EXHIBIT 10.9
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CREDIT AGREEMENT
Dated as of May 14, 2003
among
CENTRAL GARDEN & PET COMPANY,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent,
and
BANK OF AMERICA, N.A. and
SUNTRUST BANK,
as Co-Syndication Agents
CIBC WORLD MARKETS CORP.,
BANC OF AMERICA SECURITIES LLC and
SUNTRUST CAPITAL MARKETS, INC.,
Co-Lead Arrangers and Joint Bookrunners
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TABLE OF CONTENTS
Page No.
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Section 1. DEFINITIONS..................................................... 2
1.1 Certain Defined Terms........................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.................................... 29
1.3 Other Definitional Provisions and Rules of Construction......... 29
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS...................... 30
2.1 Commitments; Making of Loans; Optional Notes.................... 30
2.2 Interest on the Loans........................................... 36
2.3 Fees............................................................ 40
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments;
Application of Proceeds of Collateral and Payments Under
Subsidiary Guaranty............................................. 41
2.5 Use of Proceeds................................................. 48
2.6 Special Provisions Governing LIBOR Loans........................ 48
2.7 Increased Costs; Taxes; Capital Adequacy........................ 51
2.8 Obligation of Lenders and Issuing Lenders to Mitigate........... 56
2.9 Replacement of a Lender......................................... 56
Section 3. LETTERS OF CREDIT............................................... 57
3.1 Issuance of Letters of Credit and Revolving Lenders'
Purchase of Participations Therein.............................. 57
3.2 Letter of Credit Fees........................................... 59
3.3 Drawings and Reimbursement of Amounts Paid Under
Letters of Credit............................................... 60
3.4 Obligations Absolute............................................ 63
3.5 Indemnification; Nature of Issuing Lenders' Duties.............. 64
3.6 Increased Costs and Taxes Relating to Letters of Credit......... 65
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT....................... 66
4.1 Conditions to Tranche B Term Loans and Initial
Revolving Loans................................................. 66
4.2 Conditions to All Loans......................................... 72
4.3 Conditions to Letters of Credit................................. 73
Section 5. BORROWER'S REPRESENTATIONS AND WARRANTIES....................... 74
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5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries....................................... 74
5.2 Authorization of Borrowing, etc................................. 75
5.3 Financial Condition............................................. 76
5.4 No Material Adverse Change; No Restricted
Junior Payments................................................. 76
5.5 Title to Properties; Liens; Real Property;
Intellectual Property........................................... 76
5.6 Litigation; Adverse Facts....................................... 77
5.7 Payment of Taxes................................................ 78
5.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts.................................. 78
5.9 Governmental Regulation; OFAC; Patriot Act;
Foreign Corrupt Practices Act................................... 79
5.10 Securities Activities........................................... 80
5.11 Employee Benefit Plans.......................................... 80
5.12 Certain Fees.................................................... 81
5.13 Environmental Protection........................................ 81
5.14 Employee Matters................................................ 82
5.15 Solvency........................................................ 82
5.16 Matters Relating to Collateral.................................. 82
5.17 Disclosure...................................................... 83
5.18 Subordinated Indebtedness....................................... 84
5.19 Mortgage Taxes, Etc............................................. 84
5.20 Proceeds of Loans............................................... 84
Section 6. BORROWER'S AFFIRMATIVE COVENANTS................................ 84
6.1 Financial Statements and Other Reports.......................... 84
6.2 Existence, etc.................................................. 90
6.3 Payment of Taxes and Claims; Tax................................ 90
6.4 Maintenance of Properties; Insurance; Application of
Net Insurance/ Condemnation Proceeds........................... 91
6.5 Inspection Rights............................................... 93
6.6 Compliance with Laws, etc....................................... 93
6.7 Environmental Matters........................................... 94
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6.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents After the Closing Date..................... 96
6.9 Matters Relating to Real Property Collateral.................... 97
6.10 Deposit Accounts and Cash Management Systems.................... 98
6.11 Solvency........................................................ 99
Section 7. BORROWER'S NEGATIVE COVENANTS................................... 99
7.1 Indebtedness.................................................... 99
7.2 Liens and Related Matters...................................... 100
7.3 Investments; Acquisitions...................................... 101
7.4 Contingent Obligations......................................... 102
7.5 Restricted Junior Payments..................................... 103
7.6 Financial Covenants............................................ 103
7.7 Restriction on Fundamental Changes; Asset Sales................ 104
7.8 Consolidated Capital Expenditures.............................. 105
7.9 Sale or Discount of Receivables................................ 106
7.10 Transactions with Shareholders and Affiliates.................. 106
7.11 Sales and Lease-Backs.......................................... 106
7.12 Restriction on Leases.......................................... 106
7.13 Conduct of Business............................................ 107
7.14 Amendments of Documents Relating to Subordinated
Indebtedness................................................... 107
7.15 Fiscal Year; Tax Election...................................... 107
7.16 Subsidiary Guarantors.......................................... 107
Section 8. EVENTS OF DEFAULT.............................................. 107
8.1 Failure to Make Payments When Due.............................. 108
8.2 Default in Other Agreements.................................... 108
8.3 Breach of Certain Covenants.................................... 108
8.4 Breach of Warranty............................................. 108
8.5 Other Defaults Under Loan Documents............................ 108
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. ......... 109
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. ........... 109
8.8 Judgments and Attachments...................................... 110
8.9 Dissolution.................................................... 110
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8.10 Employee Benefit Plans......................................... 110
8.11 Change in Control.............................................. 110
8.12 Invalidity of Loan Documents; Repudiation of Obligations....... 110
8.13 Uninsured Damage............................................... 111
8.14 Criminal or Civil Proceedings.................................. 111
8.15 Subordinated Indebtedness...................................... 111
Section 9. ADMINISTRATIVE AGENT........................................... 112
9.1 Appointment.................................................... 112
9.2 Powers and Duties; General Immunity............................ 113
9.3 Representations and Warranties; No Responsibility
for Appraisal of Creditworthiness.............................. 115
9.4 Right to Indemnity............................................. 115
9.5 Successor Administrative Agent................................. 116
9.6 Collateral Documents and Guaranties............................ 116
9.7 Administrative Agent May File Proofs of Claim.................. 117
Section 10. MISCELLANEOUS.................................................. 118
10.1 Assignments and Participations in Loans and
Letters of Credit.............................................. 118
10.2 Expenses....................................................... 121
10.3 Indemnity...................................................... 122
10.4 Set-Off; Security Interest in Deposit Accounts................. 123
10.5 Ratable Sharing................................................ 124
10.6 Amendments and Waivers......................................... 124
10.7 Independence of Covenants...................................... 126
10.8 Notices; Effectiveness of Signatures........................... 127
10.9 Survival of Representations, Warranties and Agreements......... 127
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.......... 127
10.11 Marshalling; Payments Set Aside................................ 128
10.12 Severability................................................... 128
10.13 Obligations Several; Independent Nature of Lenders' Rights..... 128
10.14 Release of Security; Guarantees................................ 128
10.15 Headings....................................................... 129
10.16 Applicable Law................................................. 129
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10.17 Successors and Assigns......................................... 129
10.18 Consent to Jurisdiction and Service of Process................. 130
10.19 Waiver of Jury Trial........................................... 130
10.20 Confidentiality................................................ 131
10.21 Co- Lead Arrangers and Co-Syndication Agents................... 132
10.22 Counterparts; Effectiveness.................................... 132
10.23 Limitation of Liability........................................ 133
10.24 Further Assurances............................................. 133
Signature pages S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE
IV FORM OF TRANCHE B TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF OPINION OF BORROWER'S COUNSEL
VIII FORM OF ASSIGNMENT AGREEMENT
IX FORM OF FINANCIAL CONDITION CERTIFICATE
X FORM OF SUBSIDIARY GUARANTY
XI FORM OF SECURITY AGREEMENT
XII FORM OF MORTGAGE
XIII FORM OF ENVIRONMENTAL INDEMNITY AGREEMENT
XIV FORM OF COLLATERAL ACCESS AGREEMENT
XVI FORM OF OFAC CERTIFICATE
XVII FORM OF LANDLORD ESTOPPEL AND AGREEMENT
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SCHEDULES
4.1D CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP
4.1M CLOSING DATE MORTGAGED PROPERTIES
5.1 SUBSIDIARIES OF BORROWER
5.5B REAL PROPERTY
5.5C INTELLECTUAL PROPERTY
5.13 ENVIRONMENTAL MATTERS
5.14 EMPLOYEE MATTERS
6.9E ENVIRONMENTAL REPORTS
6.10 DEPOSIT ACCOUNTS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
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CENTRAL GARDEN & PET COMPANY
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of May 14, 2003 and entered into by
and among CENTRAL GARDEN & PET COMPANY, a Delaware corporation ("Borrower"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF OR PARTY FROM TIME
TO TIME HERETO as lenders, CANADIAN IMPERIAL BANK OF COMMERCE, acting through
one or more of its agencies, branches or affiliates ("CIBC"), as administrative
agent for Lenders (in such capacity, "Administrative Agent"), and Bank of
America, N.A. and SunTrust Bank as co-syndication agents (collectively, in such
capacity, "Co-Syndication Agents").
RECITALS
WHEREAS, Lenders, at the request of Borrower, have agreed to extend
certain credit facilities to Borrower in the aggregate principal amount of
$200,000,000, the proceeds of which will be used (i) to fund the refinancing of
the Existing Credit Agreement (capitalized terms used in these recitals without
definition have the respective meanings given to such terms in Subsection 1.1)
and other existing Indebtedness of Borrower and its Subsidiaries, and (ii) to
provide financing for working capital and other general corporate purposes,
permitted acquisitions and investments, and payment of transaction fees and
expenses of Borrower and its Subsidiaries;
WHEREAS, Borrower desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a First Priority Lien on substantially all of its owned real,
personal and mixed property, including a pledge of all of the Capital Stock of
its Domestic Subsidiaries and sixty-six percent (66%) of the voting Capital
Stock and all of the non-voting Capital Stock of its Foreign Subsidiaries; and
WHEREAS, all of the Subsidiary Guarantors have agreed to guarantee the
Obligations hereunder and under the other Loan Documents and to secure their
guaranties by granting to Administrative Agent, on behalf of Lenders, a First
Priority Lien on substantially all of their owned real, personal and mixed
property, including a pledge of all of the Capital Stock of each of their
Domestic Subsidiaries and sixty-six percent (66%) of the voting Capital Stock
and all of the non-voting Capital Stock of their respective Foreign
Subsidiaries:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders, Co-Syndication
Agents and Administrative Agent agree as follows:
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I. DEFINITIONS
A. Certain Defined Terms.
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The following terms used in this Agreement shall have the following
meanings:
"Accounts" means all present and future rights of Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(including any such rights evidenced by instruments or chattel paper), whether
due or to become due, whether now existing or hereinafter arising and wherever
arising, and whether or not they have been earned by performance.
"Additional Mortgaged Property" has the meaning assigned to that term
in Subsection VI.I.
"Additional Mortgages" has the meaning assigned to that term in
Subsection 6.9A.
"Adjusted LIBOR" means, for any Interest Rate Determination Date with
respect to an Interest Period for a LIBOR Loan, the rate per annum obtained by
dividing (x) the rate of interest equal to (a) the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period and
appearing on Moneyline Telerate Screen 3750 at or about 11:00 A.M., London time,
two Business Days prior to the commencement of such Interest Period, or (b) if
such a rate does not appear on Moneyline Telerate Screen 3750, the average of
the rates per annum at which Dollar deposits in immediately available funds are
offered to CIBC in the interbank LIBOR market as at or about 11:00 A.M. (New
York City time) two (2) Business Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period, and for a period
approximately equal to such Interest Period, by (y) a percentage equal to 100%
minus the stated maximum rate (expressed as a percentage) of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means any successor Administrative Agent
appointed pursuant to Subsection IX.E.
"Administrative Agent's Office" means (i) the office of Administrative
Agent located at CIBC, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or (ii) such
other office of Administrative Agent as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent to
Borrower and each Lender.
"Affected Lender" has the meaning assigned to that term in Subsection
II.F.2
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"Affected Loans" has the meaning assigned to that term in Subsection
II.F.2.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting Securities or
by contract or otherwise. For purposes of this definition, a Person shall be
deemed to be "controlled by" a Person if such Person possesses, directly or
indirectly, power to vote ten percent (10%) or more of the Securities having
ordinary voting power for the election of directors of such Person.
Notwithstanding the foregoing, neither Administrative Agent nor any Lender shall
be deemed to be an Affiliate of any of the Loan Parties.
"Agents" means collectively, Administrative Agent and any syndication
agent, documentation agent or other agent appointed under this Agreement.
"Aggregate Amounts Due" has the meaning assigned to that term in
Subsection 10.5.
"Agreement" means this Credit Agreement dated as of May 14, 2003.
"Applicable Base Rate Margin" means, as at any date of determination,
with respect to any Type of Loan that is a Base Rate Loan, a percentage per
annum equal to the Applicable LIBOR Margin for such Loan less 1.50%.
"Applicable LIBOR Margin" means (a) with respect to Tranche B Term
Loans that are LIBOR Loans, 2.75% per annum, and (b) with respect to Revolving
Loans that are LIBOR Loans, a percentage per annum as set forth below opposite
the applicable Consolidated Total Leverage Ratio:
Applicable
Consolidated Total Leverage Ratio LIBOR Margin
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greater than or equal to 3.50:1.00 2.75%
less than 3.50:1.00
but greater than or equal to 3.00:1.00 2.50%
less than 3.00:1.00
but greater than or equal to 2.50:1.00 2.25%
less than 2.50:1.00
but greater than or equal to 2.00:1.00 2.00%
less than 2.00:1.00 1.75%
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; provided that until the date that is five Business Days after the date on
which the first Margin Determination Certificate is scheduled to be delivered to
Administrative Agent pursuant to Subsection 2.2A, the Applicable LIBOR Margin
for Revolving Loans that are LIBOR Loans shall be 2.25%.
"Applied Amount" has the meaning assigned to that in Subsection
II.D.2.d(2).
"Approved Fund" means any fund that invests (in whole or in part) in
commercial loans or any other fund that is managed or advised by a Lender, the
same investment advisor as such Lender or by an Affiliate of such Lender or
investment advisor.
"Asset Sale" means the sale (in any single transaction or series of
related transactions) by Borrower or any of its Subsidiaries to any Person other
than Borrower or any of its wholly-owned Domestic Subsidiaries of (i) any of the
Capital Stock of any of Borrower's Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Borrower or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Borrower or any of its Subsidiaries (other than (a) inventory sold in the
ordinary course of business, (b) surplus or obsolete equipment, (c) Capital
Stock of Borrower and (d) sales of assets from Borrower or any Subsidiary
Guarantor to Borrower or any Subsidiary Guarantor).
"Assignment Agreement" means an Assignment Agreement in substantially
the form of Exhibit VIII annexed hereto.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy."
"Base Rate" means, at any time, the higher of (i) the Reference Rate
or (ii) the rate which is one-half of 1% in excess of the Federal Funds
Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in Subsection II.B.1.
"Borrower" has the meaning assigned to that term in the introductory
paragraph to this Agreement.
"Business Day" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close, and (ii) with respect to all
notices, determinations, fundings and payments in connection with the Adjusted
LIBOR or any LIBOR Loan, any day that (a) is a Business Day described in clause
(i) above, and (b) is a day for trading by and between banks in Dollar deposits
in the London Interbank Market.
"Capital Lease", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
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"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests, and (v) any other interest or participation that confers
on a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or ▇▇▇▇▇'▇; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
▇▇▇▇▇'▇; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; (v) shares of any money market mutual fund that (a) has
at least ninety-five percent (95%) of its assets invested continuously in the
types of investments referred to in clauses (i) and/or (ii) above, (b) has net
assets of not less than $500,000,000, and (c) has the highest rating obtainable
from either S&P or ▇▇▇▇▇'▇ and (vi) other assets properly classified as
"marketable securities" or "cash" or "cash equivalents" under GAAP, in each case
maturing within one year after such date and having, at the time of the
acquisition thereof, the highest rating obtainable from either S&P or ▇▇▇▇▇'▇.
"Change in Control" means any of the following: (i) any Person (other
than a Permitted Holder) acting in concert with one or more other Persons (other
than any Permitted Holder) shall have acquired beneficial ownership, directly or
indirectly, of Securities of Borrower (or other Securities convertible into such
Securities) representing twenty-five percent (25%) or more of the combined
voting power of all Securities of Borrower entitled to vote in the election of
members of the Governing Body of Borrower, other than Securities having such
power only by reason of the happening of a contingency; and (ii) the occurrence
of a change in the composition of the Governing Body of Borrower such that a
majority of the members of such Governing Body are not Continuing Members.
"Closing Date" means the date on which the initial Loans are made.
"Closing Date Mortgaged Property" has the meaning assigned to that
term in Subsection IV.A.13.
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"Closing Date Mortgages" has the meaning assigned to that term in
Subsection IV.A.13.
"Closing Date Mortgage Policies" has the meaning assigned to that term
in Subsection IV.A.13.
"Co-Lead Arrangers" means, collectively, CIBC World Markets Corp.,
Banc of America Securities LLC and SunTrust Capital Markets, Inc., each acting
in the capacity of co-lead arranger and joint bookrunner.
"Co-Syndication Agents" has the meaning assigned to that term in the
introduction to this Agreement.
"Collateral" means, collectively, all of the owned real, personal and
mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"Collateral Access Agreement" means any agreement of any landlord,
mortgagee, bailee, warehouseman, processor or similar party in possession of any
Collateral, substantially in the form of Exhibit XIV annexed hereto, with such
changes thereto as may be agreed to by Administrative Agent in the reasonable
exercise of its discretion.
"Collateral Account" has the meaning assigned to that term in the
Security Agreement.
"Collateral Documents" means the Security Agreement, the Mortgages,
the Deposit Account Control Agreements and all other instruments or documents
delivered by any Loan Party pursuant to this Agreement or any of the other Loan
Documents in order to grant to Administrative Agent, on behalf of Lenders, a
Lien on any owned real, personal or mixed property of that Loan Party as
security for the Obligations.
"Commitment Fee Percentage" means, as of any date of determination, a
percentage equal to (i) if the Consolidated Total Leverage Ratio for the most
recently ended Fiscal Quarter is greater than or equal to 2.50:1.00, 0.500%, or
(ii) if the Consolidated Total Leverage Ratio for the most recently ended Fiscal
Quarter is less than 2.50:1.00, 0.375%.
"Commitments" means the commitments of Lenders to make Loans as set
forth in Subsection 1.1A.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit VI annexed hereto delivered to Administrative Agent and Lenders by
Borrower pursuant to Subsection VI.A.c.
"Confidential Information Memorandum" means that certain Confidential
Information Memorandum dated April, 2003 relating to the credit facilities
evidenced by this Agreement.
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"Consolidated Capital Expenditures" means, for any period, the sum of
the aggregate of all expenditures (whether paid in Cash or other consideration
or accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Borrower and its Subsidiaries)
by Borrower and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Borrower and its
Subsidiaries.
"Consolidated Current Assets" means, as at any date of determination,
the total assets of Borrower and its Subsidiaries on a consolidated basis which
may properly be classified as current assets in conformity with GAAP, excluding
Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Borrower and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP.
"Consolidated EBITDA" means, for any period, (i) the sum, without
duplication, of the amounts for such period of (a) Consolidated Net Income, (b)
Consolidated Interest Expense, (c) provisions for taxes based on income, (d)
total depreciation expense, (e) total amortization expense, and (f) other
non-recurring and non-cash items reducing Consolidated Net Income but not
requiring the expenditure of cash (other than any such non-cash item to the
extent it represents an accrual of or reserve for cash expenditures in any
future period), including (1) such acquisition and transaction costs as may be
approved by Administrative Agent in its sole but reasonable discretion and (2)
during Fiscal Year 2002, non-recurring items consisting of approximately
$14,500,000 of legal and professional fees, $1,600,000 of branch closing costs,
and $1,800,000 of expenses relating to termination of a master service agreement
with Kal Kan, all such non-recurring items in the aggregate to total not more
than $18,000,000; provided that for Fiscal Year 2003, not more than $5,000,000
in the aggregate of any such non-recurring and non-cash items (other than those
described in clause (1) above) shall be included in this clause (f), and, for
each Fiscal Year after Fiscal Year 2003, not more than $2,000,000 in the
aggregate of all such non-recurring and non-cash items (other than those
described in clause (1) above) shall be included in this clause (f), less (ii)
the sum, without duplication, of (a) interest income and (b) any non-recurring
and non-cash items increasing Consolidated Net Income but not constituting the
receipt of cash (other than any such non-cash item to the extent it will result
in the receipt of cash payments in any future period; all such non-recurring and
non-cash items to be determined by adding back thereto any amounts deducted in
the calculation of Consolidated Net Income that were paid, incurred or accrued
in violation of any of the provisions of this Agreement), all of the foregoing
as determined on a consolidated basis for Borrower and its Subsidiaries in
conformity with GAAP; provided that in calculating any such items for purposes
of determining the Consolidated Total Leverage Ratio or Consolidated Senior
Leverage Ratio for such period, any Asset Sales or other acquisitions or
dispositions of assets during such period shall be deemed to have occurred on
the first day of such period, and any amounts by which Consolidated EBITDA is
adjusted pursuant to this proviso as a result of an acquisition shall have been
calculated in accordance with GAAP.
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"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA (determined by adding back thereto any amount
deducted in the calculation of Consolidated Net Income that was paid, incurred
or accrued in violation of any of the provisions of this Agreement) for such
period and (b) the Consolidated Working Capital Adjustment for such period minus
(ii) the sum, without duplication, of the amounts for such period of (a)
voluntary and scheduled repayments of Consolidated Total Debt (including
repayments of Revolving Loans only to the extent the Revolving Loan Commitments
are permanently reduced in connection with such repayments), (b) Consolidated
Capital Expenditures (net of any proceeds of any related financings with respect
to such expenditures), (c) Consolidated Interest Expense, and (d) the provision
for current taxes based on income of Borrower and its Subsidiaries and payable
in Cash with respect to such period.
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Borrower and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in Subsection II.C payable to Administrative Agent, Co-Lead
Arrangers and Lenders on or before the Closing Date.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, without
giving effect to any non-cash losses as a result of impairment of goodwill to
the extent required by Statement of Financial Accounting Standards No. 142;
provided that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of Borrower) in which any other Person (other than
Borrower or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Borrower or
any of its Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of
Borrower or is merged into or consolidated with Borrower or any of its
Subsidiaries or that Person's assets are acquired by Borrower or any of its
Subsidiaries, (iii) the income of any Subsidiary of Borrower to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to Asset Sales or returned surplus assets
of any Pension Plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary losses.
"Consolidated Rental Payments" means, for any period, the aggregate
amount of all rents paid or payable by Borrower and its Subsidiaries on a
consolidated basis during that period under all Operating Leases to which
Borrower or any of its Subsidiaries is a party as lessee.
8
"Consolidated Senior Debt" means, as at any date of determination,
Consolidated Total Debt less the aggregate principal amount of all unsecured
Subordinated Indebtedness of Borrower and its Subsidiaries, determined on a
consolidated basis.
"Consolidated Senior Leverage Ratio" means, as at the last day of any
Fiscal Quarter, the ratio of (a) Consolidated Senior Debt as of the last day of
such Fiscal Quarter, to (b) Consolidated EBITDA for the four Fiscal Quarter
period then ended.
"Consolidated Tangible Net Worth" means, as at any date of
determination, the sum of the Capital Stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) minus intangible assets (such
as goodwill, trademarks, trade names, organization expense, unamortized debt
discount and premium and other like intangibles) of Borrower and its
Subsidiaries on a consolidated basis, all as determined in conformity with GAAP.
"Consolidated Total Debt" means, as at any date of determination, the
aggregate principal amount of all Indebtedness of Borrower and its Subsidiaries.
"Consolidated Total Leverage Ratio" means, as at the last day of any
Fiscal Quarter, the ratio of (a) Consolidated Total Debt as of the last day of
such Fiscal Quarter, to (b) Consolidated EBITDA for the four Fiscal Quarter
period then ended.
"Consolidated Working Capital" means, as at any date of determination,
the excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, or (ii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, including, without
limitation, any credit support agreements, makewell agreements, keepwell
agreements and any other agreements evidencing similar obligations, (b) the
obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement (other than
purchase commitments and forward pay contracts in the ordinary course of
business), and (c) any liability of such Person for the obligation of another
through any agreement (contingent or otherwise) (1) to purchase, repurchase or
otherwise acquire such obligation or any security
9
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (2) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (1) or (2) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Continuing Member" means, as of any date of determination, any member
of the Governing Body of Borrower who (i) was a member of such Governing Body on
the Closing Date or (ii) was nominated for election or elected to such Governing
Body with the affirmative vote of a majority of the members who were either
members of such Governing Body on the Closing Date or whose nomination or
election was previously so approved.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any Material Contract to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Borrower or any of its Subsidiaries is
a party.
"Defaulting Lender" means any Lender that has failed to fund its
portion of any Loan which it is required to fund under this Agreement, provided
that no Event of Default or Potential Event of Default has occurred and is
continuing, and has continued in such failure for ten (10) days after written
notice from Administrative Agent.
"Deposit Account" means a demand, time, savings, passbook, brokerage
or similar account maintained with a Person or securities intermediary engaged
in the business of banking, including any savings bank, savings and loan
association, credit union or trust company, other than an account evidenced by a
negotiable certificate of deposit.
"Deposit Account Control Agreement" means an agreement, reasonably
satisfactory in form and substance to Administrative Agent and executed by the
financial institution at which a Deposit Account is maintained, pursuant to
which such financial institution confirms and acknowledges Administrative
Agent's First Priority Lien in such Deposit Account, agrees that such financial
institution will comply with instructions originated by Administrative Agent as
to disposition of funds in the Deposit Account, without further consent by
Borrower or any Subsidiary, and waives its right to set off with respect to
amounts in the Deposit Account, with customary limited exceptions acceptable to
Administrative Agent.
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
10
"Domestic Subsidiary" means any Subsidiary of Borrower that is
incorporated or organized under the laws of the United States of America, any
state thereof or the District of Columbia.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof (provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country); and (iv) any other entity which is an "accredited investor" (as
defined in Regulation D under the Securities Act) which extends credit or buys
loans as one of its businesses including insurance companies, mutual funds,
lease financing companies and investment funds and any Approved Funds; (B) a
Lender, an Affiliate of a Lender or an Approved Fund; or (C) any other Person
(other than a natural Person) approved by (1) Administrative Agent, (2) in the
case of any assignment of a Revolving Loan, each Issuing Lender, and (3) unless
(x) such Person is taking delivery of an assignment in connection with physical
settlement of a credit derivatives transaction, or (y) an Event of Default or
Potential Event of Default has occurred and is continuing, Borrower (each such
approval not to be unreasonably withheld or delayed); provided that no Affiliate
of Borrower shall be an Eligible Assignee; and provided further that no Person
shall be an Eligible Assignee if such Person appears on the SDN List or the
purchase by such Person of an assignment or the performance by Administrative
Agent of its duties under the Credit Agreement with respect to such Person
violates the Executive Order, the USA Patriot Act of 2001 or the United States
Foreign Corrupt Practices Act of 1977. If the consent of Borrower to an
assignment to an Eligible Assignee is required hereunder (including a consent to
an assignment which does not meet the minimum assignment thresholds specified in
Subsection 10.1B(i)), Borrower shall be deemed to have given its consent five
(5) Business Days after the date notice thereof has been delivered by the
assigning Lender (through Administrative Agent) unless such consent is expressly
refused by Borrower prior to such fifth Business Day.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA, which is or was maintained or contributed to by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Government Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Indemnity Agreement" means the Environmental Indemnity
Agreement executed and delivered by the Loan Parties on the Closing Date,
substantially in the form of Exhibit XIII annexed hereto.
11
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Borrower or any of its Subsidiaries or
any Facility, including the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Section 136 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section
651 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, any analogous present or future state or
local statutes or laws, and any regulations promulgated pursuant to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means, as applied to any Person (i) any corporation
that is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) that is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of a Person or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of such Person
or such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of such Person or such Subsidiary and
with respect to liabilities arising after such period for which such Person or
such Subsidiary could reasonably be expected to be liable under the Internal
Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of
12
any such Pension Plan resulting in liability pursuant to Section 4063 or 4064 of
ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension
Plan, or the occurrence of any event or condition which could reasonably be
expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of Borrower, any
of its Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates could reasonably be expected to have any liability
therefor, or the receipt by Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could reasonably be expected
to give rise to the imposition on Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates of fines, penalties, taxes or related charges
under Chapter 43 of the Internal Revenue Code or under Section 409, Section
502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit
Plan; (ix) the assertion of a claim in excess of $5,000,000 (other than routine
claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"Event of Default" means each of the events set forth in VIII
"Exchange Act" means the Securities Exchange Act of 1934.
"Executive Order" has the meaning assigned to that term in Subsection
5.9B.
"Existing Credit Agreement" means that certain Second Amended and
Restated Loan and Security Agreement dated as of December 12, 2000 between
Borrower, certain of its Subsidiaries, and Congress Financial Corporation
(Western), as amended prior to the Closing Date.
"Facilities" means all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Borrower or any of its Subsidiaries or any of
their respective predecessors or Affiliates.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal
13
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Administrative Agent from three Federal funds brokers of recognized
standing selected by Administrative Agent.
"Financial Plan" has the meaning assigned to that term in Subsection
VI.A.k.
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on such Collateral (other
than Permitted Encumbrances which as a matter of law have priority over any
other Lien irrespective of the prior perfection or filing of such other Lien,
and Liens permitted pursuant to Subsections 7.2A(iii) and (iv)) and (ii) such
Lien is the only Lien (other than Liens permitted pursuant to Subsection VII.B)
to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower and its Subsidiaries
ending on the Saturday closest to the last day of September of each calendar
year. For purposes of this Agreement, any particular Fiscal Year shall be
designated by reference to the calendar year in which such Fiscal Year ends.
"Flood Hazard Property" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property located in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards.
"Foreign Subsidiary" means any Subsidiary of Borrower that is not a
Domestic Subsidiary.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in Subsection I.B, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"Governing Body" means the board of directors or other body having the
power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership, trust or limited liability company.
14
"Government Authority" means any governmental or regulatory body,
agency, commission, central bank, board, bureau, department, office, organ or
instrumentality or any court and any political subdivision or department
thereof, in each case whether federal, state, local or foreign.
"Governmental Authorization" means any permit, license, registration,
authorization, plan, directive, consent, order or consent decree of or from, or
notice to, any Government Authority.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", "acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", in any Environmental Law or any other term or expression
intended to define, list or classify substances by reason of properties harmful
to health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Government Authority or which may or could pose a hazard to the
health and safety of the owners, occupants or any Persons in the vicinity of any
Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"Hedge Agreement" means (i) an Interest Rate Agreement designed to
hedge against fluctuations in interest rates, (ii) any Currency Agreement
designed to hedge against fluctuations in currency values, and (iii) any other
agreement or arrangement to which Borrower or any of its Subsidiaries is a party
which ▇▇▇▇▇▇ against or is based upon fluctuations in the value of the equity
Securities of any Person, or any equity forward agreements or similar agreements
or arrangements.
"Indebtedness", as applied to any Person, means (a) all indebtedness
for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made without regard to any original issue discount relating thereto,
(c) all obligations of such Person under conditional sale
15
or other title retention agreements relating to property purchased by such
Person (other than customary reservations or retentions), (d) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (e) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money, (f) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (1) due more than six
months from the date of incurrence of the obligation in respect thereof or (2)
evidenced by a note or similar written instrument, (g) all obligations in
respect of any preferred Capital Stock of such Person subject to mandatory
sinking fund payments, redemption or other acceleration, (h) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person, (i) the face
amount of all letters of credit or bankers' acceptances that such Person is
obligated to reimburse the related letter of credit bank for, (j) the principal
balance outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product, and (k)
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer. For purposes of
calculating the aggregate amount of Indebtedness of Borrower and its
Subsidiaries, the aggregate amount of Indebtedness shall be equal to (i) the sum
of clauses (a) through (k) above, minus, except for purposes of Subsection 7.1
and 7.4, (ii) a working capital adjustment of $25,000,000 as of the last day of
each Fiscal Quarter ending in March of each Fiscal Year, plus (iii) a working
capital adjustment of $25,000,000 as of the last day of each Fiscal Quarter
ending in September of each Fiscal Year. Obligations under Interest Rate
Agreements and Currency Agreements constitute (1) in the case of Hedge
Agreements, Contingent Obligations, and (2) in all other cases, Investments, and
in neither case constitute Indebtedness.
"Indemnitee" has the meaning assigned to that term in Subsection X.C.
"Intellectual Property" means all patents, patent rights, patent
applications, licenses, inventions, trade secrets, trademarks, tradenames,
service marks, copyrights, technology, software, know-how and proprietary
techniques (including processes and substances) used in or necessary for the
conduct of the business of Borrower and its Subsidiaries as currently conducted
that are material to the financial condition, business or operations of Borrower
and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate Loan,
the last Business Day of each March, June, September and December of each year,
commencing on the first such date to occur after the Closing Date, and (ii) with
respect to any LIBOR Loan, the last day of each Interest Period applicable to
such Loan; provided that in the case of each Interest Period of six months,
"Interest Payment Date" shall also include the date that is three months after
the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in Subsection
II.B.2.
16
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Borrower or any of its Subsidiaries is a
party.
"Interest Rate Determination Date," with respect to any Interest
Period, means the second Business Day prior to the first day of such Interest
Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Borrower), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Borrower from any Person other than
Borrower or any of its Subsidiaries, of any equity Securities of such
Subsidiary, (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Borrower or any of its Subsidiaries to any other Person (other than a
wholly-owned Subsidiary of Borrower), including all Indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements; provided that Investments shall not include prepaid expenses of such
Person incurred and prepaid in the ordinary course of business in an aggregate
amount not to exceed $10,000,000 outstanding at any time. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.
"IP Collateral" means, collectively, the Collateral consisting of
rights in or to Intellectual Property under the Security Agreement.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender that agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in Subsection III.A.2.b.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, in substantially the form of Exhibit XVII annexed
hereto.
"LC Reimbursement Amount" has the meaning assigned to that term in
Subsection III.C.1.
17
"Leasehold Property" means any leasehold interest of any Loan Party
(other than a Foreign Subsidiary) as lessee under any lease of real property,
other than any such leasehold interest designated from time to time by
Administrative Agent in its sole discretion as not being required to be included
in the Collateral.
"Lender" and "Lenders" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to Subsection X.A; provided that the term
"Lenders", when used in the context of a particular Commitment, shall mean
Lenders having that Commitment.
"Letter of Credit" or "Letters of Credit" means any standby letter of
credit or similar instrument issued by Issuing Lender pursuant to Subsection 3.1
for the purpose of supporting (i) Indebtedness of Borrower or any of its
Subsidiaries in respect of industrial revenue or development bonds or
financings, (ii) workers' compensation liabilities of Borrower or any of its
Subsidiaries, (iii) the obligations of third party insurers of Borrower or any
of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) obligations with respect to Capital Leases or
Operating Leases of Borrower or any of its Subsidiaries, and (v) performance,
payment, deposit or surety obligations of Borrower or any of its Subsidiaries,
in any case if required by law or governmental rule or regulation or in
accordance with custom and practice in the industry; provided that Letters of
Credit may not be issued for the purpose of supporting (a) trade payables or (b)
any Indebtedness constituting "antecedent debt" (as that term is used in Section
547 of the Bankruptcy Code).
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Borrower in any manner, either
directly or out of the proceeds of Revolving Loans pursuant to Subsection
III.C.1 or otherwise reimbursed by Borrower.
"LIBOR Loans" means Loans bearing interest at rates determined by
reference to the Adjusted LIBOR as provided in Subsection II.B.1.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Tranche B Term Loans or
Revolving Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Borrower in favor of an Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty, the Environmental Indemnity
Agreement and the Collateral Documents.
18
"Loan Party" means each of Borrower and any of Borrower's Subsidiaries
from time to time executing a Loan Document, and "Loan Parties" means all such
Persons, collectively.
"Margin Determination Certificate" means an Officers' Certificate of
Borrower delivered with respect to each Fiscal Quarter setting forth in
reasonable detail the Consolidated Total Leverage Ratio for the four consecutive
Fiscal Quarters ending on the last day of the fiscal period for which such
Officers' Certificate is being delivered.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"Material Adverse Effect" means any act, omission, situation,
circumstance, event or undertaking which could reasonably be expected to have,
singly or in any combination with one or more other acts, omissions, situations,
circumstances, events or undertakings, a materially adverse effect upon (a) the
business, assets, properties, liabilities, financial condition, results of
operations or prospects of Borrower and its Subsidiaries taken as a whole, (b)
the value of the whole or any material part of the Collateral, or the
enforceability or priority of the security interest in the whole or any material
part of the Collateral, (c) the respective ability of Borrower or the Subsidiary
Guarantors (taken as a whole) to perform any of its or their obligations under
this Agreement or any other Loan Document to which it is a party, or (d) the
legality, validity, binding effect, enforceability or admissibility into
evidence of any Loan Document or the material rights or remedies of
Administrative Agent or Lenders under or in connection with any Loan Document.
"Material Contract" means any contract, indenture, mortgage, deed of
trust, undertaking, agreement, instrument or other arrangement, whether written
or oral, to which Borrower or any of its Subsidiaries is a party (other than the
Loan Documents), for which breach, nonperformance, cancellation or failure to
renew could reasonably be expected to have a Material Adverse Effect.
"Material Leasehold Property" means a leasehold property where annual
rental payments exceed $2,500,000 or as otherwise reasonably determined by
Administrative Agent to be of material value as Collateral or of material
importance to the operations of Borrower or any of its Subsidiaries.
"Material Subsidiary" means each Domestic Subsidiary of Borrower now
existing or hereafter acquired or formed by Borrower which, on a consolidated
basis for such Subsidiary and its Subsidiaries, (i) for the most recent Fiscal
Year accounted for more than five percent (5%) of the consolidated revenues of
Borrower and its Subsidiaries or (ii) as at the end of such Fiscal Year, was the
owner of more than 5% of the consolidated assets of Borrower and its
Subsidiaries. As of the Closing Date, the Material Subsidiaries are Four Paws
Products Ltd., Kaytee Products Incorporated, ▇▇▇▇▇▇▇▇▇▇ Seed, Inc., All-Glass
Aquarium Co., Inc., T.F.H. Publications, Inc. and Wellmark International.
19
"Minimum Amount" means, with respect to each of the following actions,
the minimum amount and any multiples in excess thereof set forth opposite such
action:
Multiples in
Type of Action Minimum Amount excess thereof
------------------------ -------------- --------------
Funding as or conversion
into Base Rate Loans $ 1,000,000 $ 1,000,000
Funding as or conversion
into LIBOR Loans $ 1,000,000 $ 1,000,000
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in the form of Exhibit XII annexed hereto or in
such other form as may be approved by Administrative Agent in its sole but
reasonable discretion, in each case with such changes thereto as may be
recommended by Administrative Agent's local counsel based on local laws or
customary local mortgage or deed of trust practices, or (ii) at Administrative
Agent's option, in the case of an Additional Mortgaged Property, an amendment to
an existing Mortgage, in form reasonably satisfactory to Administrative Agent,
adding such Additional Mortgaged Property to the Real Property Assets encumbered
by such existing Mortgage. "Mortgages" means all such instruments, including the
Closing Date Mortgages and any Additional Mortgages, collectively.
"Multiemployer Plan" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset
Sale, (ii) payment of the outstanding principal amount of, premium or penalty,
if any, and interest on any Indebtedness (other than the Loans) that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale, and (iii) any reasonable
brokerage fees, commissions and other similar expenses relating to such Asset
Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Borrower or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Borrower or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable
20
documented costs incurred by Borrower or any of its Subsidiaries in connection
with the adjustment or settlement of any claims of Borrower or such Subsidiary
in respect thereof.
"Net Pension Proceeds" has the meaning assigned to that term in
Subsection 2.4B(iv)(d).
"Net Proceeds Amount" has the meaning assigned to that term in
Subsection II.D.2.c(7).
"Net Securities Proceeds" means the Cash proceeds (net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses) from the (i) issuance
of Capital Stock of or incurrence of Indebtedness by Borrower or any of its
Subsidiaries and (ii) capital contributions made by a holder of Capital Stock of
Borrower.
"Non-US Lender" has the meaning assigned to that term in Subsection
2.7B(iii)(a).
"Notes" means one or more of the Tranche B Term Notes or Revolving
Notes or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Borrower to Administrative Agent pursuant
to Subsection II.A.2 with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Borrower to Administrative
Agent pursuant to Subsection II.B.4 with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise, whether
contingent, direct or otherwise, including post-petition interest on such
amounts accruing subsequent to, and interest that would have accrued but for,
the commencement of a proceeding under the Bankruptcy Code (whether or not such
interest is allowed as a claim in such proceeding).
"OFAC" has the meaning assigned to such term in Subsection 5.9B.
"Officer" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.
21
"Officer's Certificate," as applied to any Person that is a
corporation, partnership, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company; provided that every Officer's Certificate with
respect to the compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the Officer or Officers making or
giving such Officer's Certificate have read such condition and any definitions
or other provisions contained in this Agreement relating thereto, (ii) a
statement that, in the opinion of the signers, they have made or have caused to
be made such examination or investigation as is reasonably necessary to enable
them to express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"Operating Lease", as applied to any Person, means any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"Organizational Documents" means the documents (including Bylaws, if
applicable) pursuant to which a Person that is a corporation, partnership, trust
or limited liability company is organized.
"Participant" means a purchaser of a participation in the rights and
obligations under this Agreement pursuant to Subsection X.A.3.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"Permitted Encumbrances" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):
a. Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by Subsection
VI.C;
b. statutory Liens of landlords, statutory Liens and rights of
set-off of banks, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue) are being contested in
good faith by appropriate proceedings in an aggregate amount not to
exceed $2,000,000, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made
for any such contested
22
amounts, and (2) in the case of a Lien with respect to any portion of
the Collateral, such contest proceedings conclusively operate to stay
the sale of any portion of the Collateral on account of such Lien;
c. Liens incurred or deposits made in the ordinary course of
business and in an aggregate amount not to exceed $2,000,000 in
connection with workers' compensation, unemployment insurance and
other types of social security so long as no foreclosure, sale or
similar proceedings have been commenced with respect to any portion of
the Collateral on account thereof, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
d. any attachment or judgment Lien not constituting an Event of
Default under Subsection VIII.H;
e. leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering
in any material respect with the ordinary conduct of the business of
Borrower or any of its Subsidiaries or resulting in a material
diminution in the value of any Collateral as security for the
Obligations;
f. easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary
conduct of the business of Borrower or any of its Subsidiaries or
result in a material diminution in the value of any Collateral as
security for the Obligations;
g. any (a) interest or title of a lessor or sublessor under any
lease not prohibited by this Agreement, (b) restriction or encumbrance
that the interest or title of such lessor or sublessor may be subject
to, or (c) subordination of the interest of the lessee or sublessee
under such lease to any restriction or encumbrance referred to in the
preceding clause (b), so long as the holder of such restriction or
encumbrance agrees to recognize the rights of such lessee or sublessee
under such lease; and
h. Liens arising from filing UCC financing statements relating
solely to leases not prohibited by this Agreement.
"Permitted Holders" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or any Permitted
Transferees of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"Permitted Transferees" means, with respect to any person, (i) any
Affiliate of such Person, (ii) the heirs, executors, administrators,
testamentary trustees, legatees or
23
beneficiaries of any such Person or (iii) a trust, the beneficiaries of which,
or a corporation or partnership, the stockholders of general or limited partners
of which, include only such Person or his or her spouse or lineal descendants,
in each case to whom such Person has transferred the beneficial ownership of any
Securities of Borrower.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledged Collateral" means the "Pledged Collateral" as defined in the
Security Agreement.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Proceedings" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.
"Prohibited Persons" has the meaning assigned to that term in
Subsection 5.9B.
"Pro Rata Share" means (i) with respect to all payments, computations
and other matters relating to the Tranche B Term Loan Commitment or the Tranche
B Term Loan of any Lender, the percentage obtained by dividing (x) the Tranche B
Term Loan Exposure of that Lender by (y) the aggregate Tranche B Term Loan
Exposure of all Lenders; (ii) with respect to all payments, computations and
other matters relating to the Revolving Loan Commitment or the Revolving Loans
of any Lender or any Letters of Credit issued or participations therein
purchased by any Lender the percentage obtained by dividing (x) the Revolving
Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all
Lenders; and (iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Tranche B Term Loan Exposure
and the Revolving Loan Exposure of that Lender by (y) the sum of the aggregate
Tranche B Term Loan Exposure and Revolving Loan Exposure of all Lenders, in any
such case as the applicable percentage may be adjusted by assignments permitted
pursuant to Subsection X.A.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Reference Rate" means the rate that CIBC announces from time to time
as its prime lending rate, as in effect from time to time. The Reference Rate is
a reference rate and
24
does not necessarily represent the lowest or best rate actually charged to any
customer. CIBC or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Reference Rate.
"Register" has the meaning assigned to that term in Subsection II.A.4.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
Subsection III.C.1.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"Request for Issuance" means a request for issuance of a Letter of
Credit delivered by Borrower to Administrative Agent substantially in the form
of Exhibit III annexed hereto.
"Requisite Lenders" means Lenders having or holding more than 50% of
the sum of the aggregate Tranche B Term Loan Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of Borrower or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in shares of that class of Capital
Stock to the holders of that class and a dividend payable by any of Borrower's
Subsidiaries to Borrower or any Subsidiary Guarantor, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of
Borrower or any of its Subsidiaries now or hereafter outstanding, (iii) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire any shares of any class of Capital Stock of
Borrower or any of its Subsidiaries now or hereafter outstanding, and (iv) any
payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"Revolving Lender" means a Lender that has a Revolving Loan Commitment
and/or has an outstanding Revolving Loan.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Borrower pursuant to Subsection II.A.b, and "Revolving Loan
25
Commitments" means such commitments of all Lenders in the aggregate. The
Revolving Loan Commitments shall be recorded by Administrative Agent in the
Register.
"Revolving Loan Commitment Termination Date" means the earlier of May
__, 2008 or the date on which the Term Loans have been paid in full.
"Revolving Loan Exposure" means, with respect to any Lender, as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment, and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) if
that Lender is an Issuing Lender, the aggregate Letter of Credit Usage in
respect of all Letters of Credit issued by that Lender (in each case net of any
participations purchased by other Lenders in such Letters of Credit or in any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
in any unreimbursed drawings under any Letters of Credit.
"Revolving Loans" means the Loans made by Lenders to Borrower pursuant
to Subsection II.A.b.
"Revolving Notes" means (i) the promissory notes of Borrower issued
pursuant to Subsection ▇▇.▇▇(ii) on the Closing Date and (ii) any promissory
notes issued by Borrower pursuant to Subsection X.A.2.a in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of any
Lenders, and any replacements thereof, in each case substantially in the form of
Exhibit V annexed hereto, and any replacements thereof.
"S&P" means Standard & Poor's Ratings Group.
"SDN List" has the meaning assigned to that term in Subsection 5.9B.
"Securities" means any stock, shares, partnership interests,
membership interests, voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement, options, warrants,
bonds, debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated, or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"Securities Act" means the Securities Act of 1933.
"Security Agreement" means the Security Agreement executed and
delivered by each of the Loan Parties on the Closing Date, substantially in the
form of Exhibit XI annexed hereto.
"Senior Subordinated Note Indenture" means the Indenture dated as of
January 30, 2003 by and among Borrower, certain of Borrower's Subsidiaries, and
▇▇▇▇▇ Fargo Bank, National Association, as Trustee.
26
"Senior Subordinated Notes" means Borrower's 9.125% Senior
Subordinated Notes due 2013 issued pursuant to the Senior Subordinated Note
Indenture in an aggregate principal amount of $150,000,000.
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Subordinated Indebtedness" means any Indebtedness of Borrower
incurred from time to time and subordinated in right of payment to the
Obligations on terms and conditions reasonably satisfactory to Administrative
Agent, including the Senior Subordinated Notes.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which 50% or more of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Subsidiary Guarantor" means any Domestic Subsidiary of Borrower that
at any time has (i) total assets of more than $1,000,000 as reflected on such
Domestic Subsidiary's most recent balance sheet as of the date of determination
or (ii) Consolidated Excess Cash Flow (with respect to such Domestic Subsidiary
alone) of more than $500,000 for the most recently ended four Fiscal Quarters
for which internal financial statements are available.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by each of the Subsidiary Guarantors on the Closing Date and to be
executed and delivered by additional Subsidiary Guarantors of Borrower from time
to time thereafter in accordance with Subsection VI.H, substantially in the form
of Exhibit X annexed hereto.
"Supplemental Collateral Agent" has the meaning assigned to that term
in Subsection IX.A.2.
27
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed, including interest, penalties, additions to tax and any similar
liabilities with respect thereto; except that, in the case of a Lender, there
shall be excluded (1) taxes that are imposed on the overall net income or net
profits (including franchise taxes imposed in lieu thereof) (i) by the United
States, (ii) by any other Government Authority under the laws of which such
Lender is organized or has its principal office or maintains its applicable
lending office or (iii) by any jurisdiction solely as a result of a present or
former connection between such Lender and such jurisdiction (other than any such
connection arising solely from such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced any of the
Loan Documents), and (2) any branch profits taxes imposed by the United States
or any similar tax imposed by any other jurisdiction in which such Lender is
located.
"Term Loans" means the Tranche B Term Loans.
"Title Company" means one or more title insurance companies reasonably
satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the Letter of Credit Usage.
"Tranche B Term Loan Commitment" means the commitment of a Lender to
make a Tranche B Term Loan to Borrower pursuant to Subsection II.A.a, and
"Tranche B Term Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Tranche B Term Loan Exposure", with respect to any Lender, means, as
of any date of determination (i) prior to the funding of the Tranche B Term
Loans, that Lender's Tranche B Term Loan Commitment and (ii) after the funding
of the Tranche B Term Loans, the outstanding principal amount of the Tranche B
Term Loan of that Lender.
"Tranche B Term Loans" means the Loans made by Lenders to Borrower
pursuant to Subsection II.A.a.
"Tranche B Term Notes" means (i) the promissory notes of Borrower
issued pursuant to Subsection II.A.5 to evidence the Tranche B Term Loans of any
Lenders, (ii) any promissory notes issued by Borrower pursuant to Subsection
X.A.2.a in connection with assignments of the Term Loan Commitments or Term
Loans of any Lenders and any replacements thereof, in each case substantially in
the form of Exhibit IV annexed hereto.
"Transaction Costs" means the fees, reasonable costs and reasonable
expenses payable by Borrower on or before the Closing Date in connection with
the transactions contemplated by the Loan Documents.
28
"Type" means, with respect to any Loan, a Term Loan or a Revolving
Loan (each of which is a "Type" of Loan).
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"USA Patriot Act of 2001" has the meaning assigned to such term in
Subsection 5.9C.
B. Accounting Terms; Utilization of GAAP for Purposes of Calculations
------------------------------------------------------------------
Under Agreement.
---------------
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to clauses (i), (ii)
and (xi) of Subsection VI.A shall be prepared in accordance with GAAP (as in
effect in the United States of America at the time of such preparation) other
than an absence of footnotes with respect to financial statements and other
information delivered pursuant to clause (i) of Subsection VI.A and delivered
together with the reconciliation statements provided for in Subsection VI.A.d.
Calculations in connection with the definitions, covenants and other provisions
of this Agreement shall utilize GAAP as in effect in the United States of
America on the date of determination, applied in a manner consistent with that
used in preparing the financial statements referred to in Subsection V.C.
Borrower shall deliver to Administrative Agent at the same time as the delivery
of any annual or quarterly financial statements given in accordance with the
provisions of Subsection VI.A, (i) a description in reasonable detail of any
material change in the application of accounting principles employed in the
preparation of such financial statements from those applied in the most recently
preceding quarterly or annual financial statements and (ii) a reasonable
estimate of the effect on such financial statements on account of such changes
in application. If at any time any change in such GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and Borrower, Administrative Agent or Requisite Lenders shall so
request Administrative Agent, Lenders and Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in such GAAP (subject to the approval of Requisite
Lenders), provided that, until so amended, such ratio or requirement shall
continue to be computed in accordance with such GAAP prior to such change
therein and Borrower shall provide to Administrative Agent and Lenders
reconciliation statements provided for in Subsection VI.A.d.
C. Other Definitional Provisions and Rules of Construction.
-------------------------------------------------------
1. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the
reference.
2. References to "Sections" and "Subsections" shall be to Sections
and Subsections, respectively, of this Agreement unless otherwise
specifically provided.
29
3. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or
matter, shall not be construed to limit such statement, term or
matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or
not nonlimiting language (such as "without limitation" or "but
not limited to" or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all
other items or matters that fall within the broadest possible
scope of such general statement, term or matter.
4. Each of the parties hereto acknowledges that (i) it has been
represented by counsel in the negotiation and documentation of
the terms of this Agreement and other Loan Documents to be
executed on or prior to the Closing Date, (ii) it has had full
and fair opportunity to review and revise the terms of this
Agreement and such other Loan Documents, (iii) this Agreement and
such other Loan Documents have been drafted jointly by all of the
parties hereto, and (iv) neither Administrative Agent nor any
Lender has any fiduciary relationship with or duty to Borrower
arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between Administrative
Agent and Lenders, on the one hand, and Borrower, on the other
hand, in connection herewith or therewith is solely that of
debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall
not be construed against or in favor of another party.
5. Any reference in this Agreement or any other Loan Document to any
agreement means such agreement as it may be amended, restated,
supplemented or otherwise modified from time to time; (ii) any
reference in this Agreement or any other Loan Document to any
law, statute, regulation, rule or other legislative action shall
mean such law, statute, regulation, rule or other legislative
action as amended, supplemented, restated or otherwise modified
from time to time and any successor thereto, and shall include
any rule or regulation promulgated thereunder; and (iii) any
reference in this Agreement or any other Loan Document to a
Person shall include the successor or assignee of such Person.
II. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
A. Commitments; Making of Loans; Optional Notes.
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A. Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, each Lender hereby severally agrees to make the Loans as
described in Subsections II.A.a and II.A.b
a. Tranche B Term Loans. Each Lender having a Tranche B Term
Loan Commitment severally agrees to lend to Borrower on the
30
Closing Date an amount not exceeding its Pro Rata Share of
the aggregate amount of the Tranche B Term Loan Commitments
to be used for the purposes identified in Subsection II.E.1.
Borrower shall deliver to Administrative Agent a Notice of
Borrowing no later than 12:00 Noon (New York City time) at
least one Business Day prior to the Closing Date, requesting
a borrowing of the Tranche B Term Loans. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which
shall be a Business Day), (ii) the amount of the borrowing,
and (iii) that such Loans shall be Base Rate Loans. The
aggregate amount of the Tranche B Term Loan Commitments is
$100,000,000; provided that the Tranche B Term Loan
Commitments of Lenders shall be adjusted to give effect to
any assignments of the Tranche B Term Loan Commitments
pursuant to Subsection X.A.2 and (2) any increase in Tranche
B Term Loans pursuant to Subsection II.A.c. Each Lender's
Tranche B Term Loan Commitment shall expire immediately and
without further action on May 31, 2003 if the Tranche B Term
Loans have not been made on or before that date. Borrower
may make only one borrowing under the Tranche B Term Loan
Commitments. Amounts borrowed under this Subsection II.A.a
and subsequently repaid or prepaid may not be reborrowed.
b. Revolving Loans. Each Revolving Lender severally agrees,
subject to the limitations set forth below with respect to
the maximum amount of Revolving Loans permitted to be
outstanding from time to time, to lend to Borrower from time
to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Revolving Loan Commitments to be
used for the purposes identified in Subsection II.E.1. The
aggregate original amount of the Revolving Loan Commitments
is $100,000,000; provided that the Revolving Loan
Commitments of Revolving Lenders shall be adjusted to give
effect to any assignments of the Revolving Loan Commitments
pursuant to Subsection X.A.2 and shall be reduced from time
to time by the amount of any reductions thereto made
pursuant to Subsection D; and provided further that the
Revolving Loan Commitments of Lenders shall be adjusted to
give effect to (1) any assignments of the Revolving Loan
Commitments pursuant to Subsection 10.1B, and (2) any
increase in Revolving Loan Commitments pursuant to
Subsection II.A.c. Each Lender's Revolving Loan Commitment
shall expire immediately and without further action on the
Revolving Loan Commitment Termination Date and all Revolving
Loans and all other amounts
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owed hereunder with respect to the Revolving Loans and the
Revolving Loan Commitments shall be paid in full no later
than that date; provided that each Revolving Lender's
Revolving Loan Commitment shall expire immediately and
without further action on May 31, 2003 if the Tranche B Term
Loans have not been made on or before that date. Amounts
borrowed under this Subsection II.A.b may be repaid and
reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary notwithstanding, the
Revolving Loans and the Revolving Loan Commitments shall be subject to the
limitation that in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in effect.
c. Increases of the Tranche B Term Loan or Revolving Loan
Commitments. So long as no Event of Default or Potential
Event of Default has occurred and is continuing, Borrower
may, one time on or after the Closing Date, increase, at
Borrower's request (x) the then effective aggregate
principal amount of the Tranche B Term Loan and/or (y) the
then effective aggregate principal amount of Revolving Loan
Commitments; provided that (1) the aggregate principal
amount of the increases in the Tranche B Term Loan and/or
Revolving Loan Commitments pursuant to this Subsection
II.A.c shall not exceed $75,000,000, (2) Borrower shall
execute and deliver such documents and instruments and take
such other actions as may be reasonably requested by
Administrative Agent in connection with such increases and
at the time of any such proposed increase, and (3) no
Potential Event of Default or Event of Default shall have
occurred and be continuing or would occur after giving
effect to such increase. Any request under this Subsection
II.A.c shall be submitted by Borrower to Administrative
Agent (which shall promptly forward copies to Lenders).
Borrower may also specify any fees offered to those Lenders
(the "Increasing Lenders") which agree to increase the
principal amount of their applicable Tranche B Term Loan or
Revolving Loan Commitments, as the case may be, which fees
may be variable based upon the amount by which any such
Lender is willing to increase the principal amount of its
applicable Tranche B Term Loan or Revolving Loan Commitment,
as the case may be. No Lender shall have any obligation,
express or implied, to offer to increase the aggregate
principal amount of its applicable Tranche B Term Loan or
Revolving Loan Commitment, as the case may be. Only the
consent of each Increasing Lender shall be required for an
increase in the aggregate principal amount of the applicable
Tranche B Term Loan or Revolving Loan Commitments, as the
32
case may be, pursuant to this Subsection II.A.c. No Lender
which declines to increase the principal amount of its
Tranche B Term Loan or Revolving Loan Commitment, as the
case may be, may be replaced in respect to its existing
applicable Tranche B Term Loan or Revolving Loan Commitment,
as the case may be, as a result thereof without such
Lender's consent.
Each Increasing Lender shall as soon as practicable specify the amount
of the proposed increase that it is willing to assume. Borrower may accept
some or all of the offered amounts or designate new lenders that qualify as
Eligible Assignees and that are reasonably acceptable to Administrative
Agent as additional Lenders hereunder in accordance with this Subsection
II.A.c (each such new lender being a "New Lender"), which New Lender may
assume all or a portion of the increase in the aggregate principal amount
of the applicable Tranche B Term Loan or Revolving Loan Commitments, as the
case may be. Borrower and Administrative Agent shall have discretion
jointly to adjust the allocation of the increased aggregate principal
amount of the applicable Tranche B Term Loan or Revolving Loan Commitments,
as the case may be, among Increasing Lenders and New Lenders. In no event
shall the "all-in" cost to Borrower on a percentage basis of the increased
amount of the Tranche B Term Loan exceed the "all-in" cost to Borrower on a
percentage basis of the Tranche B Term Loan as of the Closing Date, taking
into account the effect of any fees or discounts.
Subject to the foregoing, any increase requested by Borrower shall be
effective upon delivery to Administrative Agent of each of the following
documents: (i) an originally executed copy of an instrument of joinder
signed by a duly authorized officer of each New Lender, in form and
substance reasonably acceptable to Administrative Agent; (ii) a notice to
the Increasing Lenders and New Lenders, in form and substance reasonably
acceptable to Administrative Agent, signed by a duly authorized officer of
Borrower; (iii) an Officer's Certificate of Borrower, in form and substance
reasonably acceptable to Administrative Agent; (iv) to the extent requested
by any New Lender or Increasing Lender, executed Tranche B Term Notes
and/or Revolving Notes issued by Borrower in accordance with Subsection
2.1E hereof; and (v) any other certificates or documents that
Administrative Agent shall reasonably request, in form and substance
reasonably satisfactory to Administrative Agent. Any such increase shall be
in a principal amount equal to (A) the principal amount that Increasing
Lenders are willing to assume as increases to the principal amount of their
applicable Tranche B Term Loan or Revolving Loan Commitments, as the case
may be, plus (B) the principal amount offered by New Lenders with respect
to the Tranche B Term Loan or Revolving Loan Commitments, as the case may
be, in either case as adjusted by Borrower and Administrative Agent
pursuant to this Subsection 2.1A(iii). Upon effectiveness of any such
increase, the Commitments, Pro Rata Share and outstanding Revolving Loans
of each Lender will be adjusted to give effect to the increase in the
Tranche B Term Loan or Revolving Loan Commitments, as the case may be. To
the extent that the adjustment of Pro Rata Shares results in losses or
expenses to any Lender as a result of the prepayment of any LIBOR Loan on a
date other than the scheduled last day of the applicable Interest
33
Period, Borrower shall be responsible for such losses or expenses pursuant
to Subsection F.3.
2. Borrowing Mechanics. Revolving Loans made on any Funding Date
(other than Revolving Loans made pursuant to Subsection III.C.1
for the purpose of reimbursing any Issuing Lender for the amount
of a drawing under a Letter of Credit issued by it) shall be Base
Rate Loans or LIBOR Loans in the applicable Minimum Amount
therefor. Whenever Borrower desires that Lenders make Revolving
Loans it shall deliver to Administrative Agent a Notice of
Borrowing no later than 12:00 Noon (New York City time) at least
three Business Days in advance of the proposed Funding Date (in
the case of a LIBOR Loan) or no later than 12:00 Noon (New York
City time) on the proposed Funding Date (in the case of a Base
Rate Loan). The Notice of Borrowing shall specify (i) the
proposed Funding Date (which shall be a Business Day), (ii) the
amount and Type of Loans requested, (iii) in the case of any
Loans made on the Closing Date, that such Loans shall be Base
Rate Loans, (iv) in the case of Loans not made on the Closing
Date, whether such Loans shall be Base Rate Loans or LIBOR Loans,
(v) in the case of any Loans requested to be made as LIBOR Loans,
the initial Interest Period requested therefor and (vi)
information about the account of Borrower to be credited. Loans
may be continued as or converted into Base Rate Loans and LIBOR
Loans in the manner provided in Subsection II.B.3. In lieu of
delivering the above-described Notice of Borrowing for any Loan,
Borrower may give Administrative Agent telephonic notice by the
required time of any proposed borrowing under this Subsection
II.A.2; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Administrative
Agent at Administrative Agent's Office no later than 2:00 P.M.
(New York City time) on the date such notice was given.
None of Administrative Agent or any Lender shall incur any liability
to Borrower in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized Officer or other Person authorized to borrow on behalf of Borrower or
for otherwise acting in good faith under this Subsection II.A.2, and upon
funding of Loans by Lenders in accordance with this Agreement pursuant to any
such telephonic notice Borrower shall have effected a borrowing of Loans
hereunder.
Borrower shall notify Administrative Agent prior to the funding of any
Loans if any of the matters to which Borrower is required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Borrower of the proceeds of any
Loans shall constitute a re-certification by Borrower, as of the applicable
Funding Date, as to the matters to which Borrower is required to certify in the
applicable Notice of Borrowing.
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Except as otherwise provided in Subsections II.F.1, II.F.2 and II.F.6,
a Notice of Borrowing for LIBOR Loan (or telephonic notice in lieu thereof)
shall be irrevocable once Administrative Agent receives such notice, and
Borrower shall be bound to make a borrowing in accordance therewith.
3. Disbursement of Funds. All Term Loans and Revolving Loans under
this Agreement shall be made by Lenders having a Commitment of
that Type simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that neither Administrative
Agent nor any Lender shall be responsible for any default by any
other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to
make the particular Type of Loan requested be increased or
decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by Administrative Agent of a Notice of
Borrowing pursuant to Subsection 1.1A or II.A.2 (or telephonic
notice in lieu thereof), Administrative Agent shall notify each
Lender for that Type of Loan, as the case may be, of the proposed
borrowing. Each such Lender shall make the amount of its Loan
available to Administrative Agent at the Administrative Agent's
Office not later than 12:00 Noon (New York City time) for LIBOR
Loans, and not later than 2:00 P.M. (New York City time) for Base
Rate Loans, on the applicable Funding Date in same day funds in
Dollars. Except as provided in Subsection III.C.1 with respect to
Revolving Loans used to reimburse any Issuing Lender for the
amount of a drawing under a Letter of Credit issued by it, upon
satisfaction or waiver of the conditions precedent specified in
Subsections IV.A (in the case of Loans made on the Closing Date)
and IV.B (in the case of all Loans), Administrative Agent shall
make the proceeds of such Loans available to Borrower on the
applicable Funding Date by causing an amount of same day funds in
Dollars equal to the proceeds of all such Loans received by
Administrative Agent from Lenders to be wire-transferred to an
account of Borrower as specified in the applicable Notice of
Borrowing.
Unless Administrative Agent shall have been notified by any Lender
prior to a Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrower a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three
35
Business Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Administrative Agent, at the rate payable under this Agreement for
Base Rate Loans for such Type of Loans. Nothing in this Subsection II.A.3 shall
be deemed to relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Borrower may have against any Lender
as a result of any default by such Lender hereunder.
4. The Register.
a. Administrative Agent shall maintain, at its address referred
to in Subsection X.H, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans
of each Lender from time to time (the "Register"). The
Register shall be available for inspection by Borrower at
any reasonable time and from time to time upon reasonable
prior notice.
b. Administrative Agent shall record in the Register the
Tranche B Term Loan Commitment and Revolving Loan Commitment
and the Tranche B Term Loans and Revolving Loans from time
to time of each Lender and each repayment or prepayment in
respect of the principal amount of the Tranche B Term Loans
or Revolving Loans of each Lender. Any such recordation
shall constitute prima facie evidence of the amounts
borrowed hereunder; provided that failure to make any such
recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Borrower's Obligations in
respect of any applicable Loans.
c. Each Lender may record on its internal records (including
the Notes held by such Lender) the amount of the Tranche B
Term Loans and each Revolving Loan made by it and each
payment in respect thereof. Any such recordation shall
constitute prima facie evidence of the amounts borrowed
hereunder; provided that failure to make any such
recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Borrower's Obligations in
respect of any applicable Loans; and provided further that
in the event of any inconsistency between the Register and
any Lender's records, the recordations in the Register shall
govern (absent manifest error).
d. Borrower, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the
holders and owners of the corresponding Commitments and
Loans listed therein for all purposes hereof, and no
assignment or transfer of
36
any such Commitment or Loan shall be effective, in each case
unless and until an Assignment Agreement effecting the
assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as
provided in Subsection X.A.2.b. Prior to such recordation,
all amounts owed with respect to the applicable Commitment
or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent
of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register
as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
e. Borrower hereby designates CIBC to serve as Borrower's agent
solely for purposes of maintaining the Register as provided
in this Subsection II.A.4, and Borrower hereby agrees that,
to the extent CIBC serves in such capacity, CIBC and its
officers, directors, employees, agents and Affiliates shall
constitute Indemnitees for all purposes under Subsection
X.C.
5. Optional Notes. If so requested by any Lender by written notice
to Borrower (with a copy to Administrative Agent) at least two
Business Days prior to the Closing Date or at any time
thereafter, Borrower shall execute and deliver on the Closing
Date or within three Business Days after receipt of written
request therefor to the requesting Lender (or to Administrative
Agent for that Lender, if requested by such Lender) (i) a Tranche
B Term Note substantially in the form of Exhibit IV annexed
hereto to evidence that Lender's Tranche B Term Loan, in the
principal amount of that Lender's Tranche B Term Loan and with
other appropriate insertions, and (ii) a Revolving Note
substantially in the form of Exhibit V annexed hereto to evidence
that Lender's Revolving Loans, in the principal amount of that
Lender's Revolving Loan Commitment and with other appropriate
insertions.
Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent as provided in Subsection X.A.2.b. Any request,
authorization or consent of any Person who, at the time of making such request
or giving such authority or consent, is the holder of any Note (or Loan) shall
be conclusive and binding on any subsequent holder, assignee or transferee of
that Note (or Loan) or of any Note or Notes issued in exchange therefor.
If Borrower increases the aggregate principal amount of the Tranche B
Term Loans or Revolving Loan Commitments, as the case may be, pursuant to
Subsection II.A.c, Borrower shall issue replacement Tranche B Term Notes and/or
Revolving Notes, as the case may be, to each Increasing Lender (or to
Administrative Agent for such Increasing Lender) that
37
requests a Note in accordance with the terms hereof and new Tranche B Term
Notes and/or Revolving Notes, as the case may be, to each New Lender (or to
Administrative Agent for such New Lender) that requests a Note in accordance
with the terms hereof.
B. Interest on the Loans.
---------------------
1. Rate of Interest. Subject to the provisions of Subsections II.F
and II.G, each Term Loan and each Revolving Loan shall bear
interest on the unpaid principal amount thereof from the date
made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Base Rate or Adjusted LIBOR.
The applicable basis for determining the rate of interest with
respect to any Term Loan or any Revolving Loan shall be selected
by Borrower initially at the time a Notice of Borrowing is given
with respect to such Loan pursuant to Subsection II.A.2, and the
basis for determining the interest rate with respect to any Term
Loan or any Revolving Loan may be changed from time to time
pursuant to Subsection II.B.4 (subject to the last sentence of
Subsection A.2). If on any day a Term Loan or Revolving Loan is
outstanding with respect to which notice has not been delivered
to Administrative Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the
rate of interest, then for that day that Loan shall bear interest
determined by reference to the Base Rate.
Subject to the provisions of Subsections II.B.5 and II.G, the Tranche
B Term Loans and the Revolving Loans shall bear interest through maturity as
follows:
a. if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin for such Type of Loans; or
b. if a LIBOR Loan, then at the sum of Adjusted LIBOR plus the
Applicable LIBOR Margin for such Type of Loans.
Upon delivery of a Margin Determination Certificate by Borrower to
Administrative Agent (a) with respect to each Fiscal Quarter (other than each
fourth Fiscal Quarter), together with the three most recent financial statements
required to be delivered pursuant to Subsection 6.1(i), and (b) with respect to
each fourth Fiscal Quarter, within forty-five (45) days after the last day of
such fourth Fiscal Quarter (to be included as part of the Compliance Certificate
for each such Fiscal Quarter), the Applicable Base Rate Margin and Applicable
LIBOR Margin shall automatically be adjusted in accordance with such Margin
Determination Certificate, such adjustment to become effective on the 60th day
after the end of the Fiscal Quarter to which the financial results contained in
the Margin Determination Certificate relate; provided that (1) at any time a
Margin Determination Certificate is not delivered within forty-five (45) days
after the last day of any Fiscal Quarter, from the forty-fifth day until
delivery of such Margin Determination Certificate, the Applicable Base Rate
Margin shall be 1.25% for Revolving Loans, and 1.25% for Tranche B Term Loans,
and the Applicable LIBOR Margin shall be 2.75% for Revolving Loans, and 2.75%
for Tranche B Term Loans, and
38
(2) if a Margin Determination Certificate erroneously indicates (as determined
by Administrative Agent after consultation with Borrower) an applicable margin
more favorable to Borrower than should be afforded by the actual calculation of
the Consolidated Total Leverage Ratio, Borrower shall promptly pay additional
interest and letter of credit fees required to correct for such error.
2. Interest Periods. In connection with each LIBOR Loan, Borrower
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest
period (each an "Interest Period") to be applicable to such Loan,
which Interest Period shall be, at Borrower's option, either a
one, two, three or six month period; provided that:
a. the initial Interest Period for any LIBOR Loan shall
commence on the Funding Date in respect of such Loan, in the
case of a Loan initially made as a LIBOR Loan, or on the
date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to
a LIBOR Loan;
b. in the case of immediately successive Interest Periods
applicable to a LIBOR Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest
Period shall commence on the day on which the next preceding
Interest Period expires;
c. if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; provided that, if any
Interest Period would otherwise expire on a day that is not
a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;
d. any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Interest Period) shall, subject to clause (v) of
this Subsection II.B.2, end on the last Business Day of a
calendar month;
e. no Interest Period with respect to any portion of the
Tranche B Term Loans shall extend beyond May __, 2009, and
no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Revolving Loan
Commitment Termination Date;
f. no Interest Period with respect to the Tranche B Term Loans
shall extend beyond a date on which Borrower is required to
make a
39
scheduled payment of principal of the Tranche B Term Loans,
unless the sum of (a) the aggregate principal amount of the
Tranche B Term Loans that are Base Rate Loans plus (b) the
aggregate principal amount of the Tranche B Term Loans that
are LIBOR Loans with Interest Periods expiring on or before
such date equals or exceeds the principal amount required to
be paid on the Tranche B Term Loans on such date;
g. there shall be no more than ten (10) Interest Periods
outstanding at any time; and
h. if Borrower fails to specify an Interest Period for any
LIBOR Loan in the applicable Notice of Borrowing, Borrower
shall be deemed to have requested a Base Rate Loan.
3. Interest Payments. Subject to the provisions of Subsection
II.B.5, interest on each Loan shall be payable in arrears on and
to each Interest Payment Date applicable to that Loan, upon any
prepayment of that Loan (to the extent accrued on the amount
being prepaid) and at maturity (including final maturity)
provided that if any Revolving Loans that are Base Rate Loans are
prepaid pursuant to Subsection II.D.2.a, interest accrued on such
Loans through the date of such prepayment shall be payable on the
next succeeding Interest Payment Date applicable to Base Rate
Loans (or, if earlier, at final maturity).
4. Conversion or Continuation.
a. Subject to the provisions of Subsection II.G, Borrower shall
have the option (i) to convert at any time all or any part
of its outstanding Term Loans or Revolving Loans from Loans
bearing interest at a rate determined by reference to one
basis to Loans bearing interest at a rate determined by
reference to an alternative basis, in each case in the
applicable Minimum Amount therefor, or (ii) upon the
expiration of any Interest Period applicable to a LIBOR
Loan, to continue all or any portion of such Loan equal to
the Minimum Amount as a LIBOR Loan; provided, however, that
a LIBOR Loan may only be converted into a Base Rate Loan on
the expiration date of an Interest Period applicable
thereto.
b. Borrower shall deliver a Notice of Conversion/Continuation
to Administrative Agent no later than 12:00 Noon (New York
City time) at least three Business Days in advance of the
proposed conversion date (in the case of a conversion to a
Base Rate Loan) and at least three Business Days in advance
of the proposed conversion/continuation date (in the case of
a conversion to, or a continuation of, a LIBOR Loan). With
respect to any LIBOR
40
Loan, if Borrower fails to deliver a Notice of
Conversion/Continuation as described above or if any
proposed conversion/continuation under this Subsection
II.B.4 is not permitted hereunder, Borrower shall be deemed
to have elected to convert such LIBOR Loan to a Base Rate
Loan on the last day of the then-expiring Interest Period.
c. A Notice of Conversion/Continuation shall specify (a) the
proposed conversion/continuation date (which shall be a
Business Day), (b) the amount and type of the Loan to be
converted/continued, (c) the nature of the proposed
conversion/ continuation, (d) in the case of a conversion
to, or a continuation of, a LIBOR Loan, the requested
Interest Period, and (e) in the case of a conversion to, or
a continuation of, a LIBOR Loan, that no Potential Event of
Default or Event of Default has occurred and is continuing.
In lieu of delivering the above-described Notice of
Conversion/Continuation, Borrower may give Administrative
Agent telephonic notice by the required time of any proposed
conversion/continuation under this Subsection II.B.4,
provided that Administrative Agent shall receive a Notice of
Conversion/Continuation to confirm such telephonic notice no
later than 2:00 P.M. (New York City time) on the day on
which such telephonic notice is given. Upon receipt of
written or telephonic notice of any proposed
conversion/continuation under this Subsection II.B.4,
Administrative Agent shall promptly transmit such notice by
telefacsimile or electronic mail (or by telephone promptly
confirmed by telefacsimile or electronic mail) to each
Lender.
(iv) Neither Administrative Agent nor any Lender shall incur any
liability to Borrower in acting upon any telephonic notice referred to
above that Administrative Agent believes in good faith to have been given
by a duly authorized Officer or other Person authorized to act on behalf of
Borrower or for otherwise acting in good faith under this Subsection
II.B.4, and upon conversion or continuation of the applicable basis for
determining the interest rate with respect to any Loans in accordance with
this Agreement pursuant to any such telephonic notice Borrower shall have
effected a conversion or continuation, as the case may be, hereunder.
(v) Except as otherwise provided in Subsections F.1, F.2 and F.6, a
notice of a proposed conversion to, or continuation of, a LIBOR Loan
(whether by delivery of a Notice of Conversion/Continuation or telephonic
notice) shall be irrevocable once Administrative Agent receives such
notice, and Borrower shall be bound to effect a conversion or continuation
in accordance therewith.
5. Default Rate. Upon the occurrence and during the continuation of
any Event of Default, at the election of Administrative Agent or
Requisite
41
Lenders the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon
not paid when due and any fees and other amounts then due and
payable hereunder, shall thereafter bear interest (including
post-petition interest in any proceeding under the Bankruptcy
Code or other applicable bankruptcy laws) payable upon demand at
a rate that is 2.00% per annum in excess of the interest rate
then in effect with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2.00%
per annum in excess of the interest rate otherwise payable under
this Agreement for Revolving Loans that are Base Rate Loans);
provided that, in the case of LIBOR Loans, upon the expiration of
each Interest Period in effect at the time any such increase in
interest rate is effective such LIBOR Loans shall thereupon
become Base Rate Loans and shall thereafter bear interest
(including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate which is 2.00% per annum in excess of the
interest rate then in effect for Revolving Loans that are Base
Rate Loans. Payment or acceptance of the increased rates of
interest provided for in this Subsection II.B.5 is not a
permitted alternative to timely payment and shall not constitute
a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of Administrative Agent or any Lender.
6. Computation of Interest. Interest on the Loans and other
Obligations shall be computed (i) in the case of Base Rate Loans,
on the basis of a 365/366-day year (as applicable), and (ii) in
the case of LIBOR Loans and other Obligations (other than Base
Rate Loans), on the basis of a 360-day year, in each case for the
actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan
being converted from a LIBOR Loan, the date of conversion of such
LIBOR Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration
date of an Interest Period applicable to such Loan or, with
respect to a Base Rate Loan being converted to a LIBOR Loan, the
date of conversion of such Base Rate Loan to such LIBOR Loan, as
the case may be, shall be excluded; provided that if a Loan is
repaid on the same day on which it is made, one day's interest
shall be paid on that Loan.
7. Maximum Rate. Notwithstanding the foregoing provisions of this
Subsection B, in no event shall the rate of interest payable by
Borrower with respect to any Loan exceed the maximum rate of
interest permitted to be charged under applicable law.
42
C. Fees.
----
1. Revolving Loan Commitment Fees. Borrower agrees to pay to
Administrative Agent, for distribution to each Lender in
proportion to that Lender's Pro Rata Share of the Revolving Loan
Commitments, commitment fees for the period from and including
the Closing Date to and excluding the Revolving Loan Commitment
Termination Date equal to the average of the daily excess of the
Revolving Loan Commitments over the Total Utilization of
Revolving Loan Commitments multiplied by (i) until the date that
is five Business Days after the date on which the first Margin
Determination Certificate is scheduled to be delivered to
Administrative Agent pursuant to Subsection 2.2A, one half of 1%
per annum, and (ii), thereafter, at the applicable Commitment Fee
Percentage, such commitment fees to be calculated on the basis of
a 360-day year and the actual number of days elapsed and to be
payable quarterly in arrears on the last Business Day of each
March, June, September and December of each year commencing on
the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date.
2. Other Fees. Borrower agrees to pay to Co-Lead Arrangers and
Administrative Agent such fees in the amounts and at the times
separately agreed upon between Borrower, Co-Lead Arrangers and
Administrative Agent.
D. Repayments, Prepayments and Reductions in Revolving Loan Commitments;
---------------------------------------------------------------------
General Provisions Regarding Payments; Application of Proceeds of
-----------------------------------------------------------------
Collateral and Payments Under Subsidiary Guaranty.
-------------------------------------------------
B. Scheduled Payments of Term Loans.
a. Scheduled Payments of Tranche B Term Loans. Borrower shall
make principal payments on the Tranche B Term Loans in
installments on the dates and in the amounts set forth
below:
43
------------------------------------------------
Scheduled
Date Repayment
------------------------------------------------
September 30, 2003 $ 250,000
------------------------------------------------
December 31, 2003 $ 250,000
------------------------------------------------
March 31, 2004 $ 250,000
------------------------------------------------
June 30, 2004 $ 250,000
------------------------------------------------
September 30, 2004 $ 250,000
------------------------------------------------
December 31, 2004 $ 250,000
------------------------------------------------
March 31, 2005 $ 250,000
------------------------------------------------
June 30, 2005 $ 250,000
------------------------------------------------
September 30, 2005 $ 250,000
------------------------------------------------
December 31, 2005 $ 250,000
------------------------------------------------
March 31, 2006 $ 250,000
------------------------------------------------
June 30, 2006 $ 250,000
------------------------------------------------
September 30, 2006 $ 250,000
------------------------------------------------
December 31, 2006 $ 250,000
------------------------------------------------
March 31, 2007 $ 250,000
------------------------------------------------
June 30, 2007 $ 250,000
------------------------------------------------
September 30, 2007 $ 250,000
------------------------------------------------
December 31, 2007 $ 250,000
------------------------------------------------
March 31, 2008 $ 250,000
------------------------------------------------
June 30, 2008 $ 250,000
------------------------------------------------
September 30, 2008 $ 250,000
------------------------------------------------
December 31, 2008 $ 250,000
------------------------------------------------
March 31, 2009 $ 250,000
------------------------------------------------
May __, 2009 $ 94,250,000
------------------------------------------------
; provided that the scheduled installments of principal of the Tranche B Term
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Tranche B Term Loans in accordance with Subsection
II.D.2.d; and provided, further that the Tranche B Term Loans and all other
amounts owed hereunder with respect to the Tranche B Term Loans shall be paid in
full no later than May __, 2009, and the final installment payable by Borrower
in respect of the Tranche B Term Loans on such date shall be in an amount, if
such amount is different from that specified above, sufficient to repay all
amounts owing by Borrower
44
under this Agreement with respect to the Tranche B Term Loans; and provided,
further that if the aggregate principal amount of the Tranche B Term Loans is
increased pursuant to Subsection 2.1A(iii), then each scheduled principal
repayment to be made after such increase becomes effective shall be increased by
an amount equal to (a) the aggregate principal amount of the increase in the
Tranche B Term Loans pursuant to Subsection II.A.c multiplied by (b) an amount
equal to (x) such scheduled repayment amount divided by (y) the aggregate
principal amount of the Tranche B Term Loans to be repaid immediately prior to
giving effect to the increase in the Tranche B Term Loans made pursuant to
Subsection 2.1A(iii).
2. Prepayments and Unscheduled Reductions in Revolving Loan
Commitments.
a. Voluntary Prepayments. Borrower may, upon not less than one
Business Day's irrevocable prior written notice, in the case
of Base Rate Loans, and three Business Days' irrevocable
prior written notice, in the case of LIBOR Loans, in each
case given to Administrative Agent by 12:00 Noon (New York
City time) on the date required (which written notice
Administrative Agent will promptly transmit by telefacsimile
or electronic mail to each Lender for the Loans to be
prepaid), at any time and from time to time prepay any
Tranche B Term Loans or Revolving Loans on any Business Day
in whole or in part in an aggregate minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of
that amount; provided, however, that any LIBOR Loan may be
prepaid on a day other than the expiration of the Interest
Period applicable thereto, only if Borrower pays the amounts
due pursuant to Subsection II.F.3 caused by such prepayment.
Notice of prepayment having been given as aforesaid, the
principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be applied as
specified in Subsection II.D.2.d.
b. Voluntary Reductions of Revolving Loan Commitments. Borrower
may, upon not less than five Business Days' irrevocable
prior written notice to Administrative Agent (which written
notice Administrative Agent will promptly transmit to each
Lender), at any time and from time to time terminate in
whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to
the amount by which the Revolving Loan Commitments exceed
the Total Utilization of Revolving Loan Commitments at the
time of such proposed termination or reduction; provided
that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of
that amount. Borrower's notice to Administrative Agent shall
designate the date (which shall be a
45
Business Day) of such termination or reduction and the
amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be
effective on the date specified in Borrower's notice and
shall reduce the Revolving Loan Commitment of each Revolving
Lender proportionately according to its Pro Rata Share.
c. Mandatory Prepayments and Mandatory Reductions of Revolving
Loan Commitments. The Loans shall be prepaid and/or the
Revolving Loan Commitments shall be permanently reduced in
the amounts and under the circumstances set forth below, all
such prepayments and/or reductions to be applied as set
forth below or as more specifically provided in Subsection
II.D.2.d:
(1) Prepayments and Reductions From Net Asset Sale
Proceeds. No later than five (5) days from the date of
receipt by Borrower or any of its Subsidiaries of any
Net Asset Sale Proceeds in respect of any Asset Sale
(other than a sale of Capital Stock covered by
Subsection 2.4B(iii)(c)), Borrower shall either (1)
prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount
equal to such Net Asset Sale Proceeds or (2) so long as
no Potential Event of Default or Event of Default shall
have occurred and be continuing and to the extent that
aggregate Net Asset Sale Proceeds from the Closing Date
through the date of determination do not exceed
$5,000,000, deliver to Administrative Agent an
Officer's Certificate setting forth (x) that portion of
such Net Asset Sale Proceeds that Borrower or such
Subsidiary intends to reinvest in equipment or other
productive assets of the general type used in the
business of Borrower and its Subsidiaries within one
hundred eighty (180) days of such date of receipt and
(y) the proposed use of such portion of the Net Asset
Sale Proceeds and such other information with respect
to such reinvestment as Administrative Agent may
reasonably request, and Borrower shall, or shall cause
one or more of its Subsidiaries to, promptly and
diligently apply such portion to such reinvestment
purposes; provided, however, that pending such
reinvestment such portion of the Net Asset Sale
Proceeds shall be applied to prepay outstanding
Revolving Loans (without a reduction in Revolving Loan
Commitments) to the full extent thereof. In addition,
Borrower shall, no later than one hundred eighty (180)
days after receipt of such Net Asset Sale Proceeds that
have not
46
theretofore been applied to the Loans (other than any
prepayment of Revolving Loans not resulting in a
corresponding reduction in the Revolving Loan
Commitments) or that have not been so reinvested as
provided above, make an additional prepayment of the
Loans (and/or the Revolving Loan Commitments shall be
permanently reduced) in the full amount of all such Net
Asset Sale Proceeds.
(2) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than five (5)
days from the date Borrower or any of its Subsidiaries
is required to prepay the Loans in accordance with the
provisions of Subsection VI.D.3 with Net
Insurance/Condemnation Proceeds, Borrower shall prepay
the Loans and/or the Revolving Loan Commitments shall
be permanently reduced in an aggregate amount equal to
the amount of such Net Insurance/Condemnation Proceeds.
(3) Prepayments and Reductions Due to Issuance of Equity
Securities. No later than five (5) days from the date
of receipt of the Net Securities Proceeds from the
issuance of any Capital Stock of Borrower or of any
Subsidiary of Borrower or from any capital contribution
to Borrower by any holder of Capital Stock thereof
after the Closing Date, if the Consolidated Total
Leverage Ratio for the Fiscal Quarter most recently
ended exceeds 3.00:1.00, Borrower shall prepay the
Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to the
lesser of fifty percent (50%) of such Net Securities
Proceeds or such amount as will bring the Consolidated
Total Leverage Ratio to not more than 3.00:1.00.
(4) Reversion of Surplus Assets of Pension Plans. To the
extent permitted by applicable law, no later than five
(5) days from the date of return to Borrower or any of
its Subsidiaries of any surplus assets of any
terminated defined benefit Pension Plan of Borrower or
any of its Subsidiaries, Borrower shall prepay the
Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount (such amount
being the "Net Pension Proceeds") equal to one hundred
percent (100%) of such returned surplus assets in
excess of $1,000,000, net of transaction costs and
expenses incurred in obtaining such
47
return, including incremental taxes payable as a result
thereof.
(5) Prepayments and Reductions Due to Issuance of
Indebtedness. No later than five (5) days from the date
of receipt of the Net Securities Proceeds from the
issuance of Indebtedness permitted pursuant to
Subsection VII.A(vii) of Borrower or any of its
Subsidiaries after the Closing Date, if the
Consolidated Total Leverage Ratio for the Fiscal
Quarter most recently ended exceeds 3.00:1.00, Borrower
shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an
aggregate amount equal to the lesser of fifty percent
(50%) of such Net Securities Proceeds or such amount as
will bring the Consolidated Total Leverage Ratio to not
more than 3.00:1.00.
(6) Prepayments and Reductions from Consolidated Excess
Cash Flow. If there is Consolidated Excess Cash Flow
for any Fiscal Year (commencing with Fiscal Year 2004),
and if the Consolidated Total Leverage Ratio as of the
end of such Fiscal Year exceeds 3.00:1.00, Borrower
shall, no later than one hundred twenty (120) days
after the end of such Fiscal Year, prepay the Loans
and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to the
lesser of fifty percent (50%) of such Consolidated
Excess Cash Flow or such amount as will bring the
Consolidated Total Leverage Ratio to not more than
3.00:1.00.
(7) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent
Calculations. Concurrently with any prepayment of the
Loans and/or reduction of the Revolving Loan
Commitments pursuant to Subsections II.D.2.c(1)-(f),
Borrower shall deliver to Administrative Agent an
Officer's Certificate demonstrating the calculation of
the amount (the "Net Proceeds Amount") of the
applicable Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds, Net Pension Proceeds,
Net Securities Proceeds, or Consolidated Excess Cash
Flow, as the case may be, that gave rise to such
prepayment and/or reduction. If Borrower subsequently
determines that the actual Net Proceeds Amount was
greater than the amount set forth in such Officer's
Certificate (including if any actual taxes to be paid
as a result of an Asset Sale is less than the estimated
taxes to be paid as a result of such Asset Sale),
Borrower
48
shall promptly make an additional prepayment of the
Loans (and/or, if applicable, the Revolving Loan
Commitments shall be permanently reduced) in an amount
equal to the amount of such excess, and Borrower shall
concurrently therewith deliver to Administrative Agent
an Officer's Certificate demonstrating the derivation
of the additional Net Proceeds Amount resulting in such
excess.
(8) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Borrower shall from time to
time prepay the Revolving Loans (or, if the Revolving
Loans have been prepaid in full, cash collateralize
Letters of Credit) to the extent necessary so that the
Total Utilization of Revolving Loan Commitments shall
not at any time exceed the Revolving Loan Commitments
then in effect.
d. Application of Prepayments.
(1) Application of Voluntary Prepayments by Type of Loans
and Order of Maturity. Subject to the provisions of
Subsection D4, any voluntary prepayments pursuant to
Subsection II.D.2.a shall be applied as specified by
Borrower in the applicable notice of prepayment;
provided that if Borrower fails to specify the Loans to
which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding
Tranche B Term Loans to the full extent thereof, second
to prepay outstanding Revolving Loans to the full
extent thereof and permanently reduce the Revolving
Loan Commitments and third to cash collateralize any
outstanding Letters of Credit and to further
permanently reduce the Revolving Loan Commitments by
the amount of such prepayment. Any voluntary
prepayments of the Tranche B Term Loans pursuant to
Subsection II.D.2.a shall be applied to reduce the
scheduled installments of principal of the Tranche B
Term Loans set forth in Subsection 2.4A(i) in inverse
chronological order of maturity.
(2) Application of Mandatory Prepayments by Type of Loans.
Subject to Subsection II.D.4, any amount (the "Applied
Amount") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the
Revolving Loan Commitments pursuant to Subsections
II.D.2.c(1)-(7) shall be applied first to prepay the
Tranche B Term Loans to the full extent thereof,
second, to the
49
extent of any remaining portion of such Applied Amount,
to prepay the Revolving Loans to the full extent
thereof and to cash collateralize any outstanding
Letters of Credit and to further permanently reduce the
Revolving Loan Commitments by the amount of such
prepayment, and third, to the extent of any remaining
portion of such Applied Amount, to further permanently
reduce the Revolving Loan Commitments to the full
extent thereof.
(3) Application of Mandatory Prepayments to Tranche B Term
Loans and the Scheduled Installments of Principal
Thereof. Subject to Subsection II.D.4, any mandatory
prepayments of the Tranche B Term Loans pursuant to
Subsection II.D.2.c shall be applied to reduce the
scheduled installments of principal of the Tranche B
Term Loans in inverse chronological order of maturity.
(4) Application of Prepayments to Base Rate Loans and LIBOR
Loans. Considering Tranche B Term Loans and Revolving
Loans being prepaid separately, any prepayment thereof
shall be applied first to Base Rate Loans to the full
extent thereof before application to LIBOR Loans, in
each case in a manner which minimizes the amount of any
payments required to be made by Borrower pursuant to
Subsection F.3.
3. General Provisions Regarding Payments.
a. Manner and Time of Payment. All payments by Borrower of
principal, interest, fees and other Obligations hereunder
and under the Notes shall be made in Dollars in same day
funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to Administrative
Agent not later than 1:00 P.M. (New York City time) on the
date due at the Administrative Agent's Office for the
account of Lenders; funds received by Administrative Agent
after that time on such due date shall be deemed to have
been paid by Borrower on the next succeeding Business Day.
Borrower hereby authorizes Administrative Agent to charge
its accounts with Administrative Agent in order to cause
timely payment to be made to Administrative Agent of all
principal, interest, fees and expenses due hereunder
(subject to sufficient funds being available in its accounts
for that purpose).
b. Application of Payments. Prior to any payments being applied
to principal or interest under this Agreement or under the
Notes, such payments shall first be applied to any
outstanding and payable
50
fees, costs, expenses, indemnities or other amounts (other
than principal or interest due under the Loan Documents), as
determined in the reasonable opinion of Administrative
Agent. Except as provided in Subsection II.B.3, all payments
in respect of the principal amount of any Loan shall include
payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments (and, in any event,
any payments in respect of any Loan on a date when interest
is due and payable with respect to such Loan) shall be
applied to the payment of interest before application to
principal.
c. Apportionment of Payments. Aggregate principal and interest
payments in respect of Term Loans and Revolving Loans shall
be apportioned among all outstanding Loans to which such
payments relate, in each case proportionately according to
Lenders' respective Pro Rata Shares. Administrative Agent
shall promptly distribute to each Lender, at its primary
address set forth in the Register or at such other address
as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment
fees of such Lender, if any, when received by Administrative
Agent pursuant to Subsection II.C. Notwithstanding the
foregoing provisions of this Subsection II.D.3.c, if,
pursuant to the provisions of Subsection F.2, any Notice of
Conversion/Continuation is withdrawn as to any Affected
Lender or if any Affected Lender makes Base Rate Loans in
lieu of its Pro Rata Share of any LIBOR Loans,
Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
d. Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest
hereunder or of the commitment fees hereunder, as the case
may be.
4. Application of Proceeds of Collateral and Payments after Event of
Default.
a. Upon the occurrence and during the continuation of an Event
of Default, (a) all payments received on account of the
Obligations, whether from Borrower, from any Subsidiary
Guarantor or otherwise, shall be applied by Administrative
Agent against the Obligations and (b) all proceeds received
by Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part
of the Collateral under any Collateral Document
51
may, in the discretion of Administrative Agent, be held by
Administrative Agent as Collateral for, and/or (then or at
any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured
Obligations (as defined in such Collateral Document), in
each case in the following order of priority:
(1) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable
fees and expenses of Administrative Agent and its
agents and counsel, and all other expenses, liabilities
and advances (other than advances made by
Administrative Agent on behalf of Lenders) made or
incurred by Administrative Agent in connection
therewith, and all amounts for which Administrative
Agent is entitled to compensation (including the fees
described in Subsection C), reimbursement and
indemnification under any Loan Document and all
advances made by Administrative Agent thereunder for
the account of the applicable Loan Party (other than
advances made to a Loan Party for purposes of making a
payment to any Lender that would otherwise be shared
pro rata pursuant to clause (b) below), and to the
payment of all costs and expenses paid or incurred by
Administrative Agent in connection with the Loan
Documents, all in accordance with Subsections IX.D, X.B
and X.C and the other terms of this Agreement and the
other Loan Documents;
(2) thereafter, to the payment of all other Secured
Obligations (as defined in such Collateral Document) or
Guarantied Obligations (as defined in the Subsidiary
Guaranty) for the ratable benefit of the holders
thereof (subject to the provisions of Subsection D3.b);
and
(3) thereafter, to the payment to or upon the order of such
Loan Party or to whomsoever may be lawfully entitled to
receive the same or as a court of competent
jurisdiction may direct.
E. Use of Proceeds.
---------------
1. Tranche B Term Loans and Revolving Loans. The proceeds of the
Tranche B Term Loans and the Revolving Loans shall be applied by
Borrower (i) to fund the refinancing of the Existing Credit
Agreement and other existing Indebtedness of Borrower and its
Subsidiaries, and (ii) for working capital and other general
corporate purposes, acquisitions and investments made in
accordance with the terms hereof, payments of
52
litigation judgments or settlement of claims, and payment of
Transaction Costs.
2. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by Borrower or any of its
Subsidiaries in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation T, Regulation
U or Regulation X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board or to
violate the Exchange Act, in each case as in effect on the date
or dates of such borrowing and such use of proceeds.
F. Special Provisions Governing LIBOR Loans.
----------------------------------------
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to LIBOR Loans as to the
matters covered:
C. Determination of Applicable Interest Rate. As soon as practicable
after 12:00 Noon (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall constitute prima
facie evidence of such matters) the interest rate that shall apply to the LIBOR
Loans for which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to Borrower and each Lender.
1. Inability to Determine Applicable Interest Rate. If
Administrative Agent shall have determined (which determination
shall constitute prima facie evidence of such matters), on any
Interest Rate Determination Date with respect to any LIBOR Loans,
that by reason of circumstances affecting the interbank
Eurodollar market adequate and fair means do not exist for
ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted LIBOR,
Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Borrower
and each Lender of such determination, whereupon (i) no Loans may
be made as, or converted to, LIBOR Loans until such time as
Administrative Agent notifies Borrower and Lenders that the
circumstances giving rise to such notice no longer exist and (ii)
any Notice of Borrowing or Notice of Conversion/Continuation
given by Borrower with respect to the Loans in respect of which
such determination was made shall be deemed to be for a Base Rate
Loan.
2. Illegality or Impracticability of LIBOR Loans. If on any date any
Lender shall have determined (which determination shall
constitute prima facie evidence of such matters but shall be made
only after consultation with Borrower and Administrative Agent)
that the making, maintaining or continuation of its LIBOR Loans
(i) has become unlawful as a result of compliance by such Lender
in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with
53
any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to
comply therewith would not be unlawful) or (ii) has become
impracticable, or would cause such Lender material hardship, as a
result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank
Eurodollar market or the position of such Lender in that market,
then, and in any such event, such Lender shall be an "Affected
Lender" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Borrower and Administrative
Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the
obligation of the Affected Lender to make Loans as, or to convert
Loans to, LIBOR Loans shall be suspended until such notice shall
be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a LIBOR Loan then
being requested by Borrower pursuant to a Notice of Borrowing or
a Notice of Conversion/Continuation, the Affected Lender shall
make such Loan as (or convert such Loan to, as the case may be) a
Base Rate Loan, (c) the Affected Lender's obligation to maintain
its outstanding LIBOR Loans (the "Affected Loans") shall be
terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans
or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans at the end of the then
current Interest Period for such LIBOR Loans or when or if
required by law. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to
a LIBOR Loan then being requested by Borrower pursuant to a
Notice of Borrowing or a Notice of Conversion/Continuation,
Borrower shall have the option, subject to the provisions of
Subsection F3, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described
above (which notice of rescission Administrative Agent shall
promptly transmit to each other Lender). Except as provided in
the immediately preceding sentence, nothing in this Subsection
II.G.3 shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans
to, LIBOR Loans in accordance with the terms of this Agreement.
3. Compensation For Breakage or Non-Commencement of Interest
Periods. Borrower shall compensate each Lender, upon written
request by that Lender (which request shall set forth the basis
for requesting such amounts) pursuant to Subsection H, for all
reasonable losses, expenses and liabilities (including any
interest paid by that Lender to lenders of funds borrowed by it
to make or carry its LIBOR Loans and any loss, expense or
liability sustained by that Lender in connection with the
liquidation or re-
54
employment of such funds) which that Lender may sustain: (i) if
for any reason (other than a default by that Lender) a borrowing
of any LIBOR Loan does not occur on a date specified therefor in
a Notice of Borrowing or a telephonic request for borrowing, or a
conversion to or continuation of any LIBOR Loan does not occur on
a date specified therefor in a Notice of Conversion/Continuation
or a telephonic request for conversion or continuation, (ii) if
any prepayment or other principal payment or any conversion of
any of its LIBOR Loans (including any prepayment described in
Subsection II.D.2.a or conversion occasioned by the circumstances
described in Subsection F2) occurs on a date prior to the last
day of an Interest Period applicable to that Loan, (iii) if any
prepayment of any of its LIBOR Loans is not made on any date
specified in a notice of prepayment given by Borrower, or (iv) as
a consequence of any other default by Borrower in the repayment
of its LIBOR Loans when required by the terms of this Agreement;
provided, however, that Borrower shall have no obligation to make
any payment to any demanding party under this Subsection on
account of any such increased costs or reduced amounts unless
Borrower receives notice of such increased costs or reduced
amounts within one hundred eighty (180) days after such Lender is
able to determine the amount of such costs or amounts,
accompanied by a certificate executed by an officer of the
applicable Lender setting forth in reasonable detail the basis
and calculation of the amount of such costs or amounts, which
certificate shall constitute prima facie evidence of such costs
or amounts.
4. Booking of LIBOR Loans. Any Lender may make, carry or transfer
LIBOR Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
5. Assumptions Concerning Funding of LIBOR Loans. Calculation of all
amounts payable to a Lender under this Subsection F and under
Subsection G.1 shall be made as though that Lender had actually
funded each of its relevant LIBOR Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant
to clause (i) of the definition of Adjusted LIBOR in an amount
equal to the amount of such LIBOR Loan and having a maturity
comparable to the relevant Interest Period, whether or not its
LIBOR Loans had actually been funded in such manner and through
the transfer of such Eurodollar deposit from an offshore office
of that Lender to a domestic office of that Lender in the United
States of America; provided, however, that each Lender may fund
each of its LIBOR Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this Subsection F and under
Subsection G.1.
6. LIBOR Loans After Default. After the occurrence of and during the
continuation of a Potential Event of Default or an Event of
Default,
55
(i) Borrower may not elect to have a Loan be made or maintained
as, or converted to, a LIBOR Loan after the expiration of any
Interest Period then in effect for that Loan and (ii) subject to
the provisions of Subsection II.F.3, any Notice of Borrowing or
Notice of Conversion/Continuation given by Borrower with respect
to a requested borrowing or conversion/continuation that has not
yet occurred shall be deemed to be rescinded by Borrower.
G. Increased Costs; Taxes; Capital Adequacy.
----------------------------------------
1. Compensation for Increased Costs and Taxes. Subject to the
provisions of Subsection II.G.2 (which shall be controlling with
respect to the matters covered thereby), if any Lender (including
any Issuing Lender) shall determine (which determination shall
constitute prima facie evidence of such matters) that any law,
treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of
a court or Government Authority, in each case that becomes
effective after the date hereof, or compliance by such Lender
with any guideline, request or directive issued or made after the
date hereof by any central bank or other Government Authority or
quasi-Government Authority (whether or not having the force of
law):
a. subjects such Lender (or its applicable lending office) to
any additional Tax with respect to this Agreement or any of
its obligations hereunder (including with respect to issuing
or maintaining any Letters of Credit or purchasing or
maintaining any participations therein or maintaining any
Commitment hereunder) or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or
any other amount payable hereunder;
b. imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, insurance charge
or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances
or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other
than any such reserve or other requirements with respect to
LIBOR Loans that are reflected in the definition of Adjusted
LIBOR); or
c. imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the
interbank Eurodollar market;
56
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or agreeing to
issue, issuing or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrower shall promptly pay to such
Lender, upon receipt of the statement referred to in the proviso below, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole but reasonable discretion shall determine) as may be necessary to
compensate such Lender for any such increased cost or reduction in amounts
received or receivable hereunder; provided, however, that Borrower shall have no
obligation to make any payment to any demanding party under this Subsection on
account of any such increased costs unless Borrower receives notice of such
increased costs within one hundred eighty (180) days after such Lender is able
to determine the amount of such costs, accompanied by a certificate executed by
an officer of the applicable Lender setting forth in reasonable detail the basis
and calculation of the amount of such costs, which certificate shall constitute
prima facie evidence of such costs.
2. Withholding of Taxes.
a. Payments to Be Free and Clear. Unless otherwise required by
applicable law, all sums payable by Borrower under this
Agreement and the other Loan Documents shall be paid free
and clear of, and without any deduction or withholding on
account of, any Tax imposed, levied, collected, withheld or
assessed by or within the United States of America or any
political subdivision in or of the United States of America
or any other jurisdiction from or to which a payment is made
by or on behalf of Borrower or by any federation or
organization of which the United States of America or any
such jurisdiction is a member at the time of payment.
b. Grossing-up of Payments. If Borrower or any other Person is
required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by
Borrower to Administrative Agent or any Lender under any of
the Loan Documents:
(1) Borrower shall notify Administrative Agent of any such
requirement or any change in any such requirement as
soon as Borrower becomes aware of it;
(2) Borrower shall pay any such Tax when such Tax is due,
regardless of whether the liability for payment of such
Tax (i) is imposed on Borrower itself, Administrative
Agent or any Lender or (ii) relates to any portion of
any sums paid or payable to any Lender under any of the
Loan Documents
57
with respect to which such Lender does not act for its
own account;
(3) the sum payable by Borrower in respect of which the
relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding
or payment, Administrative Agent or such Lender, as the
case may be, receives on the due date a net sum equal
to what it would have received had no such deduction,
withholding or payment been required or made; and
(4) within thirty (30) days after paying any sum from which
it is required by law to make any deduction or
withholding, and within 30 days after the due date of
payment of any Tax which it is required by clause (b)
above to pay, Borrower shall deliver to Administrative
Agent and/or other affected parties evidence
satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority;
provided that (i) no such additional amount shall be required to be paid to
any Lender under clause (c) above to the extent such additional amount
relates to a portion of any sums paid or payable to such Lender under any
of the Loan Documents with respect to which such Lender does not act for
its own account and (ii) where any change after the date such Lender became
a Lender in any such requirement for a deduction, withholding or payment as
is mentioned therein results in an increase in the rate of such deduction,
withholding or payment from that in effect at the date on which such Lender
became a Lender, the resulting additional amount to be paid to such Lender
under clause (c) above shall be limited to the amount by which such
increase in rate increases the amount of any such required deduction,
withholding or payment.
c. Evidence of Exemption from or Reduction of U.S. Withholding
Tax.
(1) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of
this Subsection GB(iii), a "Non-US Lender") shall
deliver to Administrative Agent and to Borrower, on or
prior to the Closing Date (in the case of each Lender
listed on the signature pages hereof) or on or prior to
the date of the Assignment Agreement pursuant to which
it becomes a Lender (in the case of each other Lender),
and at such other times as may be necessary in the
determination of
58
Borrower or Administrative Agent (each in the
reasonable exercise of its discretion), two original
copies of Internal Revenue Service Form W-8BEN or
W-8ECI (or any successor forms) properly completed and
duly executed by such Non-US Lender, or, in the case of
a Non-US Lender claiming exemption from United States
federal withholding tax under Section 871(h) or 881(c)
of the Internal Revenue Code with respect to payments
of "portfolio interest", a Form W-8BEN, and, in the
case of a Non-US Lender that has certified in writing
to Administrative Agent that it is not a "bank" (as
defined in Section 881(c)(3)(A) of the Internal Revenue
Code), a certificate (the "Certificate re: Non-Bank
Status") of such Non-US Lender certifying that such
Non-US Lender is not (i) a "bank" for purposes of
Section 881(c) of the Internal Revenue Code, (ii) a
ten-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of Borrower,
or (iii) a controlled foreign corporation related to
Borrower (within the meaning of Section 864(d)(4) of
the Internal Revenue Code) in all such cases together
with any other certificate or statement of exemption
required under the Internal Revenue Code or the
regulations issued thereunder to establish that such
Non-US Lender is not subject to United States
withholding tax with respect to any payments to such
Non-US Lender of interest payable under any of the Loan
Documents.
(2) Each Non-US Lender, to the extent it does not act or
ceases to act for its own account with respect to any
portion of any sums paid or payable to such Lender
under any of the Loan Documents (for example, in the
case of a typical participation by such Lender), shall
deliver to Administrative Agent and to Borrower, on or
prior to the Closing Date (in the case of each Non-US
Lender listed on the signature pages hereof), on or
prior to the date of the Assignment Agreement pursuant
to which it becomes a Lender (in the case of each other
Non-US Lender), or on such later date when such Non-US
Lender ceases to act for its own account with respect
to any portion of any such sums paid or payable, and at
such other times as may be necessary in the
determination of Borrower or Administrative Agent (each
in the reasonable exercise of its discretion), (1) two
original copies of the forms or statements required to
be provided by such Non-US Lender under Subsection
2.7B(iii)(a), properly completed and duly
59
executed by such Non-US Lender, to establish the
portion of any such sums paid or payable with respect
to which such Non-US Lender acts for its own account
that is not subject to United States withholding tax,
and (2) two original copies of Internal Revenue Service
Form W-8IMY (or any successor forms) properly completed
and duly executed by such Non-US Lender, together with
any information, if any, such Non-US Lender chooses to
transmit with such form, and any other certificate or
statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder, to
establish that such Non-US Lender is not acting for its
own account with respect to a portion of any such sums
payable to such Non-US Lender.
(3) Each Non-US Lender hereby agrees, from time to time
after the initial delivery by such Non-US Lender of
such forms, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence so delivered obsolete or inaccurate in any
material respect or if, by virtue of a change in law or
regulations, such forms are no longer valid evidence of
a person's exemption from withholding tax which is
reasonably satisfactory to Borrower, that such Non-US
Lender shall promptly (1) deliver to Administrative
Agent and to Borrower two original copies of renewals,
amendments or additional or successor forms, properly
completed and duly executed by such Non-US Lender,
together with any other certificate or statement of
exemption required in order to confirm or establish
that such Non-US Lender is not subject to United States
withholding tax with respect to payments to such Non-US
Lender under the Loan Documents and, if applicable,
that such Non-US Lender does not act for its own
account with respect to any portion of any such
payments, or (2) notify Administrative Agent and
Borrower of its inability to deliver any such forms,
certificates or other evidence.
(4) Upon written request of Borrower stating the reasons
for such request, each Non-US Lender hereby agrees to
provide, with respect to any sums payable under this
Agreement, such additional forms, certificates,
statements of exemption or other documentation;
provided that this obligation shall not apply unless
Borrower establishes to the satisfaction of such Non-US
Lender that (i) Borrower is
60
required by law to make a deduction or withholding on
account of any Tax imposed by a jurisdiction other than
the United States of America or any political
subdivision in or of the United States of America, (ii)
such deduction or withholding will be reduced or
eliminated at no cost to such Non-US Lender if such
Non-US Lender provides such form, certificate,
statement of exemption or other documentation, and
(iii) providing such form, certificate, statement of
exemption or other documentation, will not require
disclosure of any confidential information to any
Person.
(5) Borrower shall not be required to pay any additional
amount to any Non-US Lender under clause (c) of
Subsection GB(ii) if such Non-US Lender shall have
failed to satisfy the requirements of clause (a), (b),
(c)(1) or (d) of this Subsection GB(iii); provided that
if such Non-US Lender shall have satisfied the
requirements of Subsection GB(iii)(a) on the date such
Non-US Lender became a Lender or Subsection
2.7B(iii)(d) upon Borrower's initial written request,
nothing in this Subsection GB(iii)(e) shall relieve
Borrower of its obligation to pay any amounts pursuant
to Subsection GB(ii)(c) if, as a result of any change
in any applicable law, treaty or governmental rule,
regulation or order, or any change in the
interpretation, administration or application thereof,
such Non-US Lender is no longer properly entitled to
deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Non-US
Lender is not subject to or subject only to partial
withholding as described in Subsections GB(iii)(a) and
(d).
3. Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision
thereof) regarding capital adequacy, or any change therein or in
the interpretation or administration thereof by any Government
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not
having the force of law) of any such Government Authority,
central bank or comparable agency, has or would have the effect
of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or
with reference to, such Lender's Loans or Commitments or Letters
of Credit or participations therein or other
61
obligations hereunder with respect to the Loans or the Letters of
Credit to a level below that which such Lender or such
controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such Lender
or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt
by Borrower from such Lender of the statement referred to in the
next sentence, Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction;
provided, however, that Borrower shall have no obligation to make
any payment to any demanding party under this Subsection on
account of any such increased costs unless Borrower receives
notice of such increased costs within one hundred eighty (180)
days after such Lender is able to determine the amount of such
costs, accompanied by a certificate executed by an officer of the
applicable Lender setting forth in reasonable detail the basis
and calculation of the amount of such costs, which certificate
shall constitute prima facie evidence of such costs.
H. Obligation of Lenders and Issuing Lenders to Mitigate.
-----------------------------------------------------
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under Subsection II.G or
Subsection III.F, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to Subsection II.G or Subsection III.F would
be materially reduced and if, as determined by such Lender or Issuing Lender in
its sole but reasonable discretion, the making, issuing, funding or maintaining
of such Commitments or Loans or Letters of Credit through such other lending or
letter of credit office or in accordance with such other measures, as the case
may be, would not otherwise be disadvantageous to such Lender or Issuing Lender
or materially adversely affect such Commitments or Loans or Letters of Credit or
the interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or letter of
credit office pursuant to this Subsection II.H unless Borrower agrees to pay all
incremental expenses incurred by such Lender or Issuing Lender as a result of
utilizing such other lending or letter of credit office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Borrower pursuant to this
62
Subsection II.H (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Borrower (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
I. Replacement of a Lender
-----------------------
If any Lender becomes a Defaulting Lender or an Affected Lender (any
such Lender, a "Subject Lender"), so long as (i) no Potential Event of Default
or Event of Default shall have occurred and be continuing and Borrower has
obtained a commitment from another Lender or an Eligible Assignee to purchase at
par the Subject Lender's Loans and assume the Subject Lender's Commitments and
all other obligations of the Subject Lender hereunder, (ii) such Lender is not
an Issuing Lender with respect to any Letters of Credit outstanding (unless all
such Letters of Credit are terminated or arrangements acceptable to such Issuing
Lender (such as a "back-to-back" letter of credit) are made) and (iii), if
applicable, the Subject Lender is unwilling to remedy its default or withholds
any request for reimbursement upon ten (10) days prior written notice to the
Subject Lender and Administrative Agent, Borrower may require the Subject Lender
to assign all of its Loans and Commitments to such other Lender, Lenders,
Eligible Assignee or Eligible Assignees pursuant to the provisions of Subsection
10.1B; provided that, prior to or concurrently with such replacement, (1) the
Subject Lender shall have received payment in full of all principal, interest,
fees and other amounts (including all amounts under Subsections 2.6D, 2.7 and/or
2.8 (if applicable)) through such date of replacement and a release from its
obligations under the Loan Documents, (2) the processing fee required to be paid
by Subsection 10.1B(i) shall have been paid to Administrative Agent, and (3) all
of the requirements for such assignment contained in Subsection 10.1B,
including, without limitation, the consent of Administrative Agent (if required)
and the receipt by Administrative Agent of an executed Assignment Agreement and
other supporting documents, have been fulfilled; and provided further, that if
Borrower seeks to exercise such right, Borrower must do so within sixty (60)
days after Borrower first knows or should have known of the occurrence of the
event or events giving rise to such right.
III. LETTERS OF CREDIT
A. Issuance of Letters of Credit and Revolving Lenders' Purchase of
----------------------------------------------------------------
Participations Therein.
----------------------
D. Letters of Credit. In addition to Borrower requesting that
Lenders make Revolving Loans pursuant to Subsection II.A.b, Borrower may
request, in accordance with the provisions of this Subsection III.A, from time
to time during the period from the Closing Date to but excluding the 30th day
prior to the Revolving Loan Commitment Termination Date, that one or more
Revolving Lenders issue Letters of Credit for the account of Borrower for the
purposes specified in the definition of Letters of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Borrower herein set forth, any one or more Revolving Lenders may,
but (except as provided in Subsection III.A.2.c) shall not be obligated to,
issue such Letters of Credit in accordance with the provisions of this
Subsection III.A; provided that Borrower shall not request that any Revolving
Lender issue (and no Revolving Lender shall issue):
63
a. any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan
Commitments would exceed the Revolving Loan Commitments then
in effect;
b. any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed
$25,000,000;
c. any Letter of Credit having an expiration date later than
the earlier of (a) ten days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one
year from the date of issuance of such Letter of Credit;
provided that the immediately preceding clause (b) shall not
prevent any Issuing Lender (but subject to clause (a) above)
from agreeing that a Letter of Credit will automatically be
extended for one or more successive periods not to exceed
one year each unless such Issuing Lender elects not to
extend for any such additional period; and provided, further
that such Issuing Lender shall elect not to extend such
Letter of Credit if it has knowledge that an Event of
Default or Potential Event of Default has occurred and is
continuing (and has not been waived in accordance with
Subsection X.F) at the time such Issuing Lender must elect
whether or not to allow such extension;
d. any Letter of Credit denominated in a currency other than
Dollars; or
e. any Letter of Credit with a face amount of less than
$10,000; or
f. any Letter of Credit that violates applicable law or any
policy of the applicable Issuing Lender relating to the
issuance of Letters of Credit.
2. Mechanics of Issuance.
a. Request for Issuance. Whenever Borrower desires the issuance
of a Letter of Credit, it shall deliver to Administrative
Agent a Request for Issuance of Letter of Credit
substantially in the form of Exhibit III annexed hereto no
later than 1:00 P.M. (New York City time) at least three
Business Days, or in each case such shorter period as may be
agreed to by the applicable Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The
Request for Issuance of Letter of Credit shall specify (a)
the proposed date of issuance (which shall be a Business
Day), (b) the face amount of the Letter of Credit, (c) the
expiration date of the Letter of Credit, (d) the name and
address of the beneficiary, and (e) either the verbatim text
of the proposed Letter of Credit or the proposed terms and
conditions thereof, including a precise
64
description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to
the expiration date of the Letter of Credit, would require
the Issuing Lender thereof to make payment under the Letter
of Credit and in the event CIBC is the Issuing Lender, such
Request for Issuance of Letter of Credit shall attach a
current application form from CIBC with respect to the
issuance of such Letter of Credit; provided that the Issuing
Lender, in its reasonable discretion, may require changes in
the text of the proposed Letter of Credit or any such
documents; and provided, further that no Letter of Credit
shall require payment against a conforming draft to be made
thereunder on the same Business Day (under the laws of the
jurisdiction in which the office of the Issuing Lender to
which such draft is required to be presented is located)
that such draft is presented if such presentation is made
after 10:00 a.m. (in the time zone of such office of the
Issuing Lender) on such Business Day.
b. Update of Certifications. Borrower shall notify the
applicable Issuing Lender (and Administrative Agent, if
Administrative Agent is not such Issuing Lender) prior to
the issuance of any Letter of Credit if any of the matters
to which Borrower is required to certify in the applicable
Request for Issuance of Letter of Credit is no longer true
and correct as of the proposed date of issuance of such
Letter of Credit, and upon the issuance of any Letter of
Credit Borrower shall be deemed to have re-certified, as of
the date of such issuance, as to the matters to which
Borrower is required to certify in the applicable Request
for Issuance of Letter of Credit.
c. Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Request for Issuance of Letter of
Credit pursuant to Subsection III.A.2.a requesting the
issuance of a Letter of Credit, if Administrative Agent
elects to issue such Letter of Credit, Administrative Agent
shall promptly so notify Borrower, and Administrative Agent
shall be the Issuing Lender with respect thereto. If
Administrative Agent, in its sole but reasonable discretion,
elects not to issue such Letter of Credit, Administrative
Agent shall promptly so notify Borrower, whereupon Borrower
may request any other Revolving Lender to issue such Letter
of Credit by delivering to such Revolving Lender a copy of
the applicable Request for Issuance of Letter of Credit. Any
Revolving Lender so requested to issue such Letter of Credit
shall promptly notify Borrower and Administrative Agent
whether or not, in its sole but reasonable discretion, it
has elected to issue such Letter of Credit, and any such
Revolving Lender that so elects to
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issue such Letter of Credit shall be the Issuing Lender with
respect thereto.
d. Issuance of Letter of Credit. Upon satisfaction or waiver
(in accordance with Subsection X.F) of the conditions set
forth in Subsection IV.C, the applicable Issuing Lender
shall issue the requested Letter of Credit in accordance
with such Issuing Lender's standard operating procedures.
e. Notification to Lenders. Upon the issuance of or amendment
to any Letter of Credit, the applicable Issuing Lender shall
promptly notify Administrative Agent of such issuance or
amendment. Promptly after receipt of such notice (or, if
Administrative Agent is the Issuing Lender, together with
such notice), Administrative Agent shall notify each
Revolving Lender of the amount of such Revolving Lender's
respective participation in such Letter of Credit,
determined in accordance with Subsection III.A.3.
3. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each
Revolving Lender shall be deemed to, and hereby agrees to, have
irrevocably purchased from the Issuing Lender a participation in
such Letter of Credit and any drawings honored thereunder in an
amount equal to such Revolving Lender's Pro Rata Share of the
maximum amount which is or at any time may become available to be
drawn thereunder.
B. Letter of Credit Fees.
---------------------
Borrower agrees to pay the following amounts with respect to Letters
of Credit issued hereunder:
a. with respect to each Letter of Credit, (a) a fronting fee,
payable to the Administrative Agent for the account of the
applicable Issuing Lender for its own account, equal to
0.25% per annum of the daily amount available to be drawn
under such Letter of Credit, and (b) a letter of credit fee,
payable to Administrative Agent for the account of Revolving
Lenders, equal to the Applicable LIBOR Margin for Revolving
Loans multiplied by the daily amount available to be drawn
under such Letter of Credit, each such fronting fee or
letter of credit fee to be payable in arrears on the last
Business Day of each March, June, September and December of
each Fiscal Year, commencing on the first such date to occur
after the Closing Date, and computed on the basis of a
360-day year for the actual number of days elapsed; and
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b. with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made
thereunder (without duplication of the fees payable under
clause (i) above), documentary and processing charges
payable directly to the applicable Issuing Lender for its
own account in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of
such issuance, amendment, transfer or payment, as the case
may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
Subsection III.B, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (i) or (ii) of this Subsection III.B, Administrative Agent
shall distribute to each Revolving Lender its Pro Rata Share of such amount.
C. Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
------------------------------------------------------------------
E. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
1. Reimbursement by Borrower of Amounts Paid Under Letters of
Credit. If an Issuing Lender has determined to honor a drawing
under a Letter of Credit issued by it, such Issuing Lender shall
immediately notify Borrower and Administrative Agent, and
Borrower shall reimburse such Issuing Lender on the date on which
such drawing is honored (the "Reimbursement Date") in an amount
in Dollars and in same day funds equal to the amount of such
honored drawing plus interest thereon as provided in Subsection
C3.a for the period from the date of drawing to the date on which
such Revolving Loans are made (the "LC Reimbursement Amount");
provided that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Borrower shall have notified
Administrative Agent and such Issuing Lender prior to 1:00 P.M.
(New York City time) on the date such drawing is honored that
Borrower intends to reimburse such Issuing Lender for the LC
Reimbursement Amount with funds other than the proceeds of
Revolving Loans, Borrower shall be deemed to have given a timely
Notice of Borrowing to Administrative Agent requesting Revolving
Lenders to make Revolving Loans that are Base Rate Loans on the
Reimbursement Date in an amount in Dollars equal to the LC
Reimbursement Amount (and Administrative Agent shall promptly
give notice thereof to each Revolving Lender) and (ii) subject to
satisfaction or waiver of the conditions specified in Subsection
IV.B.1, Revolving Lenders shall, on the Reimbursement Date, make
Revolving Loans that are Base Rate Loans in an amount equal to
the
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LC Reimbursement Amount, the proceeds of which shall be applied
directly by Administrative Agent to reimburse such Issuing Lender
in an amount equal to the LC Reimbursement Amount; and provided,
further that if for any reason proceeds of Revolving Loans are
not received by Administrative Agent on the Reimbursement Date in
an amount equal to the LC Reimbursement Amount, Borrower shall
reimburse Administrative Agent, on demand, in an amount in same
day funds equal to the excess of (x) the LC Reimbursement Amount
over (y) the aggregate amount of such Revolving Loans, if any,
which are so received. Nothing in this Subsection III.C.1 shall
be deemed to relieve any Revolving Lender from its obligation to
make Revolving Loans on the terms and conditions set forth in
this Agreement, and Borrower shall retain any and all rights it
may have against any Revolving Lender resulting from the failure
of such Revolving Lender to make such Revolving Loans under this
Subsection III.C.1. The Issuing Lender may honor or dishonor any
drawing in accordance with the terms of any Letter of Credit
without regard to any instruction of Borrower.
2. Payment by Revolving Lenders of Unreimbursed Amounts Paid Under
Letters of Credit.
a. Payment by Revolving Lenders. If Borrower shall fail for any
reason to reimburse any Issuing Lender (or Administrative
Agent) as provided in Subsection III.C.1 in an amount equal
to the amount of any drawing honored by such Issuing Lender
under a Letter of Credit issued by it, Administrative Agent
shall promptly notify each other Revolving Lender of the
unreimbursed amount of such honored drawing and of such
other Revolving Lender's respective participation therein
based on such Revolving Lender's Pro Rata Share of the
Revolving Loan Commitment by telefacsimile or by telephone
promptly confirmed by telefacsimile. Each Revolving Lender
shall make available to Administrative Agent for the account
of such Issuing Lender an amount equal to its respective
participation, in Dollars and in same day funds, at the
Administrative Agent's Office, not later than 2:00 P.M. (New
York City time) on the Business Day notified by
Administrative Agent. If any Revolving Lender fails to make
available to Administrative Agent for the account of such
Issuing Lender on such Business Day the amount of such
Revolving Lender's participation in such Letter of Credit as
provided in this Subsection III.C.2, Administrative Agent
and/or such Issuing Lender shall be entitled to recover such
amount on demand from such Revolving Lender together with
interest thereon at the rate customarily used by such
Issuing Lender for the correction of errors among banks for
three Business Days and thereafter at the Base Rate. Nothing
in this
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Subsection III.C.2 shall be deemed to prejudice the right of
any Revolving Lender to recover from any Issuing Lender any
amounts made available by such Revolving Lender to such
Issuing Lender pursuant to this Subsection III.C.2 if it is
determined by the final non-appealable judgment of a court
of competent jurisdiction that the payment with respect to a
Letter of Credit by such Issuing Lender in respect of which
payment was made by such Issuing Lender constituted gross
negligence or willful misconduct on the part of such Issuing
Lender.
b. Distribution to Revolving Lenders of Reimbursements Received
From Borrower. If Administrative Agent for the account of
any Issuing Lender shall have been reimbursed by other
Revolving Lenders pursuant to Subsection III.C.2.a for all
or any portion of any drawing honored by such Issuing Lender
under a Letter of Credit issued by it, Administrative Agent
shall promptly distribute to each other Revolving Lender
that has paid all amounts payable by it under Subsection
III.C.2.a with respect to such honored drawing such other
Revolving Lender's Pro Rata Share of the Revolving Loan
Commitment of all payments subsequently received by
Administrative Agent for the account of such Issuing Lender
from Borrower in reimbursement of such honored drawing when
such payments are received. Any such distribution shall be
made to a Revolving Lender at its primary address set forth
below its name in the Register or at such other address or
such account as such Revolving Lender may request.
3. Interest on Amounts Paid Under Letters of Credit.
a. Payment of Interest by Borrower. Borrower agrees to pay to
Administrative Agent for the account of each Issuing Lender,
with respect to drawings honored under any Letters of Credit
issued by it, interest on the amount paid by such Issuing
Lender in respect of each such honored drawing from the date
a drawing is honored to but excluding the date such amount
is reimbursed by Borrower (including any such reimbursement
out of the proceeds of Revolving Loans pursuant to
Subsection III.C.1) at a rate equal to (a) for the period
from the date such drawing is honored to but excluding the
Reimbursement Date, the rate then in effect under this
Agreement with respect to Revolving Loans that are Base Rate
Loans and (b) thereafter, a rate that is 2.00% per annum in
excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate
Loans. Interest payable pursuant to this Subsection
III.C.3.a shall be computed on the basis of a 365/366-day
year (as applicable), for the actual number of days elapsed
in the period during which it accrues and
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shall be payable on demand or, if no demand is made, on the
date on which the related drawing under a Letter of Credit
is reimbursed in full.
b. Distribution of Interest Payments by Administrative Agent.
Promptly upon receipt by Administrative Agent for the
account of any Issuing Lender of any payment of interest
pursuant to Subsection III.C.3.a with respect to a drawing
honored under a Letter of Credit issued by it, (a)
Administrative Agent shall distribute to each Revolving
Lender, out of the interest received by Administrative Agent
in respect of the period from the date such drawing is
honored to but excluding the date on which such Issuing
Lender is reimbursed for the amount of such honored drawing
(including any such reimbursement out of the proceeds of
Revolving Loans pursuant to Subsection III.C.1), the amount
that such other Revolving Lender would have been entitled to
receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for
such period pursuant to Subsection III.B if no drawing had
been honored under such Letter of Credit, and (b) if such
Issuing Lender shall have been reimbursed by Revolving
Lenders pursuant to Subsection III.C.2.a for all or any
portion of such honored drawing, such Issuing Lender shall
pay to Administrative Agent for the account of each such
Revolving Lender that has paid all amounts payable by it
under Subsection III.C.2.a with respect to such honored
drawing such other Revolving Lender's Pro Rata Share of the
Revolving Loan Commitment of any interest received by such
Issuing Lender in respect of that portion of such honored
drawing so reimbursed by Revolving Lenders for the period
from the date on which such Issuing Lender was so reimbursed
by Revolving Lenders to but excluding the date on which such
portion of such honored drawing is reimbursed by Borrower.
Any such distribution shall be made to a Revolving Lender at
its primary address set forth in the Register or at such
other address as such Revolving Lender may request.
D. Obligations Absolute.
--------------------
The obligation of Borrower to reimburse each Issuing Lender (or
Administrative Agent for the account of such Issuing Lender) for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Revolving Lenders pursuant to Subsection III.C.1 and the
obligations of Revolving Lenders under Subsection III.C.2.a shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including any of the following
circumstances:
a. any lack of validity or enforceability of any Letter of
Credit;
70
b. the existence of any claim, set-off, defense or other right
which Borrower or any Revolving Lender may have at any time
against a beneficiary or any transferee of any Letter of
Credit (or any Persons for whom any such transferee may be
acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Borrower,
whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including
any underlying transaction between Borrower or any of its
Subsidiaries and the beneficiary for which any Letter of
Credit was procured);
c. any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
d. payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document
which does not substantially comply with the terms of such
Letter of Credit;
e. any adverse change in the business, operations, properties,
assets, financial condition or prospects of Borrower or any
of its Subsidiaries;
f. any breach of this Agreement or any other Loan Document by
any party thereto;
g. any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or
h. the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final non-appealable judgment of a court of competent
jurisdiction).
E. Indemnification; Nature of Issuing Lenders' Duties.
--------------------------------------------------
F. Indemnification. In addition to amounts payable as provided in
Subsection III.F, Borrower hereby agrees to protect, indemnify, pay and save
harmless Administrative Agent, Co-Lead Arrangers, each Issuing Lender and each
other Lender from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which such
Person may incur or be subject to as a consequence, direct or indirect, of (i)
the
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issuance or honoring of any Letter of Credit by such Issuing Lender, other than
as a result of (a) the gross negligence or willful misconduct of such Issuing
Lender as determined by a final non-appealable judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
Government Authority (all such acts or omissions herein called "Governmental
Acts").
1. Nature of Issuing Lenders' Duties. As between Borrower and any
Issuing Lender, Borrower assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by such
Issuing Lender by, the respective beneficiaries of such Letters
of Credit. In furtherance and not in limitation of the foregoing,
such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the
application for and issuance of any such Letter of Credit, even
if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity
or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of
Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii)
the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any Governmental Acts,
and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's or any other Lender's
rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this Subsection III.E.1, any
action taken or omitted by any Issuing Lender under or in connection with the
Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing Lender
or any other Lender under any resulting liability to Borrower.
Notwithstanding anything to the contrary contained in this Subsection
III.E, Borrower shall retain any and all rights it may have against any Issuing
Lender for any liability to the extent arising out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final
non-appealable judgment of a court of competent jurisdiction.
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F. Increased Costs and Taxes Relating to Letters of Credit.
-------------------------------------------------------
Subject to the provisions of Subsection II.G.2 (which shall be
controlling with respect to the matters covered thereby), if any Issuing Lender
or Revolving Lender shall determine (which determination shall constitute prima
facie evidence of such matters) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or Government Authority, in each case that becomes effective after the
date hereof, or compliance by any Issuing Lender or Revolving Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Government Authority or quasi-Government Authority
(whether or not having the force of law):
a. subjects such Issuing Lender or Revolving Lender (or its
applicable lending or letter of credit office) to any
additional Tax (other than any Tax on the overall net income
of such Issuing Lender or Revolving Lender) with respect to
the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or
any other obligations under this III, whether directly or by
such being imposed on or suffered by any particular Issuing
Lender;
b. imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance
or similar requirement in respect of any Letters of Credit
issued by any Issuing Lender or participations therein
purchased by any Revolving Lender; or
c. imposes any other condition (other than with respect to a
Tax matter) on or affecting such Issuing Lender or Revolving
Lender (or its applicable lending or letter of credit
office) regarding this III or any Letter of Credit or any
participation therein;
and the result of any of the foregoing is to increase the cost to such
Issuing Lender or Revolving Lender of agreeing to issue, issuing or maintaining
any Letter of Credit or agreeing to purchase, purchasing or maintaining any
participation therein or to reduce any amount received or receivable by such
Issuing Lender or Revolving Lender (or its applicable lending or letter of
credit office) with respect thereto; then, in any case, Borrower shall promptly
pay to such Issuing Lender or Revolving Lender, upon receipt of the statement
referred to in the next sentence, such additional amount or amounts as may be
necessary to compensate such Issuing Lender or Revolving Lender for any such
increased cost or reduction in amounts received or receivable hereunder. Such
Issuing Lender or Revolving Lender shall deliver to Borrower a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Issuing Lender or Revolving Lender under this
Subsection III.F, which statement shall constitute prima facie evidence of such
additional amounts.
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IV. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and an Issuing Lender to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions.
A. Conditions to Tranche B Term Loans and Initial Revolving Loans.
--------------------------------------------------------------
The obligations of Lenders to make the Tranche B Term Loans and any
Revolving Loans to be made on the Closing Date are, in addition to the
conditions precedent specified in Subsection IV.B, subject to prior or
concurrent satisfaction of the following conditions:
G. Loan Party Documents. On or before the Closing Date, Borrower
shall, and shall cause each other Loan Party to, deliver to Administrative Agent
the following with respect to Borrower or such Loan Party, as the case may be,
each, unless otherwise noted, dated the Closing Date:
a. Copies of the Organizational Documents of such Loan Party,
certified by the secretary or similar Officer of the
applicable Loan Party, together with a good standing
certificate from the Secretary of State of its jurisdiction
of organization, each dated a recent date prior to the
Closing Date;
b. Resolutions of the Governing Body of each Loan Party
approving and authorizing the execution, delivery and
performance of the Loan Documents to which it is a party,
certified as of the Closing Date by the secretary or similar
Officer of such Person as being in full force and effect
without modification or amendment;
c. Signature and incumbency certificates of the Officers of
each Loan Party executing the Loan Documents to which it is
a party;
d. Executed originals of the Loan Documents to which each Loan
Party is a party; and
e. Such other documents as Administrative Agent may reasonably
request.
2. No Material Adverse Effect. Since September 28, 2002, no Material
Adverse Effect (in the sole opinion of Administrative Agent)
shall have occurred.
3. Fees. Borrower shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and
Lenders, the fees payable on the Closing Date referred to in
Subsection II.C.
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4. Corporate and Capital Structure, and Ownership. The corporate
organizational structure, capital structure, ownership, and
jurisdiction of organization of Borrower and its Subsidiaries
shall be as set forth on Schedule 4.1D annexed hereto.
5. Representations and Warranties; Performance of Agreements.
Borrower shall have delivered to Administrative Agent (for
delivery to Lenders) an Officer's Certificate, in form and
substance reasonably satisfactory to Administrative Agent, to the
effect that the representations and warranties in V hereof are
true, correct and complete in all material respects on and as of
the Closing Date to the same extent as though made on and as of
that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations
and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Borrower has
performed in all material respects all agreements and satisfied
all conditions which this Agreement provides shall be performed
or satisfied by it on or before the Closing Date except as
otherwise disclosed to and agreed to in writing by Administrative
Agent; provided that where a representation and warranty,
covenant or condition is qualified as to materiality,
such materiality qualifier shall be disregarded for purposes of
this condition.
6. Financial Statements. On or before the Closing Date, Lenders
shall have received from Borrower audited and unaudited financial
statements of Borrower and its Subsidiaries.
7. Opinions of Counsel to Loan Parties. Lenders shall have received
originally executed copies of one or more favorable written
opinions of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel for
Borrower and certain Subsidiary Guarantors, in form and substance
reasonably satisfactory to Administrative Agent and its counsel,
dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit VII annexed hereto
and as to such other matters as Administrative Agent acting on
behalf of Lenders may reasonably request (this Credit Agreement
constituting a written request by Borrower to such counsel to
deliver such opinions to Lenders).
8. Solvency Assurances. On the Closing Date, Administrative Agent
and Lenders shall have received an Officer's Certificate of
Borrower dated the Closing Date, substantially in the form of
Exhibit IX annexed hereto and with appropriate attachments,
demonstrating that, after giving effect to the consummation of
the transactions contemplated by the Loan Documents, Borrower and
its Subsidiaries, taken as a whole, will be Solvent.
9. Evidence of Insurance. Administrative Agent shall have received a
certificate from Borrower's insurance broker or other evidence
satisfactory
75
to it that all insurance required to be maintained pursuant to
Subsection VI.D is in full force and effect and that
Administrative Agent on behalf of Lenders has been named as
additional insured and/or loss payee thereunder to the extent
required under Subsection VI.D.
10. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Borrower shall have obtained all
Governmental Authorizations and all consents of other Persons, in
each case that are reasonably necessary in connection with the
transactions contemplated by the Loan Documents and the continued
operation of the business conducted by Borrower and its
Subsidiaries in substantially the same manner as conducted by
Borrower prior to the Closing Date. Each such Governmental
Authorization or consent shall be in full force and effect,
except in a case where the failure to obtain or maintain a
Governmental Authorization or consent, either individually or in
the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. All applicable waiting periods shall
have expired without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise
impose adverse conditions on the transactions contemplated by the
Loan Documents. No action, request for stay, petition for review
or rehearing, reconsideration, or appeal with respect to any of
the foregoing shall be pending, and the time for any applicable
Government Authority to take action to set aside its consent on
its own motion shall have expired.
11. [Reserved]
12. Security Interests in Personal and Mixed Property. To the extent
not otherwise satisfied pursuant to Subsection IV.A.13,
Administrative Agent shall have received evidence satisfactory to
it that Borrower and Subsidiary Guarantors shall have taken or
caused to be taken all such actions, executed and delivered or
caused to be executed and delivered all such agreements,
documents and instruments, and made or caused to be made all such
filings and recordings (other than the filing or recording of
items described in clauses (ii), (iii) and (iv) below) that may
be reasonably necessary or, in the reasonable opinion of
Administrative Agent, desirable in order to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and
(upon such filing and recording) perfected First Priority Lien in
the entire personal and mixed property Collateral, other than
certain Intellectual Property. Such actions shall include the
following:
a. Schedules to Collateral Documents. Delivery to
Administrative Agent of accurate and complete schedules to
all of the applicable Collateral Documents;
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b. Stock Certificates and Instruments. Delivery to
Administrative Agent of (a) certificates (which certificates
shall be accompanied by irrevocable undated stock powers,
duly endorsed in blank and otherwise satisfactory in form
and substance to Administrative Agent) representing all
Capital Stock evidenced by certificates pledged pursuant to
the Security Agreement and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner
reasonably satisfactory to Administrative Agent) evidencing
any Collateral having a value in excess of $2,000,000;
▇. ▇▇▇▇ Searches and UCC Termination Statements. Delivery to
Administrative Agent of (a) the results of a recent search,
by a Person reasonably satisfactory to Administrative Agent,
of all effective UCC financing statements and fixture
filings and all judgment and tax lien filings which may have
been made with respect to any personal or mixed property of
any Loan Party, together with copies of all such filings
disclosed by such search, and (b) authorization to file UCC
termination statements in all applicable jurisdictions as
may be necessary to terminate any effective UCC financing
statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings
in respect of Liens permitted to remain outstanding pursuant
to the terms of this Agreement);
d. UCC Financing Statements and Fixture Filings. Delivery to
Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, with respect to all personal
and mixed property Collateral of such Loan Party, for filing
in all jurisdictions as may be reasonably necessary or, in
the reasonable opinion of Administrative Agent, desirable to
perfect the security interests created in such Collateral
pursuant to the Collateral Documents;
e. PTO Terminations, Cover Sheets, Etc. Delivery to
Administrative Agent of (a) PTO termination statements duly
executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate
any effective PTO filings in respect of IP Collateral (other
than any such PTO filings in respect of Liens permitted to
remain outstanding pursuant to the terms of this Agreement),
and (b) all cover sheets or other documents or instruments
required to be filed with the PTO in order to create or
perfect Liens in respect of any copyrights and trademarks;
f. Opinions of Local Counsel. Delivery to Administrative Agent
of an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) under the laws of each
jurisdiction in which Borrower or any Material Subsidiary is
77
organized addressed to Administrative Agent and Lenders with
respect to the creation and perfection of the security
interests in favor of Administrative Agent in such
Collateral and such other matters governed by the laws of
such jurisdiction regarding such security interests as
Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative
Agent; and
g. Deposit Account Control Agreement. Delivery to
Administrative Agent of a Deposit Account Control Agreement
sufficient to perfect the security interests created in the
deposit accounts held at Banc of America Securities LLC
pursuant to the Collateral Documents.
13. Closing Date Mortgages; Closing Date Mortgage Policies; Etc.
Administrative Agent shall have received from Borrower and each
applicable Subsidiary Guarantor:
a. Closing Date Mortgages. Fully executed and notarized
Mortgages (each a "Closing Date Mortgage" and, collectively,
the "Closing Date Mortgages"), in proper form for recording
in all appropriate places in all applicable jurisdictions,
encumbering each Real Property Asset listed in Schedule 4.1M
annexed hereto (each a "Closing Date Mortgaged Property"
and, collectively, the "Closing Date Mortgaged Properties");
b. Opinions of Local Counsel. An opinion of counsel (which
counsel shall be reasonably satisfactory to Administrative
Agent) in Georgia and Wisconsin with respect to the
enforceability of the form(s) of Closing Date Mortgages to
be recorded in such state and such other matters as
Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative
Agent;
c. Title Insurance. (a) ALTA mortgagee title insurance policies
or unconditional commitments therefor (the "Closing Date
Mortgage Policies") issued by the Title Company with respect
to the Closing Date Mortgaged Properties listed in Part A of
Schedule 4.1M annexed hereto, in amounts not less than the
respective amounts designated therein with respect to any
particular Closing Date Mortgaged Properties, insuring fee
simple title to, or a valid leasehold interest in, each such
Closing Date Mortgaged Property vested in such Loan Party
and assuring Administrative Agent that the applicable
Closing Date Mortgages create valid and enforceable First
Priority mortgage Liens on the respective Closing Date
Mortgaged Properties encumbered thereby, which Closing
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Date Mortgage Policies (1) shall include the following
endorsements to the extent available in the states where the
Closing Date Mortgaged Properties are located:
comprehensive, mechanics' lien, variable rate, street
address, separate tax lot, survey, contiguity, zoning (ALTA
3.1), street access, usury, subdivision map act, revolving
credit, tie-in, creditors' rights, doing business, first
loss and last dollar and any other matters reasonably
requested by Administrative Agent and (2) shall provide for
affirmative insurance and such reinsurance as Administrative
Agent may reasonably request, all of the foregoing in form
and substance reasonably satisfactory to Administrative
Agent; and (b) evidence reasonably satisfactory to
Administrative Agent that such Loan Party has (i) delivered
to the Title Company all certificates and affidavits
required by the Title Company in connection with the
issuance of the Closing Date Mortgage Policies and (ii) paid
to the Title Company or to the appropriate governmental
authorities all expenses and premiums of the Title Company
in connection with the issuance of the Closing Date Mortgage
Policies and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in
connection with recording the Closing Date Mortgages in the
appropriate real estate records;
d. Title Reports. With respect to each Closing Date Mortgaged
Property listed in Part B of Schedule 4.1M annexed hereto, a
title report issued by the Title Company with respect
thereto, dated not more than 30 days prior to the Closing
Date and satisfactory in form and substance to
Administrative Agent;
e. Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or
otherwise referred to in the Closing Date Mortgage Policies
or in the title reports delivered pursuant to Subsection
IV.A.13.d;
f. Surveys. Any surveys for the Closing Date Mortgaged
Properties to the extent currently in the possession of
Borrower or its Subsidiaries;
g. Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance
broker or a municipal engineer, as to whether (1) any
Closing Date Mortgaged Property is a Flood Hazard Property
and (2) the community in which any such Flood Hazard
Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard
Properties, such Loan Party's written acknowledgement of
receipt of written notification from
79
Administrative Agent (1) as to the existence of each such
Flood Hazard Property and (2) as to whether the community in
which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and
(c) if any such Flood Hazard Property is located in a
community that participates in the National Flood Insurance
Program, evidence that Borrower has obtained flood insurance
in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of
Governors of the Federal Reserve System; and
h. Environmental Indemnity. The Environmental Indemnity
Agreement, satisfactory in form and substance to
Administrative Agent and its counsel, with respect to the
indemnification of Administrative Agent and Lenders for any
liabilities that may be imposed on or incurred by any of
them as a result of any Hazardous Materials Activity.
14. Matters Relating to Existing Indebtedness of Borrower and its
Subsidiaries.
a. Termination of Existing Credit Agreements and Related Liens;
Existing Letters of Credit. On the Closing Date, Borrower
and its Subsidiaries shall have (a) repaid in full all
Indebtedness outstanding under the Existing Credit Agreement
(the aggregate principal amount of which Indebtedness shall
not exceed $175,000,000), (b) terminated any commitments to
lend or make other extensions of credit thereunder, (c)
delivered to Administrative Agent all documents or
instruments necessary to release all Liens securing
Indebtedness or other obligations of Borrower and its
Subsidiaries thereunder, and (d) made arrangements
reasonably satisfactory to Administrative Agent with respect
to the cancellation of any letters of credit outstanding
thereunder or the provision of cash collateral or the
issuance of Letters of Credit to support the obligations of
Borrower and its Subsidiaries with respect thereto.
b. Existing Indebtedness to Remain Outstanding. Administrative
Agent shall have received an Officer's Certificate of
Borrower stating that, after giving effect to the
transactions described in this Subsection IV.A.14, the
Indebtedness of Loan Parties (other than Indebtedness under
the Loan Documents) shall consist of (a) the Senior
Subordinated Notes issued pursuant to the Senior
Subordinated Indenture, (b) the aggregate principal amount
set forth on Part I of Schedule 7.1 of outstanding
Indebtedness described in Part I of Schedule 7.1 annexed
hereto and (c) Indebtedness in an aggregate amount not to
exceed the amount
80
set forth on Part II of Schedule 7.1 in respect of Capital
Leases described in Part II of Schedule 7.1 annexed hereto.
The terms and conditions of all such Indebtedness shall be
in form and in substance reasonably satisfactory to
Administrative Agent.
15. Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent, acting on
behalf of Lenders, and its counsel shall be satisfactory in form
and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents
as Administrative Agent may reasonably request.
16. No Disruption of Financial Markets. There shall have not occurred
any material adverse change in the financial markets, as
determined by Administrative Agent in its sole discretion.
17. Minimum Consolidated EBITDA; Maximum Consolidated Total Leverage
Ratio. On the Closing Date, Administrative Agent shall have
received an Officers' Certificate executed by the chief financial
officer of Borrower, dated the Closing Date, with appropriate
attachments, demonstrating that, after giving effect to the
transactions contemplated by this Agreement, (i) Consolidated
EBITDA for the twelve month period ending on the Closing Date is
not less than $83,000,000, and (ii) the Consolidated Total
Leverage Ratio does not exceed 3.10:1.00.
18. OFAC Compliance. Administrative Agent shall have received an
Officer's Certificate of Borrower dated the Effective Date,
substantially in the form of Exhibit XVI annexed hereto,
certifying that neither the Borrower nor any of its Affiliates is
on the SDN List and the performance by Administrative Agent of
its duties under this Agreement or any other Loan Document with
respect to Borrower or its Affiliates does not violate the
Executive Order, the USA Patriot Act of 2001 or the United States
Foreign Corrupt Practices Act of 1977.
B. Conditions to All Loans.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
H. Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of Subsection II.A.2, an originally executed
Notice of Borrowing, in each case signed by a duly authorized Officer of
Borrower.
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1. As of that Funding Date:
a. The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete
in all material respects on and as of that Funding Date to
the same extent as though made on and as of that date,
except to the extent such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct
and complete in all material respects on and as of such
earlier date; provided, that where a representation and
warranty is already qualified as to materiality, such
materiality qualifier shall be disregarded for purposes of
this condition;
b. No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated
by such Notice of Borrowing and the application of proceeds
thereof that would constitute an Event of Default or a
Potential Event of Default;
c. Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which
this Agreement provides shall be performed or satisfied by
it on or before that Funding Date;
d. No order, judgment or decree of any arbitrator or Government
Authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
e. The making of the Loans requested on such Funding Date shall
not violate any law including Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal
Reserve System;
f. There shall not be pending or, to the knowledge of Borrower,
threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Borrower
or any of its Subsidiaries or any property of Borrower or
any of its Subsidiaries that has not been disclosed by
Borrower in writing pursuant to Subsection V.F or VI.A.h
prior to the making of the last preceding Loans (or, in the
case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development not
so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed,
that, in either event, in the reasonable opinion of
Administrative Agent or of Requisite Lenders, could
reasonably be expected to have a Material Adverse Effect;
and no injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other
restraining
82
order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of Loans
hereunder; and
g. Borrower shall have delivered such other certificates or
documents that Administrative Agent shall reasonably
request, in form and substance reasonably satisfactory to
Administrative Agent.
C. Conditions to Letters of Credit.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) and the
renewal of any Letter of Credit hereunder is subject to the following conditions
precedent:
I. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
1. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the
provisions of Subsection III.A, a Request for Issuance (or a
facsimile copy thereof) in each case signed by a duly authorized
Officer of Borrower, together with all other information
specified in Subsection III.A and such other documents or
information as the applicable Issuing Lender may reasonably
require in connection with the issuance of such Letter of Credit.
2. On the date of issuance of such Letter of Credit, all conditions
precedent described in Subsection IV.B.1 shall be satisfied to
the same extent as if the issuance of such Letter of Credit were
the making of a Loan and the date of issuance of such Letter of
Credit were a Funding Date.
V. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce
other Lenders to purchase participations therein, Borrower represents and
warrants to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, and the renewal of any Letter
of Credit hereunder that the following statements are true, correct and
complete:
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A. Organization, Powers, Qualification, Good Standing, Business and
----------------------------------------------------------------
Subsidiaries.
------------
J. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization as specified in Schedule 5.1 annexed hereto. Each
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.
1. Qualification and Good Standing. Each Loan Party is qualified to
do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its
business and operations, except in jurisdictions where the
failure to be so qualified or in good standing has not had and
could not reasonably be expected to result in a Material Adverse
Effect.
2. Conduct of Business. Borrower and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to
Subsection VII.M.
3. Subsidiaries. All of the Subsidiaries of Borrower and their
jurisdictions of organization are identified in Schedule 5.1
annexed hereto, as said Schedule 5.1 may be supplemented from
time to time pursuant to the provisions of Subsection VI.A.m. The
Capital Stock of Borrower and each of the Subsidiaries of
Borrower identified in Schedule 5.1 annexed hereto (as so
supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such Capital Stock constitutes Margin
Stock. Each of the Subsidiaries of Borrower identified in
Schedule 5.1 annexed hereto (as so supplemented) is a corporation
duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of organization set forth
therein, has all requisite power and authority to own and operate
its properties and to carry on its business as now conducted and
as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions
contemplated thereby, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, in
each case except where failure to be so qualified or in good
standing or a lack of such power and authority has not had and
could not reasonably be expected to result in a Material Adverse
Effect. Schedule 5.1 annexed hereto (as so supplemented)
correctly sets forth the ownership interest of Borrower and each
of its Subsidiaries in each of the Subsidiaries of Borrower
identified therein.
84
B. Authorization of Borrowing, etc.
-------------------------------
K. Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
action on the part of each Loan Party that is a party thereto.
1. No Conflict. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan
Documents do not and will not (i) violate any provision of the
Organizational Documents of Borrower or any of its Subsidiaries,
(ii) violate any provision of any law or any governmental rule or
regulation applicable to Borrower or any of its Subsidiaries, or
any order, judgment or decree of any court or other Government
Authority binding on Borrower or any of its Subsidiaries, in each
case the violation of which could reasonably be expected to have
a Material Adverse Effect, (iii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of Borrower or
any of its Subsidiaries, in each case the violation of which
could reasonably be expected to have a Material Adverse Effect,
(iv) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Borrower or any of its
Subsidiaries (other than any Liens created under any of the Loan
Documents in favor of Administrative Agent on behalf of Lenders),
(v) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of
Borrower or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date and
disclosed in writing to Lenders, (vi) other than as specifically
mentioned in clauses (i) through (v) above, conflict with, result
in a breach of or constitute (with due notice or lapse of time or
both) a default under any other contractual obligation of
Borrower or any of its Subsidiaries, which conflicts, breaches or
defaults, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or (vii) otherwise
impose any liability upon Administrative Agent or any Lenders.
2. Governmental Consents. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and
the consummation of the transactions contemplated by the Loan
Documents do not and will not require registration with, consent
or approval of, or notice to, or other action to, with or by, any
Government Authority the failure of which to obtain could
reasonably be expected to have a Material Adverse Effect.
3. Binding Obligation. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan
Party, enforceable
85
against such Loan Party in accordance with its respective terms,
except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles
relating to enforceability.
4. Compliance with Laws. Borrower and its Subsidiaries are in
compliance with all presently existing applicable statutes, laws,
regulations, rules, ordinances and orders of any kind whatsoever
(including, without limitation, any zoning and building laws or
ordinances, subdivision laws or ordinances, any Environmental
Laws or any presently existing rules, regulations or orders of
any Government Authority), and with all present existing
covenants and restrictions of record relating to the use and
occupancy of any of their respective properties, except where the
failure to so comply could not reasonably be expected to result
in a Material Adverse Effect.
C. Financial Condition.
-------------------
Borrower has heretofore delivered to Lenders, at Lenders' request, the
financial statements and information required to be delivered pursuant to
Subsection IV.A.6. All such statements other than pro forma financial statements
were prepared in conformity with GAAP and fairly present, the financial position
(on a consolidated basis) of the entities described in such financial statements
as at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments. No
Loan Party has (and will not have following the funding of the initial Loans)
any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that, as of the
Closing Date, is not reflected in the foregoing financial statements or the
notes thereto and, as of any Funding Date subsequent to the Closing Date, is not
reflected in the most recent financial statements delivered to Lenders pursuant
to Subsection VI.A or the notes thereto and that, in any such case, is material
in relation to the business, operations, properties, assets, financial condition
or prospects of Borrower or any of its Subsidiaries.
D. No Material Adverse Change; No Restricted Junior Payments.
---------------------------------------------------------
Since September 28, 2002, no event or change has occurred that has
resulted in or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Since September 28, 2002, neither Borrower nor any of its
Subsidiaries has directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Junior Payment or agreed to do so
except as permitted by Subsection VII.E.
E. Title to Properties; Liens; Real Property; Intellectual Property.
----------------------------------------------------------------
L. Title to Properties; Liens. Borrower and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold
86
interests in (in the case of leasehold interests in real or personal property),
or (iii) good title to (in the case of all other personal property), all of
their respective properties and assets reflected in the financial statements
referred to in Subsection V.C or in the most recent financial statements
delivered pursuant to Subsection VI.A, in each case except for assets disposed
of since the date of such financial statements in the ordinary course of
business or as otherwise permitted under Subsection VII.G. Except as permitted
by this Agreement, all such properties and assets are free and clear of Liens.
1. Real Property. As of the Closing Date, Schedule 5.5B annexed
hereto contains a true, accurate and complete list of (i) all fee
interests in any Real Property Assets and (ii) all leases,
subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any
thereof) affecting each Real Property Asset, regardless of
whether a Loan Party is the landlord or tenant (whether directly
or as an assignee or successor in interest) under such lease,
sublease or assignment. Each agreement listed in Schedule 5.5B
pursuant to clause (ii) of the immediately preceding sentence is
in full force and effect, there is no default by any Loan Party
thereunder, and Borrower does not have knowledge of any default
that has occurred and is continuing thereunder, and each such
agreement constitutes the legally valid and binding obligation of
each applicable Loan Party, enforceable against such Loan Party
in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability. If
Borrower or any of its Subsidiaries acquires any additional Real
Property Assets after the Closing Date, Borrower shall deliver an
updated Schedule 5.5B.
2. Intellectual Property. As of the Closing Date, Borrower and its
Subsidiaries own or have the right to use all Intellectual
Property necessary to the conduct of their business, except where
the failure to own or have such right to use, individually or in
the aggregate could not reasonably be expected to result in a
Material Adverse Effect. No claim has been asserted and is
pending and served by any Person challenging or questioning the
use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does
Borrower know of any valid basis for any such claim except for
such claims that individually or in the aggregate could not
reasonably be expected to result in a Material Adverse Effect.
The use of such Intellectual Property by Borrower and its
Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that, individually or in
the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. All federal and state and all foreign
registrations of and applications for Intellectual Property, and
all unregistered Intellectual
87
Property, that are owned or licensed by Borrower or any of its
Subsidiaries on the Closing Date are described on Schedule 5.5C
annexed hereto.
F. Litigation; Adverse Facts.
-------------------------
1. Proceedings, Investigations and Violations.
Except as set forth in Borrower's Form 10-K dated as of September 28,
2002 and Form 10-Q dated as of December 28, 2002, there are no Proceedings
(whether or not purportedly on behalf of Borrower or any of its Subsidiaries) at
law or in equity, or before or by any court or other Government Authority
(including any Environmental Claims) that are pending or, to the knowledge of
Borrower or any of its Subsidiaries, threatened against or affecting Borrower or
any of its Subsidiaries or any property of Borrower or any of its Subsidiaries
and that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. Neither Borrower nor any of its
Subsidiaries (i) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or other Government Authority, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
2. Land Use Proceedings. As of the Closing Date, there are no
pending condemnation, zoning or other land use Proceedings or
special assessment Proceedings with respect to the Real Property
Assets or the use thereof, and neither Borrower nor any of its
Subsidiaries has received written notice from any Government
Authority threatening any such Proceeding. After the Closing
Date, there are no pending condemnation, zoning or other land use
Proceedings or special assessment Proceedings with respect to the
Real Property Assets or the use thereof that could reasonably be
expected to result in a Material Adverse Effect, and neither
Borrower nor any of its Subsidiaries has received written notice
from any Government Authority threatening any such proceeding. No
Loan Party has entered into any agreements or commitments with
any Government Authority that will be binding on the Real
Property Assets after the Closing Date and that would (i)
materially affect the operations of or the entitlements
applicable to such property, (ii) require the owner of such
property to make improvements to such property or make
dedications or off-site improvements for the benefit of adjoining
properties, or (iii) make additional expenditures with respect to
the operation of the Real Property Assets.
G. Payment of Taxes.
----------------
Except to the extent permitted by Subsection VI.C, all tax returns and
reports of Borrower and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other
88
governmental charges upon Borrower and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises that are due
and payable have been paid when due and payable, except for such taxes (i) which
are not yet delinquent or (ii) that are being contested in good faith and by
proper proceedings, and against which adequate reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor. Borrower knows of no proposed tax assessment against
Borrower or any of its Subsidiaries that is not being actively contested by
Borrower or such Subsidiary in good faith and by appropriate proceedings.
H. Performance of Agreements; Materially Adverse Agreements; Material
------------------------------------------------------------------
Contracts.
---------
M. Neither Borrower nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
1. Neither Borrower nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter
or other internal restrictions or any provision of any applicable
law, rule or regulation which, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse
Effect.
I. Governmental Regulation; OFAC; Patriot Act; Foreign Corrupt Practices
---------------------------------------------------------------------
Act.
---
1. Governmental Regulation. Neither Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation that may
limit its ability to incur Indebtedness or that may otherwise
render all or any portion of the Obligations unenforceable.
2. OFAC. Neither the extensions of credit to Borrower hereunder nor
the use of the respective proceeds thereof, shall cause
Administrative Agent or any Lender to violate the U.S. Bank
Secrecy Act, as amended, and any applicable regulations
thereunder or any of the sanctions programs administered by the
U.S. Department of the Treasury's Office of Foreign Assets
Control ("OFAC") of the United States Department of Treasury, any
regulations promulgated thereunder by OFAC or under any
affiliated or successor governmental or quasi-governmental
office, bureau or agency and any enabling legislation or
executive order relating thereto. Without limiting the foregoing,
neither Borrower nor any of its Affiliates (a) is or will become
a person whose property or interests in property are blocked
89
or subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)) (the "Executive
Order"), (b) engages or will engage in any dealings or
transactions prohibited by Section 2 of the Executive Order, or
be otherwise associated with any such person in any manner
violative of Section 2, or (c) is or will otherwise become a
person on the list of Specially Designated Nationals and Blocked
Persons ("SDN List") or subject to the limitations or
prohibitions under any other OFAC regulation or executive order
("Prohibited Persons").
3. Patriot Act; Foreign Corrupt Practices Act. Borrower and each of
its Subsidiaries are in compliance, in all material respects,
with the Uniting And Strengthening of America By Providing the
Appropriate Tools Required To Intercept And Obstruct Terrorism
Act of 2001 (the "USA Patriot Act of 2001"). No part of the
extensions of credit hereunder will be used, directly or
indirectly, for any payments to any governmental official or
employee, political party, official of a political party,
candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business
or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.
J. Securities Activities.
---------------------
N. Neither Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
1. Following application of the proceeds of each Loan, not more than
twenty-five percent (25%) of the value of the assets (either of
Borrower only or of Borrower and its Subsidiaries on a
consolidated basis) subject to the provisions of Subsection
VII.B and VII.G or subject to any restriction contained in any
agreement or instrument, between Borrower and any Lender or any
Affiliate of any Lender, relating to Indebtedness and within the
scope of Subsection VII.B,will be Margin Stock.
K. Employee Benefit Plans.
----------------------
O. Borrower, each of its Subsidiaries and each of their respective
ERISA Affiliates are in substantial compliance with all applicable provisions
and requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan. Each Employee Benefit Plan
that is intended to qualify under Section 401(a) of the Internal Revenue Code is
so qualified.
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1. No ERISA Event has occurred or is reasonably expected to occur.
2. Except to the extent required under Section 4980B of the Internal
Revenue Code and except for certain selling shareholders of
Kaytee Products, Inc. who participate in Borrower's health care
plans pursuant to the terms of the sale of Kaytee Products, Inc.
to Borrower, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any
retired or former employee of Borrower, any of its Subsidiaries
or any of their respective ERISA Affiliates.
3. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all
Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit
liabilities), does not exceed $1,000,000.
4. No Borrower, Subsidiary or any of their respective ERISA
Affiliates contributes to any Multiemployer Plan. As of the most
recent valuation date for each Multiemployer Plan to which
Borrower, its Subsidiaries or their respective ERISA Affiliates
has contributed within the past five years (and for which the
actuarial report is available), the potential liability of
Borrower, its Subsidiaries and their respective ERISA Affiliates
for a complete withdrawal from all such Multiemployer Plans
(within the meaning of Section 4203 of ERISA), based on
information available pursuant to Section 4221(e) of ERISA, does
not exceed $1,000,000.
L. Certain Fees.
------------
No broker's or finder's fee or commission will be payable by any Loan
Party with respect to this Agreement or any of the transactions contemplated by
the Loan Documents, and Borrower hereby indemnifies Administrative Agent,
Co-Lead Arrangers, Co-Syndication Agents and Lenders against, and agrees that it
will hold Administrative Agent, Co-Lead Arrangers, Co-Syndication Agents and
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
M. Environmental Protection.
------------------------
Except as set forth in Schedule 5.13 annexed hereto:
a. (x) neither Borrower nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement
agreement with any Person relating to any Environmental Law,
any Environmental Claim, or any Hazardous Materials Activity
and (y) none of
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Borrower's or its Subsidiaries' respective Facilities are
subject to any outstanding written order, consent decree or
settlement agreement with any Person relating to any
Environmental Law, any Environmental Claim, or any Hazardous
Materials Activity arising from Borrower's or any of its
Subsidiaries' activities or operations;
b. neither Borrower nor any of its Subsidiaries has received
any letter or request for information under Section 104 of
the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C.Section 9604) or any comparable
state law;
c. there are and, to Borrower's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities
that could reasonably be expected to form the basis of an
Environmental Claim against Borrower or any of its
Subsidiaries;
d. compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would
not, individually or in the aggregate, be reasonably
expected to result in a Material Adverse Effect. Nothing in
this Subsection M to the contrary, no event or condition has
occurred or is occurring with respect to Borrower or any of
its Subsidiaries relating to any Environmental Law, any
Release of Hazardous Materials, or any Hazardous Materials
Activity, which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect;
e. to Borrower's and each of its Subsidiary's knowledge, all
Real Property Assets and all operations of Borrower and its
Subsidiaries are in compliance, and have in the last five
years been in compliance, with Environmental Laws; and
f. no judicial proceeding or action by any Government Authority
is pending, or to the knowledge of Borrower and each of its
Subsidiaries, threatened, under any Environmental Law to
which Borrower or any of its Subsidiaries is or will be
named as a party.
Notwithstanding anything in this Subsection M to the contrary, no event or
condition has occurred or is occurring with respect to Borrower or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 5.13 annexed hereto, which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect or could
reasonably be expected to impose any liability on the Lenders, Administrative
Agent or Co-Lead Arrangers.
92
N. Employee Matters.
----------------
There are no collective bargaining agreements covering the employees
of Borrower and its Subsidiaries except as set forth on Schedule 5.14. There is
no strike or work stoppage in existence or threatened involving Borrower or any
of its Subsidiaries that could reasonably be expected to result in a Material
Adverse Effect, and there are no strikes or walkouts in progress, pending or to
Borrower's knowledge contemplated relating to any labor contracts to which
Borrower or any of its Subsidiaries is a party, relating to any labor contracts
being negotiated, or otherwise.
O. Solvency.
--------
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
Borrower and its Subsidiaries taken as a whole are and, upon the incurrence of
any Obligations by Borrower and its Subsidiaries taken as a whole on any date on
which this representation is made, will be, Solvent.
P. Matters Relating to Collateral.
------------------------------
P. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to Subsections IV.A.12,
IV.A.13, VI.H and VI.I and the filing of any UCC financing statements and/or
amendments and PTO filings and/or amendments delivered to Administrative Agent
for filing and (ii) the delivery to Administrative Agent of any Pledged
Collateral not delivered to Administrative Agent at the time of execution and
delivery of the applicable Collateral Document (all of which Pledged Collateral
has been so delivered) are effective to create in favor of Administrative Agent
for the benefit of Lenders, as security for the respective Secured Obligations
(as defined in the applicable Collateral Document in respect of any Collateral),
a valid First Priority Lien on all of the Collateral, and all filings and other
actions reasonably necessary or reasonably desirable to perfect and maintain the
First Priority status of such Liens have been duly made or taken and remain in
full force and effect, other than the filing of any UCC financing statements
delivered to Administrative Agent for filing (but not yet filed) and the
periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
1. Governmental Authorizations. No Governmental Authorization or
other action by, and no notice to or filing with, any Government
Authority is required for either (i) the pledge or grant by any
Loan Party of the Liens purported to be created in favor of
Administrative Agent for the benefit of Lenders pursuant to any
of the Collateral Documents or (ii) the exercise by
Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to
any of the Collateral Documents or created or provided for by
applicable law), except for filings or recordings contemplated by
Subsection 1.1P and except as may be required, in connection with
the disposition of any
93
Pledged Collateral, by laws generally affecting the offering and
sale of securities.
2. Absence of Third-Party Filings. Except such as may have been
filed in favor of Administrative Agent for the benefit of Lenders
as contemplated by Subsection 1.1P and for Permitted Encumbrances
and to evidence permitted lease obligations and other Liens
permitted pursuant to Subsection VII.B, (i) no effective UCC
financing statement, fixture filing or other instrument similar
in effect covering all or any part of the Collateral is on file
in any filing or recording office and (ii) no effective filing
covering all or any part of the IP Collateral is on file in the
PTO.
3. Margin Regulations. The pledge of the Pledged Collateral pursuant
to the Collateral Documents does not violate Regulation T, U or X
of the Board of Governors of the Federal Reserve System.
4. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with
respect to any of the Collateral (in each case taken as a whole
with respect to any particular Collateral) is accurate and
complete in all material respects. Neither Borrower nor any of
its Subsidiaries nor any other Loan Party has within the six year
period immediately preceding the date of this Agreement changed
its name, been the surviving entity of a merger or consolidation,
or acquired all or substantially all of the assets of any Person.
Q. Disclosure.
----------
No representation or warranty of Borrower or any of its Subsidiaries
contained in the Confidential Information Memorandum or in any Loan Document or
in any other document, certificate or written statement furnished to Lenders by
or on behalf of Borrower or any of its Subsidiaries for use in connection with
the transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state a material fact (known to Borrower, in the
case of any document not furnished by it) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Borrower to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
There are no facts known (or which should upon the reasonable exercise of
diligence be known) to Borrower (other than matters of a general economic
nature) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect and that have not been disclosed herein or
in such other documents, certificates and statements furnished to Lenders for
use in connection with the transactions contemplated hereby.
94
R. Subordinated Indebtedness.
-------------------------
The Senior Subordinated Notes have been issued in accordance with the
Senior Subordinated Note Indenture. The subordination provisions of the Senior
Subordinated Notes and the Senior Subordinated Note Indenture are enforceable
against the holders thereof. On the Closing Date, each of the representations
and warranties made in the Senior Subordinated Note Indenture by Borrower is
true and correct in all material respects, except for representations or
warranties therein that relate to a particular date, and with regard to such
representations and warranties, the same were true and correct as of such date.
The Obligations constitute "Senior Debt" and "Designated Senior Debt" under the
Senior Subordinated Note Indenture, and constitute senior indebtedness that is
entitled to the benefits of the subordination provisions, if any, of all
Indebtedness of Borrower and its Subsidiaries.
S. Mortgage Taxes, Etc.
-------------------
All mortgage, note, transfer, documentary, stamp, intangible and other
similar taxes and impositions which may be required to be paid in connection
with the Loans, the Mortgages and the other Loan Documents have been (or
concurrently with the closing of the Loans and recording of the Mortgages, will
be) paid in full by Borrower.
T. Proceeds of Loans.
-----------------
The proceeds of the Loans will be used solely by Borrower for the
purposes set forth in Section 2.5.
VI. BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrower shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this VI.
A. Financial Statements and Other Reports.
--------------------------------------
Borrower will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Borrower will deliver to Administrative Agent and Lenders:
a. Quarterly Financials: as soon as available and in any event
within 45 days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, (a) the consolidated
balance sheet of Borrower and its Subsidiaries as at the end
of such Fiscal Quarter and the related consolidated
statements of income, stockholders' equity and cash flows of
Borrower and its Subsidiaries for such Fiscal
95
Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter,
setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the
Financial Plan for the current Fiscal Year, all in
reasonable detail and certified by the chief financial
officer of Borrower that they fairly present, in all
material respects, the financial condition of Borrower and
its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and
normal year-end adjustments, and (b) a narrative report
describing the operations of Borrower and its Subsidiaries
in the form prepared for presentation to senior management
for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such
Fiscal Quarter;
b. Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Borrower and its Subsidiaries
as at the end of such Fiscal Year and the related
consolidated statements of income, stockholders' equity and
cash flows of Borrower and its Subsidiaries for such Fiscal
Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal
Year covered by such financial statements, all in reasonable
detail and certified by the chief financial officer of
Borrower that they fairly present, in all material respects,
the financial condition of Borrower and its Subsidiaries as
at the dates indicated and the results of their operations
and their cash flows for the periods indicated, (b) a
narrative report describing the operations of Borrower and
its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Year, and (c) in the case
of such consolidated financial statements, a report thereon
of a nationally recognized accounting firm or other
independent certified public accountants of recognized
national standing selected by Borrower and reasonably
satisfactory to Administrative Agent, which report shall be
unqualified, shall express no doubts about the ability of
Borrower and its Subsidiaries to continue as a going
concern, and shall state that such consolidated financial
statements fairly present, in all material respects, the
consolidated financial position of Borrower and its
Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods
indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed
in such financial statements) and that the examination by
such accountants
96
in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing
standards;
c. Officer and Compliance Certificates: together with each
delivery of financial statements of Borrower and its
Subsidiaries pursuant to subdivisions (i) and (ii) above,
(a) an Officer's Certificate of Borrower stating that the
signers have reviewed the terms of this Agreement and have
made, or caused to be made under their supervision, a review
in reasonable detail of the transactions and condition of
Borrower and its Subsidiaries during the accounting period
covered by such financial statements and that such review
has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officer's
Certificate, of any condition or event that constitutes an
Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the
nature and period of existence thereof and what action
Borrower has taken, is taking and proposes to take with
respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the
restrictions contained in VII, in each case to the extent
compliance with such restrictions is required to be tested
at the end of the applicable accounting period;
d. Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the
preparation of the audited financial statements referred to
in Subsection V.C, the consolidated financial statements of
Borrower and its Subsidiaries delivered pursuant to
subdivisions (i), (ii) or (xi) of this Subsection VI.A will
differ in any material respect from the consolidated
financial statements that would have been delivered pursuant
to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with
the first delivery of financial statements pursuant to
subdivision (i), (ii) or (xi) of this Subsection VI.A
following such change, consolidated financial statements of
Borrower and its Subsidiaries for (y) the current Fiscal
Year to the effective date of such change and (z) the two
full Fiscal Years immediately preceding the Fiscal Year in
which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial
statements pursuant to subdivision (i), (ii) or (xi) of this
Subsection VI.A following such change, if required pursuant
to Subsection I.B, a written statement of the chief
accounting officer
97
or chief financial officer of Borrower setting forth the
differences (including any differences that would affect any
calculations relating to the financial covenants set forth
in Subsection VII.F) which would have resulted if such
financial statements had been prepared without giving effect
to such change;
e. Accountants' Certification: together with each delivery of
consolidated financial statements of Borrower and its
Subsidiaries pursuant to subdivision (ii) above, a written
statement by the independent certified public accountants
giving the report thereon (a) stating that their audit
examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that
constitutes an Event of Default or Potential Event of
Default has come to their attention and, if such a condition
or event has come to their attention, specifying the nature
and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to
obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course
of their audit examination, and (c) stating that based on
their audit examination nothing has come to their attention
that causes them to believe either or both that the
information contained in the certificates delivered
therewith pursuant to subdivision (iii) above is not correct
or that the matters set forth in the Compliance Certificate
delivered therewith pursuant to clause (b) of subdivision
(iii) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;
f. Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of
all reports submitted to Borrower by independent certified
public accountants in connection with each annual, interim
or special audit of the financial statements of Borrower and
its Subsidiaries made by such accountants, including any
comment letter submitted by such accountants to management
in connection with their annual audit;
g. SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available
generally by Borrower to its Security holders or by any
Subsidiary of Borrower to its Security holders other than
Borrower or another Subsidiary of Borrower, (b) all regular
and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if
any, filed by Borrower or any of its Subsidiaries
98
with any securities exchange or with the Securities and
Exchange Commission or any Government Authority or private
regulatory authority, and (c) all press releases and other
statements made available generally by Borrower or any of
its Subsidiaries to the public concerning material
developments in the business of Borrower or any of its
Subsidiaries;
h. Litigation or Other Proceedings: (a) promptly upon, but in
any event within fifteen days after, any officer of Borrower
obtaining knowledge of (1) the institution of, or
non-frivolous threat of, any Proceeding against or affecting
Borrower or any of its Subsidiaries or any property of
Borrower or any of its Subsidiaries not previously disclosed
in writing by Borrower to Lenders or (2) any material
development in any Proceeding that, in any case:
(x) could reasonably be expected to have a Material Adverse
Effect; or
(y) seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of,
the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Borrower to enable Lenders and their counsel to
evaluate such matters, and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an uninsured
alleged liability of, or claims against or affecting, Borrower or any of
its Subsidiaries equal to or greater than $5,000,000, and promptly after
request by Administrative Agent such other information as may be reasonably
requested by Administrative Agent to enable Administrative Agent and its
counsel to evaluate any of such Proceedings;
i. ERISA Events: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Borrower,
any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department
of Labor or the PBGC with respect thereto;
j. ERISA Notices: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates
with the Internal Revenue Service with respect to each
Pension Plan; (b) all notices received by Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates
from a Multiemployer Plan sponsor concerning
99
an ERISA Event; and (c) copies of such other documents or
governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably
request;
k. Financial Plans: as soon as practicable and in any event no
later than 30 days after the beginning of each Fiscal Year,
a consolidated plan and financial forecast for such Fiscal
Year stated on a quarterly basis and the next succeeding
Fiscal Year stated on an annual basis (the "Financial Plan"
for such Fiscal Years), including a forecasted consolidated
balance sheet and forecasted consolidated statements of
income and cash flows of Borrower and its Subsidiaries and
an explanation of the assumptions on which such forecasts
are based;
l. Insurance: (a) as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and
substance reasonably satisfactory to Administrative Agent
outlining all material insurance coverage required hereunder
to be maintained as of the date of such report by Borrower
and its Subsidiaries and all material insurance coverage
planned to be maintained by Borrower and its Subsidiaries in
the immediately succeeding Fiscal Year as required hereunder
and (b) as soon as practicable after any material change in
insurance coverage maintained by Borrower and its
Subsidiaries notice thereof to Administrative Agent
specifying the changes and reasons therefor;
m. New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Borrower, a written notice setting forth with
respect to such Person (a) the date on which such Person
became a Subsidiary of Borrower and (b) all of the data
required to be set forth in Schedule 5.1 annexed hereto with
respect to all Subsidiaries of Borrower (it being understood
that such written notice shall be deemed to supplement
Schedule 5.1 annexed hereto for all purposes of this
Agreement);
n. Deposit Accounts: promptly upon the opening of any Deposit
Account by Borrower or any of its Subsidiaries, a written
notice setting forth all of the data required to be set
forth in Schedule 6.10 annexed hereto with respect to such
Deposit Account;
o. Events of Default, etc.: promptly upon, and within five
Business Days after, any officer of Borrower obtaining
knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming
aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect
to a claimed Event of Default or Potential
100
Event of Default, (b) that any Person has given any notice
to Borrower or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or
condition of the type referred to in Subsection VIII.B, (c)
of any resignation or dismissal of Borrower's independent
accountant, (d) of any Change in Control or other event
requiring a prepayment of principal on any Subordinated
Indebtedness, (e) of any individual or series of related
Asset Sales, issuances of Capital Stock or receipt of Net
Insurance/Condemnation Proceeds aggregating in excess of
$5,000,000 or (f) of the occurrence of any event or change
that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officer's
Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice
given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Borrower has
taken, is taking and proposes to take with respect thereto;
p. Corporate Matters: with reasonable promptness, written
notice of (1) any amendment of the articles or certificate
of incorporation or by-laws or other constituent documents
of Borrower or any of its Material Subsidiaries, (2) any
change in the composition of the board of directors of
Borrower or any of its Material Subsidiaries, and (3) any
change in the executive Officers of Borrower or any of its
Subsidiaries;
q. Revisions or Updates to Schedules: should any of the
information or disclosures provided on any of the Schedules
originally attached to any of the Loan Documents become
outdated or incorrect in any material respect, as part of
the next quarterly Officers' Certificate required pursuant
to Subsection VI.A.c, such revisions or updates to such
Schedules as may be reasonably necessary to update or
correct such Schedules, provided that no such revisions or
updates to any Schedules shall be deemed to have amended,
modified or superseded such Schedules immediately prior to
the submission of such revised or updated Schedules, or to
have cured any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such
Schedules to the extent such schedules were inaccurate or
incomplete at the time such warranty or representation was
made, unless and until the Requisite Lenders in their
reasonable discretion shall have accepted in writing such
revisions or updates to such Schedules; it being understood,
however, that no Event of Default shall be deemed to have
occurred pursuant to Subsection 8.4 if such Schedules are
accurate at the time a representation or warranty is made,
and that Lenders
101
shall not be obligated to make Loans or continue any Loans
as LIBOR Loans until Requisite Lenders shall have accepted
in writing such revisions or updates; and
r. Other Information: with reasonable promptness, such other
information and data with respect to Borrower or any of its
Subsidiaries as from time to time may be reasonably
requested by any Lender.
In lieu of furnishing to Administrative Agent hard copies of the
quarterly Financial Statements described in clause (i) above and the annual
Financial Statements and auditor's report described above and the other
documents referred to in clause (vii) above, to the extent such documents are
filed with the United States Securities and Exchange Commission, Borrower shall
notify Administrative Agent and Lenders when such reports or other documents are
so filed and may make such documents available to Lenders at its website located
at ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and through the United States Securities and
Exchange Commission's ▇▇▇▇▇ system ("▇▇▇▇▇") or by transmitting such documents
electronically to Lenders. Administrative Agent shall provide to any Lender hard
copies of such documents, at Borrower's expense, upon request if such Lender
does not have access to Borrower's website or ▇▇▇▇▇.
B. Existence, etc.
--------------
Borrower will at all times preserve and keep in full force and effect
its existence as a corporation. Except as permitted under Subsection VII.G,
Borrower will, and will cause each of the Subsidiary Guarantors to, at all times
preserve and keep in full force and effect its existence in the jurisdiction of
organization specified on Schedule 4.1D and all rights and franchises material
to its business; provided, however that neither Borrower nor any of the
Subsidiary Guarantors shall be required to preserve any such right or franchise
if the Governing Body of Borrower or such other Loan Party shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of Borrower or such other Loan Party, as the case may be, and that the loss
thereof is not disadvantageous in any material respect to Borrower, such other
Loan Party or Lenders.
C. Payment of Taxes and Claims; Tax.
--------------------------------
Q. Borrower will, and will cause each of its Subsidiaries to, pay
all Taxes and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such Tax, charge or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (i) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (ii) in the case of a Tax, charge or claim which has or may
become a Lien
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against any of the Collateral, such proceedings conclusively operate to stay the
sale of any portion of the Collateral to satisfy such charge or claim.
1. Borrower will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax
return with any Person (other than Borrower or any of its
Subsidiaries).
D. Maintenance of Properties; Insurance; Application of Net Insurance/
-------------------------------------------------------------------
Condemnation Proceeds.
---------------------
R. Maintenance of Properties. (i) Borrower will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Borrower and its Subsidiaries
(including all Intellectual Property) and from time to time will make or cause
to be made all appropriate repairs, renewals and replacements thereof.
a. Borrower and its Subsidiaries shall (a) prosecute, file and/or make (i) all
applications relating to the Intellectual Property owned, held or used by
Borrower or its Subsidiaries that is pending as of the date of this
Agreement, (ii) all registrations of any existing or future unregistered or
copyrightable works and (iii) all Trademark opposition and cancellation
proceedings and renewal Trademark Registrations and Copyright Registrations
and (b) do any and all acts which are reasonably necessary or reasonably
desirable to preserve and maintain all rights in all Intellectual Property,
except in each case under clause (a) or clause (b) where the failure to do
so could not reasonably be expected to have a Material Adverse Effect. Any
expenses incurred in connection therewith shall be borne solely by Borrower
and its Subsidiaries.
2. Insurance. Borrower will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business
interruption insurance and casualty insurance with respect to
liabilities, losses or damage in respect of the assets,
properties and businesses of Borrower and its Subsidiaries as may
customarily be carried or maintained under similar circumstances
by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and
otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting
the generality of the foregoing, Borrower will maintain or cause
to be maintained (i) flood insurance with respect to each Flood
Hazard Property that is located in a community that participates
in the National Flood Insurance Program, in each case in
compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System, and (ii) replacement
value casualty insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts, with
such deductibles, and covering such risks as are at all times
reasonably satisfactory to Administrative Agent in its
commercially reasonable judgment. Each such policy of insurance
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shall (a) name Administrative Agent for the benefit of Lenders as
an additional insured thereunder as its interests may appear and
(b) in the case of each business interruption and casualty
insurance policy, contain a loss payable clause or endorsement,
reasonably satisfactory in form and substance to Administrative
Agent, that names Administrative Agent for the benefit of Lenders
as the loss payee thereunder for any covered loss in excess of
$1,000,000 and, to the extent obtainable through the commercially
reasonable best efforts of Borrower, provides for at least 30
days prior written notice to Administrative Agent of any
modification or cancellation of such policy.
3. Application of Net Insurance/Condemnation Proceeds.
a. Business Interruption Insurance. Upon receipt by Borrower or
any of its Subsidiaries of any business interruption
insurance proceeds, relating to Borrower or any of the
Material Subsidiaries and constituting Net
Insurance/Condemnation Proceeds, (a) so long as no Event of
Default or no Potential Event of Default shall have occurred
and be continuing, Borrower or such other Loan Party may
retain and apply such Net Insurance/Condemnation Proceeds
for working capital purposes, and (b) if an Event of Default
or a Potential Event of Default shall have occurred and be
continuing, Borrower shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) as provided
in Subsection II.D.2;
b. Net Insurance/Condemnation Proceeds Received by Borrower.
Upon receipt by Borrower or any of its Subsidiaries of any
Net Insurance/Condemnation Proceeds other than from business
interruption insurance, subject to any conflicting
obligations arising under senior Permitted Encumbrances on
Real Property Assets, (a) so long as no Event of Default or
Potential Event of Default shall have occurred and be
continuing, if the Net Insurance/Condemnation Proceeds are
less than $20,000,000, Borrower shall, or shall cause one or
more of its Subsidiaries to, promptly and diligently apply
such Net Insurance/Condemnation Proceeds to pay or reimburse
the costs of repairing, restoring or replacing the assets in
respect of which such Net Insurance/Condemnation Proceeds
were received or, to the extent not so applied, to prepay
the Loans (and/or the Revolving Loan Commitments shall be
reduced) as provided in Subsection II.D.2, and (b) if an
Event of Default or Potential Event of Default shall have
occurred and be continuing or the Net Insurance/Condemnation
Proceeds are greater than or equal to $20,000,000, Borrower
shall apply an amount equal to such Net
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Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) as provided
in Subsection II.D.2. If at any time Administrative Agent
reasonably determines (A) that Borrower or such Subsidiary
is not proceeding diligently with such repair, restoration
or replacement or (B) that such repair, restoration or
replacement cannot be completed with the Net
Insurance/Condemnation Proceeds received, together with
funds otherwise available to Borrower for such purpose, or
that such repair, restoration or replacement cannot be
commenced within one hundred eighty (180) days or completed
within three hundred sixty (360) days after the receipt by
Borrower or such Subsidiary of such Net
Insurance/Condemnation Proceeds, then Administrative Agent
shall notify Borrower and Borrower shall apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) as provided
in Subsection II.D.2.
c. Net Insurance/Condemnation Proceeds Received by
Administrative Agent. Upon receipt by Administrative Agent
of any Net Insurance/Condemnation Proceeds as loss payee,
subject to any conflicting obligations arising under senior
Permitted Encumbrances on Real Property Assets, (a) if and
to the extent Borrower would have been required to apply
such Net Insurance/Condemnation Proceeds (if it had received
them directly) to prepay the Loans and/or reduce the
Revolving Loan Commitments, Administrative Agent shall, and
Borrower hereby authorizes Administrative Agent to, apply
such Net Insurance/Condemnation Proceeds to prepay the Loans
(and/or the Revolving Loan Commitments shall be reduced) as
provided in Subsection II.D.2, and (b) to the extent the
foregoing clause (a) does not apply, Administrative Agent
shall deliver such Net Insurance/Condemnation Proceeds to
Borrower, and, if such proceeds are business interruption
proceeds constituting Net Insurance/Condemnation Proceeds,
Borrower or such Subsidiary may retain and apply such Net
Insurance/Condemnation Proceeds for working capital
purposes, or, if such Net Insurance/Condemnation Proceeds
are other than from business interruption insurance,
Borrower shall, or shall cause one or more of its
Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds to the costs of repairing,
restoring, or replacing the assets in respect of which such
Net Insurance/Condemnation Proceeds were received; provided,
however that if at any time Administrative Agent reasonably
determines (A) that Borrower or such Subsidiary is not
proceeding diligently with such repair, restoration or
replacement or (B) that
105
such repair, restoration or replacement cannot be completed
with the Net Insurance/Condemnation Proceeds then held by
Administrative Agent for such purpose, together with funds
otherwise available to Borrower for such purpose, or that
such repair, restoration or replacement cannot be commenced
within one hundred eighty (180) days or completed within
three hundred sixty (360) days after the receipt by
Administrative Agent of such Net Insurance/Condemnation
Proceeds, Administrative Agent shall, and Borrower hereby
authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) as provided
in Subsection II.D.2.
E. Inspection Rights.
-----------------
Borrower shall, and shall cause each of its Subsidiaries to, permit
any authorized representatives designated by Administrative Agent to visit and
inspect any of the properties of Borrower or of any of its Subsidiaries, to
inspect, copy and take extracts from Borrower's and its Subsidiaries' financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Borrower may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
F. Compliance with Laws, etc.
-------------------------
Borrower shall comply, and shall cause each of its Subsidiaries and
all other Persons on or occupying any Facilities to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
Government Authority (including all Environmental Laws), noncompliance with
which could reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect.
G. Environmental Matters.
---------------------
S. Environmental Disclosure. Borrower will deliver to Administrative
Agent and Lenders:
a. Environmental Audits and Reports. As soon as practicable
following receipt thereof by Borrower or any of its
Subsidiaries, copies of all environmental audits,
investigations, analyses and reports of any kind or
character, whether prepared by personnel of Borrower or any
of its Subsidiaries or by independent consultants,
Government Authorities or any other Persons, with respect to
significant environmental matters at any Facility.
106
b. Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to
any federal, state or local governmental or regulatory
agency under any applicable Environmental Laws, (b) any
remedial action taken by Borrower or any other Person in
response to (1) any Hazardous Materials Activities the
existence of which could reasonably be expected to result in
one or more Environmental Claims having, individually or in
the aggregate, a Material Adverse Effect, or (2) any
Environmental Claims that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse
Effect, and (c) Borrower's discovery of any occurrence or
condition on any real property adjoining or in the vicinity
of any Facility that could cause such Facility or any part
thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under
any Environmental Laws.
c. Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending
or receipt thereof by Borrower or any of its Subsidiaries, a
copy of any and all written communications with respect to
(a) any Environmental Claims that, individually or in the
aggregate, could reasonably be expected to result in a
Material Adverse Effect, (b) any Release required to be
reported to any Government Authority, and (c) any request
for information from any Government Authority that suggests
such Government Authority is investigating whether Borrower
or any of its Subsidiaries may be potentially responsible
for any Hazardous Materials Activity.
d. Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable
detail (a) any proposed acquisition of stock, assets, or
property by Borrower or any of its Subsidiaries that could
reasonably be expected to (1) expose Borrower or any of its
Subsidiaries to, or result in, Environmental Claims that
could reasonably be expected to result in, individually or
in the aggregate, a Material Adverse Effect or (2) affect
the ability of Borrower or any of its Subsidiaries to
maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for
their respective operations and (b) any proposed action to
be taken by Borrower or any of its Subsidiaries to modify
current operations in a manner that could reasonably be
expected to subject Borrower or any of its Subsidiaries to
any additional obligations or requirements under any
Environmental Laws.
107
2. Borrower's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
a. Remedial Actions Relating to Hazardous Materials Activities.
Borrower shall, in compliance with all applicable
Environmental Laws, promptly undertake, and shall cause each
of its Subsidiaries promptly to undertake, any and all
investigations, studies, sampling, testing, abatement,
cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or ▇▇▇▇▇ any
Hazardous Materials Activity on, under or about any Facility
that is in violation of any Environmental Laws or that
presents a material risk of giving rise to an Environmental
Claim. If Borrower or any of its Subsidiaries undertakes any
such action with respect to any Hazardous Materials,
Borrower or such Subsidiary shall conduct and complete such
action in compliance with all applicable Environmental Laws
and in accordance with the policies, orders and directives
of all Government Authorities except when, and only to the
extent that, Borrower's or such Subsidiary's liability with
respect to such Hazardous Materials Activity is being
diligently contested in good faith and by appropriate
proceedings by Borrower or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Borrower shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Borrower or its
Subsidiaries and (ii) make an appropriate response to any Environmental
Claim against Borrower or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder.
(iii) Environmental Management System. Following the Closing Date,
Borrower will promptly use commercially reasonable best efforts to
establish and maintain an environmental management system for its and each
of its Subsidiaries' operations that demonstrates a commitment to
environmental compliance.
3. Environmental Investigations. Borrower agrees that Administrative
Agent may, from time to time and in its reasonable discretion,
(i) if Administrative Agent believes there has been or is likely
to be a material diminution in the value of the property or
material liability to the Borrower or its Subsidiaries, retain,
at Borrower's expense, an independent professional consultant (a
"Consultant") to review any environmental audits, investigations,
analyses and reports relating to Hazardous Materials prepared by
or for Borrower and (ii) if (a) Administrative Agent reasonably
believes that Borrower has breached in any material respect any
representation, warranty or covenant contained in Subsection V.F,
5.13, 6.6 or VI.G or that there has been a material violation of
Environmental Laws at any Facility or by Borrower or any of
108
its Subsidiaries at any other location or (b) an Event of Default
has occurred and is continuing, conduct its own investigation of
any Facility; provided that, in the case of any Facility no
longer owned, leased, operated or used by Borrower or any of its
Subsidiaries, Borrower shall only be obligated to use its best
efforts to obtain permission for Administrative Agent's
Consultant to conduct an investigation of such Facility. For
purposes of conducting such a review and/or investigation,
Borrower hereby grants to Administrative Agent and its agents,
employees, consultants and contractors the right to enter into or
onto any Facilities currently owned, leased, operated or used by
Borrower or any of its Subsidiaries and to perform such tests on
such property (including taking samples of soil, groundwater and
suspected asbestos-containing materials) as are reasonably
necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by
Borrower and Administrative Agent, during normal business hours
and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at such Facility
or to cause any damage or loss to any property at such Facility.
Borrower and Administrative Agent hereby acknowledge and agree
that any report of any investigation conducted at the request of
Administrative Agent pursuant to this Subsection VI.G.3 will be
obtained and shall be used by Administrative Agent and Lenders
for the purposes of Lenders' internal credit decisions, to
monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Administrative
Agent agrees to deliver a copy of any such report to Borrower
with the understanding that Borrower acknowledges and agrees that
(x) it will indemnify and hold harmless Administrative Agent and
each Lender from any costs, losses or liabilities relating to
Borrower's use of or reliance on such report, (y) neither
Administrative Agent nor any Lender makes any representation or
warranty with respect to such report, and (z) by delivering such
report to Borrower, neither Administrative Agent nor any Lender
is requiring or recommending the implementation of any
suggestions or recommendations contained in such report.
H. Execution of Subsidiary Guaranty and Personal Property Collateral
-----------------------------------------------------------------
Documents After the Closing Date.
--------------------------------
1. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. If any Domestic Subsidiary of Borrower existing on the
Closing Date that has not previously executed the Subsidiary
Guaranty hereafter becomes a Subsidiary Guarantor, or any Person
becomes a Subsidiary Guarantor of Borrower after the date hereof,
Borrower will promptly notify Administrative Agent of that fact
and cause such Subsidiary to execute and deliver to
Administrative Agent a counterpart of the Subsidiary Guaranty and
Security Agreement and to take all such
109
further actions and execute all such further documents and
instruments (including actions, documents and instruments
comparable to those described in Subsection IV.A.12) as may be
reasonably necessary or, in the reasonable opinion of
Administrative Agent, desirable to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and
perfected First Priority Lien on all of the personal and mixed
property assets of such Subsidiary described in the applicable
forms of Collateral Documents.
2. Foreign Subsidiaries. If any Person becomes a Foreign Subsidiary
of Borrower or any Subsidiary after the date hereof, Borrower
will promptly notify Administrative Agent of that fact and, if
such Subsidiary is directly or indirectly owned by Borrower or a
Domestic Subsidiary, cause such Subsidiary and the owner of such
Subsidiary to execute and deliver to Administrative Agent such
documents and instruments and take such further actions
(including actions, documents and instruments comparable to those
described in Subsection IV.A.12) as may be reasonably necessary,
or in the reasonable opinion of Administrative Agent, desirable
to create in favor of Administrative Agent, for the benefit of
Lenders, a First Priority Lien on sixty-six percent (66%) of the
voting Capital Stock and all of the non-voting Capital Stock of
such Foreign Subsidiary.
3. Subsidiary Organizational Documents, Legal Opinions, Etc.
Borrower shall deliver to Administrative Agent, together with the
Loan Documents described in Subsection 6.8B and/or 6.8C, (i)
certified copies of the applicable Subsidiary's Organizational
Documents, together with, if such Subsidiary is a Domestic
Subsidiary, a good standing certificate from the Secretary of
State of the jurisdiction of its organization and, to the extent
generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a certificate executed by
the secretary or similar Officer of such Subsidiary as to (a) the
fact that the attached resolutions of the Governing Body of such
Subsidiary approving and authorizing the execution, delivery and
performance of such Loan Documents are in full force and effect
and have not been modified or amended and (b) the incumbency and
signatures of the Officers of such Subsidiary executing such Loan
Documents, and (iii) if such Subsidiary is or becomes a Material
Subsidiary, a favorable opinion of counsel to such Subsidiary,
addressed to Administrative Agent and Lenders, in form and
substance reasonably satisfactory to Administrative Agent and its
counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by
such Subsidiary of such Loan Documents, (c) the enforceability of
such Loan Documents against such Subsidiary and
110
(d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to
such Loan Documents) as Administrative Agent may reasonably
request, all of the foregoing to be reasonably satisfactory in
form and substance to Administrative Agent and its counsel.
I. Matters Relating to Real Property Collateral.
--------------------------------------------
T. Additional Mortgages, Etc. From and after the Closing Date, if (i)
Borrower or any Subsidiary Guarantor acquires any fee interest in real property
or any Material Leasehold Property or (ii) at the time any Person becomes a
Subsidiary Guarantor, such Person owns or holds any fee interest in real
property or any Material Leasehold Property, in either case excluding any such
Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor or then-existing senior lienholder, where Borrower and its
Subsidiaries have attempted in good faith, but are unable, to obtain such
lessor's or senior lienholder's consent after use of their best efforts (any
such non-excluded Real Property Asset described in the foregoing clause (i) or
(ii) being an "Additional Mortgaged Property"), Borrower or such Subsidiary
Guarantor shall deliver to Administrative Agent, as soon as practicable after
such Person acquires such Additional Mortgaged Property or becomes a Subsidiary
Guarantor, as the case may be, a fully executed and notarized Mortgage (an
"Additional Mortgage") in proper form for recording in all appropriate places in
all applicable jurisdictions, encumbering the interest of such Loan Party in
such Additional Mortgaged Property; and such opinions, appraisals, documents,
title insurance and environmental reports that would have been delivered on the
Closing Date if such Additional Mortgaged Property were a Closing Date Mortgaged
Property or that may be reasonably required by Administrative Agent.
1. Real Estate Appraisals. Borrower shall, and shall cause each of
its Subsidiaries to, permit an independent real estate appraiser
reasonably satisfactory to Administrative Agent, upon reasonable
notice, to visit and inspect any Additional Mortgaged Property
for the purpose of preparing an appraisal of such Additional
Mortgaged Property satisfying the requirements of any applicable
laws and regulations (in each case to the extent required under
such laws and regulations as determined by Administrative Agent
in its discretion).
2. Landlord Consents and Estoppels. Borrower shall, and shall cause
each of its Subsidiaries to, use commercially reasonable best
efforts to obtain Landlord Consents and Estoppels with respect to
each Leasehold Property (i) if such Leasehold Property is held by
Borrower or such Subsidiary as of the Closing Date, within sixty
(60) days of the Closing Date, and (ii) if such Leasehold
Property is acquired after the Closing Date, as soon as
practicable after such acquisition.
3. Collateral Access Agreements. Borrower shall, and shall cause
each of its Subsidiaries to, use commercially reasonable best
efforts obtain Collateral Access Agreements as requested by
Administrative Agent with
111
respect to certain Collateral of ▇▇▇▇▇▇▇▇▇▇ Seed, Inc. within
sixty (60) days of the Closing Date.
4. Environmental Reports. Borrower shall, and shall cause each of
its Subsidiaries to, deliver reports and other information, in
form, scope and substance satisfactory to Administrative Agent,
regarding environmental matters relating to Borrower and its
Subsidiaries and the Facilities, which reports shall include a
Phase I environmental assessment for each of the Facilities
listed in Schedule 6.9E annexed hereto which (a) conforms to the
ASTM Standard Practice for Environmental Site Assessments: Phase
I Environmental Site Assessment Process, E 1527, (b) was
conducted no more than one (1) year prior to the Closing Date by
one or more environmental consulting firms reasonably
satisfactory to Administrative Agent, (c) includes an assessment
of asbestos-containing materials at such Facilities, and (d)
includes an estimate of the reasonable worst-case cost of
investigating and remediating any Hazardous Materials Activity
identified in such Phase I environmental assessments as giving
rise to an actual or potential violation of any Environmental Law
or as presenting a material risk of giving rise to a material
Environmental Claim.
J. Deposit Accounts and Cash Management Systems.
--------------------------------------------
Borrower shall, and shall cause each of its Subsidiaries to, use and
maintain its Deposit Accounts and cash management systems in a manner reasonably
satisfactory to Administrative Agent. Information regarding these Deposit
Accounts, including (a) the name and address of the financial institutions
maintaining the Deposit Accounts, and (b) the Deposit Account numbers, are set
forth on Schedule 6.10 annexed hereto. Borrower shall not permit any of such
Deposit Accounts at any time to have a principal balance in excess of $1,000,000
unless Borrower or such Subsidiary, as the case may be, has (i) delivered to
Administrative Agent a Deposit Account Control Agreement, and (ii) taken all
other steps necessary or, in the opinion of Administrative Agent, desirable to
ensure that Administrative Agent will have a First Priority Lien in such Deposit
Account at all times while such agreement is in effect; provided that if
Borrower or such Subsidiary is unable to obtain such agreement from such
financial institution Borrower shall, or shall cause such Subsidiary to, within
30 days after receiving a written request by Administrative Agent to do so,
transfer all amounts in the applicable Deposit Account to a Deposit Account
maintained at a financial institution from which Borrower or such Subsidiary has
obtained such an agreement. Borrower shall not permit the aggregate amount on
deposit in all Deposit Accounts of Borrower and of its Subsidiaries (other than
Deposit Accounts maintained with Administrative Agent) or Deposit Accounts for
which a Deposit Account Control Agreement described above has been executed and
delivered) at any time to exceed $1,000,000.
K. Solvency.
--------
Borrower shall at all times be Solvent and Borrower shall cause Borrower
and its Subsidiaries, taken as a whole, to be at all times Solvent.
112
VII. BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrower shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this VII.
A. Indebtedness.
------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
a. Borrower may become and remain liable with respect to the
Obligations;
b. Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by
Subsection VII.D and, upon any matured obligations actually
arising pursuant thereto, the Indebtedness corresponding to
the Contingent Obligations so extinguished;
c. Borrower may become and remain liable with respect to
unsecured Indebtedness to any Subsidiary Guarantor, and any
Subsidiary Guarantor may become and remain liable with
respect to unsecured Indebtedness to Borrower or any other
Subsidiary Guarantor; provided that (a) a Lien on all such
intercompany Indebtedness shall have been granted to
Administrative Agent for the benefit of Lenders and (b) if
such intercompany Indebtedness is evidenced by a promissory
note or other instrument, such promissory note or instrument
shall have been pledged to Administrative Agent pursuant to
the Security Agreement;
d. Borrower and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness described in Schedule
7.1 annexed hereto;
e. Borrower and its Subsidiaries may become and remain liable
with respect to the Senior Subordinated Notes;
f. Borrower and its Subsidiaries may become and remain liable
with respect to Indebtedness incurred in connection with
acquisitions permitted pursuant to Subsection 7.3(v) in an
aggregate principal amount not to exceed $75,000,000 at any
time outstanding;
113
g. Borrower and its Subsidiaries may become and remain liable
with respect to any additional Subordinated Indebtedness in
an aggregate principal amount not to exceed $150,000,000 at
any time outstanding; and
h. Borrower and Subsidiary Guarantors may become and remain
liable with respect to Indebtedness, other than Indebtedness
described in Subsections 7.1(i) through (vii), in an
aggregate principal amount for all such Indebtedness and
Contingent Obligations permitted pursuant to Subsection
7.4(vii) not to exceed $20,000,000 at any time outstanding.
B. Liens and Related Matters.
-------------------------
U. Prohibition on Liens. Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom or proceeds thereof, or
file or permit the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any such property,
asset, income or profits or proceeds under the UCC of any State or under any
similar recording or notice statute, except:
a. Permitted Encumbrances;
b. Liens granted pursuant to the Collateral Documents;
c. Liens existing on the Closing Date and set forth on Schedule
7.2; provided that no such Lien shall at any time be
extended to cover property or assets other than the property
or assets subject thereto on the Closing Date;
d. Other Liens securing Indebtedness in an aggregate amount not
to exceed $20,000,000 at any time outstanding; and
e. Liens incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by the Liens
described in clause (iii) above, provided that any
extension, renewal or replacement Lien (A) is limited to the
property covered by the terms of the existing Lien and (B)
secures Indebtedness which is no greater in amount and has
material terms no less favorable to Borrower or the
applicable Subsidiary and Lenders than the Indebtedness
secured by the existing Lien.
2. Equitable Lien in Favor of Lenders. If Borrower or any of its
Subsidiaries shall create or assume any Lien upon any of its
properties or
114
assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of Subsection 1.1U, it shall make or
cause to be made effective provision whereby the Obligations will
be secured by such Lien equally and ratably with any and all
other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured which provision shall not cure
any default that may have occurred and which provision shall be
made without prejudice to any rights of Administrative Agent or
Lenders with respect to such default; provided that,
notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or
assumption of any such Lien not permitted by the provisions of
Subsection 1.1U.
3. No Further Negative Pledges. Neither Borrower nor any of its
Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, except with
respect to specific property encumbered to secure payment of
particular Indebtedness or to be sold pursuant to an executed
agreement with respect to an Asset Sale or with respect to an
acquisition or Investment permitted by this Agreement.
4. No Restrictions on Subsidiary Distributions to Borrower or Other
Subsidiaries. Borrower will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to (i) pay dividends
or make any other distributions on any of such Subsidiary's
Capital Stock owned by Borrower or any other Subsidiary of
Borrower, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Borrower or any other Subsidiary of Borrower, (iii)
make loans or advances to Borrower or any other Subsidiary of
Borrower, or (iv) transfer any of its property or assets to
Borrower or any other Subsidiary of Borrower, except as provided
in this Agreement.
C. Investments; Acquisitions.
-------------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, or acquire, by purchase or otherwise, all or substantially all
the business, property or fixed assets of, or Capital Stock or other ownership
interest of any Person, or any division or line of business of any Person
except:
a. Borrower and its Subsidiaries may make and own Investments
in Cash Equivalents;
b. Borrower and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any
115
Subsidiaries of Borrower and Borrower and its wholly-owned
Subsidiaries may make and own additional equity Investments
in their respective wholly-owned Subsidiaries;
c. Borrower and its Subsidiaries may make intercompany loans to
the extent permitted under Subsection VII.A.c;
d. Borrower and its Subsidiaries may make Consolidated Capital
Expenditures permitted by Subsection VII.H;
e. Borrower and its Subsidiaries may acquire assets (including
Capital Stock and including Capital Stock of Subsidiaries
formed in connection with any such acquisition) having a
purchase price not in excess of $75,000,000 in the aggregate
and continue to own such assets after the acquisition
thereof; provided that (i) no Potential Event of Default or
Event of Default shall have occurred or be continuing as a
result of such acquisition or after giving effect thereto,
and (ii) Borrower shall, and shall cause its Subsidiaries
to, comply with the requirements of Subsections VI.H and
VI.I with respect to each such acquisition that results in a
Person becoming a Subsidiary;
f. Borrower and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$50,000,000, of which up to $10,000,000 may be used by
Borrower for repurchase of shares of its own Capital Stock;
provided that no Potential Event of Default or Event of
Default shall have occurred or be continuing at the time any
such Investment is made; and
(vii) Borrower and its Subsidiaries may receive and hold promissory
notes and other non-cash consideration received in connection with any
Asset Sale permitted by Subsection 7.7.
D. Contingent Obligations.
----------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
a. Subsidiaries of Borrower may become and remain liable with
respect to Contingent Obligations in respect of the
Subsidiary Guaranty;
b. Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of
customary indemnification (including, without limitation,
for product defect,
116
negligence and breach of contract claims arising in the
ordinary course of business) and purchase price adjustment
obligations incurred in connection with Asset Sales or other
sales of assets;
c. Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations, including Hedge
Agreements, in respect of any Indebtedness of Borrower or
any of its Subsidiaries permitted by Subsection VII.A;
d. Borrower and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in
Schedule 7.4 annexed hereto;
e. Subsidiary Guarantors may become and remain liable with
respect to Contingent Obligations arising under their
subordinated guaranties of the Senior Subordinated Notes;
and
f. Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations other than Contingent
Obligations described in Subsections 7.4(i) through (vi);
provided that the maximum aggregate liability, contingent or
otherwise, of Borrower and its Subsidiaries, without
duplication, in respect of all such Contingent Obligations
and Indebtedness permitted pursuant to Subsection 7.1(viii)
shall at no time exceed $20,000,000.
E. Restricted Junior Payments.
--------------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that, if no Event of Default or Potential
Event of Default has occurred and is continuing, Borrower may (i) make regularly
scheduled payments of interest in respect of any Subordinated Indebtedness,
including the Senior Subordinated Notes, in accordance with the terms of, and
only to the extent required by, and subject to the subordination provisions
contained in, the Senior Subordinated Note Indenture or other agreement pursuant
to which such Subordinated Indebtedness was issued, as such indenture or other
agreement may be amended from time to time to the extent permitted under
Subsection 7.14 and (ii) make Restricted Junior Payments to repurchase shares of
its own Capital Stock in an aggregate amount not to exceed $10,000,000.
F. Financial Covenants.
-------------------
V. Minimum Interest Coverage Ratio. Borrower shall not permit the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense for any
four-Fiscal Quarter period ending during any of the periods set forth below to
be less than the correlative ratio indicated:
117
Minimum Interest
Period Coverage Ratio
------------------------------- ----------------
Closing Date to March 31, 2004 2.75:1.00
April 1, 2004 to March 31, 2005 3.00:1.00
April 1, 2005 and thereafter 3.25:1.00
1. Maximum Total Leverage Ratio. Borrower shall not permit the
Consolidated Total Leverage Ratio as of the last day of the most
recently ended Fiscal Quarter ending during any of the periods
set forth below to exceed the correlative ratio indicated:
Period Maximum Total Leverage Ratio
--------------------------------------- ----------------------------
Closing Date through September 30, 2004 4.25:1.00
October 1, 2004 through March 31, 2006 4.00:1.00
April 1, 2006 through March 31, 2007 3.75:1.00
April 1, 2007 and thereafter 3.50:1.00
2. Maximum Senior Leverage Ratio. Borrower shall not permit the
Consolidated Senior Leverage Ratio as of the last day of the most
recently ended Fiscal Quarter ending during any of the periods
set forth below to exceed the correlative amount indicated:
Period Maximum Senior Leverage Ratio
--------------------------------------- -----------------------------
Closing Date through September 30, 2004 3.00:1.00
October 1, 2004 through March 31, 2006 2.75:1.00
April 1, 2006 through March 31, 2007 2.50:1.00
April 1, 2007 and thereafter 2.25:1.00
3. Minimum Consolidated Tangible Net Worth. Borrower shall not
permit Consolidated Tangible Net Worth as of the end of any
Fiscal Quarter to be less than (i) 85% of Consolidated Tangible
Net Worth as of the Closing Date plus (ii) 50% of Consolidated
Net Income for each Fiscal Quarter thereafter ending on or prior
to the date of determination (to the
118
extent such Consolidated Net Income for any such Fiscal Quarter
is positive) plus (iii) 100% of the Net Securities Proceeds of
any issuance of Capital Stock.
G. Restriction on Fundamental Changes; Asset Sales.
-----------------------------------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Borrower or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets (including its
notes or receivables and Capital Stock of a Subsidiary, whether newly issued or
outstanding), whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business of any Person (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of Borrower's, or any
of its Subsidiaries', business) except:
a. any Subsidiary of Borrower may be merged with or into
Borrower, or any wholly-owned Subsidiary of Borrower, or be
liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or
a series of transactions, to Borrower or any wholly-owned
Subsidiary; provided that, (i) in the case of such a merger,
Borrower, or a Subsidiary Guarantor or a Material Subsidiary
shall be the continuing or surviving Person if any of the
entities involved in the transaction was Borrower, a
Subsidiary Guarantor or a Material Subsidiary and (ii) if a
merger results in a Subsidiary becoming a Subsidiary
Guarantor or a Material Subsidiary, such Subsidiary shall
comply with the requirements of Subsection 6.8 and/or
Subsection 6.9, (iii) in the case of such a liquidation,
winding up or dissolution, all of the assets of such
Subsidiary are transferred to Borrower, a Subsidiary
Guarantor or a Material Subsidiary that is wholly owned,
directly or indirectly, by Borrower or as otherwise
expressly permitted under this Agreement;
b. Borrower and its Subsidiaries may make Consolidated Capital
Expenditures permitted under Subsection 7.8;
c. Borrower and its Subsidiaries may sell or otherwise dispose
of assets in transactions that do not constitute Asset
Sales; provided that the consideration received for such
assets shall be in an amount at least equal to the fair
market value thereof;
119
d. Borrower and its Subsidiaries may dispose of obsolete, worn
out or surplus property in the ordinary course of business;
e. Borrower and its Subsidiaries may make Asset Sales to
Persons who are not Affiliates of Borrower and its
Subsidiaries of assets having a fair market value not in
excess of $25,000,000 in the aggregate; provided that (a)
the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; and
(b) the proceeds of such Asset Sales shall be applied as
required by Subsection II.D.2.c(1) or Subsection II.D.4; and
f. Any Person may be merged with or into Borrower or any
Subsidiary of Borrower if the acquisition of the Capital
Stock of such Person by Borrower or such Subsidiary would
have been permitted pursuant to Subsections VII.C and H;
provided that (a) in the case of Borrower, Borrower shall be
the continuing or surviving Person, (b) if a Subsidiary of
Borrower is not the surviving or continuing Person, the
surviving Person becomes a Subsidiary of Borrower and
complies with the provisions of Subsections VI.H and VI.I
and (c) no Potential Event of Default or Event of Default
shall have occurred or be continuing after giving effect
thereto.
H. Consolidated Capital Expenditures.
---------------------------------
Borrower shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures in any Fiscal Year in an aggregate
amount in excess of $20,000,000 (the "Maximum Consolidated Capital Expenditures
Amount"); provided that the Maximum Consolidated Capital Expenditures Amount for
any Fiscal Year shall be increased by an amount equal to the excess, if any (but
in no event more than $5,000,000), of the Maximum Consolidated Capital
Expenditures Amount for the previous Fiscal Year (without giving effect to any
adjustment in accordance with this proviso) over the actual amount of
Consolidated Capital Expenditures for such previous Fiscal Year; provided,
further that for Fiscal Year 2003, Borrower may make or incur expansion capital
expenditures related to the Borrower's Kaytee product line, and all such
expenditures shall be excluded from such calculations.
I. Sale or Discount of Receivables.
-------------------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
120
J. Transactions with Shareholders and Affiliates.
---------------------------------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of five percent (5%) or more of any class of equity
Securities of Borrower or with any Affiliate of Borrower or of any such holder,
on terms that are less favorable to Borrower or that Subsidiary, as the case may
be, than those that might be obtained at the time from Persons who are not such
a holder or Affiliate; provided that the foregoing restriction shall not apply
to (i) any transaction between Borrower and any of its wholly-owned Domestic
Subsidiaries that are Subsidiary Guarantors or between any of its wholly-owned
Domestic Subsidiaries that are Subsidiary Guarantors or (ii) reasonable and
customary fees paid to members of the Governing Bodies of Borrower and its
Subsidiaries.
K. Sales and Lease-Backs.
---------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) that Borrower or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Borrower
or any of its Subsidiaries) or (ii) that Borrower or any of its Subsidiaries
intends to use for substantially the same purpose as any other property that has
been or is to be sold or transferred by Borrower or any of its Subsidiaries to
any Person (other than Borrower or any of its Subsidiaries) in connection with
such lease.
L. Restriction on Leases.
---------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
become liable in any way, whether directly or by assignment or as a guarantor or
other surety, for the obligations of the lessee under any lease (other than the
intercompany leases between Borrower and its wholly-owned Subsidiaries), unless,
immediately after giving effect to the incurrence of liability with respect to
such lease, the Consolidated Rental Payments at the time in effect during the
then current Fiscal Year do not exceed $30,000,000 in the aggregate.
M. Conduct of Business.
-------------------
From and after the Closing Date, Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Borrower and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders.
N. Amendments of Documents Relating to Subordinated Indebtedness.
-------------------------------------------------------------
Borrower shall not, and shall not permit any of its Subsidiaries to,
amend or otherwise change the terms of the Senior Subordinated Notes, the Senior
Subordinated Note Indenture, and any other Subordinated Indebtedness, or make
any payment consistent with an
121
amendment thereof or change thereto, if the effect of such amendment or change
is to increase the interest rate on the Senior Subordinated Notes or such
Subordinated Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of the Senior
Subordinated Notes or such Subordinated Indebtedness (or a trustee or other
representative on their behalf) which would be adverse to Borrower or Lenders.
O. Fiscal Year; Tax Election.
-------------------------
Borrower shall not change its Fiscal Year-end from the Saturday
closest to the last day of September, unless, if such change would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, Borrower, Administrative Agent and Requisite Lenders agree to amend
such ratio or requirement to preserve the original intent thereof in light of
such change in Fiscal Year.
P. Subsidiary Guarantors.
---------------------
Borrower shall not permit the aggregate consolidated revenues or
aggregate consolidated assets of all of its Subsidiaries that are not Subsidiary
Guarantors at any time to exceed ten percent (10%) of the total consolidated
revenues or consolidated assets of Borrower and its Subsidiaries, taken as a
whole.
VIII. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
A. Failure to Make Payments When Due.
---------------------------------
Failure by Borrower to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Borrower to pay
when due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Borrower to pay any interest on any Loan
or any fee or any other amount due under this Agreement within three Business
Days after the date due; or
B. Default in Other Agreements.
---------------------------
a. Failure of Borrower or any of its Subsidiaries to pay when
due any principal of or interest on or any other amount
payable in respect of one or more items of Indebtedness
(other than Indebtedness referred to in Subsection VIII.A)
or Contingent Obligations in an
122
individual principal amount of $5,000,000 or more or with an
aggregate principal amount of $10,000,000 or more, in each
case beyond the end of any grace period provided therefor
(not to exceed 30 days); or
b. breach or default by Borrower or any of its Subsidiaries
with respect to any other term of (a) one or more items of
Indebtedness or Contingent Obligations in the individual or
aggregate principal amounts referred to in clause (i) above
or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of
that Indebtedness or Contingent Obligation(s) (or a trustee
on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be
declared due and payable prior to its stated maturity or the
stated maturity of any underlying obligation, as the case
may be (upon the giving or receiving of notice, lapse of
time, both, or otherwise); or
C. Breach of Certain Covenants.
---------------------------
Failure of Borrower to perform or comply with any term or condition
contained in Subsections 2.5 or VI.B or VII of this Agreement; or
D. Breach of Warranty.
------------------
Any representation, warranty, certification or other statement made by
Borrower or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Borrower or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
E. Other Defaults Under Loan Documents.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other Subsection of this VIII, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an Officer of Borrower or such other Loan Party becoming aware of such
default or (ii) receipt by Borrower and such other Loan Party of notice from
Administrative Agent or any Lender of such default; or
F. Involuntary Bankruptcy; Appointment of Receiver, etc.
----------------------------------------------------
a. A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Borrower or any of
the Material Subsidiaries in an involuntary case under the
Bankruptcy Code or
123
under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not
stayed; or any other similar relief shall be granted under
any applicable federal or state law; or
b. an involuntary case shall be commenced against Borrower or
any of the Material Subsidiaries under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order
of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers
over Borrower or any of the Material Subsidiaries, or over
all or a substantial part of its property, shall have been
entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other
custodian of Borrower or any of the Material Subsidiaries
for all or a substantial part of its property; or a warrant
of attachment, execution or similar process shall have been
issued against any substantial part of the property of
Borrower or any of the Material Subsidiaries, and any such
event described in this clause (ii) shall continue for 60
days unless dismissed, bonded or discharged; or
G. Voluntary Bankruptcy; Appointment of Receiver, etc.
--------------------------------------------------
a. Borrower or any of the Material Subsidiaries shall have an
order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under
any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or Borrower
or any of the Material Subsidiaries shall make any
assignment for the benefit of creditors; or
b. Borrower or any of the Material Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or
the Governing Body of Borrower or any of the Loan Parties
(or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
124
H. Judgments and Attachments.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
(other than those which may issue from the Scotts litigation up to an aggregate
amount not to exceed $10,400,000) involving (i) in any individual case an amount
in excess of $5,000,000 or (ii) in the aggregate at any time an amount in excess
of $10,000,000 (in either case not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against Borrower or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
I. Dissolution.
-----------
Any order, judgment or decree shall be entered against Borrower or any
of the Material Subsidiaries decreeing the dissolution or split up of Borrower
or such Material Subsidiaries and such order shall remain undischarged or
unstayed for a period in excess of 60 days; or
J. Employee Benefit Plans.
----------------------
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $5,000,000 during the term of this Agreement; or there shall exist
an amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $5,000,000; or
K. Change in Control.
-----------------
A Change in Control shall have occurred; or
L. Invalidity of Loan Documents; Repudiation of Obligations.
--------------------------------------------------------
At any time after the execution and delivery thereof, (i) any Loan
Document or any material provision thereof for any reason, other than the
satisfaction in full of all Obligations, shall cease to be in full force and
effect (other than in accordance with its terms) or shall be declared to be null
and void, (ii) Administrative Agent shall not have or shall cease to have a
First Priority Lien in any Collateral purported to be covered by the Collateral
Documents, having a fair market value, individually or in the aggregate,
exceeding $5,000,000, or (iii) any Loan Party (or any Person authorized to act
on behalf of such Loan Party) shall contest the validity or enforceability of
any Loan Document or any provision thereof in writing or deny in writing that it
has any further liability, including with respect to future advances by Lenders,
under any Loan Document or any provision thereof to which it is a party; or
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M. Uninsured Damage.
----------------
Any uninsured damage to or losses, theft or destruction of any of the
assets of Borrower or any of its Subsidiaries occurs in excess of $5,000,000 in
the aggregate;
N. Criminal or Civil Proceedings.
-----------------------------
The indictment or threatened indictment of Borrower or any of its
Subsidiaries under any criminal statute, or commencement or threatened
commencement of criminal or civil proceedings against Borrower or any of its
Subsidiaries, pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture of any material portion of the property
of Borrower or such Subsidiary; or
O. Subordinated Indebtedness.
-------------------------
There shall occur any material default under any Subordinated
Indebtedness, or there shall occur any event that requires Borrower or any of
its Subsidiaries to purchase, redeem or otherwise acquire or offer to purchase,
redeem or otherwise acquire all or any portion of any Subordinated Indebtedness;
or Borrower or any of its Subsidiaries shall for any reason purchase, redeem or
otherwise acquire or offer to purchase, redeem or otherwise acquire, or make any
other payments in respect of, all or any portion of any Subordinated
Indebtedness, except to the extent expressly permitted by Subsection 7.5;
THEN (i) upon the occurrence of any Event of Default described in Subsection
VIII.F or VIII.G, each of (a) the unpaid principal amount of and accrued
interest on the Loans, (b) an amount equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Borrower, and the obligation of each Lender to make any
Loan, the obligation of any Issuing Lender to issue any Letter of Credit and the
right of any Revolving Lender to issue any Letter of Credit hereunder shall
thereupon terminate, and (ii) upon the occurrence and during the continuation of
any other Event of Default, Administrative Agent shall, upon the written request
or with the written consent of Requisite Lenders, by written notice to Borrower,
declare all or any portion of the amounts described in clauses (a) through (c)
above to be, and the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan, the obligation of any
Issuing Lender to issue any Letter of Credit and the right of any Revolving
Lender to issue any Letter of Credit hereunder shall thereupon terminate;
provided that the foregoing shall not affect in any way the obligations of
Revolving Lenders under Subsection III.C.2.a.
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Security Agreement and shall be applied as therein provided.
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Notwithstanding anything contained in the second preceding paragraph,
if at any time within sixty (60) days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Borrower shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to Subsection X.F, then Requisite Lenders, by
written notice to Borrower, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon and, if the Commitments of Lenders to make Loans and issue or
participate in Letters of Credit have been terminated pursuant to clause (ii),
such Commitments shall be reinstated only with the approval of each Lender
directly affected. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Borrower, and such
provisions shall not at any time be construed so as to grant Borrower the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
IX. ADMINISTRATIVE AGENT
A. Appointment.
-----------
1. Appointment of Administrative Agent. CIBC is hereby appointed
Administrative Agent hereunder and under the other Loan Documents
and each Lender hereby authorizes Administrative Agent to act as
its administrative agent in accordance with the terms of this
Agreement and the other Loan Documents. Administrative Agent
agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The
provisions of this IX are solely for the benefit of
Administrative Agent and Lenders and no Loan Party shall have any
rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this
Agreement, Administrative Agent shall act solely as an
administrative agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship
of agency or trust with or for Borrower or any of its
Subsidiaries.
2. Appointment of Supplemental Collateral Agents. It is the purpose
of this Agreement and the other Loan Documents that there shall
be no violation of any law of any jurisdiction denying or
restricting the right of banking corporations or associations to
transact business as agent or trustee in such jurisdiction. It is
recognized that in case of litigation under this Agreement or any
of the other Loan Documents, and in particular in
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case of the enforcement of any of the Loan Documents, or in case
Administrative Agent deems that by reason of any present or
future law of any jurisdiction it may not exercise any of the
rights, powers or remedies granted herein or in any of the other
Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that
Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent
or collateral co-agent (any such additional individual or
institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental
Collateral Agents").
If Administrative Agent appoints a Supplemental Collateral Agent with
respect to any Collateral, (i) each and every right, power, privilege or duty
expressed or intended by this Agreement or any of the other Loan Documents to be
exercised by or vested in or conveyed to Administrative Agent with respect to
such Collateral shall be exercisable by and vest in such Supplemental Collateral
Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either Administrative Agent
or such Supplemental Collateral Agent, and (ii) the provisions of this IX and of
Subsections X.B and X.C that refer to Administrative Agent shall inure to the
benefit of such Supplemental Collateral Agent and all references therein to
Administrative Agent shall be deemed to be references to Administrative Agent
and/or such Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Borrower or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Borrower shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
▇. ▇▇▇▇▇▇ and Duties; General Immunity.
-----------------------------------
1. Powers; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf
and to exercise such powers, rights and remedies hereunder and
under the other Loan Documents as are specifically delegated or
granted to Administrative Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably
incidental thereto. Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this
Agreement and the other Loan Documents.
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Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or
employees. Administrative Agent shall not have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this
Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose
upon Administrative Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly
set forth herein or therein.
2. No Responsibility for Certain Matters. Administrative Agent shall
not be responsible to any Lender for the execution,
effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any other Loan
Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments,
reports or certificates or any other documents furnished or made
by Administrative Agent to Lenders or by or on behalf of Borrower
to Administrative Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Borrower or any other
Person liable for the payment of any Obligations, nor shall
Administrative Agent be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the
use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding
Loans or the Letter of Credit Usage or the component amounts
thereof unless any such liability results from the gross
negligence or willful misconduct of Administrative Agent.
3. Exculpatory Provisions. Neither Administrative Agent nor any of
its officers, directors, employees or agents shall be liable to
Lenders for any action taken or omitted by Administrative Agent
under or in connection with any of the Loan Documents except to
the extent caused by Administrative Agent's gross negligence or
willful misconduct. Administrative Agent shall be entitled to
refrain from any act or the taking of any action (including the
failure to take an action) in connection with this Agreement or
any of the other Loan Documents or from the exercise of any
power, discretion or authority vested in it hereunder or
thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders
(or such other Lenders as may be required to give such
instructions under Subsection X.F) and, upon receipt
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of such instructions from Requisite Lenders (or such other
Lenders, as the case may be), Administrative Agent shall be
entitled to act or (where so instructed) refrain from acting, or
to exercise such power, discretion or authority, in accordance
with such instructions. Without prejudice to the generality of
the foregoing, (i) Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper
Person or Persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who
may be attorneys for Borrower and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii)
no Lender shall have any right of action whatsoever against
Administrative Agent as a result of Administrative Agent acting
or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with
the instructions of Requisite Lenders (or such other Lenders as
may be required to give such instructions under Subsection X.F).
4. Administrative Agent Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon,
Administrative Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the
Letters of Credit, Administrative Agent shall have the same
rights and powers hereunder as any other Lender and may exercise
the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or
"Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its
individual capacity. Administrative Agent and its Affiliates may
accept deposits from, lend money to, acquire equity interests in
and generally engage in any kind of commercial banking,
investment banking, trust, financial advisory or other business
with Borrower or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and
other consideration from Borrower for services in connection with
this Agreement and otherwise without having to account for the
same to Lenders.
C. Representations and Warranties; No Responsibility for Appraisal of
------------------------------------------------------------------
Creditworthiness.
----------------
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrower and
its Subsidiaries in connection with the making of the Loans and the extensions
of credit hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of Borrower and its Subsidiaries.
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or, except as expressly provided herein, to provide any
Lender with any credit or other information with
130
respect thereto, whether coming into its possession before the making of the
Loans or at any time or times thereafter, and Administrative Agent shall not
have any responsibility with respect to the accuracy of or the completeness of
any information provided to Lenders.
D. Right to Indemnity.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, Co-Lead Arrangers and their officers, directors,
employees, agents, attorneys, professional advisors and affiliates, to the
extent that any such Person shall not have been reimbursed by Borrower, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements and fees and disbursements of any financial advisor engaged by
Administrative Agent) or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against Administrative Agent or such
other Persons in exercising its powers, rights and remedies or performing its
duties as an Administrative Agent or Co-Lead Arranger hereunder or under the
other Loan Documents or otherwise in its capacity as Administrative Agent or
Co-Lead Arranger in any way relating to or arising out of this Agreement or the
other Loan Documents; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Administrative Agent's or
any Co-Lead Arranger's gross negligence or willful misconduct as determined by a
final non-appealable judgment of a court of competent jurisdiction. If any
indemnity furnished to Administrative Agent or any other such Person for any
purpose shall, in the opinion of Administrative Agent, be insufficient or become
impaired, Administrative Agent and/or Co-Lead Arrangers may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.
E. Successor Administrative Agent.
------------------------------
Administrative Agent may resign at any time by giving thirty (30)
days' prior written notice thereof to Lenders and Borrower. Upon any such notice
of resignation, Requisite Lenders shall have the right, upon twenty (20)
Business Days' notice to Borrower, to appoint a successor Administrative Agent
subject to Borrower's approval, which shall not be unreasonably withheld,
conditioned or delayed. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this IX shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.
F. Collateral Documents and Guaranties.
-----------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be
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Administrative Agent for and representative of Lenders under the Subsidiary
Guaranty, and each Lender agrees to be bound by the terms of each Collateral
Document and the Subsidiary Guaranty; provided that Administrative Agent shall
not (i) enter into or consent to any material amendment, modification,
termination or waiver of any provision contained in any Collateral Document or
the Subsidiary Guaranty or (ii) release any Collateral or Subsidiary Guarantor
(except as otherwise expressly permitted or required pursuant to the terms of
this Agreement or the applicable Collateral Document), in each case without the
prior consent of Requisite Lenders (or, if required pursuant to Subsection X.F,
all Lenders); provided further, however, that, without further written consent
or authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented, or (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the Capital
Stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of Borrower) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented or (c)
subordinate the Liens of Administrative Agent, on behalf of Lenders, to any
Liens permitted by Subsection VII.B provided that, in the case of a sale of such
item of Collateral referred to in subclause (a) or (b), the requirements of
Subsection X.F are satisfied. Anything contained in any of the Loan Documents to
the contrary notwithstanding, Borrower, Administrative Agent and each Lender
hereby agree that (X) no Lender shall have any right individually to realize
upon any of the Collateral under any Collateral Document or to enforce the
Subsidiary Guaranty, it being understood and agreed that all powers, rights and
remedies under the Collateral Documents and the Subsidiary Guaranty may be
exercised solely by Administrative Agent for the benefit of Lenders in
accordance with the terms thereof, and (Y) in the event of a foreclosure by
Administrative Agent on any of the Collateral pursuant to a public or private
sale, Administrative Agent or any Lender may be the purchaser of any or all of
such Collateral at any such sale and Administrative Agent, as administrative
agent for and representative of Lenders (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any Collateral payable by
Administrative Agent at such sale.
G. Administrative Agent May File Proofs of Claim.
---------------------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Borrower or any of its Subsidiaries,
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Administrative Agent shall have made any demand on
Borrower) shall be entitled and empowered, by intervention in such proceeding or
otherwise
a. to file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Loans and
any other Obligations that are owing and unpaid and to file
such other papers or documents as may be reasonably
necessary or reasonably
132
advisable in order to have the claims of Lenders,
Administrative Agent and Co-Lead Arrangers (including any
claim for the reasonable compensation, expenses,
disbursements and advances of Lenders, Administrative Agent
and Co-Lead Arrangers and their agents and counsel and all
other amounts due Lenders, Administrative Agent and Co-Lead
Arrangers under Subsections II.C and X.B) allowed in such
judicial proceeding, and
b. to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the
same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, if Administrative
Agent shall consent to the making of such payments directly to Lenders, to pay
to Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of Administrative Agent and Co-Lead
Arrangers and their agents and counsel, and any other amounts due Administrative
Agent and Co-Lead Arrangers under Subsections II.C and X.B.
Nothing herein contained shall be deemed to authorize Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lenders or to authorize Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.
X. MISCELLANEOUS
A. Assignments and Participations in Loans and Letters of Credit.
-------------------------------------------------------------
1. General. Subject to Subsections X.A.2 and X.A.3, each Lender
shall have the right at any time to (i) sell, assign or transfer
to any Eligible Assignee, or (ii) sell participations to any
Person in, all or any part of its Commitments or any Loan or
Loans made by it or its Letters of Credit (or participations in
Letters of Credit) or any other interest herein or in any other
Obligations owed to it; provided that no such sale, assignment,
transfer or participation shall, without the consent of Borrower,
require Borrower to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities laws
of any state; provided, further, that no such sale, assignment,
or transfer described in clause (i) above shall be effective
unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative
Agent and recorded in the Register as provided in Subsection
X.A.2.b; and provided, further, that no such sale, assignment, or
transfer of any Letter of Credit or any participation therein may
be made separately from a sale, assignment, transfer or
participation of a corresponding interest in the
133
Revolving Loan Commitment and the Revolving Loans of the Lender
effecting such sale, assignment, transfer or participation.
Except as otherwise provided in this Subsection X.A, no Lender
shall, as between Borrower and such Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment or
transfer of, or any granting of participations in, all or any
part of its Commitments or the Loans, or Letters of Credit or
participations therein, or the other Obligations owed to such
Lender, and such Lender shall remain solely responsible for the
performance of such Obligations, and Borrower shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement.
2. Assignments.
a. Amounts and Terms of Assignments. Each Commitment, Loan,
Letter of Credit or participation therein, or other
Obligation may (a) be assigned in any amount to another
Lender, or to an Affiliate or Approved Fund of the assigning
Lender or another Lender, with the giving of notice to
Borrower and Administrative Agent or (b) be assigned in an
aggregate amount of not less than $1,000,000 (or such lesser
amount as shall constitute the aggregate amount of the
Commitments, Loans, Letters of Credit and participations
therein, or other Obligations of the assigning Lender) to
any other Eligible Assignee treating any two or more
Approved Funds with the same investment advisor as a single
Eligible Assignee with the consent of Borrower (unless a
Potential Event of Default or an Event of Default has
occurred and is continuing) and Administrative Agent (which
consent of Borrower and Administrative Agent shall not be
unreasonably withheld or delayed). To the extent of any such
assignment in accordance with either clause (a) or (b)
above, the assigning Lender shall be relieved of its
obligations with respect to its Commitments, Loans, Letters
of Credit and participations therein, or other Obligations
or the portion thereof so assigned. The parties to each such
assignment shall execute and deliver to Administrative
Agent, for its acceptance and recording in the Register, an
Assignment Agreement, together with a processing and
recordation fee of $3,500 (provided that (i) no such
processing and recordation fee shall be payable if the
assignee is an Affiliate of the assignor or a Person under
common management with the assignor and (ii) only one such
fee shall be required in connection with a simultaneous
assignment to a group of Approved Funds with the same
investment advisor) and such forms (including an
administrative questionnaire if the Eligible Assignee is not
a Lender), certificates or other evidence, if any, with
respect to United States federal
134
income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to
Administrative Agent pursuant to Subsection ▇▇.▇▇(iii)(a).
Upon such execution, delivery, acceptance and recordation,
from and after the effective date specified in such
Assignment Agreement, (y) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations
of a Lender hereunder, and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights (other than any
rights that survive the termination of this Agreement under
Subsection X.I.1) and be released from its obligations under
this Agreement (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto except for any
rights retained as described above; provided that, anything
contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is the Issuing Lender with
respect to any outstanding Letters of Credit such Lender
shall continue to have all rights and obligations of an
Issuing Lender with respect to such Letters of Credit until
the cancellation or expiration of such Letters of Credit and
the reimbursement of any amounts drawn thereunder). The
Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment of
such assigning Lender and, if any such assignment occurs
after the issuance of any Notes hereunder, the assigning
Lender shall, upon the effectiveness of such assignment or
as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for
cancellation, and thereupon new Notes shall, if so requested
by the assignee and/or the assigning Lender in accordance
with Subsection II.A.4, be issued to the assignee and/or to
the assigning Lender, substantially in the form of Exhibit
IV or Exhibit V annexed hereto, as the case may be, with
appropriate insertions, to reflect the new Commitments
and/or outstanding Revolving Loans and/or outstanding Term
Loans, as the case may be, of the assignee and/or the
assigning Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not
comply with this Subsection X.A.2 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 Subsection X.A.3.
135
b. Acceptance by Administrative Agent; Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an
Eligible Assignee, together with the processing and
recordation fee (if so required) referred to in Subsection
X.A.2.a and any forms, certificates or other evidence with
respect to United States federal income tax withholding
matters that such assignee may be required to deliver to
Administrative Agent pursuant to Subsection II.HB(iii)(a),
Administrative Agent shall, if Administrative Agent (and if
necessary, Borrower) has consented to the assignment
evidenced thereby (in each case to the extent such consent
is required pursuant to Subsection X.A.2.a), (a) accept such
Assignment Agreement by executing a counterpart thereof as
provided therein (which acceptance shall evidence any
required consent of Administrative Agent to such
assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to
Borrower. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as
provided in this Subsection X.A.2.b.
c. If the consent of Borrower to an assignment or to an
Eligible Assignee is required hereunder (including a consent
to an assignment which does not meet the minimum assignment
thresholds specified in Subsection 10.1B(i)), Borrower shall
be deemed to have given its consent five Business Days after
the date notice thereof has been delivered by the assigning
Lender (through Administrative Agent) unless such consent is
expressly refused by Borrower prior to such fifth Business
Day.
3. Participations. Any Lender may, without the consent of, or notice
to, Borrower or Administrative Agent, sell participations to one
or more banks or other entities (a "Participant") in all or a
portion of such Lender's rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or
the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, and (iii)
Borrower, Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall
retain the sole right to enforce the Loan Documents and to
approve any amendment, modification or waiver of any provision of
the Loan Documents; provided that such agreement or instrument
may provide that such Lender will not, without the consent of
such Participant, agree to any
136
amendment, modification or waiver that affects such Participant
if such amendment, modification or waiver requires the unanimous
written consent of all Lenders pursuant to Subsection X.F.
Subject to Subsection X.A.4, Borrower agrees that each
Participant shall be entitled to the benefits of Subsections
2.6D, 2.7, and 3.6 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to this
Subsection X.A.3; provided, however, that in no event shall
Borrower be obligated to make any payment with respect to such
Subsections which is greater than the amount that Borrower would
have paid to the Lender had no such participation been sold. To
the extent permitted by law, each Participant also shall be
entitled to the benefits of Subsection 10.4 as though it were a
Lender, provided such Participant agrees to be subject to
Subsection 10.5 as though it were a Lender if any amounts
outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each participant shall be
deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement.
4. No Greater Payments to Participants. A Participant shall not be
entitled to receive any greater payment under Subsections 2.6D,
2.7, and 3.6 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such
Participant is made with Borrower's prior written consent. A
Participant that would be a Non-US Lender if it were a Lender
shall not be entitled to the benefits of Subsection 2.7 unless
Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of
Borrower, to comply with Subsection 2.7B(iii) as though it were a
Lender.
5. Assignments to Secured Parties and Trustees.
a. In addition to the assignments and participations permitted
under the foregoing provisions of this Subsection X.A, (1)
any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender and its
Notes to any creditor, including any Federal Reserve Bank,
as collateral security pursuant to Regulation A of the Board
of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve Bank; provided that
(i) no Lender shall, as between Borrower and such Lender, be
relieved of any of its obligations hereunder as a result of
any such assignment and pledge, and (ii) in no event shall
such creditor be considered to be a "Lender" or be entitled
to require the assigning Lender to take or omit to take any
action hereunder and (2) any Lender which is an Approved
Fund may
137
pledge its Loans and/or Notes to its trustee for the benefit
of its investors without consent by or notice to Borrower or
Administrative Agent.
6. Information. Each Lender may furnish any information concerning
Borrower and its Subsidiaries in the possession of that Lender
from time to time to assignees and participants (including
prospective assignees and participants), subject to Subsection
X.T.
7. Representations of Lenders. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an
Eligible Assignee described in clause (A) of the definition
thereof; (ii) that it has experience and expertise in the making
of loans such as the Loans; and (iii) that it will make its Loans
for its own account in the ordinary course of its business and
without a present view to distribution of such Loans within the
meaning of the Securities Act or the Exchange Act or other
federal securities laws (it being understood that, subject to the
provisions of this Subsection X.A, the disposition of such Loans
or any interests therein shall at all times remain within its
exclusive control). Each Lender that becomes a party hereto
pursuant to an Assignment Agreement shall be deemed to agree that
the representations and warranties of such Lender contained in
such Assignment Agreement are incorporated herein by this
reference.
B. Expenses.
--------
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (i) all the actual and reasonable
out-of-pocket costs and expenses of preparation of the Loan Documents and any
consents, amendments, waivers or other modifications thereto; (ii) all the costs
of furnishing all opinions by counsel for Borrower (including any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Borrower's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to Administrative Agent in connection with
the negotiation, preparation, execution and administration of the Loan Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Borrower; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Administrative
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Administrative Agent and of counsel providing any opinions that
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by
138
Administrative Agent or its counsel) of obtaining and reviewing any
environmental audits or reports provided for as a result of its due diligence
and any audits or reports provided for under Subsection VI.I.4 or 6.7 with
respect to any Collateral; (vi) the custody or preservation of any of the
Collateral; (vii) all other actual and reasonable costs and expenses incurred by
Administrative Agent in connection with the syndication of the Commitments and
the negotiation, preparation and execution of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (viii) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and fees, costs and expenses of
accountants, advisors and consultants, incurred by Administrative Agent and its
counsel relating to efforts to (a) evaluate or assess any Loan Party, its
business or financial condition and (b) protect, evaluate, assess or dispose of
any of the Collateral; and (ix) all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel), fees, costs and
expenses of accountants, advisors and consultants and costs of settlement,
incurred by Administrative Agent and each Lender in enforcing any Obligations of
or in collecting any payments due from any Loan Party hereunder or under the
other Loan Documents by reason of such Event of Default (including in connection
with the sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Subsidiary Guaranty) or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
C. Indemnity.
---------
In addition to the payment of expenses pursuant to Subsection X.B,
whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Administrative Agent and Lenders, and the
officers, directors, employees, counsel, agents, representatives, trustees,
advisors and affiliates of Administrative Agent and Lenders (collectively called
the "Indemnitees"), from and against any and all Indemnified Liabilities (as
hereinafter defined); provided that Borrower shall not have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee as determined by a final non-appealable judgment
of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims and Releases), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and
139
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Loan Documents or the transactions contemplated hereby or thereby
(including Lenders' agreement to make the Loans hereunder or the use or intended
use of the proceeds thereof or the issuance of Letters of Credit hereunder or
the use or intended use of any thereof, or any enforcement of any of the Loan
Documents (including any sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Subsidiary Guaranty), (ii) the
statements contained in the commitment letter delivered by any Lender to
Borrower or Administrative Agent with respect thereto, or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Borrower or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this Subsection X.C may be unenforceable in whole or in
part because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
D. Set-Off; Security Interest in Deposit Accounts.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Borrower at any time or
from time to time, without notice to Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits or other amounts held by any Lender (or any Affiliate of
such Lender) for the credit or account of Borrower (general or special, time or
demand, provisional or final, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender (or any
Affiliate of such Lender) to or for the credit or the account of Borrower and
each other Loan Party against and on account of the Obligations of Borrower and
each other Loan Party to that Lender (or any Affiliate of such Lender) or to any
other Lender (or any Affiliate of any other Lender) under this Agreement, the
Letters of Credit and participations therein and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement, the Letters of Credit and participations therein or any
other Loan Document, irrespective of whether or not (i) that Lender shall have
made any demand hereunder or (ii) the principal of or the interest on the Loans
or any amounts in respect of the Letters of Credit or any other amounts due
hereunder or under any of the other Loan Documents shall have become due and
payable pursuant to VIII and although said obligations and liabilities, or any
of them, may be contingent or unmatured. Borrower hereby further grants to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
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E. Ratable Sharing.
---------------
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) that is greater than the proportion received by any
other Lender in respect of the Aggregate Amounts Due to such other Lender
hereunder, then the Lender receiving such proportionately greater payment shall
(i) notify Administrative Agent and each other Lender of the receipt of such
payment and (ii) apply a portion of such payment to purchase participations
(which it shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them hereunder; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Borrower or
otherwise (and whether by litigation, demand, settlement or otherwise), those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
F. Amendments and Waivers.
----------------------
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes or of any of the other Loan Documents, and no
consent to any departure by Borrower herefrom or therefrom, shall in any event
be effective without the written concurrence of Requisite Lenders; unless
otherwise provided elsewhere in this Agreement; provided that in addition:
(a) any such amendment, modification, termination, waiver or consent
which:
(i) postpones the date or reduces the amount of any scheduled
payment of principal of any of the Loans;
(ii) postpones the date on which any interest or any fees are
payable or reduces the amount of any interest or any fees payable
hereunder (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to Subsection 2.2E);
141
(iii) amends, modifies, terminates or waives any provision of
Subsection II.B which decreases the interest rate borne by Loans
(other than any waiver of any increase in the interest rate applicable
to such Loans pursuant to Subsection 2.2) or the percentages set forth
in the definitions of "Applicable Base Rate Margin" and "Applicable
LIBOR Margin";
(iv) changes in any manner the definition of "Pro Rata Share"
or the definition of "Requisite Lenders"
(v) changes the provisions of Subsections 2.4C(iii), 2.4D or
10.5 to provide that Lenders will not share pro rata in payments,
proceeds of Collateral or Aggregate Amounts Due;
(vi) changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of
all Lenders;
(vii) releases any Lien granted in favor of Administrative Agent
with respect to all or substantially all of the Collateral;
(viii) releases all or substantially all of the Subsidiary
Guarantors from their obligations under the Subsidiary Guaranty, in
each case other than in accordance with the terms of the Loan
Documents;
(ix) changes in any manner the provisions contained in
Subsection VIII.A or this Subsection X.F; or
(x) increases the amount of any Lender's Term Loan Commitments
or Revolving Loan Commitments over the amount thereof then in effect
(it being understood that amendments, modifications or waivers of
conditions precedent, representations and warranties, covenants or
Events of Default or of a mandatory reduction in the Commitments shall
not constitute an increase of the Commitments, and that an increase in
the available portion of any Commitments shall not constitute an
increase in the Commitments);
shall be effective only if evidenced by the written concurrence of all
Lenders affected thereby.
In addition,
(a) no amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of
the Lender that is the holder of that Note;
(b) no amendment, modification, termination or waiver of any
provision of Subsection 2.1A(i)-(ii) or of any other provision of this
Agreement relating to the Tranche B Term Loan Commitments or the Revolving
Loan Commitments shall increase the Commitments of any Lender over the
amount thereof then in effect without the
142
consent of Requisite Lenders and such Lender (it being understood that
amendments, modifications or waivers of conditions precedent,
representations and warranties, covenants or Events of Default or of a
mandatory reduction in the Commitments shall not constitute an increase of
the Commitment of any Lender, and that an increase in the available portion
of any Commitment of any Lender shall not constitute an increase in the
Commitment of such Lender); and
(c) no amendment, modification, termination or waiver of any
provision of IX or of any other provision of this Agreement that, by its
terms, expressly requires the approval or concurrence of Administrative
Agent shall be effective without the written concurrence of Administrative
Agent.
Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on Borrower in any case shall entitle Borrower to any other
or further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Subsection X.F shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Borrower, on Borrower. Notwithstanding anything
contained herein to the contrary, as among Lenders and Administrative Agent in
connection with the exercise of remedies under any of Loan Documents, the
written concurrence of Requisite Lenders shall be required for Administrative
Agent to exercise proxy rights in the election of the Governing Body of any Loan
Party owning real property or to acquire any ownership interest in real property
of any Loan Party.
G. Independence of Covenants.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
H. Notices; Effectiveness of Signatures.
------------------------------------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices delivered by United States mail to
Administrative Agent or any Loan Party shall not be effective until received.
For the purposes hereof, the address of each party hereto shall be as set forth
under such party's name on the signature pages hereof or (i) as to Borrower and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other
143
party, such other address as shall be designated by such party in a written
notice delivered to Administrative Agent. Electronic mail may be used to
distribute routine communications, such as financial statements and other
information; provided, however, that no signature with respect to any notice,
request, agreement, waiver, amendment or other document or any notice that is
intended to have binding effect may be sent by electronic mail.
Loan Documents and notices under the Loan Documents may be transmitted
and/or signed by facsimile. The effectiveness of any such documents and
signatures shall, subject to applicable law, have the same force and effect as
an original copy with manual signatures and shall be binding on all Loan
Parties, Agents and Lenders. Administrative Agent may also require that any such
documents and signature be confirmed by a manually-signed copy thereof;
provided, however, that the failure to request or deliver any such
manually-signed copy shall not affect the effectiveness of any facsimile
document or signature.
I. Survival of Representations, Warranties and Agreements.
------------------------------------------------------
W. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
1. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Borrower set forth in Subsections
2.6D, 2.7, 1.1F, X.B, X.C, X.D, X.R and X.S and the agreements of
Lenders set forth in Subsections IX.B.3, IX.D, X.E and X.S shall
survive, for the applicable limitations period, the payment of
the Loans, the cancellation or expiration of the Letters of
Credit and the reimbursement of any amounts drawn thereunder, and
the termination of this Agreement.
J. Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
K. Marshalling; Payments Set Aside.
-------------------------------
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are
144
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause (whether by litigation, demand, settlement or otherwise), then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
L. Severability.
------------
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
M. Obligations Several; Independent Nature of Lenders' Rights.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or
Lenders and Borrower, as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
N. Release of Security; Guarantees.
-------------------------------
Upon the proposed sale or other disposition of any Collateral that is
permitted by this Agreement or to which Requisite Lenders (or, if required
pursuant to Subsection 10.6, all Lenders) have otherwise consented, or the sale
or other disposition of all of the Capital Stock of a Subsidiary Guarantor to
any Person (other than to a Subsidiary Guarantor) permitted by this Agreement or
to which Requisite Lenders (or, if required pursuant to Subsection 10.6, all
Lenders) have otherwise consented, for which a Loan Party desires to obtain a
security interest release or a release of the Subsidiary Guaranty from
Administrative Agent, such Loan Party shall deliver an Officer's Certificate (i)
stating that the Collateral or the Capital Stock subject to such disposition is
being sold or otherwise disposed of in compliance with the terms hereof and (ii)
specifying the Collateral or Capital Stock being sold or otherwise disposed of
in the proposed transaction. Upon the receipt of such Officer's Certificate,
Administrative Agent shall, at such Loan Party's expense, so long as
Administrative Agent (a) has no reason to believe that the facts stated in such
Officer's Certificate are not true and correct, and (b) if the sale or other
disposition of such item of Collateral or Capital Stock constitutes an Asset
Sale, shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery of the Net Asset Sale Proceeds if
and as required by Subsection 2.4, execute and deliver such releases of its
security interest in such Collateral or such Subsidiary Guaranty, as may be
reasonably
145
requested by such Loan Party. Upon the payment in full of all Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit (or the cash collateralization
thereof), each Subsidiary Guaranty and the security interests granted pursuant
to the Loan Documents (other than with respect to any cash collateral in respect
of Letters of Credit) shall terminate and all rights to the Collateral shall
revert to the applicable grantor Loan Parties. Upon any such termination
Administrative Agent will, at such Loan Party's expense, execute and deliver to
such Loan Party such documents as such Loan Party shall reasonably request to
evidence such termination.
O. Headings.
--------
Section and Subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
P. Applicable Law.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
Q. Successors and Assigns.
----------------------
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 Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by Borrower 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, Affiliates of Administrative Agent and
Affiliates of Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
R. Consent to Jurisdiction and Service of Process.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
HEREUNDER OR THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ OR IN ANY
FEDERAL COURT IN THE NORTHERN DISTRICT OF CALIFORNIA, U.S.A. BY EXECUTING AND
DELIVERING THIS AGREEMENT, BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
146
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND ANY OBJECTION TO
VENUE;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO BORROWER AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION X.H;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION X.R RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
S. Waiver of Jury Trial.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION X.S AND EXECUTED BY EACH OF THE
PARTIES
147
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
T. Confidentiality.
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement that has been identified in writing as
confidential by Borrower in accordance with such Lender's customary procedures
for handling confidential information of this nature and in accordance with safe
and sound banking practices, it being understood and agreed by Borrower that in
any event a Lender may make disclosures (a) to its Affiliates and to directors,
officers, employees and agents of such Lender and its Affiliates, 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), (b) to the extent requested by any Government Authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Subsection X.T, to (i) any Eligible Assignee of or Participant in,
or any prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of Borrower, (g) with the consent of
Borrower, (h) to the extent such information (i) becomes publicly available
other than as a result of a breach of this Subsection X.T, or (ii) becomes
available to Administrative Agent or any Lender on a nonconfidential basis from
a source other than Borrower, or (i) to the National Association of Insurance
Commissioners or any other similar organization or any nationally recognized
rating agency that requires access to information about a Lender's or its
Affiliates' investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates and that no written or oral communications from
counsel to an Agent and no information that is or is designated as privileged or
as attorney work product may be disclosed to any Person unless such Person is a
Lender or a participant hereunder; provided that, unless specifically prohibited
by applicable law or court order, each Lender shall notify Borrower of any
request by any Government Authority or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such Government Authority) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further, that
in no event shall any Lender be obligated or required to return any materials
furnished by Borrower or any of its Subsidiaries. Notwithstanding anything
contained herein to the contrary, Borrower understands and agrees that
Administrative Agent and each of the institutions identified as "Co-Lead
Arranger" or "Co-Syndication Agent" on the title page to this Agreement may make
customary disclosures for advertising and "league table" purposes.
148
Notwithstanding anything to contrary herein, Borrower and
Administrative Agent hereby agree that Borrower (and each of its employees,
representatives and agents) is permitted to disclose to any Person, the
structure and tax aspects of the transactions contemplated by the Loan
Documents, and all materials of any kind (including opinions and other tax
analyses) that are provided to Borrower related to such structure and tax
aspects. In this regard, Borrower acknowledges and agrees that Borrower's
disclosure of the structure or tax aspects of such transactions is not limited
in any way by an express or implied understanding or agreement, oral or written
(whether or not such agreement or understanding is legally binding).
Furthermore, Borrower acknowledges and agrees that it does not know or have
reason to know that its use or disclosure of information relating to the
structure or tax aspects of the transactions contemplated by the Loan Documents
is limited in any other manner for the benefit of any other Person.
U. Co- Lead Arrangers and Co-Syndication Agents.
--------------------------------------------
None of the institutions identified as "Co-Lead Arrangers" or
"Co-Syndication Agents" on the title page to this Agreement shall have any
obligations, liabilities or duties under this Agreement other than those
applicable to a Lender (but only if such institution is a Lender) as such, and
no such institution shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any such institution in deciding to enter into this Agreement or in
taking or not taking any action hereunder.
V. Counterparts; Effectiveness.
---------------------------
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
W. Limitation of Liability.
-----------------------
Neither Administrative Agent nor any Lender shall be responsible or
liable to any other party or any other person for consequential or punitive
damages that may be alleged as a result of this Agreement or any other Loan
Document.
X. Further Assurances.
------------------
Each Loan Party agrees that from time to time, it shall, at its
expense, promptly execute and deliver, or cause to be executed and delivered,
all further agreements, documents and instruments, and do or cause to be done
all further acts as may be reasonably necessary or reasonably desirable, or that
Administrative Agent may reasonably request, in order to evidence,
149
perfect, maintain and enforce any security interest granted or purported to be
granted by, or to otherwise effectuate the provisions or purposes of, this
Agreement or any of the other Loan Documents and to enable Administrative Agent,
on behalf of the Lenders, to exercise and enforce its rights and remedies under
this Agreement or any of the other Loan Documents.
[Remainder of page intentionally left blank]
150
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER:
CENTRAL GARDEN & PET COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President,
Chief Financial Officer
Notice Address:
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
ADMINISTRATIVE AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
CIBC World Markets Corp., AS
AGENT
Notice Address:
CANADIAN IMPERIAL BANK OF COMMERCE
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: Agency Services Dept.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to:
CIBC WORLD MARKETS CORP.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
LENDERS:
CIBC INC., as Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
CIBC World Markets Corp., AS
AGENT
Notice Address:
CIBC INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: Agency Services Dept.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to:
CIBC WORLD MARKETS CORP.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
--------------------------------------,
as Lender
By:
-------------------------------------
[Name]
[Title]
Notice Address:
----------------------------------------
----------------------------------------
----------------------------------------
Facsimile:
------------------------------
S-4