the latter as the amount that could be obtained for the
properties in question within such period by a capable and diligent
businessperson from an interested buyer who is willing to purchase under
ordinary selling conditions), exceeds the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities) of the Parent Guarantor and its Included Subsidiaries, (ii) the
Parent Guarantor and its Included Subsidiaries will not, on a consolidated
basis, have unreasonably small capital with which to conduct their business
operations as heretofore conducted and (iii) the Parent Guarantor and its
Included Subsidiaries will have, on a consolidated basis, sufficient cash flow
to enable them to pay their debts as they mature.
SECTION 4.19. Labor Matters. Except as set forth on Schedule VIII, (a)
neither the Parent Guarantor nor any of its Included Subsidiaries is subject to
any collective bargaining agreement, (b) no petition for certification or union
election is pending with respect to the employees of the Parent Guarantor or any
of its Included Subsidiaries and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of the
Parent Guarantor or any of its Included Subsidiaries and (c) there are no
strikes, slowdowns or work stoppages pending or, to the knowledge of the Parent
Guarantor or any of its Included Subsidiaries, threatened between the Parent
Guarantor or any of its Included Subsidiaries and its respective employees,
other than employee grievances arising in the ordinary course of business which
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. Except as set forth on Schedule VIII,
neither the Parent Guarantor nor any of its Included Subsidiaries is subject to
an employment contract.
ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date. The obligations of the Lenders to make Loans
and of the Issuing Lender to issue Letters of Credit hereunder shall not become
effective until the date on which the Administrative Agent shall have received
each of the following documents, each of which shall be satisfactory to the
Administrative Agent (and to the extent specified below, to each Lender) in form
and substance (or such condition shall have been waived in accordance with
Section 10.02):
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(a) Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page to this Agreement)
that such party has signed a counterpart of this Agreement.
(b) Opinions of Counsel to the Obligors. Favorable written opinions
(addressed to the Agents and the Lenders and dated the Effective Date) of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special New York counsel to the Obligors;
▇▇▇▇▇ ▇▇▇▇▇▇, general counsel of the Borrower; ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP,
special North Carolina and intellectual property counsel to the Obligors;
▇▇▇▇▇▇ Law Offices, P.C., special Illinois counsel to the Obligors; ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A., special North Carolina real estate counsel
to the Obligors; ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ PLLC, special Kentucky counsel to the
Obligors; and ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, special Texas counsel to the Obligors.
(c) Corporate Documents. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Obligor, the
authorization of the Transactions and any other legal matters relating to
the Obligors, this Agreement or the Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.
(d) Officer's Certificate. A certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of the
Borrower, (i) confirming compliance with the conditions set forth in the
lettered clauses of the first sentence of Section 5.02 and (ii) as to the
matters set forth in Section 4.18.
(e) Borrowing Base Certificate. A Borrowing Base Certificate for the
period ending on the last day of the Borrower's January fiscal month.
(f) Security Agreement. The Security Agreement, duly executed and
delivered by each Obligor and the Collateral Agent and the certificates
identified under the name of such Obligor in Annex 3 thereto, in each case
accompanied by undated stock powers executed in blank. In addition, each
Obligor shall have taken such other action (including delivering to the
Collateral Agent, for filing, appropriately completed copies of Uniform
Commercial Code financing statements and taking any necessary action in
connection therewith) as the Collateral Agent shall have reasonably
requested in order to perfect the security interests created pursuant to
the Security Agreement.
(g) Control Agreements. The Concentration Account Control Agreements,
each duly executed and delivered by the Collateral Agent and the applicable
Concentration Account Bank with respect to a Concentration Account.
(h) Mortgages and Title Insurance. The following documents, each of
which shall be executed (and, where appropriate, acknowledged) by Persons
satisfactory to the Administrative Agent:
(i) one or more Mortgages covering the Principal Facilities, in
each case duly executed and delivered by the Borrower in recordable
form (in such number of copies as the Administrative Agent shall have
reasonably requested);
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(ii) one or more mortgagee policies of title insurance on forms
of and issued by one or more title companies reasonably satisfactory
to the Administrative Agent (the "Title Companies"), insuring the
validity and priority of the Liens created under the Mortgages
covering the Principal Facilities for and in amounts equal to at least
one hundred fifteen percent (115%) of the appraised value of each of
the Principal Facilities, subject only to such exceptions as are
reasonably satisfactory to the Administrative Agent and, to the extent
necessary under applicable law, for filing in the appropriate county
land offices, Uniform Commercial Code financing statements covering
fixtures, in each case appropriately completed and duly executed;
(iii) as-built surveys of recent date of each of the Principal
Facilities, other than those Principal Facilities located at ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇, showing such matters as may be required by the
Administrative Agent, which surveys shall be in form and content
reasonably acceptable to the Administrative Agent, shall be certified
to the Administrative Agent, the Collateral Agent and the Title
Companies, and shall have been prepared by a registered surveyor
acceptable to the Administrative Agent; and
(iv) certified copies of permanent and unconditional certificates
of occupancy (other than for the Principal Facility located at ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, NC) permitting the fully functioning
operation and occupancy of such Principal Facility and of such other
permits necessary for the use and operation of such Principal Facility
issued by the respective governmental authorities having jurisdiction
over such Principal Facility.
In addition, the Borrower shall have paid to the Title Companies all
expenses and premiums of the Title Companies in connection with the
issuance of such policies and in addition shall have paid to the Title
Companies an amount equal to the recording and stamp taxes payable in
connection with recording the Mortgages and Uniform Commercial Code
fixture filings, if applicable, in the appropriate county land offices.
(i) Insurance. Certificates of insurance evidencing the existence of all
insurance required to be maintained by the Parent Guarantor pursuant to Section
6.05(a) and the designation of the Shared Lien Collateral Agent as the loss
payee or additional named insured thereunder. In addition, the Borrower shall
have delivered a certificate of the president, a vice-president, or a Financial
Officer of the Borrower stating that the insurance described in the certificates
referred to in the preceding sentence is in full force and effect and that all
premiums then due and payable thereon have been paid.
(j) Repayment of Existing Indebtedness. Evidence that the principal of and
interest on, and all other amounts owing in respect of, the Indebtedness
(including any contingent or other amounts payable in respect of letters of
credit) outstanding under the Existing Credit Agreement shall have been (or
shall be simultaneously) paid in full, that any commitments to extend credit
under the Existing Credit Agreement shall have been canceled or terminated and
that all Guarantees in respect of, and all Liens securing, any
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such Indebtedness shall have been released (or arrangements for such release
satisfactory to the Required Lenders shall have been made).
(k) Intercreditor Agreement. The Intercreditor Agreement, duly executed and
delivered by each Obligor, the Administrative Agent, the Collateral Agent, the
paying agent under the Second Lien Loan Documents and the collateral agent under
the Second Lien Loan Documents.
(l) Second Lien Loan Documents. Evidence that the Second Lien Loan
Documents shall have been executed and delivered by all of the Persons stated to
be party thereto in their respective forms then most recently delivered to the
Administrative Agent, and evidence that the "Effective Date" (as defined in the
Second Lien Credit Agreement) will occur on the Effective Date.
(m) Due Diligence. Reports from (i) Keen & Shotenstein with respect to the
components of the Collateral, and (ii) an environmental site assessment
(commonly known as a "Phase I") of the Principal Facility located at ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ performed by a qualified environmental assessment firm
reasonably acceptable to the Administrative Agent.
(n) Certain Regulatory Matters. All documentation requested by either Agent
or any Lender under applicable "know your customer" and anti-money laundering
rules and regulations, including without limitation under the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001).
(o) Lien Results. The Administrative Agent shall have received the results
of a recent lien search in each relevant jurisdiction with respect to the
Obligors, and such search shall reveal no Liens on any of the assets of any
Obligor except for Liens permitted by Section 7.02 or Liens to be discharged on
or prior to the Effective Date.
(p) Other Documents. Such other documents as the Administrative Agent or
any Lender or special New York counsel to CSFB may reasonably request.
The obligation of each Lender to make its initial extension of credit
hereunder is also subject to the payment by the Borrower of (i) such fees as the
Borrower shall have agreed to pay to any Lender or the Administrative Agent in
connection herewith, and (ii) the reasonable fees and expenses of Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP ("MTHM"), special New York counsel to CSFB, in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Loan Documents, the extensions of credit hereunder and
otherwise in connection with the Transactions (to the extent that statements for
such fees and expenses have been delivered to the Borrower). Borrower agrees
that any prior writings with respect to the fees and expenses of MTHM that are
the subject of this paragraph are superseded by the Borrower's Obligation under
this paragraph.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Lender to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or
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waived pursuant to Section 10.02) on or prior to 3:00 p.m., New York City time,
on April 1, 2005 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time). SECTION 5.02. Each Credit
Event. The obligation of each Lender to make any Loan, and of the Issuing Lender
to issue, amend, renew or extend any Letter of Credit, is additionally subject
to the satisfaction of the following conditions:
(a) the representations and warranties of the Borrower and the Parent
Guarantor set forth in this Agreement, and of each Obligor in each of the
other Loan Documents to which it is a party, shall be true and correct in
all material respects on and as of the date of such Loan or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (unless any such representation or warranty expressly relates to
an earlier date, in which case such representation or warranty shall be
true and correct in all material respects as of such earlier date);
(b) at the time of and immediately after giving effect to such Loan or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing;
(c) the total Revolving Credit Exposures shall not exceed the
Borrowing Base reflected on the most recent Borrowing Base Certificate
delivered pursuant to Section 5.01(e) or 6.01(f), as applicable;
(d) Net Liquidity shall be at least $10,000,000; and
(e) for each borrowing of a Loan, Borrower shall have delivered a
completed and signed Request for Loan and for each issuance of a Letter of
Credit, Borrower shall have provided the information required by Section
2.05(b).
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in the preceding
sentence.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of the Borrower and the Parent
Guarantor covenants and agrees with the Lenders that:
SECTION 6.01. Financial Statements and Other Information. The Parent
Guarantor will furnish to the Administrative Agent for distribution to each
Lender:
(a) within 90 days after the end of each Fiscal Year (or, in the case
of the 2005 Fiscal Year, within 90 days after the Restatement Date), the
audited consolidated balance
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sheets and related statements of operations, stockholders' equity and cash
flows of the Parent Guarantor and its Consolidated Subsidiaries as of the
end of and for such year, setting forth in each case in comparative form
the figures for the previous Fiscal Year (setting forth in a footnote or in
a financial schedule thereto consolidating balance sheets and related
statements of operations and cash flows for the Parent Guarantor, the
Borrower, Freedom Rings, LLC, the other Consolidated Subsidiaries that are
Guarantors and the Consolidated Subsidiaries that are not Guarantors;
provided that if the separate listing of Freedom Rings, LLC is not
acceptable to PricewaterhouseCoopers LLP (or other independent public
accountants of recognized national standing of the Borrower), then Freedom
Rings, LLC will be included with the other Consolidated Subsidiaries that
are Guarantors), all reported on by PricewaterhouseCoopers LLP or other
independent public accountants of recognized national standing (without a
"going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect
that each one of such consolidated financial statements present fairly in
all material respects the financial condition and results of operations of
the Parent Guarantor and its Consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year:
(i) with respect to each such Fiscal Quarter ending prior to the
Restatement Date, the Modified Financial Statements as of the end of
and for such Fiscal Quarter and the then elapsed portion of the Fiscal
Year, setting forth in each case in comparative form the figures for
the corresponding date, period or periods of the Projections, all
certified by a Financial Officer of the Parent Guarantor as being a
good faith presentation of the information contained therein and based
on reasonable assumptions and estimates; and
(ii) with respect to each such Fiscal Quarter ending after the
Restatement Date, the consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the
Parent Guarantor and its Consolidated Subsidiaries as of the end of
and for such Fiscal Quarter and the then elapsed portion of the Fiscal
Year (setting forth in a footnote or in a financial schedule thereto
consolidating balance sheets and related statements of operations and
cash flows in the same presentation as for the information presented
pursuant to Section 5.01(a)), setting forth in each case in
comparative form the figures for (or, in the case of the balance
sheet, as of the end of) the corresponding period or periods of the
previous Fiscal Year, all certified by a Financial Officer of the
Parent Guarantor as presenting fairly in all material respects the
financial condition and results of operations of the Parent Guarantor
and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
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(c) within 30 days after the end of each of the first two fiscal
months of each Fiscal Quarter (provided that in the case of February 2005
only, within 45 days after the end of such fiscal month):
(i) with respect to each such fiscal month ending prior to the
Restatement Date, the Modified Financial Statements as of the end of
and for such fiscal month and the then elapsed portion of the Fiscal
Quarter, setting forth in each case in comparative form the figures
for the corresponding date, period or periods of the Projections, all
certified by a Financial Officer of the Parent Guarantor as being a
good faith presentation of the information contained therein and based
on reasonable assumptions and estimates; and
(ii) with respect to each such fiscal month ending after the
Restatement Date, the consolidated balance sheet and related
statements of operations and cash flows of the Parent Guarantor and
its Consolidated Subsidiaries as of the end of and for such fiscal
month and the then elapsed portion of the Fiscal Quarter (setting
forth in a footnote or in a financial schedule thereto consolidating
balance sheets and related statements of operations and cash flows in
the same presentation as for the information presented pursuant to
Section 5.01(a)), all certified by a Financial Officer of the Parent
Guarantor as presenting fairly in all material respects the financial
condition and results of operations of the Parent Guarantor and its
Consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal quarterly and year-end
audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Financial Officer of
the Parent Guarantor (i) certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with
Section 7.09 and such portions of Sections 7.01, 7.02, 7.03 and 7.05
requiring compliance with certain specified limits, and (iii) stating
whether any material change in GAAP used in preparing such financial
statements or in the application thereof has occurred since the date of the
most recently delivered audited financial statements pursuant to Section
6.01(a) and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under
clause (a) of this Section, a certificate of the accounting firm that
reported on such financial statements stating whether it obtained knowledge
during the course of its examination of such financial statements of any
Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(f) as soon as available and in any event within 30 days after the end
of each fiscal month with respect to the first two fiscal months of each
Fiscal Quarter (provided that in the case of February 2005, within 45 days
after the end of such fiscal month) and
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within 45 days after the end of the third month of each Fiscal Quarter, a
Borrowing Base Certificate as at the last day of such fiscal month;
(g) if requested by the Collateral Agent, up to two times in each
Fiscal Year at the cost and expense of the Borrower, a report of an
independent financial firm selected by the Collateral Agent (which may be,
or be affiliated with, one of the Lenders) with respect to the calculation
of Consolidated EBITDA, which report shall indicate that, based upon a
review by such firm of the relevant books and records of the Borrower
containing the information regarding Consolidated EBITDA that is set forth
in the Borrowing Base Certificate delivered by the Borrower as at the end
of the most recently ended fiscal month, such Consolidated EBITDA has been
calculated in all material respects pursuant to the requirements of this
Agreement;
(h) not later than the first Business Day following the Friday of each
week falling on or before June 24, 2005, and on the first Business day
following each Friday thereafter on which a Liquidity Trigger Event has
occurred and is continuing, a 13-week rolling cash flow projection
(beginning with the second Monday preceding such Friday), included
therewith, (i) notice of any variance between actual cash receipts and
disbursements and such aforesaid projections for such month previously
delivered and (ii) a narrative detailing the reasons for and causes of such
variance, all of the foregoing to be in form and substance reasonably
satisfactory to the Administrative Agent;
(i) within 60 days after the commencement of each Fiscal Year
commencing after the Effective Date, the annual operating plan for the
Financial Test Group, including an annual budget for the Financial Test
Group, forecasts of the income statement, the balance sheet and an
operating profit and cash flow statement for the immediately succeeding
year;
(j) as soon as available and in any event 90 days after the end of
each fiscal year of each Majority-Owned Joint Venture that ends after the
Effective Date, a consolidated balance sheet for such Majority-Owned Joint
Venture and its consolidated subsidiaries as of the end of such fiscal year
and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
reported on by PricewaterhouseCoopers LLP or other independent public
accountants of recognized national standing to the effect that such
consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the such
Majority-Owned Joint Venture and its consolidated subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(k) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Parent Guarantor or any of its Subsidiaries with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all
of the functions of the Securities and Exchange Commission, or with any
national securities exchange;
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(l) concurrently with the dispatch or receipt of the same to or from
Second Lien Lenders or any of their agents under the Second Lien Credit
Agreement, copies of all communications (other than requests for extensions
of credit or notices of prepayment) dispatched to or received from any
Second Lien Lender or any agent therefor under or in connection with the
Second Lien Credit Agreement;
(m) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Parent Guarantor or any of its Included Subsidiaries, or compliance with
the terms of this Agreement and the other Loan Documents, as the
Administrative Agent or any Lender (through the Administrative Agent) may
reasonably request; and
(n) concurrently with the dispatch to the administrative agent, paying
agent or collateral agent under the Second Lien Credit Agreement of each
report relating to the status of Covered Property Value required to be
delivered pursuant to Section 6.01 of the Second Lien Credit Agreement, a
copy of each such report.
Information required to be delivered pursuant to Sections 6.01(a), 6.01(b)
and 6.01(k) above shall be deemed to have been delivered on the date on which
the Parent Guarantor provides notice to the Administrative Agent that such
information has been posted on the Parent Guarantor's website on the internet or
at another website identified in such notice and accessible by the
Administrative Agent and the Lenders without charge; provided that (i) such
notice may be included in the certificate delivered pursuant to Section 6.01(d)
and (ii) the Parent Guarantor shall deliver, or cause to be delivered, paper
copies of the information referred to in Sections 6.01(a), 6.01(b) and 6.01(k)
above to the Administrative Agent upon any request for such delivery.
SECTION 6.02. Notices of Material Events. The Borrower (for itself and on
behalf of the Parent Guarantor) will furnish to the Administrative Agent and
each Lender written notice of the following:
(a) promptly after obtaining knowledge of any Default, the occurrence
of such Default;
(b) within ten (10) Business Days after discovery by Borrower, the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Parent
Guarantor or any of its Subsidiaries that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) within ten (10) Business Days after discovery by Borrower, the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(d) within ten (10) Business Days after discovery by Borrower, the
assertion of any Environmental Claim by any Person against, or with respect
to the activities of, the Parent Guarantor or any of its Subsidiaries and
any alleged violation of or non-compliance with any Environmental Laws or
any permits, licenses or authorizations,
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other than any Environmental Claim or alleged violation that, if adversely
determined, would not (either individually or in the aggregate) have a
Material Adverse Effect;
(e) within ten (10) Business Days after discovery by Borrower, any
other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect; and
(f) promptly after obtaining knowledge that the Net Liquidity is on
any Business Day less than $20,000,000, such shortfall.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower or the Parent
Guarantor setting forth the details of the event or development requiring such
notice and any action taken or proposed to be taken by the Borrower or the
Parent Guarantor, as the case may be, with respect thereto.
SECTION 6.03. Existence; Conduct of Business. The Parent Guarantor will,
and, subject to Section 7.03, will cause each of its Included Subsidiaries to,
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.03.
SECTION 6.04. Payment of Obligations. The Parent Guarantor will, and will
cause each of its Included Subsidiaries to, pay its obligations, including tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Parent Guarantor or such Included Subsidiary has set aside on its books
adequate reserves with respect thereto if required by and in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 6.05. Maintenance of Properties; Insurance. (a) Except to the
extent that such obligations are express obligations of any landlord under a
lease, the Parent Guarantor will, and will cause each of its Included
Subsidiaries to, (i) keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear and
Casualty Events excepted, and (ii) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
(b) Compromise, Adjustment or Settlement. The Administrative Agent shall be
entitled at its option to participate in any compromise, adjustment or
settlement in connection with any claims for loss, damage or destruction under
any policy or policies of insurance, in excess of $2,000,000, and if the
Administrative Agent so shall elect to participate in such compromise,
adjustment or settlement, the Parent Guarantor shall, and shall cause each of
its Included Subsidiaries to, within five Business Days after request therefor
reimburse the Administrative Agent for all out-of-pocket expenses (including
reasonable attorneys' fees and
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disbursements) incurred by the Administrative Agent in connection with such
participation. Neither the Parent Guarantor nor any of its Included Subsidiaries
shall make any compromise, adjustment or settlement in connection with any such
claim, in respect of which the Administrative Agent elected to participate,
without the approval of the Administrative Agent, which will not be unreasonably
withheld, delayed or conditioned.
SECTION 6.06. Books and Records; Inspection Rights. The Parent Guarantor
will, and will cause each of its Included Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The Parent
Guarantor will, and will cause each of its Included Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender (at such
Lender's sole expense except during the continuance of an Event of Default),
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.
SECTION 6.07. Compliance with Laws. (a) The Parent Guarantor will, and will
cause each of its Included Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority (including Environmental
Laws) applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
(b) Notification of Notices and Orders. The Borrower shall notify the
Administrative Agent and the Collateral Agent promptly of any material notice,
order, claim or demand that such party receives from any Governmental Authority
or any other Person with respect to the Borrower's compliance with or liability
under any laws or regulations (including Environmental Laws) applicable to the
Real Property and promptly take any and all actions to challenge such notice,
order, claim or demand in accordance with accepted practices and such other
actions reasonably necessary to bring its operations at such Real Property into
compliance with such laws or regulations, other than where the failure to comply
with or the liability under such laws or regulations could not reasonably be
expected to cause or result in a Material Adverse Effect. Material notice,
order, claim or demand from any Governmental Authority pursuant to an
Environmental Law means any such item that could reasonably be expected to
result in fines or penalties, exclusive of interest and costs, of $100,000 or
more.
(c) Right to Cure Non-Compliance with Environmental Laws. After the
occurrence and during the continuance of any Event of Default with respect to a
breach of Section 4.07 or this Section 6.07, the Administrative Agent or the
Collateral Agent, at its election and in its sole discretion may, without
obligation to do so, and upon reasonable notice to the Borrower (except in an
emergency), may cure any failure on the part of the Borrower to comply with
Environmental Laws or respond to any Environmental Liability to the extent
required under any Environmental Laws.
Any partial exercise by the Administrative Agent or the Collateral Agent of the
remedies hereinafter set forth, or any partial undertaking on the part of the
Administrative Agent or the Collateral Agent to cure the Borrower's failure to
comply with any Environmental Law, shall not
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obligate the Administrative Agent or the Collateral Agent to complete the
actions taken or require the Administrative Agent or the Collateral Agent to
expend further sums to cure the Borrower's noncompliance; nor shall the exercise
of any such remedies operate to place upon the Administrative Agent or the
Collateral Agent any responsibility for the operation, control, care, management
or repair of the Real Property, nor will the Borrower or the Parent Guarantor
assert that any such actions make the Administrative Agent or Collateral Agent
the "operator" of such Real Property under CERCLA or any other Environmental
Laws. Any amount paid or costs incurred by the Administrative Agent or the
Collateral Agent as a result of the exercise by the Administrative Agent or the
Collateral Agent of any of the rights hereinabove set forth, together with
interest thereon at the default rate specified herein, shall be immediately due
and payable by the Borrower to the Administrative Agent or the Collateral Agent,
as the case may be, and until paid shall be added to and become a part of the
Obligations; and the Administrative Agent or the Collateral Agent, by making any
such payment or incurring any such costs, shall be subrogated to any rights of
the Borrower to seek reimbursement from any third parties, including, without
limitation, a predecessor-in-interest to the Borrower's title who may be a
"responsible party" or otherwise liable under any Environmental Law.
(d) Environmental Assessment. If after the occurrence and during the
continuance of any Event of Default with respect to a breach of Section 4.07 or
this Section 6.07, the Administrative Agent or the Collateral Agent desires that
an environmental assessment with respect to the Real Properties that are at
issue in the Event of Default be prepared, the Borrower agrees to supply such an
assessment by an environmental consultant selected by the Borrower and
reasonably satisfactory to the Administrative Agent and the Collateral Agent, in
form and detail reasonably satisfactory to the Administrative Agent and the
Collateral Agent (including, where appropriate, test borings of the ground and
chemical analyses of air, water and waste discharges), identifying alternatives
and associated costs to address the subject matter of the Event of Default to
the extent required under applicable Environmental Laws.
(e) Indemnity. The Borrower shall indemnify and hold the Administrative
Agent, the Collateral Agent, any Issuing Lender and each Lender harmless from
and against any and all losses, liabilities, claims, damages or expenses
(including any reasonable attorney or expert fees and any Lien filed against the
Real Property in favor of any governmental entity, but excluding any loss,
liability, claim, damage or expense to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified) to the
extent arising under any Environmental Law as the result of the operations of
Borrower (or any predecessor-in-interest to the Borrower) at the Real Property,
or the condition of the Real Property, or any presence, Release or threatened
Release of any Hazardous Materials at or from the Real Property (excluding any
such Release or threatened Release that shall occur during any period when the
Administrative Agent, the Collateral Agent, any Issuing Lender or any of the
Lenders shall be in possession of the Real Property following the exercise by
the Administrative Agent or the Collateral Agent of any of its rights and
remedies hereunder, but including any such Release or threatened Release
occurring during such period that is a continuation of conditions previously in
existence, or of practices employed by the Borrower, at the Real Property).
SECTION 6.08. Use of Proceeds and Letters of Credit. The proceeds of the
Loans will be used for working capital and other general corporate purposes,
including without limitation to pay fees, costs and other transaction expenses
incurred in connection with
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the financings contemplated by the Loan Documents and the Second Lien Loan
Documents. No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations U and X. Letters of Credit will be issued
only to support payment obligations incurred for general corporate purposes of
the Borrower and its Included Subsidiaries.
SECTION 6.09. Hedging Agreements. The Borrower will within 90 days of the
Effective Date enter into, and thereafter maintain in full force and effect, one
or more Hedging Agreements with one or more of the Lenders, the Arranger or
Affiliates of any Lender or the Arranger (and/or with a bank or other financial
institution having capital, surplus and undivided profits of at least
$500,000,000), that effectively enables the Borrower (in a manner reasonably
satisfactory to the Administrative Agent) to protect itself against three-month
London interbank offered rates exceeding a rate per annum reasonably acceptable
to the Administrative Agent as to a notional principal amount at least equal to
50%, but not more than 66?%, of the aggregate principal amount of term loans
from time to time outstanding under the Second Lien Credit Agreement, for a
period of at least three years measured from the Effective Date. It shall not be
a default of this Section if, following entry into Hedging Agreements that
comply with this Section when entered into, the notional principal amount of
Hedging Agreements later exceeds 66 ?% of outstanding principal of such term
loans by reason of a prepayment of the principal of such loans.
SECTION 6.10. Certain Obligations Respecting Subsidiaries; Further
Assurances.
(a) Subsidiary Guarantors. The Parent Guarantor will take such action,
and will cause each of its Included Subsidiaries to take such action, from
time to time as shall be necessary to ensure that each Domestic Subsidiary
(other than a Domestic Subsidiary that, at the time of determination, is a
Prohibited Subsidiary) is a "Subsidiary Guarantor" hereunder. Without
limiting the generality of the foregoing, in the event that the Borrower or
any of its Included Subsidiaries shall hereafter form or acquire any Person
that shall constitute a Domestic Subsidiary (other than a Domestic
Subsidiary that, at the time of determination, is a Prohibited Subsidiary)
of the Borrower, the Parent Guarantor and its Included Subsidiaries will
cause such Person to
(i) become a "Subsidiary Guarantor" hereunder, and a "Securing
Party" under the Security Agreement pursuant to a Guarantee Assumption
Agreement,
(ii) cause such Subsidiary to take such action (including
delivering such shares of stock, delivering such Uniform Commercial
Code financing statements and executing and delivering mortgages or
deeds of trust covering the real property and fixtures owned or leased
by such Subsidiary) as shall be necessary to, subject to the
thresholds set forth in clause (c) below with respect to Real Property
and subject to the applicable exceptions in the Security Agreement,
create and perfect valid and enforceable first priority Liens on
substantially all of the property of such new Subsidiary (other than
(x) voting stock of any Foreign Subsidiary to the extent that all
voting stock of such Foreign Subsidiary subject to such Lien would
exceed 65% of the issued and outstanding voting stock of such Foreign
Subsidiary and (y) without limitation of Section 6.15, equity
interests in any
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Joint Venture to the extent the pledge of such equity interests under
the Security Agreement is prohibited by its organizational documents,
joint venture agreement, operating agreement or an agreement governing
its Indebtedness) as collateral security for the obligations of such
new Subsidiary hereunder and
(iii) deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents with respect to such
Subsidiary Guarantor as is consistent with those delivered by each
Obligor pursuant to Section 5.01 on the Effective Date or as the
Administrative Agent shall have reasonably requested.
(b) Ownership of Subsidiaries. The Parent Guarantor will, and will
cause each of its Included Subsidiaries to, take such action from time to
time as shall be necessary to ensure that the Parent Guarantor and each of
its Included Subsidiaries at all times owns (subject only to the Lien of
the Security Agreement) the same percentage of the issued and outstanding
shares of each class of stock of each of its respective Wholly Owned
Subsidiaries as is owned on the date hereof. In the event that any
additional shares of stock shall be issued by any Subsidiary to any Obligor
(other than (x) voting stock of any Foreign Subsidiary to the extent that
all voting stock of such Foreign Subsidiary subject to the Lien of the
Security Agreement would exceed 65% of the issued and outstanding voting
stock of such Foreign Subsidiary and (y) without limitation of Section
6.15, equity interests in any Joint Venture to the extent the pledge of
such equity interests under the Security Agreement is prohibited by its
organizational documents, joint venture agreement, operating agreement or
an agreement governing its Indebtedness), such Obligor agrees forthwith to
deliver to the Collateral Agent in accordance with and subject to the terms
of the Security Agreement the certificates, if any, evidencing such shares
of stock, accompanied by undated stock powers executed in blank and to take
such other action as the Collateral Agent shall request to perfect the
security interest created therein pursuant to the Security Agreement.
Notwithstanding the foregoing or any other provision herein to the
contrary, the Parent Guarantor shall have no Subsidiaries other than the
Borrower and Subsidiaries of the Borrower. Notwithstanding the foregoing,
nothing set forth herein shall preclude Borrower or any Included Subsidiary
from disposing of 100% of its equity interest in any Subsidiary in
compliance with the requirements of Section 7.03 of this Agreement,
provided that following such sale Borrower or such Included Subsidiary
shall not have any further Guarantee liability in respect of such former
Subsidiary.
(c) Further Assurances. The Parent Guarantor will, and will cause each
of its Included Subsidiaries to, take such action from time to time as
shall reasonably be requested by the Administrative Agent to effectuate the
purposes and objectives of this Agreement. Without limiting the generality
of the foregoing, the Parent Guarantor will, and will cause each other
Obligor to, take such action from time to time (including filing
appropriate Uniform Commercial Code financing statements and executing and
delivering such assignments, security agreements, account control
agreements and other instruments) as shall be reasonably requested by the
Collateral Agent to create, in favor of the Collateral Agent for the
benefit of the Lenders (and any Affiliate of any Lender or of the Arranger
that is a party to any Hedging Agreement entered into with the Borrower)
and the Administrative Agent, perfected security interests and Liens in
substantially all of the property of such Obligor (other than Excluded Real
Property) as collateral security for its obligations hereunder; provided
that any such security interest or Lien shall be subject to the relevant
requirements of the Security Documents.
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SECTION 6.11. Ownership of the Borrower. The Parent Guarantor will at all
times cause the Borrower to be its Wholly Owned Subsidiary.
SECTION 6.12. Collection of Accounts and Payments; Creation of Depositary
Account.
(a) Subject to Section 6.12(b), the Borrower will, at its own cost and
expense, cause all payments received by any Obligor from any source, whether in
the form of cash, checks, notes, drafts, bills of exchange, money orders, credit
card payments, debit card payments or otherwise (referred to herein as
"Payments"), (i) to be deposited within one Business Day in the form received
(but with any endorsements of any Obligor necessary for deposit or collection)
in one or more bank accounts maintained by the Borrower and (ii) to be
transferred each Business Day from the accounts referred to in clause (i) to any
Concentration Account. If any Obligor or any other Person acting for or in
concert with any Obligor shall receive any Payments, such Obligor shall hold
such Payment in trust for Collateral Agent, and, immediately upon receipt
thereof, the Borrower shall or shall cause such Obligor or other Person to remit
the same or cause the same to be remitted, in kind, to any Concentration Account
or after the same is established, the Depositary Account referred to below.
(b) The Borrower will, within 60 days after April 1, 2005, open at Wachovia
Bank, National Association or another bank acceptable to the Administrative
Agent a new deposit account (the "Depositary Account"), which Depositary Account
shall be made subject to a Concentration Account Control Agreement at all times
after the same is opened. Within 60 days after April 1, 2005 (i) the Borrower
will cause all Payments that would otherwise be transferred to a Concentration
Account pursuant to clause (a) above to be transferred instead into the
Depositary Account and (ii) such Payments shall cease to be deposited into a
Concentration Account except upon transfer from the Depositary Account (the date
of such event, the "Depositary Effective Date"). If no Liquidity Trigger Event
has occurred and is continuing, all Payments deposited into the Depositary
Account may be transferred by the Borrower to any of the Borrower's
Concentration Accounts in the Borrower's discretion. On any Business Day during
the continuance of a Liquidity Trigger Event, the Borrower shall not transfer
any Payments from the Depositary Account to a Concentration Account until after
it has fully complied with its obligations under Section 2.10(b)(iii). To the
extent that Borrower is eligible to request Loans during the continuance of a
Liquidity Trigger Event, the proceeds of such Loans will be deposited into a
Concentration Account designated by the Borrower.
SECTION 6.13. Ratings. The Borrower will obtain not later than 90 days
after the Restatement Date, and will maintain at all times thereafter, ratings
for the Loans from S&P and from ▇▇▇▇▇'▇.
SECTION 6.14. Separateness. The Parent Guarantor will, and will cause each
of its Included Subsidiaries to, conduct its management, business and affairs,
and maintain its books and records, in such manner so that each such Person
shall be treated as a corporate entity distinct from each other such Person.
SECTION 6.15. Pledge of Equity Interests in Consolidated Joint Ventures.
From and after the date hereof the Parent Guarantor will, and will cause each
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of its Included Subsidiaries to, use commercially reasonable efforts to obtain
all necessary consents to enable the equity interests in the Consolidated Joint
Ventures owned by the Obligors to be pledged to the Collateral Agent pursuant to
the Security Agreement.
SECTION 6.16. Post Closing Appraisals. Within forty-five (45) days after
the Effective Date, Borrower shall deliver to Administrative Agent Acceptable
Appraisals with respect to all Real Property (other than that real property
located at Lakeland Drive/E. Metro Connector, Jackson, MS and other than the
Excluded Real Property) owned by Borrower or any Guarantor as of the date of
such Acceptable Appraisals, it being understood that Acceptable Appraisals with
respect to the Principal Facilities have been delivered to the Administrative
Agent prior to the date hereof.
SECTION 6.17. Post Closing Mortgages.
(a) Post Closing Mortgages on Owned Real Property. The Covered Property
Value shall be equal to Ninety Percent (90%) of the sum of the Median Desktop
Analysis Values for all Real Property (except Real Property that the Collateral
Agent declines a Mortgage on and the Real Properties located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ and 1200 ▇▇▇▇ Abbot Drive, Cayce, SC) listed in the Desktop
Analysis on or before 120 days after April 1, 2005. Thereafter the Borrower
shall use commercially reasonable efforts to cause the Covered Property Value to
be equal to the sum of the Median Desktop Analysis Values for all Real Property
(except Real Property that the Collateral Agent declines a Mortgage on and the
Real Properties located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ and 1200 ▇▇▇▇ Abbot
Drive, Cayce, SC) listed in the Desktop Analysis. The Collateral Agent agrees,
with respect to each Real Property set forth on Schedule XI, that, upon request
of the applicable Tenant, it shall enter into a Subordination, Non-Disturbance
and Attornment Agreement, substantially in the form of Exhibit J.
(b) Encumbrance of Property Designated for Sale. The Borrower shall, with
respect to the Property Designated for Sale (including improvements but
excluding the Principal Facilities and the Excluded Real Property) owned by the
Borrower on the Effective Date, not later than 180 days after April 1, 2005 (it
being understood that any Property Designated For Sale that is sold prior to
such time shall not be subject to the requirements of this paragraph) execute
and deliver in favor of the Shared Lien Collateral Agent a Mortgage appropriate
for the jurisdiction in which such respective Real Property is situated,
pursuant to which the Borrower will create a Lien upon such Real Property (and
improvements) in favor of the Shared Lien Collateral Agent for the benefit of
the Lenders (and any Affiliate of any Lender or of the Arranger that is a party
to any Hedging Agreement entered into with the Borrower) and the Administrative
Agent as collateral security for the obligations of the Borrower under this
Agreement and will deliver such certificates of occupancy (or, if it is not the
practice to issue certificates of occupancy in the jurisdiction in which such
Real Property is located, then such other evidence reasonably satisfactory to
the Administrative Agent that the fully functioning operation and occupancy of
such Real Property is permitted), opinions of counsel and title insurance
policies as the Administrative Agent shall reasonably request in connection
therewith (provided that a legal opinion substantially in the form of the legal
opinions addressing certain real estate matters delivered pursuant to Section
5.01(b) on the Effective Date, with such modifications as are necessary for the
relevant jurisdictions, shall be deemed to be satisfactory in form and substance
to the Administrative Agent), including payment for all such title insurance
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policies and recording and stamp taxes payable in connection with recording all
Mortgages and Uniform Commercial Code fixture filings, if applicable, in the
appropriate county land offices.
(c) After Acquired Fee Interests in Real Property. If any Obligor shall
acquire any real property interest, including improvements (but excluding
leasehold interests and improvements thereon and any real property interest
situated on land not owned in fee), after the date hereof that (i) consists of a
retail store or (ii) that is not a retail store and that has a fair market value
of $750,000 or more (or shall make improvements upon any existing real property
interest (excluding leasehold interests and improvements thereon and any real
property interest situated on land not owned in fee and the Excluded Real
Property) resulting in the fair market value of such interest together with such
improvements being equal to $750,000 or more), then the Parent Guarantor will
(or, as applicable, will cause the respective Obligor holding such real property
interest to), subject to the last sentence of this paragraph, within 10 days of
the acquisition of or improvements upon such property interest by such Obligor,
if the Administrative Agent elects to encumber such property as Collateral in
Administrative Agent's sole and absolute discretion, (A) execute and deliver in
favor of the Shared Lien Collateral Agent a Mortgage appropriate for the
jurisdiction in which such respective real property is situated, pursuant to
which such Obligor will create a Lien upon such real property (and improvements)
in favor of the Shared Lien Collateral Agent for the benefit of the Lenders (and
any Affiliate of any Lender or of the Arranger that is a party to any Hedging
Agreement entered into with the Borrower) and the Administrative Agent as
collateral security for the obligations of such Obligor under this Agreement or,
as applicable, under the respective Guarantee Assumption Agreement to which such
Obligor is a party, (B) obtain or deliver a current Phase I (with respect to a
property, a "current Phase I" means a Phase I prepared within three years of the
acquisition of such property) for such property and (C) deliver such
certificates of occupancy (or, if it is not the practice to issue certificates
of occupancy in the jurisdiction in which such real property is located, then
such other evidence reasonably satisfactory to the Administrative Agent that the
fully functioning operation and occupancy of such real property is permitted),
opinions of counsel and title insurance policies as the Administrative Agent
shall reasonably request in connection therewith, including payment for all such
title insurance policies and recording and stamp taxes payable in connection
with recording all Mortgages and Uniform Commercial Code fixture filings, if
applicable, in the appropriate county land offices. The parties hereto agree
that (i) the real property of the Obligors located at or near ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ and the corner of
First Street and Green Street in Winston-Salem, NC shall be treated for all
purposes under the Loan Documents as after acquired or leased real property, as
the case may be, that was acquired or leased, as the case may be, by the
Obligors on the Effective Date and (ii) that with respect to the properties
listed in this sentence only, the Borrower shall comply with the applicable
requirements of this paragraph within 60 days after April 1, 2005.
SECTION 6.18. Post Closing Environmental Surveys. The Borrower shall cause
to be completed and delivered to Administrative Agent not later than thirty (30)
days after April 1, 2005 a Phase I of each of the locations for which a post
closing Phase I is required as indicated on Schedule VII.
SECTION 6.19. Issuance of Subsidiary Stock Certificate. The Borrower shall
cause to be delivered to the Collateral Agent not later than thirty (30) days
after April 1,
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2005 the stock certificate(s) issued by Krispy Kreme International, Ltd. in
favor of Borrower as shareholder constituting 65% of the issued and outstanding
stock of Krispy Kreme International, Ltd. together with (a) an endorsement in
blank and in form acceptable to the Collateral Agent and (b) an officer's
certificate of the Borrower attaching resolutions of the Board of Directors of
Krispy Kreme International, Ltd. (i) acknowledging the terms of the Security
Agreement and the pledge of the shares of Krispy Kreme International, Ltd.
thereunder, (ii) agreeing to register the Collateral Agent as the owner of such
shares in the share register of Krispy Kreme International, Ltd. in the event
that the ownership of such shares are transferred in accordance with the
Security Agreement and (iii) agreeing that such resolutions shall not be amended
and shall remain in full force and effect.
ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, each of the Borrower and the Parent Guarantor covenants
and agrees with the Lenders that:
SECTION 7.01. Indebtedness. The Parent Guarantor will not, nor will it
permit any of its Included Subsidiaries to, create, incur, assume or permit to
exist any Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in or
permitted pursuant to this Agreement to be excluded from Part A of Schedule
II (excluding, however, following the making of the initial Loans
hereunder, the Indebtedness under the Existing Credit Agreement) and
extensions, renewals, refinancings and replacements ("refinancing") of any
such Indebtedness that do not increase the outstanding principal amount
thereof (other than to cover the amount of all accrued and unpaid interest
thereon, plus the stated amount of any premium and other payments required
to be paid in connection with such refinancing and the amount of reasonable
expenses incurred in connection with such refinancing);
(c) Indebtedness under the Second Lien Credit Agreement in an
aggregate amount (including in respect of the undrawn portion of
outstanding letters of credit) not exceeding $150,000,000, including any
refinancing thereof permitted by the Intercreditor Agreement, provided that
in the case of a refinancing, the principal amount of such refinancing may
be increased to the extent necessary to pay accrued interest, prepayment
premiums and transactional expenses associated with such refinancing in an
aggregate amount not to exceed 105% of the principal amount outstanding
under the Second Lien Credit Agreement immediately prior to such
refinancing;
(d) owing by any Obligor to any other Obligor;
(e) Guarantees by any Obligor of Indebtedness of any other Obligor;
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(f) Indebtedness of the Parent Guarantor or any of its Included
Subsidiaries incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition
of any such assets or secured by a Lien on any such assets prior to the
acquisition thereof, and refinancings of any such Indebtedness that do not
increase the outstanding principal amount thereof beyond the amount
necessary to capitalize accrued interest, fees, and transactional expenses
incurred in respect of such refinancings any such Indebtedness; provided
that (i) such Indebtedness is incurred prior to or within 90 days after
such acquisition or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness permitted by this
clause (f) shall not exceed $3,000,000 at any time outstanding;
(g) Guarantees by any Obligor in respect of Indebtedness incurred by
Joint Ventures constituting Investments permitted by Section 7.05(i) and
7.05(k);
(h) Indebtedness under Hedging Agreements permitted by Section
7.05(e);
(i) overdrafts in operating accounts at banks incurred in the ordinary
course of business and in an aggregate amount not exceeding $500,000
outstanding at any time, provided that no such overdraft shall remain
outstanding for more than three Business Days;
(j) bankers acceptances opened in the ordinary course of business for
the importing or exporting of goods in an aggregate amount not exceeding
$500,000 at any time;
(k) unsecured structured settlements relating to Disclosed Matters or
other actions, suits, proceedings or governmental enforcement actions
relating to the historical financial statements of Parent Guarantor and its
Consolidated Subsidiaries under review (as the date hereof) by the Special
Committee of the Board of Directors of the Parent Guarantor; and
(l) other unsecured Indebtedness (other than Guarantees of
Indebtedness incurred by Joint Ventures) in an aggregate principal amount
not exceeding $3,000,000 at any time outstanding.
SECTION 7.02. Liens. The Parent Guarantor will not, nor will it permit any
of its Included Subsidiaries to, create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:
(a) Liens created pursuant to the Security Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Parent Guarantor or any
of its Included Subsidiaries existing on the date hereof and set forth in
or permitted by this Agreement to be excluded from Part B of Schedule II
(excluding, however, following the
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making of the initial Loans hereunder, Liens securing Indebtedness under
the Existing Credit Agreement); provided that (i) no such Lien shall extend
to any other property or asset of the Parent Guarantor or any of its
Included Subsidiaries and (ii) any such Lien shall secure only those
obligations which it secures on the date hereof and refinancings thereof
that do not increase the outstanding principal amount thereof, except as
permitted by Section 7.01(b);
(d) Liens securing the obligations of the Obligors with respect to
Indebtedness incurred pursuant to Section 7.01(c) to the extent permitted
by the Intercreditor Agreement;
(e) Liens on fixed or capital assets acquired, constructed or improved
by the Parent Guarantor or any Included Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by clause (f) of Section
7.01, (ii) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring, constructing
or improving such fixed or capital assets and (iv) such security interests
shall not apply to any other property or assets of the Parent Guarantor or
any Included Subsidiary; and
(f) Liens on cash posted as margin in an aggregate amount not
exceeding $500,000 at any time to secure obligations of the Parent
Guarantor or any of its Included Subsidiaries under commodity Hedging
Agreements permitted by Section 7.05(e).
SECTION 7.03. Fundamental Changes. The Parent Guarantor will not, nor will
it permit any of its Included Subsidiaries to, enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution). The Parent Guarantor will
not, nor will it permit any of its Included Subsidiaries to, acquire any
business or property from, or capital stock of, or be a party to any acquisition
of, any Person except for purchases of inventory and other property to be sold
or used in the ordinary course of business, Investments permitted under Section
7.05 and Capital Expenditures permitted under Section 7.09(c). The Parent
Guarantor will not, nor will they permit any of its Included Subsidiaries to,
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, any part of its business or property, whether now owned
or hereafter acquired (including receivables and leasehold interests, but
excluding (x) obsolete or worn-out property, tools or equipment no longer used
or useful in its business and (y) any inventory or other property sold or
disposed of in the ordinary course of business and on ordinary business terms).
Notwithstanding the foregoing provisions of this Section:
(a) any Included Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower or any other such Included
Subsidiary or dissolved and its affairs wound up; provided that (i) if any
such transaction shall be between a Included Subsidiary that is not an
Obligor and an Obligor, the Obligor shall be the continuing or surviving
corporation and (ii) if any such transaction shall be between a Included
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Subsidiary that is not a Wholly Owned Subsidiary and a Wholly Owned
Subsidiary, the Wholly Owned Subsidiary shall be the continuing or
surviving corporation;
(b) any Included Subsidiary of the Borrower may sell, lease, transfer
or otherwise dispose of any or all of its property (upon voluntary
liquidation or otherwise) to the Borrower or any Wholly Owned Subsidiary;
provided that, if the transferor in any such transaction shall be an
Obligor, the transferee shall be an Obligor;
(c) the capital stock of any Included Subsidiary of the Borrower may
be sold, transferred or otherwise disposed of to the Borrower or any Wholly
Owned Subsidiary ; provided that, if the transferor in any such transaction
shall be an Obligor, the transferee shall be an Obligor;
(d) unless a Default has occurred and is continuing, the Borrower or
any of its Included Subsidiaries may sell Property Designated For Sale for
cash and for fair market value as determined by the Board of Directors;
(e) the Borrower or any of its Subsidiaries may dispose of obsolete or
surplus equipment to the extent that (i) such equipment is exchanged for
credit against the purchase price of similar replacement equipment or (ii)
the proceeds of such dispositions are reasonably promptly applied to the
purchase price of such replacement equipment;
(f) unless a Default has occurred and is continuing, the Borrower may
sell all or any portion of its equity interests in any Joint Venture for
cash for fair market value, subject to the conditions that (a) the amount
of consideration to be received by the Borrower (including the amount of
any Guarantee theretofore issued by the Borrower to be cancelled in
connection with such sale) has been determined by the Board of Directors to
be fair to the Borrower, (b) if the aggregate amount of such consideration
exceeds $10,000,000, the Board of Directors shall have received a fairness
opinion in connection with such sale rendered by a recognized institution
with established expertise in valuing transactions of such type and (c) in
connection with such sale, all Guarantees theretofore issued by the
Borrower in support of obligations of such Joint Venture shall be cancelled
or reduced at least in proportion to the percentage of interests sold;
(g) unless a Default has occurred and is continuing, the Borrower and
its Included Subsidiaries may sell other property for cash for fair market
value for consideration not exceeding $3,000,000 in any Fiscal Year;
(h) leases and subleases of property in the ordinary course of
business;
(i) non-exclusive licenses of Intellectual Property in the ordinary
course of business; and
(j) the Parent Guarantor and its Included Subsidiaries may sell assets
to the extent permitted by Section 7.10.
The Collateral Agent agrees to execute such UCC termination statements or
partial
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release statements, as applicable, and other Lien release documents as the
Borrower reasonably requests to evidence the release of the Collateral Agent's
Lien in respect of property conveyed, sold, transferred or otherwise disposed of
in compliance with this Section 7.03; provided that the Borrower shall provide
to the Collateral Agent evidence of such transaction's compliance with this
Section 7.03 as the Collateral Agent may reasonably request.
SECTION 7.04. Lines of Business. The Parent Guarantor and the Borrower will
not, nor will they permit any of their Included Subsidiaries to, engage to any
material extent in any business other than the business of manufacturing,
distributing, franchising, licensing and selling (i) doughnuts, (ii) equipment
to manufacture doughnuts and (iii) related products.
SECTION 7.05. Investments. The Parent Guarantor and the Borrower will not,
nor will they permit any of their Included Subsidiaries to, make or permit to
remain outstanding any Investments except:
(a) Investments outstanding on the date hereof and identified in or
permitted pursuant to this Agreement to be excluded from Part B of Schedule
VI;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Parent Guarantor or any of its Included
Subsidiaries in any of its Included Subsidiaries that is an Obligor or that
becomes an Obligor contemporaneously with the making of such Investment;
(e) Hedging Agreements entered into by the Borrower or its Included
Subsidiaries in the ordinary course of its or their financial planning and
not for speculative purposes;
(f) Investments consisting of security deposits with government
agencies, utilities and other like Persons made in the ordinary course of
business;
(g) Investments consisting of advances to employees for reasonable
business and travel expenses incurred in the ordinary course of business;
(h) Investments consisting of loans or advances to employees not
exceeding $1,000,000 in the aggregate principal amount outstanding at any
time, in each case made in the ordinary course of business and consistent
with practices existing on the Effective Date;
(i) Investments in Joint Ventures, loans or advances to Krispy Kreme
franchisees or doughnut and bakery store operators, or Guarantee
obligations at any of the foregoing under leases or Synthetic Leases, in
each case made in the ordinary course of business; provided that (x) the
aggregate amount of such Investments made in cash after the date hereof
shall not exceed $6,000,000 at any one time outstanding and (y) the
aggregate
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amount of such Investments made in any form after the date hereof shall not
exceed $10,000,000 at any one time outstanding. After an initial $6,000,000
in cash Investments have been made hereunder, no more than $2,000,000 in
aggregate cash Investments may be reinvested by Borrower after return to
Borrower of initial cash Investments. After an initial $10,000,000 in total
Investments have been made hereunder, no more than $4,000,000 in aggregate
Investments made in any form may be reinvested after return to Borrower, or
in the case of guarantees, release of Borrower therefrom;
(j) any acquisition pursuant to a collateral repurchase agreement that
has been identified as a Specified Contingent Obligation in favor of any
Krispy Kreme franchisee or its lenders;
(k) Investments in Joint Ventures made after the date hereof in the
form of Guarantees or cash issued in exchange for the cancellation or
reduction of Guarantees by the Borrower outstanding on the date hereof of
Indebtedness of the respective Joint Ventures, provided that the amount of
each such Investment made after the date hereof shall not exceed the amount
of the Guarantee so cancelled or the reduction of the Guarantee so reduced,
as the case may be;
(l) Investments in securities or property of trade creditors or
customers in the ordinary course of business received upon foreclosure or
pursuant to any plan or organization or liquidation or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or customers;
(m) Investments (i) for utilities, security deposits, leases and
similar prepaid expenses incurred in the ordinary course of business and
(ii) trade accounts created, or prepaid expenses accrued, in the ordinary
course of business; and
(n) additional Investments (other than in Joint Ventures) up to but
not exceeding $2,000,000 in the aggregate at any one time outstanding.
SECTION 7.06. Restricted Payments. The Parent Guarantor will not, nor will
it permit any of its Included Subsidiaries to, declare or make, or agree to pay
or make, directly or indirectly, any Restricted Payment, except that (a) any
Wholly Owned Subsidiary may declare and make Restricted Payments to any other
Wholly Owned Subsidiary, (b) any other Included Subsidiary may declare and make
dividends or other distributions on its common equity interests ratably to all
of its equity holders (i) if no Event of Default has occurred and is occurring
or (ii) (in the case of any such other Included Subsidiary that is treated as a
partnership for tax purposes) to the extent necessary to enable its equity
holders to pay income taxes arising from the income of such other Included
Subsidiary, (c) the Borrower may declare and make dividends to the Parent
Guarantor at such times and in such amounts as are necessary to enable the
Parent Guarantor to pay taxes and operating expenses, (d) provided that no Event
of Default has occurred and is occurring, the Borrower may declare and make
dividends to the Parent Guarantor at such times and in such amounts as are
necessary to enable the Parent Guarantor to pay judgment or settlement costs in
connection with any action, suit,
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proceeding, inquiry or investigations involving the Parent Guarantor (i) that is
an exception to Section 4.06 or (ii) that is based on substantially the same
underlying facts and circumstances as any action, suit, proceeding, inquiry or
investigation described in clause (i) above, or (e) provided that no Event of
Default has occurred and is occurring, the Borrower may declare and make
dividends to the Parent Guarantor at such times and in such amounts as are
necessary to enable the Parent Guarantor to pay judgment or settlement costs in
connection with any other action, suit, proceeding, inquiry or investigations
involving the Parent Guarantor not exceeding $500,000 in the aggregate in any
Fiscal Year.
SECTION 7.07. Transactions with Affiliates. The Parent Guarantor will not,
nor will it permit any of its Included Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) transactions in the ordinary course of business at
prices and on terms and conditions not less favorable to the Parent Guarantor or
such Included Subsidiary, as the case may be, than could be reasonably obtained
on an arm's-length basis from unrelated third parties, (b) transactions between
or among the Parent Guarantor and/or one or more of its Wholly Owned
Subsidiaries that are Obligors, not involving any other Affiliate, (c) any
Restricted Payment permitted by Section 7.06, (d) transactions listed on
Schedule X, (e) Investments permitted by Section 7.05 (including Permitted
Investments), (f) issuances of capital stock (other than Redeemable Preferred
Stock) and Equity Rights (other than Equity Rights for Redeemable Preferred
Stock) by the Parent Guarantor and (g) a success or similar fee payable by the
Borrower or the Parent Guarantor to Kroll, provided that the amount of any
portion thereof paid in cash is acceptable to the Administrative Agent in its
reasonable discretion.
SECTION 7.08. Restrictive Agreements. The Parent Guarantor will not, and
will not permit any of its Included Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the Parent
Guarantor or any Included Subsidiary to create, incur or permit to exist any
Lien upon any of its property or assets, or (b) the ability of any Included
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Parent Guarantor
or any other Included Subsidiary or to Guarantee Indebtedness of the Parent
Guarantor or any other Included Subsidiary; provided that:
(i) the foregoing shall not apply to (1) restrictions and conditions
imposed by law or by the Loan Documents, (2) restrictions and conditions
imposed by the Second Lien Loan Documents, (3) restrictions and conditions
existing on the date hereof identified on Schedule III (and contained in
any extension or renewal of, or any amendment or modification of the
relevant documentation except to the extent expanding the scope of, any
such restriction or condition), (4) customary restrictions and conditions
contained in agreements relating to the sale of a Included Subsidiary
pending such sale, provided such restrictions and conditions apply only to
the Included Subsidiary that is to be sold and such sale is permitted
hereunder, (5) restrictions and conditions in any agreement of an Included
Subsidiary in effect at the time such Included Subsidiary becomes a
Subsidiary of the Borrower, so long as such agreement was not entered into
in connection with or in contemplation of such person becoming a Subsidiary
of the Borrower (and contained in any extension or renewal of, or any
amendment or modification of the relevant documentation except to the
extent expanding the scope of, any such restriction or
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condition) and (6) restrictions on cash or other deposits or net worth
imposed by suppliers or landlords under contracts entered into in the
ordinary course of business; and
(ii) clause (a) of the foregoing shall not apply to (x) restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only
to the property or assets securing such Indebtedness, (y) customary
provisions in leases and other contracts restricting the assignment thereof
and (z) restrictions with respect to the capital stock of an entity imposed
by any joint venture agreement, limited liability operating company
agreement, partnership agreement or similar agreement governing the
operation of such entity with respect to which no Obligor holds a
controlling interest.
SECTION 7.09. Certain Financial Covenants.
(a) Consolidated Leverage Ratio. Commencing with the second Fiscal Quarter
of the 2006 Fiscal Year, the Parent Guarantor will not permit the Consolidated
Leverage Ratio to exceed the following respective ratios for any Test Period in
any of the following respective periods if a Liquidity Trigger Event shall have
occurred and be continuing:
Period Ratio
Second, Third and Fourth Fiscal 4.50 to 1.00
Quarters of 2006 Fiscal Year
First Fiscal Quarter of 2007 Fiscal 4.25 to 1.00
Year
Second Fiscal Quarter of 2007 Fiscal 4.20 to 1.00
Year
Third and Fourth Fiscal Quarters of 3.95 to 1.00
2007 Fiscal Year
First Fiscal Quarter of 2008 Fiscal 3.70 to 1.00
Year and Thereafter
(b) Consolidated Interest Coverage Ratio. Commencing with the second Fiscal
Quarter of the 2006 Fiscal Year, the Parent Guarantor will not permit the
Consolidated Interest Coverage Ratio to be less than the following respective
ratios for any Test Period in any of the following respective periods if a
Liquidity Trigger Event shall have occurred and be continuing:
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Period Ratio
Second Fiscal Quarter of 2006 Fiscal 3.15 to 1.00
Year through Third Fiscal Quarter
of 2007 Fiscal Year
Fourth Fiscal Quarter of 2007 Fiscal 3.40 to 1.00
Year and Thereafter
(c) Capital Expenditures. The Parent Guarantor will not permit the
aggregate amount of Capital Expenditures by the Parent Guarantor and its
Included Subsidiaries to exceed the following respective amounts for the
following respective periods:
Period Amount
2006 Fiscal Year $15,000,000
2007 Fiscal Year $15,000,000
2008 Fiscal Year $33,000,000
If the aggregate amount of Capital Expenditures for any Fiscal Year shall
be less than the amount permitted by the table above to be made in such Fiscal
Year, then 50% of the shortfall shall be added to the amount of Capital
Expenditures permitted for the immediately succeeding (but not any other) Fiscal
Year and, for purposes hereof, the amount of Capital Expenditures made during
any Fiscal Year shall be deemed to have been made first from the amount
permitted by the table above to be made in such Fiscal Year and last from
carryover from the preceding Fiscal Year.
SECTION 7.10. Sale-Leasebacks; Synthetic Leases. The Parent Guarantor will
not, nor will it permit any of its Included Subsidiaries to engage in any
sale-leaseback, Synthetic Lease or similar transaction involving any of its
assets; provided that the following shall be permitted: (i) a sale-leaseback of
the Real Property located at Lakeland Drive / E. Metro Connector, Jackson, MS
and (ii) a sale of real or personal property made for cash consideration in an
amount not less than the cost of such real or personal property and consummated
within 90 days after the Parent Guarantor or any Included Subsidiary acquires or
completes the construction of such property.
SECTION 7.11. Parent Guarantor as Holding Company. Notwithstanding anything
contained herein to the contrary, the Parent Guarantor will not (a) create,
incur, assume or permit to exist any Indebtedness other than Indebtedness under
the Loan
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Documents and the Second Lien Loan Documents, (until the Effective Date) its
Guarantee of the obligations of the Borrower under the Existing Credit Agreement
and Indebtedness permitted by Section 7.01 (b), (e), (g) and (k), (b) create,
incur, assume or permit to exist any Lien on any of its properties other than
Permitted Encumbrances and Liens created by the Loan Documents and the Second
Lien Loan Documents, (c) own any Investments or any material properties other
than shares of stock of the Borrower and of Montana ▇▇▇▇▇ or (d) engage in any
business or transactions other than those ancillary to its status as a publicly
traded holding company, including issuances of capital stock and Equity Rights.
SECTION 7.12. Limitations on Voluntary Prepayments of Certain Other
Indebtedness. The Parent Guarantor will not, nor will it permit any of its
Included Subsidiaries to, purchase, redeem, retire or otherwise acquire for
value, or set apart any money for a sinking, defeasance or other analogous fund
for the purchase, redemption, retirement or other acquisition of, or make any
voluntary payment or prepayment (each of the foregoing actions being referred to
herein as a "Voluntary Prepayment") of the principal of or interest on, or any
other amount owing in respect of, any Indebtedness incurred as permitted by
Section 7.01(l), unless the Net Availability would exceed $10,000,000 after
giving effect thereto. In no event shall the Borrower make a Voluntary
Prepayment of the principal of or interest on, or any other amount owing in
respect of, any Indebtedness outstanding under the Second Lien Credit Agreement
with the proceeds of any Loans.
SECTION 7.13. Modifications of Certain Documents. The Parent Guarantor will
not, nor will it permit any of its Included Subsidiaries to, consent to any
modification, supplement or waiver of any of the provisions of any Second Lien
Loan Document, without the prior consent of the Administrative Agent (with the
approval of the Required Lenders), to the extent such modification, supplement
or waiver is not permitted by the Intercreditor Agreement. The Parent Guarantor
will not, nor will it permit any of its Included Subsidiaries to, consent to any
modification, supplement or waiver of any of the provisions of any agreement or
instrument governing or evidencing Subordinated Indebtedness in any manner that
is maternally adverse to the Borrower or the Lenders without the prior consent
of the Administrative Agent (with the approval of the Required Lenders).
SECTION 7.14. Change in Fiscal Year; Accounting Policies; Capital Stock.
The Parent Guarantor will not, nor will it permit any of its Included
Subsidiaries to, (i) change its Fiscal Year, (ii) change their accounting
policies except as required by GAAP or otherwise permitted under Section 1.03 or
(iii) change their capital structure including any revision of the terms of
their outstanding capital stock or other equity interests, from the Fiscal Year,
the accounting policies and the capital structure in existence on the date
hereof without the prior consent of the Administrative Agent; provided that the
Parent Guarantor may issue additional capital stock and Equity Rights without
such consent.
SECTION 7.15. No New Bank Accounts Without Prior Written Notice. The Parent
Guarantor will not, nor will it permit any of its Included Subsidiaries to, open
any new bank accounts after the date hereof without at least five Business Days
prior written notice to the Administrative Agent, or attempt to amend or
terminate any Concentration Account Control Agreement without the prior consent
of the Administrative Agent.
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ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or under any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three or more Business Days;
(c) subject to the proviso set forth in Section 4.12, any
representation or warranty made or deemed made by or on behalf of any
Affiliated Party in or in connection with this Agreement or any other Loan
Document or any amendment or modification hereof or thereof, or in any
report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any other Loan Document
or any amendment or modification hereof or thereof, shall prove to have
been incorrect in any material respect when made or deemed made;
(d) the Borrower or the Parent Guarantor (as applicable) shall fail to
observe or perform any covenant, condition or agreement contained in
Section 6.01(f) and such failure shall continue unremedied for a period of
10 or more days, in the case of a Borrowing Base Certificate for the first
or second month of any Fiscal Quarter, or a period of 30 or more days, in
the case of a Borrowing Base Certificate for the final month of any Fiscal
Quarter;
(e) the Borrower or the Parent Guarantor (as applicable) shall fail to
observe or perform any covenant, condition or agreement contained in
Section 6.02, 6.03 (with respect to the Borrower's or the Parent
Guarantor's existence), 6.08 or 6.11 or in Article VII, or any Obligor
shall default in the performance of any of its obligations contained in
Section 5.02 of the Security Agreement;
(f) the Borrower or the Parent Guarantor (as applicable) shall fail to
observe or perform any covenant, condition or agreement contained in
Section 6.01(h) and such failure shall continue unremedied for a period of
five or more Business Days;
(g) [reserved];
(h) the Borrower or its Parent Guarantor (as applicable) shall fail to
observe or perform any covenant, condition or agreement contained in
Section 6.01(c) and such failure shall continue unremedied for a period of
10 or more days;
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(i) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in this Article) or any other Loan Document and such failure
shall continue unremedied for a period of 30 or more days after notice
thereof from the Administrative Agent (given at the request of any Lender)
to the Borrower;
(j) any Affiliated Party other than an Immaterial Subsidiary shall
fail to make any payment (whether of principal or interest and regardless
of amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;
(k) any event or condition occurs that results in any Material
Indebtedness incurred by any Affiliated Party other than an Immaterial
Subsidiary becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both)
the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or
to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (k) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness;
(l) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of any Affiliated Party other than an Immaterial
Subsidiary or its debts, or of a substantial part of its assets, under any
federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any
Affiliated Party other than an Immaterial Subsidiary or for a substantial
part of its assets, and, in any such case, such proceeding or petition
shall continue undismissed for a period of 60 or more days or an order or
decree approving or ordering any of the foregoing shall be entered;
(m) any Affiliated Party other than an Immaterial Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (l) of this Article, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for any Affiliated Party other than an Immaterial Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;
(n) any Affiliated Party other than an Immaterial Subsidiary shall
become unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(o) one or more judgments for the payment of money in an aggregate
amount in excess of $1,000,0000 shall be rendered against any Affiliated
Party other than an
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Immaterial Subsidiary or any combination thereof and the same shall remain
undischarged, unsatisfied, unstayed and unbonded for a period of 30
consecutive days, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of any Affiliated Party to
enforce any such judgments;
(p) an ERISA Event shall have occurred that, when taken together with
all other ERISA Events that have occurred, would reasonably be expected to
result in a Material Adverse Effect;
(q) a reasonable basis shall exist for the assertion against the
Parent Guarantor or any of its Included Subsidiaries, or any predecessor in
interest of the Parent Guarantor or any of its Included Subsidiaries, of
(or there shall have been asserted against the Parent Guarantor or any of
its Included Subsidiaries) an Environmental Claim that, in the judgment of
the Required Lenders, is reasonably likely to be determined adversely to
the Parent Guarantor or any of its Included Subsidiaries, and the amount
thereof (either individually or in the aggregate) is reasonably likely to
have a Material Adverse Effect (insofar as such amount is payable by the
Parent Guarantor or any of its Included Subsidiaries but after deducting
any portion thereof that is reasonably expected to be paid by other
creditworthy Persons jointly and severally liable therefor);
(r) a Change in Control shall occur;
(s) the Liens created by the Security Documents shall at any time not
constitute a valid and perfected Lien on collateral having a fair market
value in excess of $250,000 in the aggregate, intended to be covered
thereby (to the extent perfection by filing, registration, recordation or
possession is required herein or therein) in favor of the Collateral Agent
(except as a result of the gross negligence or willful misconduct of the
Collateral Agent in taking or failing to take any action), free and clear
of all other Liens (other than Liens permitted under Section 7.02), or,
except for expiration or termination in accordance with its terms, any of
the Security Documents shall for whatever reason be terminated or cease to
be in full force and effect, or the enforceability thereof shall be
contested by any Obligor;
(t) the Restatement Date shall not have occurred on or before December
15, 2005; or
(u) before the earlier of the Restatement Date or December 15, 2005,
Kroll shall cease to be engaged by the Parent Guarantor to perform
substantially the same services for the Parent Guarantor as it performs on
the date hereof, unless on the date of determination a firm with at least
the same capabilities and reputation, in the reasonable judgment of the
Administrative Agent, to perform such services is engaged by the Parent
Guarantor to perform such services;
then, and in every such event (other than an event with respect to the Borrower
described in clause (l) or (m) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times:
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(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Obligors accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Obligor; and in case of any event with respect to the Borrower described in
clause (l) or (m) of this Article, the Commitments shall automatically terminate
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Obligors accrued hereunder,
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by each Obligor.
ARTICLE IX
THE ADMINISTRATIVE AGENT, COLLATERAL AGENT,
LENDERS AND ARRANGER
Each of the Lenders and the Issuing Lender hereby irrevocably appoints the
Administrative Agent as its agent hereunder and under the other Loan Documents
and the Collateral Agent as its agent under the Intercreditor Agreement and the
Security Documents and authorizes each Agent to take such actions on its behalf
and to exercise such powers as are delegated to such Agent by the applicable
Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
Each Person serving as an Agent shall have the same rights and powers in
its capacity as a Lender as any other Lender and may exercise the same as though
it were not an Agent, and such Person and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with the Parent
Guarantor or any Subsidiary or other Affiliate thereof as if it were not an
Agent.
Neither Agent shall have any duties or obligations except those expressly
set forth herein and in the other Loan Documents. Without limiting the
generality of the foregoing, (a) neither Agent shall be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) neither Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby or by the other Loan Documents that such
Agent is required to exercise in writing by the Required Lenders, and (c) except
as expressly set forth herein and in the other Loan Documents, neither Agent
shall have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Parent Guarantor or any of its
Subsidiaries that is communicated to or obtained by the Person serving as Agent
or any of their Affiliates in any capacity. Neither Agent shall be liable for
any action taken or not taken by it with the consent or at the request of the
Required Lenders or in the absence of its own gross negligence or willful
misconduct. Neither Agent shall be deemed to have knowledge of any Default
unless and until written notice thereof is given to such Agent by the Borrower
or a Lender, and the Agent shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or
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in connection with this Agreement or any other Loan Document, (ii) the contents
of any certificate, report or other document delivered hereunder or thereunder
or in connection herewith or therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth herein
or therein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article V or
elsewhere herein or therein, other than to confirm receipt of items expressly
required to be delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for an
Obligor), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by such Agent. Each
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Agents and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Each Agent may resign at any time by notifying the Lenders, the Issuing
Lender, the Borrower and the Parent Guarantor. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed for the
retiring Administrative Agent by the Required Lenders and shall have accepted
such appointment within 30 days after such retiring Agent gives notice of its
resignation, then such retiring Agent's resignation shall nonetheless become
effective and (1) such retiring Agent shall be discharged from its duties and
obligations hereunder and (2) the Required Lenders shall perform the duties of
such Agent (and all payments and communications provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender
directly) until such time as the Required Lenders appoint a successor agent as
provided for above in this paragraph. The Collateral Agent's resignation shall
not be effective until a successor Collateral Agent shall have been appointed by
the Required Lenders and shall have accepted such appointment. Upon the
acceptance of its appointment as an Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring (or retired) Agent, and the retiring
Agent, shall be discharged from its duties and obligations hereunder (if not
already discharged therefrom as provided above in this paragraph). The fees
payable by the Borrower to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After an Agent's resignation hereunder, the provisions of this
Article and Section 10.03 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 Agent.
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Each Lender acknowledges that it has, independently and without reliance
upon either Agent, any Credited Institution or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon either Agent,
any Credited Institution or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
Each Lender acknowledges that (a) CSFB has no obligation, responsibility or
liability to such Lender by reason of any of CSFB's roles as sole bookrunner and
sole lead arranger for the financing contemplated, (b) WFF has no obligation,
responsibility or liability to such Lender by reason of its role as syndication
agent for the financing contemplated hereby, (c) Silver Point Finance, LLC has
no obligation, responsibility or liability to such Lender by reason of either of
Silver Point Finance, LLC's roles as co-arranger and documentation agent for the
financing contemplated hereby and (d) no Credited Institution is an agent or
fiduciary for such Lender by reason of any of such roles.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices; Electronic Communications.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(i) if to the Borrower or any Guarantor, to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy
No. ▇▇▇-▇▇▇-▇▇▇▇, Telephone No. ▇▇▇-▇▇▇-▇▇▇▇); with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, Esq. (Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇, Telephone No. ▇▇▇-▇▇▇-▇▇▇▇);
(ii) if to the Administrative Agent, to Credit Suisse First Boston, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇);
(iii) if to the Collateral Agent, to ▇▇▇▇▇ Fargo Foothill, Inc., at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of
Specialty Finance Credit Officer, (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇ ; Telephone
No (▇▇▇) ▇▇▇-▇▇▇▇ ;
(iv) if to the Issuing Lender, to it at Credit Suisse First Boston, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇);
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(v) if to the Swingline Lender, to ▇▇▇▇▇ Fargo Foothill, Inc., at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of
Specialty Finance Credit Officer, (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇ ; Telephone
No (▇▇▇) ▇▇▇-▇▇▇▇ ; and
(vi) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to the Borrower and the Administrative
Agent). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt. Notices delivered through electronic
communications to the extent provided in paragraph (b) below, shall be effective
as provided in said paragraph (b).
(b) Electronic Communications. Notices and other communications to the
Lenders and the Issuing Bank hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant
to Section 2.05 if such Lender or the Issuing Bank, as applicable, has notified
the Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
SECTION 10.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by either
Agent, the Issuing Lender or any Lender in exercising any right or power under
any Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agents, the Issuing Lender and the Lenders under the Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by
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any Obligor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether either Agent, any Lender or the Issuing Lender
may have had notice or knowledge of such Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall
(i) increase the Commitment of any Lender, increase the amount of
the Borrowing Base or allow the aggregate amount of the Revolving
Credit Exposures of all of the Lenders to exceed the amount of the
Borrowing Base without the written consent of all of the Lenders
(provided that any modification of the definition of "Consolidated
EBITDA" shall require approval only of the Required Lenders),
(ii) reduce the principal amount of any Loan or LC Disbursement
or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected
thereby,
(iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any
fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected
thereby,
(iv) change Section 2.17(d) without the consent of each Lender
adversely affected thereby,
(v) change any of the provisions of this Section or the
percentage in the definition of the term "Required Lenders" or any
other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written
consent of each Lender,
(vii) release all or substantially all of the Collateral; or
(viii) release any Guarantor that is not an Immaterial Subsidiary
from its guarantee obligations under Article III without the written
consent of each Lender;
and provided further that (x) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent, the
Collateral Agent, the Issuing Lender or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the
Collateral Agent, the Issuing Lender or the Swingline Lender, as the
case may be, and (y) that any modification or supplement of Article III
shall require the consent of each Guarantor.
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Except as otherwise provided in this Section 10.02(b) with respect to this
Agreement, the Administrative Agent or the Collateral Agent may, with the prior
consent of the Required Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the Loan Documents, provided
that, without the prior consent of each Lender, the Collateral Agent shall not
(except as permitted herein or in the Security Documents) release all or
substantially all of the collateral or otherwise terminate all or substantially
all of the Liens under any Security Document providing for collateral security,
agree to additional obligations (other than obligations under the Second Lien
Loan Documents) being secured by all or substantially all of such collateral
security (unless the Lien for such additional obligations shall be junior to the
Lien in favor of the other obligations secured by such Security Document, in
which event the Collateral Agent may consent to such junior Lien provided that
it obtains the consent of the Required Lenders thereto), alter the relative
priorities of the obligations entitled to the benefits of the Liens created
under the Security Documents with respect to all or substantially all of such
collateral, except that no such consent shall be required, and the Collateral
Agent is hereby authorized, to release any Lien covering property that is the
subject of either a disposition of property permitted hereunder or a disposition
to which the Required Lenders have consented.
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Shared Lien
Collateral Agent (to the extent and under the circumstances provided in Section
8.2(a)(iv) of the Intercreditor Agreement), the Collateral Agent and their
Affiliates, including the reasonable fees, charges and disbursements of one
special counsel for the Administrative Agent, the Collateral Agent and the
Credited Institutions in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket
expenses incurred by the Issuing Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder, (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Shared Lien Collateral Agent (to the extent and under
the circumstances provided in Section 8.2(a)(iv) of the Intercreditor
Agreement), the Collateral Agent, the Issuing Lender, any Credited Institution
or any Lender, including the fees, charges and disbursements of any counsel for
the Administrative Agent, the Shared Lien Collateral Agent (to the extent and
under the circumstances provided in Section 8.2(a)(iv) of the Intercreditor
Agreement), the Collateral Agent, the Issuing Lender or any Lender in connection
with the enforcement or protection of its rights (x) in connection with this
Agreement and the other Loan Documents, including its rights under this Section,
or (y) in connection with the Loans made or Letters of Credit issued hereunder,
including in connection with any workout or restructuring or negotiations in
respect of any workout or restructuring and (iv) and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording, perfection or release of any security interest
contemplated by any Security Document or any other document referred to therein.
(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, the Collateral Agent, the Issuing Lender, the Shared Lien
Collateral Agent (to the extent and under the circumstances provided in Section
8.2(a)(iv) of the Intercreditor
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Agreement), each Credited Institution and each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee by any third party, the Parent Guarantor or any of its
Subsidiaries arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder, or in connection herewith, or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal by
the Issuing Lender to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), any payments that the Collateral Agent is
required to make under any indemnity issued to any bank referred to in the
Security Agreement to which remittances in respect of Accounts, as defined
therein, are to be made, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Parent
Guarantor or any of its Subsidiaries, or any Environmental Liability related in
any way to the Parent Guarantor or any of its Subsidiaries, or (iv) any actual
or prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by any third party or the Parent Guarantor or any of its Subsidiaries,
and regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
its Related Parties.
(c) Reimbursement by Lenders. To the extent that the Borrower fails to pay
any amount required to be paid by it to the Administrative Agent, the Shared
Lien Collateral Agent (to the extent and under the circumstances provided in
Section 8.2(a)(iv) of the Intercreditor Agreement), the Collateral Agent, the
Issuing Lender or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the
Collateral Agent, the Issuing Lender or the Swingline Lender, as the case may
be, such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent, the Collateral Agent, the Issuing
Lender or the Swingline Lender in its capacity as such.
(d) Waiver of Consequential Damages, Etc. To the extent permitted by
applicable law, no Obligor shall assert, and each Obligor hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable promptly
after written demand therefor.
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SECTION 10.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Obligor
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted
assignment or transfer by any Obligor without such consent shall be null
and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Collateral Agent, the Issuing Lender and the
Lenders) any legal or equitable right, remedy or claim under or by reason
of this Agreement.
(b) Assignments by Lenders. Any Lender may assign to one or more
assignees who are in the business of making revolving loans all or a
portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans at the time owing to it);
provided that
(i) each Issuing Lender and, except in the case of an assignment
to a Lender or an Affiliate of a Lender, the Administrative Agent (and
(A) in the case of an assignment of all or a portion of a Commitment
or any Lender's obligations in respect of its Swingline Exposure, the
Swingline Lender and (B) unless a Default shall have occurred and be
continuing, the Borrower) must give its prior written consent to such
assignment (which consents shall not be unreasonably withheld or
delayed),
(ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount
of the assigning Lender's Commitment, the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Acceptance with respect to such assignment
is delivered to the Administrative Agent) shall not be less than
$1,000,000 unless the Administrative Agent otherwise consents,
(iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and
obligations under this Agreement,
(iv) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance (such
Assignment and Acceptance to be (A) electronically executed and
delivered to the Administrative Agent via an electronic settlement
system then acceptable to the Administrative Agent, which shall
initially be the settlement system of ClearPar, LLC, or (B) manually
executed and delivered together with a processing and recordation fee
of $3,500), and
(v) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire and any
applicable tax forms as may be requested by the Administrative Agent.
Upon acceptance and recording pursuant to paragraph (d) of this Section, from
and after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a
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party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 10.03 and shall continue to be
obligated pursuant to Section 10.12). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) Maintenance of Register by the Administrative Agent. The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices in New York City 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 Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent, the Issuing Lender and the Lenders shall
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower, the Issuing Lender and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Effectiveness of Assignments. Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire and applicable tax forms, if
any, requested by the Administrative Agent (unless the assignee shall already be
a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section (if required) and any written consents to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Participations. Any Lender may, without the consent of the Borrower,
the Administrative Agent, the Issuing Lender or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement and
the other Loan Documents (including all or a portion of its Commitment and the
Loans owing to it); provided that (i) such Lender's obligations under this
Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent, the
Collateral Agent, the Issuing Lender and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. 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
Agreement and the other Loan Documents and to approve any amendment,
modification or waiver of any provision of this Agreement or any other Loan
Document; provided that such agreement or instrument may provide that such
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Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 10.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.14,
2.15 and 2.16 (subject to the requirements of those sections) to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.
(f) Limitations on Rights of Participants. A Participant shall not be
entitled to receive any greater payment under Section 2.14 or 2.16 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.16
unless the Borrower consents to the participation sold to such Participant and
such Participant agrees, for the benefit of the Borrower, to comply with Section
2.16(e) as though it were a Lender.
(g) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such assignee for such Lender as a party hereto.
(h) No Assignments to the Obligors or Affiliates. Anything in this Section
to the contrary notwithstanding, no Lender may assign or participate any
interest in any Loan or LC Exposure held by it hereunder to the Parent Guarantor
or any of its Affiliates or Subsidiaries without the prior consent of each
Lender.
SECTION 10.05. Survival. All covenants, agreements, representations and
warranties made by the Obligors herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16,
3.03 and 10.03 and Article IX shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with
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respect to fees payable to the Administrative Agent or the Collateral Agent
constitute the entire contract between and among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 5.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Obligor against any of and all the obligations of
any Obligor now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each party hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
against any Obligor or its properties in the courts of any jurisdiction.
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(c) Waiver of Venue. Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in the first sentence of paragraph (b) of this Section.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Service of Process. Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in Section 10.01.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Treatment of Certain Information; Confidentiality.
(a) Treatment of Certain Information. Each of the Borrower and the Parent
Guarantor acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrower, the
Parent Guarantor or one or more of their Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
Affiliates of such Lender and each of the Borrower and the Parent Guarantor
hereby authorizes each Lender to share any information delivered to such Lender
by the Borrower, the Parent Guarantor and their Subsidiaries pursuant to this
Agreement, or in connection with the decision of such Lender to enter into this
Agreement, to any such subsidiary or Affiliate, it being understood that any
such subsidiary or Affiliate receiving such information shall be bound by the
provisions of paragraph (b) of this Section as if it were a Lender hereunder.
Such authorization shall survive the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.
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(b) Confidentiality. Each of the Administrative Agent, the Collateral
Agent, the Issuing Lender and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(i) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (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), (ii) to the extent requested by any regulatory authority having
jurisdiction over such Person, (iii) to the extent required by applicable laws
or regulations or by any subpoena or similar legal process; provided that the
Administrative Agent or such Lender, unless prohibited by applicable law, shall
use reasonable efforts to notify the Borrower in advance of any disclosure
pursuant to this clause (iii) but only to the extent reasonably practicable
under the circumstances and on the understanding that neither the Administrative
Agent nor any Lender shall incur any liability for failure to give such notice,
(iv) to any other party to this Agreement, (v) in connection with the exercise
of any remedies hereunder or under any other Loan Document or any suit, action
or proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (vi) subject to an agreement
containing provisions substantially the same as those of this paragraph, to (A)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (B) any actual or
prospective counterparty (or its advisors) to any Hedging Agreement relating to
the Borrower and its obligations, (vii) with the consent of the Borrower or the
Parent Guarantor or (viii) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this paragraph or (B) becomes
available to the Administrative Agent, the Collateral Agent, the Issuing Lender
or any Lender on a nonconfidential basis from a source other than an Obligor.
For the purposes of this paragraph, "Information" means all information received
from any Obligor relating to any Obligor or its business, other than any such
information that is available to the Administrative Agent, the Collateral Agent,
the Issuing Lender or any Lender on a nonconfidential basis prior to disclosure
by an Obligor; including all information provided pursuant to Section
6.01(c)(i), (f), (g), (h) and (i) and all Projections, the Desktop Analysis,
appraisals and the due diligence report from Keen & Shotenstein (the "Specified
Information"); provided that, in the case of information received from an
Obligor after the date hereof (other than any Specified Information), such
information is clearly identified at the time of delivery as confidential. 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.
SECTION 10.13. USA PATRIOT Act. Each Lender hereby notifies the Borrower
that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender to identify the Borrower in accordance with said Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
[SIGNATURE PAGES TO FOLLOW]
KRISPY KREME DOUGHNUT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and
Chief Operating Officer
GUARANTORS:
KRISPY KREME DOUGHNUTS, INC.
KRISPY KREME DISTRIBUTING COMPANY,
INCORPORATED
KRISPY KREME MOBILE STORE COMPANY
KRISPY KREME CANADA, INC.
HD CAPITAL CORPORATION
HDN DEVELOPMENT CORPORATION
KRISPY KREME COFFEE COMPANY, LLC
By: KRISPY KREME DOUGHNUT
CORPORATION,
an authorized Member
GOLDEN GATE DOUGHNUTS, LLC
By: KRISPY KREME DOUGHNUT
CORPORATION,
an authorized Member
PANHANDLE DOUGHNUTS, LLC
By: KRISPY KREME DOUGHNUT
CORPORATION,
an authorized Member
FREEDOM RINGS, LLC
By: KRISPY KREME DOUGHNUT
CORPORATION,
an authorized Member
NORTH TEXAS DOUGHNUTS, L.P.
By: KRISPY KREME DOUGHNUT
CORPORATION,
an authorized Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Officer
LENDERS
CREDIT SUISSE FIRST BOSTON,
CAYMAN ISLANDS BRANCH,
as Administrative Agent,
Lender and Issuing Lender
By: /s/ ▇▇▇▇ ▇.▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as Collateral Agent, Lender,
Issuing Lender and Swingline Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Field Point I, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
SPCP Group III LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
SPCP Group LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
`