Exhibit 10.2
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$80,000,000 CREDIT FACILITY
CREDIT AGREEMENT
Dated as of December 20, 2002
by and among
THE ▇▇▇▇▇▇▇▇ GROUP, LTD.,
as Borrower
ANTARES CAPITAL CORPORATION
for itself, as a Lender and as Agent for all Lenders
GENERAL ELECTRIC CAPITAL CORPORATION
for itself, as a Lender, and as Syndication Agent for all Lenders,
LASALLE BANK NATIONAL ASSOCIATION
for itself, as a Lender, and as Documentation Agent for all Lenders
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
for itself, as a Lender, and as Co-Agent for all Lenders
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
as Lenders
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TABLE OF CONTENTS
ARTICLE I - THE CREDITS...................................................1
1.1 Amounts and Terms of Commitments........................................1
1.2 Notes...................................................................3
1.3 Interest................................................................3
1.4 Loan Accounts...........................................................4
1.5 Procedure for Revolving Credit Borrowing................................5
1.6 Conversion and Continuation Elections...................................6
1.7 Optional Prepayments....................................................6
1.8 Mandatory Prepayments of Loans and Commitment Reductions................7
1.9 Fees....................................................................9
1.10 Payments by the Borrower..............................................10
1.11 Payments by the Lenders to the Agent; Settlement......................11
ARTICLE II - CONDITIONS PRECEDENT.........................................13
2.1 Conditions of Initial Loans............................................13
2.2 Conditions to All Borrowings...........................................16
2.3 Conditions to Certain Loans............................................17
ARTICLE III - REPRESENTATIONS AND WARRANTIES...............................18
3.1 Corporate Existence and Power..........................................18
3.2 Corporate Authorization; No Contravention..............................18
3.3 Governmental Authorization.............................................19
3.4 Binding Effect.........................................................19
3.5 Litigation.............................................................20
3.6 No Default.............................................................20
3.7 ERISA Compliance.......................................................20
3.8 Use of Proceeds; Margin Regulations....................................21
3.9 Title to Properties....................................................21
3.10 Taxes.................................................................21
3.11 Financial Condition...................................................21
3.12 Environmental Matters.................................................22
3.13 Collateral Documents..................................................22
3.14 Regulated Entities....................................................22
3.15 Solvency..............................................................23
3.16 Labor Relations.......................................................23
3.17 Copyrights, Patents, Trademarks and Licenses, etc.....................23
3.18 Subsidiaries..........................................................23
3.19 Brokers' Fees; Transaction Fees.......................................24
3.20 Insurance.............................................................24
3.21 Full Disclosure.......................................................24
3.22 Related Agreements....................................................24
ARTICLE IV - AFFIRMATIVE COVENANTS........................................24
4.1 Financial Statements...................................................24
4.2 Certificates; Borrowing Base Certificates; Other Information...........25
4.3 Notices................................................................26
4.4 Preservation of Corporate Existence, Etc...............................28
4.5 Maintenance of Property................................................29
4.6 Insurance..............................................................29
4.7 Payment of Obligations.................................................29
4.8 Compliance with Laws...................................................30
4.9 Inspection of Property and Books and Records...........................30
4.10 Use of Proceeds.......................................................31
4.11 Further Assurances....................................................31
ARTICLE V - NEGATIVE COVENANTS...........................................31
5.1 Limitation on Liens....................................................32
5.2 Disposition of Assets..................................................33
5.3 Consolidations and Mergers.............................................34
5.4 Loans and Investments..................................................34
5.5 Limitation on Indebtedness.............................................36
5.6 Transactions with Affiliates...........................................37
5.7 Management Fees and Compensation.......................................37
5.8 Use of Proceeds........................................................37
5.9 Contingent Obligations.................................................37
5.10 Compliance with ERISA.................................................38
5.11 Restricted Payments...................................................38
5.12 Change in Business....................................................40
5.13 Change in Structure...................................................41
5.14 Accounting Changes....................................................41
5.15 Amendments to Related Agreements and Subordinated Indebtedness........41
5.16 No Negative Pledges...................................................41
5.17 Reserved..............................................................42
5.18 Designated Senior Indebtedness........................................42
5.19 Deposit Accounts......................................................42
ARTICLE VI - FINANCIAL COVENANTS..........................................42
6.1 Capital Expenditures...................................................42
6.2 Leverage Ratio.........................................................42
6.3 Fixed Charge Coverage Ratio............................................43
6.4 Interest Coverage Ratio................................................44
6.5 Minimum EBITDA.........................................................45
ARTICLE VII - EVENTS OF DEFAULT............................................46
7.1 Event of Default.......................................................46
7.2 Remedies...............................................................49
7.3 Rights Not Exclusive...................................................49
7.4 Cash Collateral for Letters of Credit..................................49
ARTICLE VIII - THE AGENT....................................................50
8.1 Appointment and Authorization..........................................50
8.2 Delegation of Duties...................................................50
8.3 Liability of Agent.....................................................50
8.4 Reliance by Agent......................................................50
8.5 Notice of Default......................................................51
8.6 Credit Decision........................................................51
8.7 Indemnification........................................................52
8.8 Agent in Individual Capacity...........................................52
8.9 Successor Agent........................................................52
8.10 Collateral Matters....................................................53
8.11 Documentation Agent, Syndication Agent and Co-Agent...................54
ARTICLE IX - MISCELLANEOUS................................................54
9.1 Amendments and Waivers.................................................54
9.2 Notices................................................................55
9.3 No Waiver; Cumulative Remedies.........................................55
9.4 Costs and Expenses.....................................................56
9.5 Indemnity..............................................................56
9.6 Marshaling; Payments Set Aside.........................................57
9.7 Successors and Assigns.................................................58
9.8 Assignments, Participations, etc.......................................58
9.9 Confidentiality........................................................60
9.10 Set-off; Sharing of Payments..........................................61
9.11 Notification of Addresses, Lending Offices, Etc.......................61
9.12 Counterparts..........................................................62
9.13 Severability..........................................................62
9.14 Captions..............................................................62
9.15 Independence of Provisions............................................62
9.16 Interpretation........................................................62
9.17 No Third Parties Benefited............................................62
9.18 Governing Law and Jurisdiction........................................62
9.19 Waiver of Jury Trial..................................................63
9.20 Entire Agreement; Release.............................................63
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY.......................64
10.1 Taxes.................................................................64
10.2 Illegality............................................................66
10.3 Increased Costs and Reduction of Return...............................67
10.4 Funding Losses........................................................68
10.5 Inability to Determine Rates..........................................68
10.6 Reserves on LIBOR Rate Loans..........................................69
10.7 Certificates of Lenders...............................................69
10.8 Survival..............................................................69
10.9 Replacement of Lender in Respect of Increased Costs...................69
10.10 Change of Lending Office.............................................69
ARTICLE XI - DEFINITIONS..................................................70
11.1 Defined Terms.........................................................70
11.2 Other Interpretive Provisions.........................................87
11.3 Accounting Principles.................................................88
SCHEDULES
Schedule 1.1(a) Term Loan Commitments
Schedule 1.1(b) Revolving Loan Commitments
Schedule 3.2 Capitalization
Schedule 3.5 Litigation
Schedule 3.7 ERISA
Schedule 3.17 Intellectual Property
Schedule 3.19 Fees
Schedule 3.20 Insurance
Schedule 5.1 Liens
Schedule 5.4 Investments
Schedule 5.5 Indebtedness
Schedule 5.6 Transactions with Affiliates
Schedule 5.9 Contingent Obligations
Schedule 11.1 Prior Indebtedness
EXHIBITS
Exhibit 1.8(e) Excess Cash Flow Certificate
Exhibit 4.2(b) Compliance Certificate
Exhibit 11.1(a) Borrowing Base Certificate
Exhibit 11.1(b) Notice of Borrowing
Exhibit 11.1(c) Notice of Continuation/Conversion
Exhibit 11.1(d) Revolving Note
Exhibit 11.1(e) Term Note
CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement") is entered into as of December 20,
2002, by and among The ▇▇▇▇▇▇▇▇ Group, Ltd., a Delaware corporation (the
"Borrower"), Antares Capital Corporation, a Delaware corporation, as agent for
the several financial institutions from time to time party to this Agreement
(collectively, the "Lenders" and individually, each a "Lender") and for itself
as a Lender, General Electric Capital Corporation, as Syndication Agent, LaSalle
Bank National Association, as Documentation Agent, ▇▇▇▇▇▇ Trust and Savings
Bank, as Co-Agent, and such Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower has requested, and the Lenders have agreed to make
available to the Borrower, a revolving credit facility (including a letter of
credit subfacility) and a term loan upon and subject to the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto agree as follows:
ARTICLE I - THE CREDITS
1.1 Amounts and Terms of Commitments.
(a) The Term Loan. Each Lender with a Term Loan Commitment severally and
not jointly agrees, on the terms and conditions hereinafter set forth, to lend
to the Borrower on the Closing Date, the amount set forth opposite such Lender's
name in Schedule 1.1(a) under the heading "Term Loan Commitment" (such amount
being referred to herein as such Lender's "Term Loan Commitment"). Amounts
borrowed under this subsection 1.1(a) are referred to as the "Term Loan."
Amounts borrowed as a Term Loan which are repaid or prepaid may not be
reborrowed.
(b) The Revolving Credit. Each Lender with a Revolving Loan Commitment
severally and not jointly agrees, on the terms and conditions hereinafter set
forth, to make Loans to the Borrower (each such Loan, a "Revolving Loan") from
time to time on any Business Day during the period from the Closing Date to the
Revolving Termination Date, in an aggregate amount not to exceed at any time
outstanding the amount set forth opposite such Lender's name in Schedule 1.1(b)
under the heading "Revolving Loan Commitment" (such amount as the same may be
reduced from time to time pursuant to subsection 1.8(f) hereof or as a result of
one or more assignments pursuant to Section 9.8, being referred to herein as
such Lender's "Revolving Loan Commitment"); provided, however, that, after
giving effect to any Borrowing of Revolving Loans, the aggregate principal
amount of all outstanding Revolving Loans shall not exceed the Maximum Revolving
Loan Balance. Subject to the other terms and conditions hereof, amounts borrowed
under this subsection 1.1(b) may be repaid and reborrowed from time to time. The
"Maximum Revolving Loan Balance" from time to time will be the lesser of:
(i) the "Borrowing Base" (as calculated pursuant to the Borrowing
Base Certificate) in effect from time to time, or
(ii) the Aggregate Revolving Loan Commitment then in effect;
less, in either case, the amount of any Letter of Credit Participation
Liability.
If at any time the Revolving Loans exceed the Maximum Revolving Loan Balance,
then Borrower shall, within five (5) Business Days, prepay Revolving Loans in an
amount sufficient to eliminate such excess.
(c) Lender Letters of Credit and Letter of Credit Participation Agreements.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Borrower herein set forth, the Revolving Loan
Commitment may, in addition to advances under the Revolving Loan, be utilized,
upon the request of Borrower, for (i) the issuance of letters of credit by the
Issuing Lender (each such letter of credit, a "Lender Letter of Credit") or (ii)
the issuance of letter of credit participation agreements by the Issuing Lender
(each such letter of credit participation, a "Letter of Credit Participation
Agreement") to confirm payment to banks (whether or not such banks are Lenders)
which issue letters of credit for the account of Borrower on behalf of each
Lender having a Revolving Loan Commitment (severally and not jointly) according
to such Lender's Revolving Loan Commitment, provided in the event an Issuing
Lender refuses to issue Letter of Credit Participation Agreements, the Agent
shall be deemed the Issuing Lender with respect thereto. The aggregate amount of
Letter of Credit Participation Liability with respect to all Lender Letters of
Credit and Letter of Credit Participation Agreements outstanding at any time
shall not exceed $7,500,000.
The Borrower shall be irrevocably and unconditionally obligated forthwith
without presentment, demand, protest or other formalities of any kind, to
reimburse the Issuing Lender for any amounts paid by the Issuing Lender under
any Lender Letter of Credit or Letter of Credit Participation Agreement. The
Borrower hereby authorizes and directs the Lenders with Revolving Loan
Commitments, at the Issuing Lender's option, to make a Revolving Loan in the
amount of any payment made by the Issuing Lender with respect to any Lender
Letter of Credit or Letter of Credit Participation Agreement. All amounts paid
by the Issuing Lender with respect to any Lender Letter of Credit or Letter of
Credit Participation Agreement that are not immediately repaid by Borrower with
the proceeds of a Revolving Loan or otherwise shall bear interest at the
interest rate then applicable to Revolving Loans, calculated using the Base Rate
and the Applicable Margin then in effect. Each Lender agrees to fund its
Commitment Percentage of any Revolving Loan made pursuant to this subsection
1.1(c) and, if no such Revolving Loans are made, each Lender with a Revolving
Loan Commitment agrees to purchase, and shall be deemed to have purchased, a
participation in such Lender Letter of Credit or Letter of Credit Participation
Agreement in an amount equal to its ratable share of such Lender Letter of
Credit or Letter of Credit Participation Agreement based upon the Revolving Loan
Commitments then in effect and each Lender agrees to pay to the Issuing Lender
such share of any payments made by the Issuing Lender under such Lender Letter
of Credit or Letter of Credit Participation Agreement. The obligations of each
Lender under the preceding two (2) sentences shall be absolute and unconditional
and such remittance shall be made notwithstanding the occurrence or continuation
of an Event of Default or Default or the failure to satisfy any condition set
forth in Section 2.2 hereof.
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In addition to all other terms and conditions set forth in this Agreement,
the issuance by Issuing Lender of any Lender Letter of Credit or Letter of
Credit Participation Agreement shall be subject to the condition precedent that
the Lender Letter of Credit, Letter of Credit Participation Agreement or the
letter of credit or written contract for which Borrower requests a Letter of
Credit Participation Agreement shall support a transaction entered into by
Borrower or one of its Subsidiaries in the Ordinary Course of Business, or
otherwise reasonably acceptable to Issuing Lender, and shall be in such form, be
for such amount, and contain such terms in connection with the issuance thereof
as are reasonably satisfactory to Issuing Lender.
The expiration date of each Lender Letter of Credit shall be on a date
which is the earlier of (a) one year from its date of issuance (except with
respect to Lender Letters of Credit in support of letters of credit issued by
Fleet National Bank and in existence on the date hereof, which may expire as
late as twenty (20) Business Days after the expiry date of the last relevant
letter of credit issued by Fleet National Bank), or (b) the fifth (5th) day
before the Revolving Termination Date. Each Letter of Credit Participation
Agreement shall provide that the Letter of Credit Participation Agreement
terminates and all demands or claims for payment must be presented by a date
certain, which date will be the earlier of (a) one year from its date of
issuance, or (b) the fifth (5th) day before the Revolving Termination Date.
Borrower shall give Agent and Issuing Lender at least ten (10) Business
Days' prior written notice specifying the date a Lender Letter of Credit or
Letter of Credit Participation Agreement is to be issued, identifying the
beneficiary and describing the nature of the transactions proposed to be
supported thereby. The notice shall be accompanied by the drawing terms for the
Lender Letter of Credit or form of each letter of credit or other written
contract which will be supported by the Letter of Credit Participation
Agreement. Borrower shall also, at least ten (10) Business Days prior to the
requested issuance date, execute and deliver an application for such Lender
Letter of Credit to the Issuing Lender on the form then customarily prescribed
for such type of Lender Letter of Credit by the Issuing Lender.
▇▇▇▇▇▇ shall be the initial Issuing Lender with respect to Lender Letters
of Credit and shall remain so for as long as ▇▇▇▇▇▇ maintains a Revolving Loan
Commitment, provided, however that any Issuing Lender may resign as Issuing
Lender upon thirty (30) days' prior notice to Agent and to Borrower.
1.2 Notes.
(a) The Term Loan made by each Lender with a Term Loan Commitment shall be
evidenced by a Term Note payable to the order of such Lender in an amount equal
to such Lender's Term Loan Commitment.
(b) The Revolving Loans made by each Lender with a Revolving Loan
Commitment shall be evidenced by a Revolving Note payable to the order of such
Lender in an amount equal to such Lender's Revolving Loan Commitment.
1.3 Interest.
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(a) Subject to subsections 1.3(c) and 1.3(d), each Loan shall bear interest
on the outstanding principal amount thereof from the date when made at a rate
per annum equal to the LIBOR or the Base Rate, as the case may be, plus the
Applicable Margin, as the same may be adjusted pursuant to the provisions of the
definition of Applicable Margin. The Agent will with reasonable promptness
notify the Borrower and the Lenders of the effective date and the amount of each
such change, provided that any failure to provide such notice shall not relieve
the Borrower of any liability hereunder or provide the basis for any claim
against the Agent. Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. All computations of fees and interest payable under this
Agreement (other than the Agent's Fees) shall be made on the basis of a 360-day
year and actual days elapsed. Interest and fees shall accrue during each period
during which interest or such fees are computed from the first day thereof to
but (subject to the provisions of subsections 1.10(a) and 1.10(b) hereof)
excluding the last day thereof.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any payment or prepayment of
Loans in full.
(c) At the election of the Agent or the Required Lenders while any Event of
Default exists, the Borrower shall pay interest (after as well as before entry
of judgment thereon to the extent permitted by law) on the Obligations from and
after the date of occurrence of such Event of Default, at a rate per annum which
is determined by adding two percent (2.00%) per annum to the Applicable Margin
then in effect for such Loans (plus the LIBOR or Base Rate, as the case may be)
and, in the case of Obligations not subject to an Applicable Margin (other than
the fees described in Section 1.9), at a rate per annum equal to the rate per
annum applicable to Revolving Loans which are Base Rate Loans (including the
Applicable Margin with respect thereto) plus two percent (2.00%); provided,
however, that, on and after the expiration of any Interest Period applicable to
any LIBOR Rate Loan outstanding during the continuance of such Event of Default,
the principal amount of such Loan shall, during the continuation of such Event
of Default, bear interest at a rate per annum equal to the Base Rate plus the
Applicable Margin plus two percent (2.00%). All such interest shall be payable
on demand of the Agent or the Required Lenders.
(d) Anything herein to the contrary notwithstanding, the obligations of the
Borrower hereunder shall be subject to the limitation that payments of interest
shall not be required, for any period for which interest is computed hereunder,
to the extent (but only to the extent) that contracting for or receiving such
payment by the respective Lender would be contrary to the provisions of any law
applicable to such Lender limiting the highest rate of interest which may be
lawfully contracted for, charged or received by such Lender, and in such event
the Borrower shall pay such Lender interest at the highest rate permitted by
applicable law.
1.4 Loan Accounts. The Agent, on behalf of the Lenders, shall record on its
books and records the amount of each Loan made, the interest rate applicable,
all payments of principal and interest thereon and the principal balance thereof
from time to time outstanding. The Agent shall deliver to the Borrower on a
monthly basis a loan statement setting forth such record for the immediately
preceding month. Such record shall, absent manifest error, be conclusive
evidence of the amount of the Loans made by the Lenders to the Borrower and the
interest and payments thereon. Any failure to so record or any error in doing
so, or any failure to deliver such loan
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statement shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder (and under any Note) to pay any amount owing with respect to
the Loans or provide the basis for any claim against the Agent.
1.5 Procedure for Revolving Credit Borrowing.
(a) Each Borrowing under the Revolving Loan shall be made upon the
Borrower's irrevocable (subject to Section 10.5 hereof) written notice delivered
to the Agent in the form of a Notice of Borrowing, which notice must be received
by the Agent prior to 11:00 a.m. (Chicago time) (i) on the requested Borrowing
date in the case of each Base Rate Loan equal to or less than $1,000,000 and in
the case of the initial Loans to be made on the Closing Date, (ii) on the date
which is one (1) Business Day prior to the requested Borrowing date of each Base
Rate Loan in excess of $1,000,000 but equal to or less than $3,000,000 and (iii)
on the day which is three (3) Business Days prior to the requested Borrowing
date in the case of each LIBOR Rate Loan and each Base Rate Loan in excess of
$3,000,000; provided that with respect to Loans subsequent to the initial Loans,
the Borrower may give notice of the requested Borrowing to the Agent by
telephone call, with such notice confirmed not later than the following Business
Day by delivery to the Agent of a signed Notice of Borrowing. Such Notice of
Borrowing shall specify:
(i) the amount of the Borrowing (which shall be in an aggregate
minimum principal amount of $100,000 and multiples of $50,000 in
excess thereof);
(ii) the requested Borrowing date, which shall be a Business Day;
(iii) whether the Borrowing is to be comprised of LIBOR Rate
Loans or Base Rate Loans; and
(iv) if the Borrowing is to be LIBOR Rate Loans, the Interest
Period applicable to such Loans.
provided, however, that with respect to the Borrowing to be made on the Closing
Date, such Borrowing will consist of Base Rate Loans only and shall remain so
for not less than three (3) Business Days. Thereafter, Borrower may request that
Revolving Loans be made as LIBOR Rate Loans and that Loans be converted to or
continued as LIBOR Rate Loans (it being agreed that a Notice of
Continuation/Conversion may be delivered on the Closing Date).
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly notify
each Lender with a Commitment affected thereby of such Notice and of the amount
of such Lender's Commitment Percentage of the Borrowing.
(c) Unless Agent is otherwise directed in writing by Borrower, the proceeds
of each requested Borrowing after the Closing Date will be made available to the
Borrower by the Agent by wire transfer (or ACH transfer) of such amount to the
Borrower pursuant to the wire transfer instructions specified on the signature
page hereto.
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1.6 Conversion and Continuation Elections.
(a) The Borrower may upon irrevocable (subject to subsection 10.2(c) and
Section 10.5) written notice to the Agent in accordance with subsection 1.6(b)
elect to convert on any Business Day, any Base Rate Loans into LIBOR Rate Loans
or elect to continue on the last day of the applicable Interest Period any LIBOR
Rate Loans having Interest Periods maturing on such day, in each instance, in
whole or in part in an amount not less than $100,000, or that is in an integral
multiple of $50,000 in excess thereof.
(b) The Borrower shall deliver a Notice of Continuation/Conversion to be
received by the Agent not later than 11:00 a.m. (Chicago time) at least three
(3) Business Days in advance of the requested Conversion Date or continuation
date, specifying:
(i) the proposed Conversion Date or continuation date;
(ii) the aggregate amount of Loans to be converted or continued;
and
(iii) the duration of the requested Interest Period with respect
to the Loans to be converted or continued as LIBOR Rate Loans.
(c) If upon the expiration of any Interest Period applicable to LIBOR Rate
Loans, the Borrower has failed to select timely a new Interest Period to be
applicable to such LIBOR Rate Loans or if any Event of Default shall then exist,
the Borrower shall be deemed to have elected to convert such LIBOR Rate Loans
into Base Rate Loans effective as of the expiration date of such current
Interest Period.
(d) Upon receipt of a Notice of Continuation/Conversion, the Agent will
promptly notify each Lender thereof. In addition, the Agent will, with
reasonable promptness, notify the Borrower and the Lenders of each determination
of LIBOR; provided that any failure to do so shall not relieve the Borrower of
any liability hereunder or provide the basis for any claim against the Agent.
All conversions and continuations shall be made pro rata according to the
respective outstanding principal amounts of the Loans with respect to which the
notice was given held by each Lender.
(e) Unless the Agent or the Required Lenders shall otherwise agree, during
the existence of an Event of Default, the Borrower may not elect to have a Loan
converted into or continued as a LIBOR Rate Loan.
(f) Notwithstanding any other provision contained in this Agreement, after
giving effect to any Borrowing, or to any continuation or conversion of any
Loans, there shall not be more than seven (7) different Interest Periods in
effect.
1.7 Optional Prepayments.
(a) The Borrower may at any time upon at least one (1) Business Day's prior
written notice to the Agent, prepay the Loans in whole or in part, and in the
case of the Term Loan, in an amount greater than or equal to $100,000, in each
instance, without penalty or premium except as provided in Section 10.4.
Optional partial prepayments of the Term Loan shall be applied in
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the manner set forth in subsection 1.8(f). Optional partial prepayments of the
Term Loan in amounts less than $100,000 shall not be permitted.
(b) The notice of any prepayment shall not thereafter be revocable by the
Borrower and the Agent will promptly notify each Lender thereof and of such
Lender's Commitment Percentage of such prepayment. The payment amount specified
in such notice shall be due and payable on the date specified therein. Together
with each prepayment under this Section 1.7, the Borrower shall pay any amounts
required pursuant to Section 10.4.
1.8 Mandatory Prepayments of Loans and Commitment Reductions.
(a) Scheduled Term Loan Payments. The principal amount of the Term Loan
shall be paid in installments on the last Business Day of each month shown below
and on December 19, 2008, and in the respective amounts shown below (as reduced
pursuant to the provisions of subsection 1.8(f) hereof):
Date of Payment Amount of Term Loan Payment
--------------- ---------------------------
March 2003 $1,000,000
June 2003 $ 750,000
September 2003 $ 750,000
December 2003 $2,500,000
March 2004 $1,000,000
June 2004 $ 750,000
September 2004 $ 750,000
December 2004 $2,500,000
March 2005 $2,000,000
June 2005 $1,500,000
September 2005 $1,500,000
December 2005 $3,000,000
March 2006 $2,500,000
June 2006 $2,000,000
September 2006 $2,000,000
December 2006 $3,500,000
March 2007 $2,500,000
June 2007 $2,000,000
September 2007 $2,000,000
December 2007 $3,500,000
March 2008 $3,000,000
June 2008 $2,500,000
September 2008 $2,500,000
December 19, 2008 $4,000,000
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(b) Revolving Loan. The Borrower shall repay to the Lenders in full on the
date specified in clause (a) of the definition of "Revolving Termination Date"
the aggregate principal amount of the Revolving Loans outstanding on the
Revolving Termination Date.
(c) Asset Dispositions. If the Borrower or any of its Subsidiaries shall at
any time or from time to time:
(i) consummate a Disposition; or
(ii) suffer an Event of Loss;
and the aggregate amount of the Net Proceeds received by Borrower and its
Subsidiaries in connection with such Disposition or Event of Loss and all other
Dispositions and Events of Loss occurring during the fiscal year exceeds
$250,000, then (A) the Borrower shall promptly notify the Agent of such
Disposition or Event of Loss (including the amount of the Net Proceeds to be
received by the Borrower and/or any of its Subsidiaries in respect thereof) and
(B) promptly upon receipt by the Borrower and/or any of its Subsidiaries of the
Net Proceeds of such Disposition or Event of Loss, the Borrower shall deliver
such Net Proceeds to the Agent for distribution to the Lenders as a prepayment
of the Loans, which prepayment shall be applied in accordance with subsection
1.8(f) hereof. Notwithstanding the foregoing and provided no Default or Event of
Default has occurred and is continuing, such prepayment shall not be required to
the extent the Borrower (I) notifies the Agent in writing of its election to (x)
reinvest the Net Proceeds of such Disposition or Event of Loss, or a portion
thereof, in productive assets of a kind then used or usable in the business of
the Borrower within one hundred eighty (180) days after the date of such
Disposition or Event of Loss or (y) enter into a binding commitment thereof
within said one hundred eighty (180) day period, and (II) the Borrower, in fact,
(x) so reinvests such Net Proceeds, or such portion thereof, within said one
hundred eighty (180) day period or (y) enters into a binding commitment thereof
and subsequently makes such reinvestment. Pending such reinvestment, the Net
Proceeds shall be delivered to the Agent, for distribution to the Lenders, as a
prepayment of the Revolving Loans, but not as a permanent reduction of the
Revolving Loan Commitment. Any portion of Net Proceeds not reinvested as
provided herein shall applied as a prepayment of the Loans, which prepayment
shall be applied in accordance with subsection 1.8(f) hereof.
(d) Issuance of Securities. Immediately upon the receipt by Holdings,
Borrower or any of the Subsidiaries of Borrower of the Net Issuance Proceeds of
the issuance of equity securities or debt securities (other than Net Issuance
Proceeds from the issuance of (i) debt securities in respect of Indebtedness
permitted hereunder, (ii) equity securities to management, (iii) equity
securities, the proceeds of which are used to finance Permitted Acquisitions and
Capital Expenditures permitted hereunder, (iv) equity securities issued on the
Closing Date and (v) provided no Event of Default has occurred and is
continuing, equity securities issued after the Closing Date to Persons who are
stockholders of Holdings on the Closing Date), Borrower shall deliver to Agent
an amount equal to such Net Issuance Proceeds, net of underwriting discounts
associated therewith, for application to the Loans in accordance with subsection
1.8(f).
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(e) Excess Cash Flow. Within five (5) days after the annual financial
statements are required to be delivered under subsection 4.1(a) hereof,
commencing with the year ending December 31, 2003, the Borrower (i) shall
deliver to the Agent a written calculation of Excess Cash Flow of the Borrower
for such year (the "Calculation Year") in the form of Exhibit 1.8(e) and
certified as correct on behalf of Borrower by a Responsible Officer and (ii)
concurrently therewith shall deliver to the Agent, for distribution to the
Lenders, an amount equal to seventy-five percent (75%) of such Excess Cash Flow,
for application to the Loans in accordance with the provisions of subsection
1.8(f) hereof, provided, however, that the Borrower shall only be required to
deliver to Agent, for distribution to the Lenders, an amount equal to fifty
percent (50%) of such Excess Cash Flow for application to the Loans in
accordance with the provisions of subsection 1.8(f) hereof in the event (A) the
ratio (the "Modified Leverage Ratio") of (i) Total Indebtedness minus
unrestricted cash on hand held in deposit accounts in which Agent shall have
been granted a perfected first priority security interest pursuant to Deposit
Account Control Agreements, in each instance, calculated as of such payment date
on a pro forma basis after giving effect to such payment to (ii) Adjusted EBITDA
(as calculated in Exhibit 4.2(b)) for the most recent twelve (12) month period
for which financial statements are available is less than 3.5 to 1.0 and (B) the
Credit Level of the Loans shall be Level I or Level II as of the date the
payment is required to be made; and provided further that no prepayment (or only
a portion thereof as shall be necessary for Borrower's Modified Leverage Ratio
to equal 3.0 as provided in clause (A) below) shall be required in the event (A)
the Borrower's Modified Leverage Ratio as of such payment date is less than 3.0
after giving effect to any payment or portion thereof which is actually made on
such date and (B) the Credit Level of the Loans as of the date the payment would
otherwise be required to be made shall be Level I. Excess Cash Flow shall be
calculated in the manner set forth in Exhibit 1.8(e).
(f) Application of Prepayments. Any prepayments pursuant to Section 1.7 or
subsections 1.8(c) (other than prepayments of Revolving Loans as set forth
therein), 1.8(d) or 1.8(e) shall be applied first to prepay installments of the
Term Loan coming due pro rata against all such scheduled installments based upon
the respective amounts thereof, and then in permanent reduction of the Revolving
Loan, whereupon the Revolving Loan Commitment of each Lender shall automatically
and permanently be reduced by an amount equal to such Lender's ratable share of
the aggregate of principal repaid, effective as of the earlier of the date that
such prepayment is made or the date by which such prepayment is due and payable
hereunder. To the extent permitted by the foregoing sentence, amounts prepaid
shall be applied first to any Base Rate Loans then outstanding and then to
outstanding LIBOR Rate Loans with the shortest Interest Periods remaining.
Together with each prepayment under this Section 1.8, the Borrower shall pay any
amounts required pursuant to Section 10.4 hereof.
1.9 Fees.
(a) Closing, Arrangement and Agent's Fees. The Borrower shall pay to the
Agent for the Agent's own account a closing fee, an arrangement fee and an
agent's fee (collectively, the "Agent's Fees") in the amounts and at the times
set forth in a letter agreement between the Borrower and the Agent dated of even
date herewith.
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(b) Commitment Fee. Borrower shall pay to Agent, for the ratable benefit of
the Lenders having Revolving Loan Commitments, a fee (the "Commitment Fee") in
an amount equal to
(i) the Aggregate Revolving Loan Commitment, less
(ii) the sum of (x) the average daily balance of all Revolving
Loans outstanding plus (y) the average daily amount of the Letter of
Credit Participation Liability, in each case, during the preceding
month,
multiplied by one-half of one percent (0.50%) per annum, such fee to be payable
monthly in arrears on the first day of the month following the date hereof and
the first day of each month thereafter. The Commitment Fee provided in this
subsection 1.9(b) shall accrue at all times from and after mutual execution and
delivery of this Agreement.
(c) Letter of Credit Participation Fee. Borrower shall pay to Agent, for
the ratable benefit of the Lenders having Revolving Loan Commitments, fees for
each Lender Letter of Credit and each Letter of Credit Participation Agreement
(the "Letter of Credit Participation Fee") for the period from and including the
date of issuance of same to and excluding the date of expiration or termination,
equal to the average daily amount of Letter of Credit Participation Liability
multiplied by a rate per annum equal to the Applicable Margin then in effect for
Revolving Loans that are LIBOR Rate Loans; provided, however, at Agent's or
Required Lenders' option, while an Event of Default exists such Applicable
Margin shall be increased by two percent (2.00%) per annum, such fees to be
payable monthly in arrears on the first day of the month following the date
hereof and the first day of each month thereafter. Borrower shall also reimburse
Agent for, or pay, any and all fees and expenses, if any, paid by Agent, or
required to be paid, to the issuer (including the Issuing Lender) of any Lender
Letter of Credit or any letter of credit subject to a Letter of Credit
Participation Agreement.
1.10 Payments by the Borrower.
(a) All payments (including prepayments) to be made by the Borrower on
account of principal, interest, fees and other amounts required hereunder shall
be made without set-off, recoupment, counterclaim or deduction of any kind,
shall, except as otherwise expressly provided herein, be made to the Agent for
the ratable account of the Lenders at the address for payment specified on the
signature page hereof in relation to the Agent (or such other address as Agent
may from time to time specify in accordance with Section 9.2), and shall be made
in Dollars and in immediately available funds, no later than 12:00 noon.
(Chicago time) on the date due. Any payment which is received by the Agent later
than 12:00 noon (Chicago time) shall be deemed to have been received on the
immediately succeeding Business Day and any applicable interest or fee shall
continue to accrue. Borrower hereby authorizes Agent and each Lender to make a
Revolving Loan (which shall be a Base Rate Loan) to pay (i) interest, principal,
agent fees, Commitment Fees and Letter of Credit Participation Fees, in each
instance, on the date due, or (ii) after five (5) Business Days prior notice to
Borrower, other fees, costs or expenses payable by Borrower or any of its
Subsidiaries hereunder or under the other Loan Documents.
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(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, if any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Except for payments collected or received prior to the occurrence of an
Event of Default in respect of a specific Obligation, all amounts collected or
received by Agent shall be applied as follows:
first, to payment of costs and expenses, including Attorney Costs, of
Agent payable or reimbursable by Borrower under the Loan Documents;
second, to payment of Attorney Costs of Lenders payable or
reimbursable by Borrower under this Agreement;
third, to payment of all accrued unpaid fees (including fees payable
to Agent) and interest then due and owing on the Obligations;
fourth, to payment of principal of the Obligations (including, if an
Event of Default has occurred and is continuing, cash collateralization of
Letter of Credit Participation Liability);
fifth, to payment of any other amounts owing constituting Obligations;
sixth, to payment of Rate Contract Obligations then due and owing; and
seventh, any remainder shall be for the account of and paid to whoever
may be lawfully entitled thereto.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Agent and Lenders shall receive an amount
equal to its pro rata share of amounts available to be applied pursuant to
clauses second, third, fourth and fifth above.
1.11 Payments by the Lenders to the Agent; Settlement.
(a) As set forth in subsection 1.5(b), upon receipt of a Notice of
Borrowing, the Agent will promptly notify each Lender of such Lender's
Commitment Percentage of the Borrowing requested thereby. Each Lender with a
Revolving Loan Commitment will fund its Commitment Percentage of Borrowings of
Revolving Loans to Agent at Agent's account specified on Agent's signature page
hereto, or to such other account as Agent may designate in writing, no later
than 1:00 p.m. (Chicago time) on the scheduled Borrowing date.
(b) Unless the Agent shall have received notice from a Lender on the
Closing Date or, with respect to each Borrowing after the Closing Date, by 12:00
p.m. (Chicago time) on the date of any proposed Borrowing, that such Lender will
not make available to the Agent as and when required hereunder for the account
of the Borrower the amount of such Lender's
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Commitment Percentage of the proposed Borrowing, the Agent may assume that each
Lender has made such amount available to the Agent in immediately available
funds on the applicable Borrowing date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to the Agent in immediately available funds and
the Agent in such circumstances has made available to the Borrower such amount,
that Lender shall on the next Business Day following the date of such Borrowing
make such amount available to the Agent, together with interest at the Federal
Funds Rate for and determined as of each day during such period. A notice of the
Agent submitted to any Lender with respect to amounts owing under this
subsection 1.11(b) shall be conclusive, absent manifest error. If such amount is
so made available, such payment to the Agent shall constitute such Lender's Loan
on the date of Borrowing for all purposes of this Agreement. If such amount is
not made available to the Agent on the next Business Day following the date of
such Borrowing, the Agent shall notify the Borrower of such failure to fund and,
no later than one (1) Business Day after demand by the Agent, the Borrower shall
pay such amount to the Agent for the Agent's account, together with interest
thereon for each day elapsed since the date of such Borrowing, at a rate per
annum equal to the interest rate applicable at the time to the Loans comprising
such Borrowing.
(c) The failure of any Lender to make any Loan on any date of Borrowing
shall not relieve any other Lender of any obligation hereunder to make a Loan on
the date of such Borrowing, but no Lender shall be responsible for the failure
of any other Lender to make the Loan to be made by such other Lender on the date
of any Borrowing. Without limiting the generality of the foregoing, each Lender
shall be obligated to fund its Commitment Percentage of any Revolving Loan made
after any acceleration of the Obligations with respect to any draw on any Lender
Letter of Credit or any payment made under any Letter of Credit Participation
Agreement.
(d) Provided that such Lender has made all payments required to be made by
it under this Agreement, the Agent will pay to such Lender, by wire transfer to
such Lender's account (as specified by such Lender on such Lender's respective
signature page to this Agreement or the applicable Assignment and Acceptance)
such Lender's Commitment Percentage of principal, interest, Commitment Fees and
Letter of Credit Participation Fees, in each instance, received by Agent,
promptly after Agent's receipt thereof.
(e) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full as and when required hereunder, the Agent may
assume that the Borrower has made such payment in full to the Agent on such date
in immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If the Agent pays
an amount to a Lender under this Agreement in the belief or expectation that a
related payment has been or will be received by the Agent from the Borrower and
such related payment is not received by the Agent, the Agent shall be entitled
to recover such amount from such Lender, and each Lender shall repay to Agent on
demand such amount, together with interest thereon for each day from the date
such amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate,
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without setoff, recoupment, counterclaim or deduction of any kind. If the Agent
determines at any time that any amount received by the Agent under this
Agreement must be returned to the Borrower or paid to any other Person pursuant
to any solvency, fraudulent conveyance or similar law or otherwise, then,
notwithstanding any other term or condition of this Agreement, the Agent will
not be required to distribute any portion of such payment to any Lender. In
addition, each Lender will repay to the Agent on demand any portion of such
amount that the Agent has distributed to such Lender, together with interest
thereon at such rate, if any, as the Agent is required to pay to the Borrower or
such other Person, without setoff, recoupment, counterclaim or deduction of any
kind.
ARTICLE II - CONDITIONS PRECEDENT
2.1 Conditions of Initial Loans. The obligation of each Lender to make its
initial Loan and of the Agent to issue the initial Lender Letter of Credit or
Letter of Credit Participation Agreement hereunder is subject to the condition
that the Agent shall have received on or before the Closing Date all of the
following, in form and substance reasonably satisfactory to the Agent and each
Lender and (except for the Notes and any instruments or documents which are
Pledged Collateral) in sufficient counterparts for each Lender, duly executed by
all parties thereto:
(a) Credit Agreement and Notes. This Agreement executed by the Borrower,
the Agent and each of the Lenders, and the Notes executed by the Borrower;
(b) Secretary's Certificates; Resolutions; Incumbency. A certificate of the
Secretary or Assistant Secretary of Holdings, the Borrower and each Subsidiary
of the Borrower which is a party to any Loan Document, certifying:
(i) the names and true signatures of the officers of Holdings,
the Borrower and each such Subsidiary of the Borrower authorized to
execute, deliver and perform, as applicable, this Agreement, and all
other Loan Documents to be executed, delivered and performed, as
applicable, hereunder; and
(ii) copies of the resolutions of the board of directors or other
governing body of Holdings, the Borrower and each such Subsidiary of
Borrower approving and authorizing the execution, delivery and
performance, as applicable, by Holdings, the Borrower or each such
Subsidiary of Borrower of this Agreement and the other Loan Documents
to be executed or delivered by it hereunder;
(c) Organization Documents and Good Standing. Each of the following
documents:
(i) the Organization Documents of Holdings, Borrower and each
Subsidiary of the Borrower, as such Organization Documents are in
effect on the Closing Date, certified by the Secretary of State (or
similar, applicable Governmental Authority) of the state of
incorporation or formation, as applicable, of Holdings, Borrower or
such Subsidiary as of a recent date, if and as applicable, all
certified by the Secretary or Assistant Secretary of Holdings, the
Borrower or such Subsidiary as of the Closing Date; and
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(ii) a good standing and, if available, tax good standing
certificate for Holdings, the Borrower, each Subsidiary of the
Borrower from the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation or formation, as
applicable, and each state where Holdings, the Borrower or such
Subsidiary is qualified to do business as a foreign entity as of a
recent date;
(d) Collateral Documents. The Collateral Documents executed by Holdings,
the Borrower, any Subsidiary of Borrower or such other Persons party thereto, as
applicable, in appropriate form for recording, where necessary, together with:
(i) acknowledgment copies of all uniform commercial code
financing statements filed, registered or recorded to perfect the
security interests of the Agent, for the benefit of Agent and the
Lenders, granted pursuant to the Collateral Documents, or other
evidence reasonably satisfactory to the Agent that there has been
filed, registered or recorded all financing statements and other
filings, registrations and recordings reasonably necessary and
advisable to perfect the Liens of the Agent, for the benefit of Agent
and the Lenders, granted pursuant to the Collateral Documents, in
accordance with applicable law;
(ii) uniform commercial code financing statement, federal and
state tax lien, pending litigation and judgment searches as the Agent
shall have reasonably requested of Holdings, the Borrower and each
Subsidiary of the Borrower and such other Persons as Agent may
reasonably request, and such termination statements, releases or other
documents as may be reasonably necessary to confirm that the
Collateral is subject to no other Liens in favor of any Persons (other
than Permitted Liens);
(iii) all certificates and instruments representing the Pledged
Collateral, irrevocable proxies and stock transfer powers or
assignments separate from certificate executed in blank, or other
executed endorsements reasonably satisfactory to the Agent, with
signatures guaranteed as the Agent may require;
(iv) evidence that all other actions reasonably necessary or, in
the reasonable opinion of the Agent, desirable to perfect and protect
the Liens created by the Collateral Documents have been taken; and
(v) such consents, estoppels, subordination agreements and other
documents and instruments executed by landlords, as reasonably
requested by the Agent;
(e) Legal Opinions. Such opinions of counsel to Holdings, the Borrower and
each Subsidiary of Borrower, addressed to the Agent and the Lenders, in form and
substance reasonably satisfactory to Agent;
(f) Payment of Fees. The Borrower shall have paid all accrued and unpaid
fees, costs and expenses to the extent then due and payable on the Closing Date,
together with Attorney Costs of the Agent;
14
(g) Certificate. A certificate signed on behalf of Borrower by a
Responsible Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article III
hereof are true and correct on and as of such date, as though made on
and as of such date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing or issuance of the initial Lender Letter of
Credit or Letter of Credit Participation Agreement; and
(iii) there has occurred since December 31, 2001 no event or
circumstance that has resulted in or would reasonably be expected to
result in a Material Adverse Effect;
(h) Financial Statements. Copies of all of the financial statements of the
Borrower and its Subsidiaries referred to in Section 3.11 (including any
auditor's management letters for the Borrower and or its Subsidiaries for the
fiscal years ended December 31, 1999, December 31, 2000 and December 31, 2001)
together with a pro forma balance sheet giving effect to the transactions
contemplated hereby and by the Related Agreements, certified on behalf of
Borrower by a Responsible Officer;
(i) Insurance Policies. Evidence satisfactory to Agent that all insurance
required to be maintained in accordance with Section 4.6 has been obtained and
is in full force and effect;
(j) Environmental Review. An environmental site assessment with respect to
any real Property owned or operated by Borrower or any of its Subsidiaries,
dated as of a recent date prior to the Closing Date, prepared by a qualified
firm reasonably acceptable to the Agent and the Lenders, in form and substance
satisfactory to Agent. Agent acknowledges receipt of the foregoing in form and
substance satisfactory to Agent;
(k) Due Diligence. Evidence of completion to the satisfaction of the Agent
of such investigations, reviews, audits and management background checks with
respect to the Borrower and its Subsidiaries and the transactions contemplated
by the Related Agreements as the Agent or any Lender may deem appropriate. Agent
acknowledges receipt of the foregoing in form and substance satisfactory to
Agent;
(l) Accountants' Review. An accountants' review of the books and records of
the Borrower and its Subsidiaries prepared by a "Big Four" accounting firm
selected by the Agent, dated as of a recent date prior to the Closing Date and
otherwise in form and substance reasonably satisfactory to the Agent. Agent
acknowledges receipt of the foregoing in form and substance satisfactory to
Agent;
(m) Insurance Review. A review of the Borrower's insurance coverages,
prepared by a qualified firm reasonably acceptable to the Agent, dated as of a
recent date prior to the Closing Date and otherwise in form and substance
reasonably satisfactory to the Agent. Agent acknowledges receipt of the
foregoing in form and substance satisfactory to Agent;
15
(n) Borrowing Base Certificate. A duly completed Borrowing Base Certificate
for the twelve month period ending October 31, 2002;
(o) Related Transactions. The Related Transactions shall have closed in the
manner contemplated by the Related Agreements and shall otherwise be in form and
substance reasonably satisfactory to the Agent;
(p) Prior Indebtedness. A payoff letter from each lender of any Prior
Indebtedness in form and substance reasonably satisfactory to the Agent,
together with such uniform commercial code termination statements, releases of
mortgage Liens and other instruments, documents and/or agreements necessary or
appropriate to terminate any Liens in favor of such lenders securing Prior
Indebtedness which is to be paid off on the Closing Date as the Agent may
reasonably request, duly executed and in form and substance reasonably
satisfactory to the Agent;
(q) Maximum Leverage Ratio. The ratio of (i) Borrower's Indebtedness (as
defined in Exhibit 4.2(b) and calculated on a pro forma basis after giving
effect to the Related Transactions) to (ii) EBITDA for the twelve month period
ending October 31, 2002, shall not be greater than 4.45 to 1.0;
(r) Loan Ratings. Evidence that the Loans have received a minimum rating of
(i) B+ by S&P and (ii) B1 by ▇▇▇▇▇'▇;
(s) Projections. Projections of the Borrower's and its Subsidiaries'
consolidated and consolidating financial performance for the period from January
1, 2003 through December 31, 2007 on an annual basis;
(t) Cash Equity Investment in Holdings. Sponsor and the other investors
shall have rolled-over common and preferred equity and/or contributed cash
equity of not less than $195,000,000 (of which not less than $80,000,000 shall
have been contributed in cash, of which not less than $45,000,000 shall have
been contributed by Sponsor) in the aggregate into Holdings prior to the Closing
Date for capital stock in Holdings pursuant to the terms of the
Recapitalization;
(u) Subordinated Indebtedness. The Borrower shall have issued not less than
$150,000,000 stated principal amount of Senior Subordinated Notes pursuant to
the Senior Subordinated Note Indenture, the gross cash proceeds of which shall
not be less than $150,000,000; and
(v) Other Documents. Such other approvals, opinions, documents or materials
as the Agent or any Lender may reasonably request.
2.2 Conditions to All Borrowings. The obligation of each Lender to make any
Loan and of the Agent to issue any Lender Letter of Credit or Letter of Credit
Participation Agreement, is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing or issuance date:
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(a) Notice of Borrowing. The Agent shall have received a Notice of
Borrowing, in accordance with Section 1.5;
(b) Continuation of Representations and Warranties. The representations and
warranties made by the Borrower contained in Article III shall be true and
correct on and as of such Borrowing or issuance date with the same effect as if
made on and as of such Borrowing or issuance date (except to the extent such
representations and warranties (i) expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier date, or (ii) are not
true and correct due to events or conditions, the occurrence or existence of
which are not prohibited by this Agreement or the other Loan Documents and which
do not, in and of themselves, constitute a Default or an Event of Default);
(c) No Existing Default. No Default or Event of Default shall exist or
shall result from such Borrowing or issuance; and
(d) Subsidiaries. Borrower shall have pledged the stock or other equity
interest of each of its Subsidiaries to the Agent, for the benefit of Agent and
the Lenders, and shall have delivered, or caused to be delivered, to the Agent
the items described in subsection 2.1(d)(iii) and, to the extent not previously
delivered, the items described in subsections 2.1(b) and 2.1(c), with respect to
each such Subsidiary. In addition, each such Subsidiary shall have guaranteed
the Obligations and shall have granted to the Agent, for the benefit of Agent
and the Lenders, a security interest in all of such Subsidiary's Property to
secure such guaranty.
(e) Leverage. After giving effect to the making of any Loan or issuance of
any Lender Letter of Credit or Letter of Credit Participation Agreement, the
ratio of (i) Borrower's Indebtedness (as defined in Exhibit 4.2(b)) as of such
Borrowing or issuance date to (ii) Adjusted EBITDA (as defined in Exhibit
4.2(b)) for the most recent twelve (12) month period ending on or prior to such
date for which financial statements have been delivered pursuant to subsection
4.1(b) hereof, does not exceed the then applicable maximum Leverage Ratio
pursuant to Section 6.2 hereof.
Each Notice of Borrowing submitted by the Borrower hereunder shall constitute a
representation and warranty by the Borrower hereunder, as of the date of each
such notice or application and as of the date of each Borrowing or issuance that
the conditions in Section 2.2 are satisfied.
2.3 Conditions to Certain Loans. In the event the proceeds of the Revolving
Loan are to be used to finance all or a portion of the purchase price of a
Permitted Acquisition, the obligations of each Lender to make such Loan is
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing date:
(a) Evidence of Perfected First Priority Security Interest. With respect to
the Target acquired or financed with the proceeds of a Loan, and prior to or
simultaneously with the funding of such Loan, the Agent shall have been granted,
for the benefit of Agent and the Lenders, a first priority Lien on and security
interest in such Target thereof, subject only to Permitted Liens, and shall have
received, without limitation, (a) the items described in subsection 2.1(d)(ii)
and Section 4.11, and (b) duly executed uniform commercial code financing
statements or amendments to existing financing statements with respect to such
Target, in form and
17
substance reasonably satisfactory to the Agent and which, upon filing, shall
perfect the first priority security interest of the Agent, for the benefit of
Agent and the Lenders, in such Property to the extent such security interest can
be perfected by filing such financing statements. In the event real Property) is
being acquired in connection with such Acquisition, prior to or simultaneously
with the funding of such Loan, the Agent shall have received (x) to the extent
not encumbered with a Lien permitted under subsection 5.1(h), a fully executed
Mortgage, in form and substance reasonably satisfactory to the Agent together
with an A.L.T.A. lender's title insurance policy issued by a title insurer
reasonably satisfactory to the Agent, in form and substance and in an amount
reasonably satisfactory to the Agent insuring that the Mortgage is a valid and
enforceable first priority Lien on the respective Property, free and clear of
all defects, encumbrances and Liens other than Permitted Liens, (y) to the
extent not encumbered with a Lien permitted under subsection 5.1(h), then
current A.L.T.A. surveys, certified to the Agent by a licensed surveyor
sufficient to allow the issuer of the lender's title insurance policy to issue
such policy without a survey exception and (z) an environmental site assessment
prepared by a qualified firm reasonably acceptable to the Agent and the Required
Lenders, in form and substance reasonably satisfactory to the Agent and the
Required Lenders.
(b) Approval. Such Acquisition is a Permitted Acquisition.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and each Lender that the
following are, and after giving effect to the Related Transactions will be,
true, correct and complete:
3.1 Corporate Existence and Power. Holdings, the Borrower and each
Subsidiary of Borrower:
(a) is a corporation, limited liability company or limited partnership, as
applicable, duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, as applicable;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and execute, deliver, and perform its obligations under the Loan Documents and
the Related Agreements to which it is a party;
(c) is duly qualified as a foreign corporation, limited liability company
or limited partnership, as applicable, and licensed and in good standing, under
the laws of each jurisdiction where its ownership, lease or operation of
Property or the conduct of its business requires such qualification or license;
and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d) above, to the
extent that the failure to do so could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
3.2 Corporate Authorization; No Contravention.
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(a) The execution, delivery and performance by (i) the Borrower of this
Agreement and (ii) Holdings, Borrower and each Subsidiary of Borrower, as
applicable, of the other Loan Document and Related Agreements to which such
Person is party, have been duly authorized by all necessary action, and do not
and will not:
(i) contravene the terms of any of that Person's Organization
Documents;
(ii) conflict with or result in any material breach or
contravention of, or result in the creation of any Lien under, any
document evidencing any material Contractual Obligation to which such
Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its Property is
subject; or
(iii) violate any material Requirement of Law in any material
respect.
(b) Schedule 3.2 sets forth the authorized equity securities of each of
Borrower, and as of the Closing Date, each Subsidiary of Borrower and Holdings.
All issued and outstanding equity securities of each of Holdings, Borrower and
each Subsidiary of Borrower are duly authorized and validly issued, fully paid,
non-assessable, and, with respect to equity securities of Borrower and its
Subsidiaries, are free and clear of all Liens other than those in favor of
Agent, for the benefit of Agent and Lenders, and other Permitted Liens. All such
securities were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. All of the issued and outstanding equity
securities of Borrower is owned by Holdings. As of the Closing Date, all of the
issued and outstanding equity securities of each Subsidiary of Borrower is owned
by Borrower. As of the Closing Date, all of the issued and outstanding equity
securities of Holdings is owned by the Persons and in the amounts set forth on
Schedule 3.2. Except as set forth on Schedule 3.2, there are no pre-emptive or
other outstanding rights, options, warrants, conversion rights or other similar
agreements or understandings for the purchase or acquisition of any shares of
capital stock, membership interests or other securities of Borrower, any of its
Subsidiaries and, as of the Closing Date, Holdings.
3.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Holdings, the
Borrower or any of Borrower's Subsidiaries of this Agreement, any other Loan
Document or any Related Agreement except (a) for recordings and filings in
connection with the Liens granted to the Agent under the Collateral Documents,
(b) those obtained or made on or prior to the Closing Date and (c) in the case
of any Related Agreement, those which, if not obtained or made, could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
3.4 Binding Effect. This Agreement, each other Loan Document and each
Related Agreement to which Holdings, the Borrower or any of Borrower's
Subsidiaries is a party constitute the legal, valid and binding obligations of
Holdings, the Borrower and each such Subsidiary which is a party thereto,
enforceable against such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
19
or similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
3.5 Litigation. Except as specifically disclosed in Schedule 3.5, there are
no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Borrower, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against Holdings, the
Borrower, or Borrower's Subsidiaries or any of their respective Properties
which:
(a) purport to pertain to this Agreement or any other Loan Document, or any
of the transactions contemplated hereby; or
(b) seeks to restrain, enjoin, or prevent the consummation of or
performance of any Person`s obligations under, any Related Agreement; or
(c) if determined adversely to Holdings, Borrower or any of Borrower's
Subsidiaries, would reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement, any other
Loan Document or any Related Agreement, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
3.6 No Default. No Default or Event of Default exists or would result from
the grant or perfection of the Agent's Liens on the Collateral or the
consummation of the Related Transactions. Neither Holdings, the Borrower nor any
of Borrower's Subsidiaries is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect or
that would, if such default had occurred after the Closing Date, create an Event
of Default under subsection 7.1(e).
3.7 ERISA Compliance.
(a) Schedule 3.7 lists all Qualified Plans and Multiemployer Plans.
Borrower and each of its Subsidiaries is in compliance in all material respects
with all requirements of each Plan, and each Plan complies in all material
respects, and is operated in compliance in all material respects, with all
applicable provisions of law. Borrower is not aware, after due inquiry, of any
item of non-compliance which could potentially result in the loss of Plan
qualification or tax-exempt status, or give rise to a material excise tax or
other penalty imposed by a Governmental Authority. No material proceeding,
claim, lawsuit and/or investigation is pending concerning any Plan. All required
contributions have been and will be made in accordance with the provisions of
each Qualified Plan and Multiemployer Plan, and with respect to Borrower or any
ERISA Affiliate, there are, have been and will be no material Unfunded Pension
Liabilities or Withdrawal Liabilities.
20
(b) No ERISA Event has occurred or is expected to occur with respect to any
Qualified Plan, Multiemployer Plan or Plan.
(c) Members of the Controlled Group currently comply and have complied in
all material respects with the notice and continuation coverage requirements of
Section 4980B of the Code.
3.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
intended to be and shall be used solely for the purposes set forth in and
permitted by Section 4.10, and are intended to be and shall be used in
compliance with Section 5.8. Neither the Borrower nor any of its Subsidiaries is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
Proceeds of the Loans shall not be used for the purpose of purchasing or
carrying Margin Stock.
3.9 Title to Properties. The Borrower and each of its Subsidiaries have
good record and marketable title in fee simple to, or valid leasehold interests
in, all real Property necessary in the ordinary conduct of their respective
businesses, except for Permitted Liens. The Property of the Borrower and its
Subsidiaries is subject to no Liens, other than Permitted Liens.
3.10 Taxes. Holdings, the Borrower and Borrower's Subsidiaries have filed
all federal and other material tax returns and reports required to be filed, and
have paid all federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their Properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently prosecuted and for which adequate
reserves have been provided in accordance with GAAP and, to Borrower's
knowledge, no notice of Lien has been filed or recorded. To Borrower's
knowledge, there is no proposed tax assessment against the Borrower or any of
its Subsidiaries which would, if the assessment were made, either individually
or in the aggregate, have a Material Adverse Effect.
3.11 Financial Condition.
(a) Each of (i) the audited consolidated balance sheet of the Borrower and
its Subsidiaries dated December 31, 2001, and the related audited consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal year ended on that date and (ii) the unaudited interim consolidated
balance sheet of Borrower and its Subsidiaries dated October 31, 2002 and the
related unaudited consolidated statements of income, shareholders' equity and
cash flows for the ten (10) months then ended:
(x) were prepared in accordance with GAAP consistently applied
throughout the respective periods covered thereby, except as otherwise
expressly noted therein, subject to, in the case of the unaudited interim
financial statements, normal year-end adjustments and the lack of footnote
disclosures; and
(y) present fairly in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries as of the dates thereof and
results of operations for the periods covered thereby.
21
(b) Since December 31, 2001, there has been no Material Adverse Effect.
(c) Borrower and its Subsidiaries have no Indebtedness other than
Indebtedness permitted pursuant to Section 5.5 and have no Contingent
Obligations other than Contingent Obligations permitted pursuant to Section 5.9.
(d) The projections delivered to Agent and Lenders under subsection 2.1(s)
have been prepared by the Borrower in good faith and are based on reasonable
estimates and assumptions believed by the Borrower to be reasonable in light of
the conditions which existed at the time the projections were prepared and as of
the Closing Date.
3.12 Environmental Matters.
(a) The on-going operations of the Borrower and each of its Subsidiaries
comply in all respects with all Environmental Laws except for any such
non-compliance which would not (if enforced in accordance with applicable law)
reasonably be expected to result in, either individually or in the aggregate, a
Material Adverse Effect.
(b) The Borrower and each of its Subsidiaries have obtained all licenses,
permits, authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective Ordinary Course of
Business, all such Environmental Permits are in good standing, and the Borrower
and each of its Subsidiaries are in compliance with all material terms and
conditions of such Environmental Permits, except where the failure to obtain, to
maintain in good standing, or to be in compliance with such Environmental
Permits would not reasonably be expected to result in, either individually or in
the aggregate, a Material Adverse Effect.
(c) None of the Borrower, any of its Subsidiaries or any of their
respective present Property or operations, is subject to any outstanding written
order from or agreement with any Governmental Authority, nor subject to any
judicial or docketed administrative proceeding, respecting any liability
relating to any Environmental Law, Environmental Claim or Hazardous Material.
(d) There are no Hazardous Materials existing with respect to any Property,
or arising from operations prior to the Closing Date, of the Borrower or any of
its Subsidiaries that would reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect. In addition,
neither the Borrower nor any of its Subsidiaries has any underground storage
tanks (i) that are not properly registered or permitted under applicable
Environmental Laws, or (ii) that are leaking or disposing of Hazardous
Materials.
3.13 Collateral Documents. All representations and warranties of Holdings,
the Borrower, any of Borrower's Subsidiaries or any other party to any
Collateral Document (other than the Agent and/or any Lender) contained in the
Collateral Documents are true and correct in all material respects as of the
date made or deemed made.
3.14 Regulated Entities. None of the Borrower, any Person controlling the
Borrower, or any Subsidiary of the Borrower, is (a) an "investment company"
within the meaning of the
22
Investment Company Act of 1940; or (b) subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other federal or state
statute or regulation limiting its ability to incur Indebtedness.
3.15 Solvency. The Borrower, individually, is, and Holdings, the Borrower
and Borrower's Subsidiaries, on a consolidated basis, are, Solvent.
3.16 Labor Relations. There are no strikes, lockouts or other labor
disputes against the Borrower or any of its Subsidiaries, or, to the best of the
Borrower's knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries, in any case which would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect and no significant
unfair labor practice complaint is pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them before any Governmental Authority in any case which would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
3.17 Copyrights, Patents, Trademarks and Licenses, etc. Schedule 3.17
identifies all registered United States patents, trademarks, service marks,
trade names and copyrights, and all registrations and applications for
registration thereof and all licenses thereof, owned or held by Borrower or any
of its Subsidiaries on the Closing Date after giving effect to the Related
Transactions, and identifies the jurisdictions in which such registrations and
applications have been filed. Except as otherwise disclosed in Schedule 3.17, as
of the Closing Date, Borrower and its Subsidiaries are the sole beneficial
owners of, or have the right to use, free from any restrictions, claims, rights
encumbrances or burdens, the intellectual property identified on Schedule 3.17
and all other processes, designs, formulas, computer programs, computer software
packages, trade secrets, inventions, product manufacturing instructions,
technology, research and development, know-how and all other intellectual
property that are necessary for the operation of Borrower's and its
Subsidiaries' businesses as being operated on the Closing Date after giving
effect to the Related Transactions. Each patent, trademark, service ▇▇▇▇, trade
name, copyright and license listed on Schedule 3.17 is in full force and effect
except to the extent the failure to be in effect will not and would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. Except as set forth in Schedule 3.17, to the best
knowledge of Borrower, as of the Closing Date (a) none of the present or
contemplated products or operations of Borrower or its Subsidiaries infringes
any patent, trademark, service ▇▇▇▇, trade name, copyright, license of
intellectual property or other right owned by any other Person, and (b) there is
no pending or threatened claim or litigation against or affecting Borrower or
any of its Subsidiaries contesting the right of any of them to manufacture,
process, sell or use any such product or to engage in any such operation.
except, in the case of clauses (a) and (b), for claims and/or litigation which
will not and could not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect. None of the trademark registrations
set forth on Schedule 3.17 is an "intent-to-use" registration.
3.18 Subsidiaries. As of the Closing Date, the Borrower has no Subsidiaries
or equity investments in any other corporation or entity other than those
specifically disclosed in Schedule 3.2.
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3.19 Brokers' Fees; Transaction Fees. Except as set forth in Schedule 3.19,
neither the Borrower nor any of its Subsidiaries has any obligation to any
Person in respect of any finder's, broker's or investment banker's fee in
connection with the transactions contemplated hereby other than fees to Agent
and Lenders.
3.20 Insurance. The Borrower and each of its Subsidiaries and their
respective Properties are insured with financially sound and reputable insurance
companies which are not Affiliates of the Borrower, in such amounts, with such
deductibles and covering such risks as Borrower deems appropriate. A true and
complete listing of such insurance, including issuers, coverages and
deductibles, as of the Closing Date, is attached hereto as Schedule 3.20.
3.21 Full Disclosure. None of the representations or warranties made by
Holdings, the Borrower or any of the Subsidiaries of Borrower in the Loan
Documents as of the date such representations and warranties are made or deemed
made, and, subject to the last sentence of this Section 3.21, none of the
statements concerning Holdings, Borrower or any of their respective Subsidiaries
contained in each exhibit, report, statement or certificate furnished by or on
behalf of Holdings, the Borrower or any of the Subsidiaries of Borrower pursuant
to the Loan Documents, (including the offering and disclosure materials, if any,
delivered by or on behalf of the Borrower to the Lenders prior to the Closing
Date), when taken as a whole, contains any untrue statement of a material fact
or omits any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they are
made, not materially misleading as of the time when made or delivered. Agent and
Lenders recognize that the projections delivered pursuant to this Agreement are
not to be viewed as fact, that actual results may vary from such projections and
that Borrower does not make any representation that such projections will be
realized.
3.22 Related Agreements. As of the Closing Date, (i) each of the
representations and warranties contained in each of the Purchase Agreement and
the Senior Subordinated Notes Indenture made by Borrower is true, correct and
complete in all material respects and (ii) each of the representations and
warranties contained in the Recapitalization Agreement made by each of Borrower
and Holdings is true, correct and complete in all material respects.
ARTICLE IV - AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:
4.1 Financial Statements. The Borrower shall maintain, and shall cause each
of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit the
preparation of financial statements in conformity with GAAP (provided that
monthly financial statements shall not be required to have footnote disclosure
and are subject to normal year-end adjustments). The Borrower shall deliver to
the Agent and each Lender:
24
(a) as soon as available, but not later than one hundred five (105) days
after the end of each fiscal year, a copy of the audited consolidated balance
sheets of Borrower as at the end of such year and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, and accompanied by the unqualified opinion (without any
going concern qualification or exception) of any "Big Four" or other
nationally-recognized independent public accounting firm reasonably acceptable
to the Agent which report shall state that such consolidated financial
statements present fairly in all material respects the financial position for
the periods indicated in conformity with GAAP applied on a basis consistent with
prior years;
(b) as soon as available, but not later than thirty (30) days after the end
of each fiscal month of each year commencing November 2002, a copy of the
unaudited consolidated and, if all of Borrower's Subsidiaries in existence as of
the date hereof have not been merged into Borrower or liquidated as permitted
under Section 5.3 within twelve (12) months after the date hereof, consolidating
balance sheets of the Borrower and each of Borrower's Subsidiaries, and the
related consolidated and, to the extent required above, consolidating statements
of income, and cash flows as of the end of such month and for the portion of the
fiscal year then ended, all certified on behalf of Borrower by an appropriate
Responsible Officer as being complete and correct in all material respects and
fairly presenting in all material respects, in accordance with GAAP, the
financial position and the results of operations of the Borrower and the
Borrower's Subsidiaries, subject to normal year-end adjustments and absence of
footnote disclosure.
4.2 Certificates; Borrowing Base Certificates; Other Information. The
Borrower shall furnish to the Agent and each Lender:
(a) concurrently with the delivery of the annual financial statements
referred to in subsection 4.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in subsections 4.1(a) and 4.1(b) above, a fully and properly completed
compliance certificate ("Compliance Certificate") in the form of Exhibit 4.2(b),
certified on behalf of Borrower by a Responsible Officer;
(c) promptly after the same are sent, copies of all financial statements
and reports which Holdings sends to its shareholders or members, as applicable,
generally; and promptly after the same are filed, copies of all financial
statements and regular, periodic or special reports which Holdings and/or the
Borrower may make to, or file with, the Securities and Exchange Commission or
any successor or similar Governmental Authority;
(d) as soon as available and in any event within thirty (30) days after the
end of each calendar month and no later than five (5) days prior to the
consummation of a Permitted Acquisition, a Borrowing Base Certificate, certified
on behalf of Borrower by a Responsible Officer, setting forth the Borrowing Base
of Borrower as at the end of the most-recently ended calendar month;
25
(e) together with each delivery of financial statements pursuant to
subsections 4.1(a) and 4.1(b) (i) a management report, in reasonable detail,
signed by the chief financial officer of the Borrower, describing the operations
and financial condition of the Borrower and Borrower's Subsidiaries for the
month and the portion of the fiscal year then ended (or for the fiscal year then
ended in the case of annual financial statements), and (ii) a report setting
forth in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the most
recent projections for the current fiscal year delivered pursuant to subsection
4.2(g) and discussing the reasons for any significant variations;
(f) concurrently with delivery thereof to the Trustee, copies of the
certificates delivered pursuant to Sections 4.04 and 4.11(c) of the Senior
Subordinated Notes Indenture;
(g) as soon as available and in any event no later than thirty (30) days
after the first day of each fiscal year of the Borrower, projections of the
Borrower's (and its Subsidiaries') consolidated financial performance for such
fiscal year on a month by month basis;
(h) annually, concurrently with the Borrower's delivery of the projections
under subsection 4.2(g), the Borrower shall supplement in writing and deliver to
the Agent revisions of and supplements to the Schedules hereto related to
Article III hereof to the extent (i) pertaining to representations and
warranties which do not expressly relate to the Closing Date and (ii) necessary
to disclose new or changed facts or circumstances after the Closing Date with
respect thereto; provided that delivery or receipt of such subsequent disclosure
shall not constitute a waiver by the Agent or any Lender or a cure of any
Default or Event of Default resulting in connection with the matters disclosed;
(i) promptly upon receipt thereof, copies of any reports submitted by the
Borrower's certified public accountants in connection with each annual, interim
or special audit or review of any type of the financial statements or internal
control systems of the Borrower made by such accountants, including any comment
letters submitted by such accountants to management of the Borrower in
connection with their services;
(j) from time to time, if the Agent or any Lender determines in good faith
that obtaining appraisals is necessary in order for the Agent or any Lender to
comply with applicable laws or regulations, and at any time if an Event of
Default shall have occurred and be continuing, the Agent may, or may require the
Borrower to, in either case at the Borrower's expense, obtain appraisals in form
and substance and from appraisers reasonably satisfactory to the Agent stating
the then current fair market value of all or any portion of the real or personal
Property of the Borrower or any of its Subsidiaries; and
(k) promptly, such additional business, financial, corporate affairs,
perfection certificates and other information, in each case, regarding Holdings
or any of its Subsidiaries as the Agent may from time to time reasonably
request.
4.3 Notices. The Borrower shall notify promptly the Agent and each Lender
of each of the following (and in no event later than three (3) Business Days
after a Responsible Officer becoming aware thereof):
26
(a) the occurrence or existence of any Default or Event of Default, or any
event or circumstance that would reasonably be likely to become an Event of
Default due to a failure to comply with any provision of Article VI hereof;
(b) any breach or non-performance by Holdings or any of its Subsidiaries
of, or any default by Holdings or any of its Subsidiaries under, any Contractual
Obligation of Holdings or any of its Subsidiaries, or any violation of, or
non-compliance with, any Requirement of Law by Holdings or any of its
Subsidiaries, which could reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect, including a description of
such breach, non-performance, default, violation or non-compliance and the
steps, if any, Holdings or such Subsidiary has taken, is taking or proposes to
take in respect thereof;
(c) any dispute, litigation, investigation, proceeding or suspension which
may exist at any time between Holdings or any of its Subsidiaries and any
Governmental Authority which could reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect;
(d) the commencement of, or any material development in, any litigation or
proceeding affecting the Holdings, Borrower or any of Borrower's Subsidiaries
(i) in which the amount of damages claimed is $1,000,000 (or its equivalent in
another currency or currencies) or more, (ii) in which injunctive or similar
relief is sought and which would reasonably be expected to have a Material
Adverse Effect, or (iii) in which the relief sought is an injunction or other
stay of the performance of this Agreement, any other Loan Document or any
Related Agreement;
(e) any of the following if the same would reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect: (i) any
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened against the Borrower or any of its
Subsidiaries or any of their respective Properties pursuant to any applicable
Environmental Laws, (ii) any other Environmental Claims, and (iii) any
environmental or similar condition on any real Property adjoining the Property
of the Borrower or any Subsidiary of Borrower that could reasonably be
anticipated to cause Borrower's or any of its Subsidiaries' Property or any part
thereof to be subject to any material restrictions on the ownership, occupancy,
transferability or use of such Property under any Environmental Laws;
(f) any of the following if the same would reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect, together
with a copy of any notice with respect to such event that may be required to be
filed with a Governmental Authority and any notice delivered by a Governmental
Authority to the Borrower or any member or its Controlled Group with respect to
such event:
(i) an ERISA Event;
(ii) the adoption of any new Qualified Plan that is subject to
Title IV of ERISA or Section 412 of the Code by any member of the
Controlled Group;
27
(iii) the adoption of any amendment to a Qualified Plan that is
subject to Title IV of ERISA or Section 412 of the Code, if such
amendment results in a material increase in benefits or unfunded
liabilities; or
(iv) the commencement of contributions by any member of the
Controlled Group to any Multiemployer Plan or any Qualified Plan that
is subject to Title IV of ERISA or Section 412 of the Code;
(g) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements of the Borrower delivered to the Agent and Lenders
pursuant to this Agreement;
(h) any material change in accounting policies or financial reporting
practices by the Borrower or any of its Subsidiaries;
(i) any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or
involving the Borrower or any of its Subsidiaries if the same would reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect;
(j) the creation, establishment or acquisition of any Subsidiary; and
(k) the occurrence of a default or event of default under the Senior
Subordinated Note Indenture.
Each notice pursuant to this Section shall be accompanied by a written statement
by a Responsible Officer on behalf of Borrower setting forth details of the
occurrence referred to therein, and stating what action the Borrower proposes to
take with respect thereto and at what time. Each notice under subsection 4.3(a)
shall describe with particularity any and all clauses or provisions of this
Agreement or other Loan Document that have been breached or violated.
4.4 Preservation of Corporate Existence, Etc. The Borrower shall, and shall
cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its organizational
existence and good standing under the laws of its state or jurisdiction of
incorporation, organization or formation, as applicable, except, with respect to
Borrower's Subsidiaries, in connection with transactions permitted by Section
5.3;
(b) preserve and maintain in full force and effect all rights, privileges,
qualifications, permits, licenses and franchises necessary in the normal conduct
of its business except in connection with transactions permitted by Section 5.3
and sales of assets permitted by Section 5.2 and except as would not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect;
(c) use its reasonable efforts, in the Ordinary Course of Business, and in
the reasonable business judgment of the Borrower, to preserve its business
organization and preserve
28
the goodwill and business of the customers, suppliers and others having material
business relations with it; and
(d) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
4.5 Maintenance of Property. The Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, and preserve all of its Property which is
used or useful in its business in good working order and condition, ordinary
wear and tear and damage by casualty (subject to Borrower's obligation to repair
to the extent insurance proceeds therefrom are not used to prepay Loans)
excepted, and shall make all necessary repairs thereto and renewals and
replacements thereof in each case except where the failure to do so would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
4.6 Insurance. The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to its Properties and business, in all material respects
consistent with that described in Schedule 3.20. All property damage and
casualty insurance shall name the Agent as loss payee/mortgagee and all
liability insurance shall name the Agent and the Lenders as additional insureds.
Subject to the provisions of subsection 1.8(c), to the extent Agent receives Net
Proceeds of property damage or casualty insurance, Agent shall make such Net
Proceeds available to Borrower to repair and reconstruct Borrower's Property to
the extent covered thereby. Upon request of the Agent or any Lender, the
Borrower shall furnish the Agent, with sufficient copies for each Lender, at
reasonable intervals (but not more than once per calendar year) a certificate of
a Responsible Officer on behalf of Borrower (and, if requested by the Agent, any
insurance broker of the Borrower) setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section 4.6. Unless Borrower provides Agent with evidence of the insurance
coverage required by this Agreement, Agent may purchase insurance at Borrower's
expense to protect Agent's and Lenders' interests in Borrower's and its
Subsidiaries' Properties. This insurance may, but need not, protect Borrower's
and its Subsidiaries' interests. The coverage that Agent purchases may not pay
any claim that Borrower or any Subsidiary of Borrower makes or any claim that is
made against Borrower or any Subsidiary of Borrower in connection with said
Property. Borrower may later cancel any insurance purchased by Agent, but only
after providing Agent with evidence that Borrower has obtained insurance as
required by this Agreement. If Agent purchases insurance, Borrower will be
responsible for the costs of that insurance, including interest and any other
charges Agent may impose in connection with the placement of insurance, until
the effective date of the cancellation or expiration of the insurance. The costs
of the insurance may be added to the Obligations. The costs of the insurance may
be more than the cost of insurance Borrower may be able to obtain on its own.
4.7 Payment of Obligations. The Borrower shall, and shall cause its
Subsidiaries to, pay, discharge and perform:
(a) all material tax liabilities, assessments and governmental charges or
levies upon it or its Properties or assets, unless the same are being contested
in good faith by appropriate proceedings diligently prosecuted which stay the
enforcement of any Lien and for which
29
adequate reserves in accordance with GAAP are being maintained by the Borrower
or such Subsidiary;
(b) all material lawful claims which, if unpaid, would by law become a Lien
(other than Permitted Liens) upon its Property unless the same are being
contested in good faith by appropriate proceedings diligently prosecuted which
stay the imposition or enforcement of the Lien and for which adequate reserves
in accordance with GAAP are being maintained by Borrower or such Subsidiary;
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained herein and/or in any instrument or agreement
evidencing such Indebtedness, the non-payment of all or any portion of which
would result in an Event of Default under subsection 7.1(e); and
(d) all obligations under any Contractual Obligation (other than
obligations with respect to Indebtedness) to which Borrower or any of its
Subsidiaries is bound, or to which it or any of its Properties is subject,
except where the failure to perform would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
4.8 Compliance with Laws. The Borrower shall comply, and shall cause each
of its Subsidiaries to comply, in all material respects, with all Requirements
of Law of any Governmental Authority having jurisdiction over it or its business
(including, without limitation, all Environmental Laws), except (a) (i) such as
may be contested in good faith by appropriate proceedings diligently prosecuted
without risk of loss of any Collateral, (ii) as to which a bona fide dispute
exists, and (iii) for which appropriate reserves have been established on the
Borrower's financial statements, or (b) where the failure to comply could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
4.9 Inspection of Property and Books and Records. The Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Borrower and such Subsidiaries.
The Borrower shall permit, and shall cause each of its Subsidiaries to permit,
representatives and independent contractors of the Agent (at the expense of the
Borrower, provided that Borrower shall be responsible for such expenses not more
than one (1) time per year unless an Event of Default has occurred and is
continuing), or any Lender accompanying Agent (at such Lender's expense unless
an Event of Default shall have occurred and be continuing), to visit and inspect
any of their respective Properties, to conduct appraisals, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants (Borrower shall be afforded the opportunity to be present at any
meeting with Borrower's independent public accountants), at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrower; provided, however, when an Event
of Default exists the Agent or any Lender may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.
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4.10 Use of Proceeds. The Borrower shall use the proceeds of the Loans
solely as follows: (a) to partially refinance the Prior Indebtedness, (b) to pay
costs and expenses of the Related Transactions and costs and expenses required
to be paid pursuant to Section 2.1, (c) to consummate Permitted Acquisitions and
(d) for working capital and other general corporate purposes not in
contravention of any Requirement of Law and not in violation of this Agreement.
4.11 Further Assurances.
(a) The Borrower shall ensure that all written information, exhibits and
reports taken as a whole furnished by Sponsor (with respect to the transactions
contemplated hereby), Holdings, Borrower or any of its Subsidiaries concerning
Holdings, Borrower or any of their respective Subsidiaries, to the Agent or the
Lenders do not and will not contain any untrue statement of a material fact and
do not and will not omit to state any material fact or any fact necessary to
make the statements contained therein not materially misleading in light of the
circumstances in which made, and will promptly disclose to the Agent and the
Lenders and correct any defect or error that may be discovered therein or in any
Loan Document or in the execution, acknowledgement or recordation thereof. Agent
and Lenders recognize that the projections delivered pursuant to this Agreement
are not to be viewed as fact, that actual results may vary from such projections
and that Borrower does not make any representation that such projections will be
realized.
(b) Promptly upon written request by Agent, the Borrower shall (and shall
cause each of its Subsidiaries to) take such additional actions as the Agent may
reasonably require from time to time in order (i) to subject to the Liens
created by any of the Collateral Documents any of the Properties, rights or
interests covered by any of the Collateral Documents, (ii) to perfect and
maintain the validity, effectiveness and priority of any of the Collateral
Documents and the Liens intended to be created thereby, and (iii) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Agent and Lenders the rights granted or now or hereafter intended to be granted
to the Agent and the Lenders under any Loan Document or under any other document
executed in connection therewith. Without limiting the generality of the
foregoing and except as otherwise approved in writing by the Lenders, Borrower
shall (x) cause each of its Subsidiaries to guaranty the Obligations, (y) cause
each such Subsidiary to grant to Agent, for the benefit of Agent and Lenders, a
security interest in all of such Subsidiary's Property to secure such guaranty
and (z) deliver to Agent, such opinions of counsel as Agent may reasonably
request. Furthermore and except as otherwise approved in writing by the Lenders,
Borrower shall pledge the stock or other equity interests of each of its
Subsidiaries to Agent, for the benefit of Agent and Lenders, to secure the
Obligations. In connection with each pledge of stock or other equity interests,
Borrower shall deliver, or cause to be delivered, to Agent, the items described
in subsection 2.1(d)(iii), if applicable, and such opinions of counsel as Agent
may reasonably request.
ARTICLE V - NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:
31
5.1 Limitation on Liens. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
Property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
(a) any Lien existing on the Property of the Borrower or its Subsidiaries
on the Closing Date and set forth in Schedule 5.1 securing Indebtedness
outstanding on such date and permitted by subsection 5.5(c), including
replacement Liens on the Property currently subject to such Liens securing
Indebtedness permitted by subsection 5.5(c);
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges (i)
which are not delinquent or remain payable without penalty, or (ii) the
non-payment of which is permitted by Section 4.7;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the Ordinary Course of Business
which are not delinquent for more than ninety (90) days or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings diligently prosecuted, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject thereto and for which
adequate reserves in accordance with GAAP are being maintained;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the Ordinary Course of Business (i) in connection with
workers' compensation, unemployment insurance and other social security
legislation, (ii) to secure the performance of tenders, statutory obligations,
surety, stay, customs and appeals bonds, bids, leases, governmental contract,
trade contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money) or
(iii) to secure liability to insurance carriers;
(f) Liens consisting of judgment or judicial attachment liens, the
existence of which does not constitute an Event of Default under subsections
7.1(i) or 7.1(j);
(g) easements, rights-of-way, zoning and other restrictions, minor defects
or other irregularities in title, and other similar encumbrances incurred in the
Ordinary Course of Business which, either individually or in the aggregate, and
which do not in any case materially detract from the value of the Property
subject thereto or interfere in any material respect with the ordinary conduct
of the businesses of the Borrower and/or its Subsidiaries;
(h) Liens on any Property acquired or held by the Borrower or its
Subsidiaries in the Ordinary Course of Business, securing Indebtedness incurred
or assumed for the purpose of financing (or refinancing) all or any part of the
cost of acquiring such Property and permitted under subsection 5.5(d); provided
that (i) any such Lien attaches to such Property concurrently with or within
ninety (90) days after the acquisition thereof, (ii) such Lien attaches solely
to the Property so acquired in such transaction, and (iii) the principal amount
of the debt secured thereby does not exceed 100% of the cost of such Property;
32
(i) Liens securing Capital Lease Obligations permitted under subsection
5.5(d);
(j) any interest or title of a lessor, sublessor, licensor or sublicensor
under any lease or license permitted by this Agreement;
(k) Liens arising from precautionary uniform commercial code financing
statements filed under any lease permitted by this Agreement;
(l) rights of set off and bankers' Liens upon deposits of cash (i) held by,
and in favor of, banks and other depository institutions and (ii) in connection
with Permitted Acquisitions;
(m) licenses, sublicenses, leases or subleases granted to third parties in
the Ordinary Course of Business not interfering, individually or in the
aggregate, with the business of the Borrower or any of its Subsidiaries;
(n) Liens arising under, and solely encumbering, repurchase agreements
permitted hereunder;
(o) Liens in favor of collecting banks arising under Section 4-210 of the
Uniform Commercial Code;
(p) other Liens not described above securing obligations other than
Indebtedness provided such Liens do not secure obligations in excess of $250,000
in the aggregate at any one time;
(q) Liens in favor of the ▇▇▇▇▇▇▇▇ Investors on any insurance policy (and
any proceeds thereof) securing Borrower's obligation to make payments under the
Indemnity Agreement; and
(r) Liens securing Rate Contracts permitted hereunder, provided such Rate
Contracts are entered into between Borrower and a Lender or an Affiliate of a
Lender.
5.2 Disposition of Assets. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease
(as lessor), convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any Property (including accounts and notes receivable,
with or without recourse) or enter into any agreement to do any of the
foregoing, except, in each instance, provided the same is permitted, and solely
to the extent permitted, under the Senior Subordinated Notes Indenture:
(a) dispositions of inventory, or dispositions or exchanges of used,
worn-out or surplus assets, all in the Ordinary Course of Business;
(b) dispositions not otherwise permitted hereunder which are made for fair
market value and the mandatory prepayment in the amount of the Net Proceeds of
such disposition is made as and to the extent provided in Section 1.8; provided
that (i) at the time of any disposition, no Event of Default shall then exist or
shall result from such disposition, and (ii) the aggregate fair market value of
all assets so sold by the Borrower and its Subsidiaries, together, shall not
exceed in any fiscal year $750,000;
33
(c) upon not less than five (5) Business Days' prior written notice to
Agent, transfers by Borrower to a Wholly-Owned Subsidiary of Borrower, or by a
Subsidiary of Borrower to Borrower or a Wholly-Owned Subsidiary of Borrower, in
each instance, for bona fide business purposes and, if the transferee is a
Subsidiary of Borrower, Borrower and such Subsidiary shall have complied with
Section 4.11 hereof;
(d) as permitted by Section 5.3 hereof;
(e) sales of Cash Equivalents;
(f) discount or sales on a non-recourse basis of past due receivables in
the Ordinary Course of Business in connection with the collection or compromise
thereof;
(g) Liens permitted pursuant to subsection 5.1(m) hereof;
(h) sales of non-core assets acquired in, and sold within 365 days after
consummation of, a Permitted Acquisition which are made for fair market value
and the mandatory prepayment in the amount of the Net Proceeds of such
disposition is made as and to the extent provided in Section 1.8 provided such
assets are identified as required in clause (b)(4) of the definition of
Permitted Acquisition; and
(i) sales of those Investments permitted pursuant to subsection 5.4(q).
5.3 Consolidations and Mergers. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except (i) upon not
less than five (5) Business Days prior written notice to Agent, any Subsidiary
of the Borrower may merge with, or dissolve or liquidate into, the Borrower or a
Wholly-Owned Subsidiary of Borrower, provided that the Borrower (in the case of
any merger, dissolution or liquidation involving the Borrower) or such
Wholly-Owned Subsidiary shall be the continuing or surviving entity or (ii) in
connection with a Permitted Acquisition.
5.4 Loans and Investments. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, (i) purchase or acquire, or make any
commitment to purchase or acquire, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any other Person,
including the establishment or creation of a Subsidiary, or (ii) make or commit
to make any Acquisitions, or any other acquisition of all or substantially all
of the assets of another Person, or of any business or division of any Person,
including without limitation, by way of merger, consolidation or other
combination or (iii) make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Borrower or any Subsidiary of Borrower but
excluding trade payables, accrued operating expenses, prepaid operating expenses
and accounts receivable, in each instance, incurred, made or arising in the
Ordinary Course of Business (the items described in clauses (i), (ii) and (iii)
are referred to as "Investments"), except for, in each instance, provided the
same is permitted, and solely to the extent permitted, under the Senior
Subordinated Notes Indenture and, with respect to clause (d) below, provided
Borrower demonstrates the same
34
to the reasonable satisfaction of Agent (Agent hereby agreeing to deliver to
each Lender copies of the certificates or other evidence delivered to Agent):
(a) Investments in cash and Cash Equivalents;
(b) extensions of credit by (i) the Borrower to any of its Wholly-Owned
Subsidiaries, (ii) any Wholly-Owned Subsidiary of Borrower to Borrower or (iii)
any Wholly-Owned Subsidiary of Borrower to any other Wholly-Owned Subsidiary of
Borrower provided the obligations of each obligor shall be evidenced by notes,
which notes shall be pledged to Agent, for the benefit of Agent and Lenders;
(c) loans and advances to employees in the Ordinary Course of Business not
to exceed $2,000,000 in the aggregate at any time outstanding;
(d) Permitted Acquisitions;
(e) Investments in customers and account debtors of Borrower or any of its
Subsidiaries received in the Ordinary Course of Business in connection with the
bankruptcy or reorganization, or in settlement of delinquent obligations, of
such Persons, provided such Investments are pledged to Agent, for the benefit of
Agent and Lenders, as security for the obligations;
(f) Investments received as the non-cash portion of consideration received
in connection with transactions permitted pursuant to Section 5.2 provided such
Investments are pledged to Agent, for the benefit of Agent and Lenders, as
security for the Obligations;
(g) Borrower and its Subsidiaries may make pledges and deposits permitted
under this Agreement;
(h) Borrower and its Subsidiaries may hold Investments to the extent such
Investments reflect an increase in the value of the Investments;
(i) Investments consisting of endorsements for collection or deposit in the
Ordinary Course of Business;
(j) Investments in deposit accounts opened in the Ordinary Course of
Business;
(k) Borrower and its Subsidiaries may capitalize or forgive any
Indebtedness owed to it by any of its other Subsidiaries;
(l) creation of, and capital contributions to, Wholly-Owned Subsidiaries
provided Borrower and such Subsidiary shall have complied with the terms and
conditions contained in Section 4.11;
(m) Capital Expenditures permitted hereunder;
(n) Investments in existence on the Closing Date and disclosed on Schedule
5.4;
35
(o) to the extent constituting Investments, Contingent Obligations
permitted hereunder;
(p) loans by Borrower or any of its Wholly-Owned Subsidiaries to Holdings
to the extent constituting Holdings Loans; or
(q) other Investments not listed above in an aggregate amount not to exceed
$500,000.
The amount of any Investment shall be the initial amount thereof less all cash
repayments, returns and distributions received in respect thereof.
5.5 Limitation on Indebtedness. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except, in each instance, provided the same is permitted,
and solely to the extent permitted, under the Senior Subordinated Notes
Indenture:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 5.9;
(c) Indebtedness existing on the Closing Date and set forth in Schedule 5.5
including extensions and refinancings thereof which do not increase the
principal amount of such Indebtedness as of the date of such extension or
refinancing;
(d) Indebtedness not to exceed $5,000,000 in the aggregate at any time
outstanding, consisting of Capital Lease Obligations or secured by Liens
permitted by subsection 5.1(h);
(e) unsecured intercompany Indebtedness permitted pursuant to subsection
5.4(b);
(f) Subordinated Indebtedness not to exceed $150,000,000 in the aggregate
principal amount at any time outstanding evidenced by the Senior Subordinated
Notes issued pursuant to the Senior Subordinated Notes Indenture, plus interest
paid in kind and capitalized interest;
(g) other unsecured Indebtedness not exceeding in the aggregate at any time
outstanding $3,000,000;
(h) Indebtedness for bank overdrafts incurred in the Ordinary Course of
Business that are promptly repaid;
(i) to the extent constituting Indebtedness, obligations secured by Liens
permitted under subsection 5.1(e); and
(j) to the extent constituting Indebtedness, purchase price adjustments in
connection with Permitted Acquisitions.
36
5.6 Transactions with Affiliates. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, enter into any transaction with any
Affiliate of the Borrower or of any such Subsidiary, except:
(a) as expressly permitted by this Agreement;
(b) in the Ordinary Course of Business and pursuant to the reasonable
requirements of the business of the Borrower or such Subsidiary provided that in
the case of this clause (b), upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate of the Borrower or such
Subsidiary; and
(c) transactions described on Schedule 5.6.
5.7 Management Fees and Compensation. The Borrower shall not, and shall not
permit any of its Subsidiaries to, or make any distribution to Holdings to
permit Holdings to, pay any management, consulting or similar fees to any
Affiliate of Holdings or the Borrower or to any officer, director or employee of
Holdings, Borrower or any of Borrower's Subsidiaries or any Affiliate of
Holdings or Borrower except (a) payment of reasonable compensation to officers
and employees for actual services rendered to Borrower and its Subsidiaries in
the Ordinary Course of Business, and (b) payment of directors' fees and
reimbursement of actual out-of-pocket expenses incurred in connection with
attending board of director meetings not to exceed in the aggregate, with
respect to all such fees, $100,000 in any fiscal year of Borrower.
5.8 Use of Proceeds. The Borrower shall not, and shall not suffer or permit
any of its Subsidiaries to, use any portion of the Loan proceeds, directly or
indirectly, to purchase or carry Margin Stock or repay or otherwise refinance
Indebtedness of the Borrower or others incurred to purchase or carry Margin
Stock, or otherwise in any manner which is in contravention of any Requirement
of Law or in violation of this Agreement.
5.9 Contingent Obligations. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Contingent Obligations except in respect of the Obligations and except:
(a) endorsements for collection or deposit in the Ordinary Course of
Business;
(b) Rate Contracts entered into in the Ordinary Course of Business for bona
fide hedging purposes and not for speculation with Agent's prior written
consent;
(c) Contingent Obligations of the Borrower and its Subsidiaries existing as
of the Closing Date and listed in Schedule 5.9, including extension and renewals
thereof which do not increase the amount of such Contingent Obligations as of
the date of such extension or renewal;
(d) Contingent Obligations incurred in the Ordinary Course of Business with
respect to surety and appeal bonds, performance bonds and other similar
obligations;
(e) Contingent Obligations arising under indemnity agreements to title
insurers to cause such title insurers to issue to Agent title insurance
policies;
37
(f) Contingent Obligations arising with respect to customary
indemnification obligations in favor of (i) sellers in connection with Permitted
Acquisitions, (ii) purchasers in connection with transactions permitted under
Section 5.2 and (iii) officers and directors of the Borrower and any of its
Subsidiaries;
(g) Contingent Obligations arising under Lender Letters of Credit and other
letters of credit which are the subject of a Letter of Credit Participation
Agreement;
(h) Contingent Obligations arising under guarantees of the Subordinated
Indebtedness evidenced by the Senior Subordinated Notes; and
(i) Contingent Obligations arising under guarantees made in the Ordinary
Course of Business by Borrower or any of its Subsidiaries of obligations of
Borrower or any of its Subsidiaries, which obligations are otherwise permitted
hereunder.
5.10 Compliance with ERISA. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to:
(a) terminate any Plan subject to Title IV of ERISA so as to result in any
material liability to the Borrower;
(b) permit to exist any ERISA Event, or any other event or condition, which
would reasonably be expected to have a Material Adverse Effect;
(c) make a complete or partial withdrawal (within the meaning of ERISA
Section 4201) from any Multiemployer Plan so as to result in any material
liability to the Borrower;
(d) enter into any new Plan or modify any existing Plan so as to increase
its obligations thereunder which would reasonably be expected to have a Material
Adverse Effect; or
(e) permit the present value of all nonforfeitable accrued benefits under
any Plan (using the actuarial assumptions utilized by the PBGC upon termination
of a Plan) materially to exceed the fair market value of Plan assets allocable
to such benefits, all determined as of the most recent valuation date for each
such Plan.
5.11 Restricted Payments. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, (i) declare or make any dividend payment or
other distribution of assets, Properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock,
partnership interests, membership interests or other equity securities, (ii)
purchase, redeem or otherwise acquire for value any shares of its capital stock,
partnership interests, membership interests or other equity securities or any
warrants, rights or options to acquire such shares, interests or securities now
or hereafter outstanding, (iii) make any payment or prepayment of principal of,
premium, if any, interest, fees, redemption, exchange, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, Subordinated
Indebtedness or (iv) make any payment pursuant to the Indemnity Agreement (the
items described in clauses (i), (ii), (iii) and (iv) above are referred to as
"Restricted Payments"); except
38
that any Wholly-Owned Subsidiary of the Borrower may declare and pay dividends
to the Borrower or any Wholly-Owned Subsidiary of the Borrower, and except that
the Borrower may, in each instance provided the same is permitted, and solely to
the extent permitted, under the Senior Subordinated Notes Indenture and, with
respect to clauses (b) and (f) below, provided Borrower demonstrates the same to
the reasonable satisfaction of Agent (Agent hereby agreeing to deliver to each
Lender copies of the certificates or other evidence delivered to Agent):
(a) declare and make dividend payments or other distributions payable
solely in its common stock or other equity securities;
(b) make distributions to Holdings which are immediately used by Holdings
to redeem from management stockholders, upon termination of employment, shares
of Holdings stock or warrants or options to acquire any such shares, or to make
payments in respect of Management Redemption Notes, provided, in each instance,
all of the following conditions are satisfied:
(i) no Default or Event of Default has occurred and is continuing
or would arise as a result of such Restricted Payment;
(ii) after giving effect to such Restricted Payment, Borrower is
in compliance on a pro forma basis with the covenants set forth in
Article VI, recomputed for the most recent month for which financial
statements have been delivered;
(iii) the aggregate Restricted Payments in cash permitted (x) in
each of the fiscal years ended December 31, 2003 and December 31,
2004, shall not exceed $500,000 for each such fiscal year, minus, in
each instance, the then outstanding principal amount of Holdings Loans
made in such fiscal year in respect thereof, (y) in any fiscal year of
Borrower thereafter shall not exceed $5,000,000 minus the principal
amount of Holdings Loans made in such fiscal year in respect thereof
and (z) during the term of this Agreement shall not exceed $6,000,000
minus the then outstanding principal amount of Holdings Loans made
during the term of this Agreement in respect thereof provided such
$6,000,000 shall be increased to $10,000,000 after such time as
Leverage Ratio (as calculated pursuant to Exhibit 4.2(b)) is not
greater than 2.0 to 1.0 as of the last day of two (2) consecutive
calendar quarters with respect to which Borrower has delivered
financial statements and Compliance Certificates as required pursuant
to subsection 4.1(b) and subsection 4.2(b), respectively; and
(iv) after giving effect to such Restricted Payment, the Maximum
Revolving Loan Balance exceeds the aggregate outstanding principal
balance of Revolving Loans by not less than $5,000,000;
(c) in the event Borrower files a consolidated income tax return with
Holdings, make distributions to Holdings to permit Holdings to pay federal and
state income taxes then due and owing, franchise taxes and other similar
licensing expenses incurred in the Ordinary Course of Business provided that the
amount of such distribution shall not be greater, nor the receipt by
39
Borrower of tax benefits less, than they would have been had Borrower not filed
a consolidated return with Holdings;
(d) pay, as and when due and payable, (i) regularly scheduled payments of
interest, and, if the scheduled maturity of the Loans is extended beyond the
stated maturity of the Senior Subordinated Notes, regularly scheduled payments
of principal at maturity on the Subordinated Indebtedness evidenced by the
Senior Subordinated Notes to the extent permitted under the subordination terms
set forth in the Senior Subordinated Notes Indenture and (ii) regularly
scheduled payments of interest and principal on any other Subordinated
Indebtedness to the extent permitted under the subordination terms with respect
thereto;
(e) make distributions to Holdings which are used by Holdings to pay
operating expenses, professional fees and expenses and director's fees and
expenses, all incurred in the Ordinary Course of Business; provided the
aggregate distribution permitted in any fiscal year of Borrower shall not exceed
$200,000 minus the principal amount of Holdings Loans made in such fiscal year
in respect thereof; and
(f) Borrower may make payments as and when required to be made pursuant to
the Indemnity Agreement provided the following conditions are satisfied:
(i) no Default under subsection 7.1(a) or Event of Default has
occurred and is continuing; and
(ii) after giving effect to such Restricted Payment, Borrower is
in compliance on a pro forma basis with the covenants set forth in
Article VI, recomputed for the most recent month for which financial
statements have been delivered.
Provided, that, the foregoing conditions in this clause (f) need not be
satisfied if such payment under the Indemnity Agreement is made with the
proceeds of insurance obtained for such purpose.
5.12 Change in Business. (a) The Borrower shall not, and shall not permit
any of its Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it on the
date hereof or any business similarly related to or which constitutes a
reasonable extension thereof.
(b) The Borrower shall not permit Holdings to engage in any business
activity or incur any Indebtedness other than (i) the ownership of the equity
interests of Borrower and the ownership of notes issued by officers, directors
or employees in connections with the purchase of stock or options by such
Persons, (ii) the performance of its obligations under the Loan Documents and
the Related Agreements to which it is a party, (iii) the performance of certain
administrative and managerial functions on behalf of itself and its
Subsidiaries, (iv) Indebtedness under Management Redemption Notes and Holdings
Loans and (v) the guaranty of obligations of Borrower and its Subsidiaries
permitted hereunder other than Indebtedness under the Senior Subordinated Notes.
40
5.13 Change in Structure. Except as expressly permitted under Section 5.3,
the Borrower shall not, and shall not permit any of its Subsidiaries to amend
any of its Organization Documents in any material respect or which is adverse to
Agent or Lenders in their capacity as such.
5.14 Accounting Changes. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP or the Securities
and Exchange Commission, or change the fiscal year of the Borrower or of any of
its consolidated Subsidiaries.
5.15 Amendments to Related Agreements and Subordinated Indebtedness.
(a) The Borrower shall not, and shall not permit any of its Subsidiaries
to, (i) amend, supplement, waive or otherwise modify any provision of, any
Related Agreement in a manner adverse to Agent or Lenders or which could
reasonably be expected to have a Material Adverse Effect, or (ii) take or fail
to take any action under any Related Agreement that could reasonably be expected
to have a Material Adverse Effect.
(b) Borrower shall not, and shall not permit any of its Subsidiaries
directly or indirectly to, change or amend the terms of any Subordinated
Indebtedness if the effect of such amendment is to: (i) increase the interest
rate on such Indebtedness other than, with respect to the Senior Subordinated
Notes, in accordance with Section 4 of the Registration Rights Agreement as in
effect on the Closing Date; (ii) shorten the dates upon which payments of
principal or interest are due on such Indebtedness; (iii) add or change in a
manner adverse to Borrower any event of default or add or make more restrictive
any covenant with respect to such Indebtedness; (iv) change in a manner adverse
to Borrower or the Lenders the prepayment provisions of such Indebtedness; (v)
change the subordination provisions thereof (or the subordination terms of any
guaranty thereof); or (vi) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights on the holder of such Indebtedness in a manner
adverse to Borrower, any of its Subsidiaries, Agent or Lenders.
5.16 No Negative Pledges. Borrower will not, and will not permit any of its
Subsidiaries directly or indirectly to, create or otherwise cause or suffer to
exist or become effective any consensual restriction or encumbrance of any kind
on the ability of any such Subsidiary to pay dividends or make any other
distribution on any of such Subsidiary's equity securities or to pay fees,
including management fees, or make other payments and distributions to Borrower
or any of its Subsidiaries, other than restrictions contained herein or in the
Senior Subordinated Notes Indenture with respect to distributions by a
Subsidiary of Borrower which is not a Wholly-Owned Subsidiary of Borrower.
Borrower will not, and will not permit any of its Subsidiaries, directly or
indirectly, to enter into, assume or become subject to any Contractual
Obligation prohibiting or otherwise restricting the existence of any Lien upon
any of its assets in favor of the Agent, whether now owned or hereafter acquired
except in connection with any document or instrument governing Liens permitted
pursuant to subsections 5.1(h), 5.1(i) and 5.1(j) provided that any such
restriction contained therein relates only to the asset or assets subject to
such permitted Liens.
41
5.17 Reserved.
5.18 Designated Senior Indebtedness. Borrower will not, and will not permit
any of its Subsidiaries to, designate any Indebtedness as "Designated Senior
Indebtedness" (as such term is defined in the Senior Subordinated Notes
Indenture).
5.19 Deposit Accounts. Borrower will not, and will not permit any of its
Subsidiaries to, open or maintain any deposit account at any bank or other
financial institution except for deposit accounts (i) which are subject to the
terms and provisions of a Deposit Account Control Agreement or (ii) which have
been established to pay certain operating expenses of Borrower or its
Subsidiaries in the Ordinary Course of Business ("Convenience Accounts"),
provided that (A) the amount deposited in each Convenience Account,
individually, shall at no time exceed $15,000 and (B) the aggregate amount
deposited in all Convenience Accounts shall at no time exceed $500,000. Agent
agrees that it shall not deliver any notice to any depositary party to a Deposit
Account Control Agreement directing such depositary to act pursuant thereto
unless an Event of Default then exists. As soon as reasonably practicable, but
in no event later than February 18, 2003 (the "BofA DACA Termination Date"),
Borrower shall (i) enter into an amendment to that certain Deposit Account
Control Agreement (the "BofA DACA") among Borrower, Agent and Bank of America
("BofA") which, among other things, extends the BofA DACA Termination Date to a
date, and is otherwise in form and substance, reasonably satisfactory to Agent
or (ii) close all Deposit Accounts maintained at BofA and transfer all amounts
deposited in such Deposit Accounts to a bank or financial institution which has
entered into a Deposit Account Control Agreement in form and substance
reasonably satisfactory to Agent.
ARTICLE VI - FINANCIAL COVENANTS
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:
6.1 Capital Expenditures. The Borrower and its Subsidiaries shall not make
or commit to make Capital Expenditures for any fiscal year to exceed five
percent (5.00%) of the aggregate net revenue of Borrower and its Subsidiaries
for such fiscal year; provided, however, in the event Borrower and its
Subsidiaries do not expend the entire Capital Expenditure Limitation in any
fiscal year, Borrower and its Subsidiaries may carry forward to the immediately
succeeding fiscal year 50% of the unutilized portion. All Capital Expenditures
shall first be applied to reduce the applicable Capital Expenditure Limitation
and then to reduce the carry-forward from the previous fiscal year, if any.
"Capital Expenditures" shall be calculated in the manner set forth in Exhibit
4.2(b).
6.2 Leverage Ratio. The Borrower shall not permit its Leverage Ratio for
the twelve month period ending on any date set forth below to be greater than
the maximum ratio set forth in the table below opposite such date:
42
Date Maximum Leverage Ratio
---- ----------------------
March 31, 2003 5.00
June 30, 2003 4.75
September 30, 2003 4.50
December 31, 2003 4.25
March 31, 2004 4.25
June 30, 2004 4.00
September 30, 2004 4.00
December 31, 2004 3.75
March 31, 2005 3.75
June 30, 2005 3.50
September 30, 2005 3.50
December 31, 2005 3.25
March 31, 2006 3.25
June 30, 2006 3.00
September 30, 2006 3.00
December 31, 2006 2.75
March 31, 2007 2.75
June 30, 2007 2.50
September 30, 2007 2.50
December 31, 2007 2.50
March 31, 2008 2.25
June 30, 2008 2.25
September 30, 2008 2.25
December 31, 2008 2.25
"Leverage Ratio" shall be calculated in the manner set forth in Exhibit 4.2(b).
6.3 Fixed Charge Coverage Ratio. The Borrower shall not permit its Fixed
Charge Coverage Ratio for the twelve month period ending on any date set forth
below to be less than the minimum ratio set forth in the table below opposite
such date:
Date Minimum Fixed Charge Ratio
---- --------------------------
March 31, 2003 1.00
June 30, 2003 1.00
September 30, 2003 1.00
December 31, 2003 1.05
March 31, 2004 1.05
43
June 30, 2004 1.05
September 30, 2004 1.05
December 31, 2004 1.05
March 31, 2005 1.05
June 30, 2005 1.05
September 30, 2005 1.05
December 31, 2005 1.05
March 31, 2006 1.10
June 30, 2006 1.10
September 30, 2006 1.10
December 31, 2006 1.10
March 31, 2007 1.10
June 30, 2007 1.10
September 30, 2007 1.10
December 31, 2007 1.10
March 31, 2008 1.10
June 30, 2008 1.10
September 30, 2008 1.10
December 31, 2008 1.10
"Fixed Charge Coverage Ratio" shall be calculated in the manner set forth in
Exhibit 4.2(b).
6.4 Interest Coverage Ratio. The Borrower shall not permit its Interest
Coverage Ratio for the twelve month period ending on any date set forth below to
be less than the minimum ratio set forth in the table below opposite such date:
Date Minimum Interest Coverage Ratio
---- -------------------------------
March 31, 2003 1.50
June 30, 2003 1.50
September 30, 2003 1.50
December 31, 2003 2.00
March 31, 2004 2.00
June 30, 2004 2.00
September 30, 2004 2.25
December 31, 2004 2.25
March 31, 2005 2.25
June 30, 2005 2.25
September 30, 2005 2.50
December 31, 2005 2.50
44
March 31, 2006 2.50
June 30, 2006 2.75
September 30, 2006 2.75
December 31, 2006 3.00
March 31, 2007 3.00
June 30, 2007 3.00
September 30, 2007 3.00
December 31, 2007 3.00
March 31, 2008 3.00
June 30, 2008 3.00
September 30, 2008 3.00
December 31, 2008 3.00
"Interest Coverage Ratio" shall be calculated in the manner set forth in Exhibit
4.2(b).
6.5 Minimum EBITDA. The Borrower shall not permit its EBITDA for the twelve
month period ending on any date set forth below to be less than the minimum
EBITDA set forth in the table below opposite such date:
Date Minimum EBITDA
---- --------------
March 31, 2003 $37,000,000
June 30, 2003 $39,000,000
September 30, 2003 $41,000,000
December 31, 2003 $43,000,000
March 31, 2004 $44,000,000
June 30, 2004 $45,000,000
September 30, 2004 $46,000,000
December 31, 2004 $47,000,000
March 31, 2005 $48,000,000
June 30, 2005 $48,000,000
September 30, 2005 $49,000,000
December 31, 2005 $50,000,000
March 31, 2006 $51,000,000
June 30, 2006 $51,000,000
September 30, 2006 $52,000,000
December 31, 2006 $53,000,000
March 31, 2007 $54,000,000
June 30, 2007 $54,000,000
September 30, 2007 $55,000,000
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December 31, 2007 $56,000,000
March 31, 2008 $57,000,000
June 30, 2008 $58,000,000
September 30, 2008 $59,000,000
December 31, 2008 $60,000,000
"EBITDA" shall be calculated in the manner set forth in Exhibit 4.2(b).
ARTICLE VII - EVENTS OF DEFAULT
7.1 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. The Borrower fails to pay, (i) when and as required to be
paid herein, any amount of principal of any Loan, including after maturity of
the Loans, whether by acceleration or otherwise, (ii) within three (3) days
after the same shall become due, any interest payable hereunder, including after
maturity of the Loans, whether by acceleration or otherwise, or (iii) within
five (5) days after the same shall become due, any fee or any other amount
payable hereunder or pursuant to any other Loan Document; or
(b) Representation or Warranty. Any representation, warranty or
certification by or on behalf of the Borrower or any of its Subsidiaries made or
deemed made herein, in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the Borrower, any of
its Subsidiaries, or their respective Responsible Officers, furnished at any
time under this Agreement, or in or under any other Loan Document, shall prove
to have been incorrect in any material respect, or, with respect to any
representation, warranty or certification evaluated by a materiality or Material
Adverse Effect standard, in any respect, in each instance, on or as of the date
made or deemed made; or
(c) Specific Defaults. The Borrower fails to perform or observe any term,
covenant or agreement contained in Sections 4.1, 4.2(b), 4.2(d), 4.6, 4.9 or
Article V or Article VI hereof; or
(d) Other Defaults. The Borrower or any of its Subsidiaries fails to
perform or observe any other term, covenant or agreement contained in this
Agreement or any other Loan Document, and such default shall continue unremedied
for a period of thirty (30) days after the earlier to occur of (i) the date upon
which a Responsible Officer becomes aware of such default and (ii) the date upon
which written notice thereof is given to the Borrower by the Agent or Required
Lenders; or
(e) Cross-Default. The Borrower or any of its Subsidiaries (i) fails to
make any payment in respect of any Indebtedness (other than the Obligations) or
Contingent Obligation having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $3,750,000
when due (whether by scheduled maturity, required prepayment,
46
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the document relating
thereto on the date of such failure; or (ii) fails to perform or observe any
other condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any such Indebtedness or
Contingent Obligation, if the effect of such failure, event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or
(f) Insolvency; Voluntary Proceedings. The Borrower or any of its
Subsidiaries (i) ceases or fails to be Solvent, (ii) generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (iii)
voluntarily ceases to conduct its business in the ordinary course; (iv)
commences any Insolvency Proceeding with respect to itself; or (v) takes any
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Borrower or any Subsidiary of the Borrower, or
any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Borrower's or any of its
Subsidiaries' Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within sixty (60) days
after commencement, filing or levy; (ii) the Borrower or any of its Subsidiaries
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Borrower or any of its
Subsidiaries acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its Property or business;
(h) ERISA. (i) A member of the Controlled Group shall fail to pay when due,
after the expiration of any applicable grace period, any installment payment
with respect to its Withdrawal Liability under a Multiemployer Plan; (ii) a
member of the Controlled Group shall fail to satisfy its contribution
requirements under Section 412(c)(11) of the Code, whether or not it has sought
a waiver under Section 412(d) of the Code; (iii) the occurrence of an ERISA
Event; (iv) a Plan that is intended to be qualified under Section 401(a) of the
Code shall lose its qualification; (v) any member of the Controlled Group
engages in or otherwise becomes liable for a non-exempt prohibited transaction;
(vi) a violation of Section 404 or 405 of ERISA or the exclusive benefit rule
under Section 401(a) of the Code; (vii) any member of the Controlled Group is
assessed a tax under Section 4980B of the Code or incurs a liability under
Section 601 et seq. of ERISA; and, the occurrence of any such event listed in
clauses (i) through (vii), or the occurrence of any combination of events listed
in clauses (i) through (vii) results in, or could reasonably be expected to
result in, a Material Adverse Effect.
(i) Monetary Judgments. One or more judgments, non-interlocutory orders,
decrees or arbitration awards shall be entered against the Borrower or any of
its Subsidiaries involving in the aggregate a liability (to the extent not
covered by independent third-party insurance or
47
contractual indemnification on terms and conditions and from indemnitors,
reasonably acceptable to Agent) as to any single or related series of
transactions, incidents or conditions, of $2,500,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of thirty
(30) days after the entry thereof; or
(j) Non-Monetary Judgments. One or more non-monetary judgments, orders or
decrees shall be rendered against the Borrower or any of its Subsidiaries which
does or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, and there shall be any period of ten (10)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(k) Collateral. Any material provision of any Collateral Document shall for
any reason cease to be valid and binding on or enforceable against the Borrower
or any Subsidiary of the Borrower party thereto or the Borrower or any
Subsidiary of the Borrower shall so state in writing or bring an action to limit
its obligations or liabilities thereunder; or any Collateral Document shall for
any reason (other than pursuant to the terms thereof) cease to create a valid
security interest in any material portion of the Collateral purported to be
covered thereby or, if such security interest is a perfected security interest,
such security interest shall for any reason (other than the failure of the Agent
to take any action solely within its control) cease to be a perfected and first
priority security interest subject only to Permitted Liens; or
(l) Ownership. (i) any person or group of persons (within the meaning of
the Securities and Exchange Act of 1934) (other than Sponsor and/or the ▇▇▇▇▇▇▇▇
Group) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under the Securities
and Exchange Act of 1934) of fifty percent (50%) or more of the issued and
outstanding shares of capital stock of Holdings having the right to vote for the
election of directors of Holdings under ordinary circumstances, or (ii) Holdings
ceases to own one hundred percent (100%) of the issued and outstanding equity
securities of Borrower, or (iii) except as expressly permitted hereunder,
Borrower ceases to own one hundred percent (100%) of the issued and outstanding
equity securities of each of its Subsidiaries (in each instance in clauses (ii)
and (iii), free and clear of all Liens, rights, options, warrants or other
similar agreements or understandings, other than Liens in favor of Agent, for
the benefit of Agent and Lenders), or (iv) a "Change of Control" (as defined in
the Senior Subordinated Notes Indenture) shall occur, or (v) a "Change of
Control" (as defined in the Certificate of Incorporation of Holdings as in
effect on the Closing Date) shall occur; or
(m) Defaults. (i) Holdings shall fail in any material respect to perform or
observe any term, covenant or agreement in the Holdings Guaranty or the Holdings
Pledge Agreement; or (ii) the Holdings Guaranty or Holdings Pledge Agreement
shall for any reason be partially (including with respect to future advances) or
wholly revoked or invalidated, or otherwise ceases to be in full force and
effect, except in accordance with its terms; or (iii) Holdings shall contest in
any manner the validity or enforceability thereof or deny that it has any
further liability or obligation thereunder; or (iv) any event described in
subsections 7.1(f) or 7.1(g) shall occur with respect to Holdings; or
48
(n) Invalidity of Subordination Provisions. The subordination provisions of
the Senior Subordinated Notes Indenture or any agreement or instrument governing
any Subordinated Indebtedness shall for any reason be revoked or invalidated, or
otherwise cease to be in full force and effect, or Holdings or any of its
Subsidiaries shall contest in any manner the validity or enforceability thereof
or deny that it has any further liability or obligation thereunder, or the
Obligations, for any reason, shall not have the priority contemplated by this
Agreement or such subordination provisions.
7.2 Remedies. Upon the occurrence and during the continuance of any Event
of Default, the Agent shall at the request, and with the consent, of the
Required Lenders:
(a) declare all or any portion of the Commitment of each Lender to make
Loans or issue Lender Letters of Credit or Letter of Credit Participation
Agreements to be terminated, whereupon such Commitments shall forthwith be
terminated;
(b) declare all or any portion of the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable; without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
and
(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
subsections 7.1(f) or 7.1(g) above (in the case of clause (i) of subsection
7.1(g) upon the expiration of the sixty (60) day period mentioned therein), the
obligation of each Lender to make Loans and the obligation of Agent to issue
Lender Letters of Credit and Letter of Credit Participation Agreements shall
automatically terminate and the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable without further act of the Agent or any Lender.
7.3 Rights Not Exclusive. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
7.4 Cash Collateral for Letters of Credit. If an Event of Default has
occurred and is continuing or this Agreement (or the Revolving Loan Commitment)
shall be terminated for any reason, then the Agent may, and upon request of
Lenders holding more than fifty percent (50%) of the Revolving Loan Commitments
shall, demand (which demand shall be deemed to have been delivered automatically
upon any acceleration of the Loans and other obligations hereunder pursuant to
Section 7.2 hereof or upon payment in full of the Term Loan), and Borrower shall
thereupon deliver to the Agent, to be held for the benefit of the Agent and the
Lenders entitled thereto, an amount of cash equal to the amount of Letter of
Credit Participation Liability (determined in accordance with subsection 1.1(c)
hereof) as additional collateral security for Borrower's Obligations in respect
of any outstanding Lender Letter of Credit and Letter of Credit
49
Participation Agreement. The Agent may at any time apply any or all of such cash
and cash collateral to the payment of any or all of Borrower's Obligations in
respect of any Lender Letters of Credit or Letter of Credit Participation
Agreements. Pending such application, the Agent may (but shall not be obligated
to) invest the same in an interest bearing account in the Agent's name, for the
benefit of the Agent and the Lenders entitled thereto, under which deposits are
available for immediate withdrawal, at such bank or financial institution as the
Agent may, in its discretion, select.
ARTICLE VIII - THE AGENT
8.1 Appointment and Authorization. Each Lender hereby irrevocably appoints,
designates and authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
8.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by the Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or for the value of any Collateral or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the Properties, books or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile or telephone message,
statement or other document or conversation believed by it to be genuine and to
have been signed, sent or made by the proper Person or Persons, and
50
upon advice and statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Lenders (or, where an action or waiver need only be
approved by the Required Lenders, by the Required Lenders) as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Lenders (or, where an action or waiver need only be
approved by the Required Lenders, by the Required Lenders) and such request and
any action taken or failure to act pursuant thereto shall be binding upon all of
the Lenders.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Lenders, unless the Agent shall have
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
requested by the Required Lenders in accordance with Article VII; provided,
however, that unless and until the Agent shall have received any such request,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
8.6 Credit Decision. Each Lender expressly acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries shall be deemed to constitute any representation
or warranty by the Agent to any Lender. Each Lender represents to the Agent that
it has, independently and without reliance upon the Agent and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, Property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon the Agent and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, Property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
Property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of the Agent.
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8.7 Indemnification. Whether or not the transactions contemplated hereby
shall be consummated, upon demand therefor the Lenders shall indemnify the Agent
(to the extent not reimbursed by or on behalf of the Borrower and without
limiting the obligation of the Borrower to do so), ratably from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind whatsoever which
may at any time (including at any time following the repayment of the Loans and
the termination or resignation of the Agent) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing; provided, however,
that no Lender shall be liable for the payment to the Agent of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent resulting from the Agent's
gross negligence or willful misconduct. In addition, each Lender shall reimburse
the Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. Without limiting the generality of the foregoing, if the
Internal Revenue Service or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section 8.7, together with all related costs and
expenses (including Attorney Costs). The obligation of the Lenders in this
Section 8.7 shall survive the payment of all Obligations hereunder.
8.8 Agent in Individual Capacity. Antares and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower and its Subsidiaries and
Affiliates as though Antares were not the Agent hereunder and without notice to
or consent of the Lenders. With respect to its Loans, Antares shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include Antares in its individual capacity. Each other Lender and the
Affiliates of each such Lender may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory or other business with
the Borrower and its Subsidiaries and Affiliates.
8.9 Successor Agent. The Agent may resign as Agent upon thirty (30) days'
prior notice to the Lenders and to Borrower. If the Agent shall resign as Agent
under this Agreement, the Required Lenders shall appoint from among the Lenders
a successor agent for the Lenders,
52
which successor shall, if no Event of Default has occurred and is continuing, be
reasonably acceptable to Borrower. If no successor agent is appointed prior to
the effective date of the resignation of the Agent, the Agent may thereupon
appoint a successor agent from among the Lenders reasonably acceptable to
Borrower. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article VIII and Sections 9.4 and 9.5 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation
(or, if later, ten (10) days after the date upon which the Agent designates a
successor agent), the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.
8.10 Collateral Matters.
(a) The Agent is authorized (but not required) on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral:
(i) upon termination of the Commitments and payment in full of
all Loans and all other Obligations then payable under this Agreement
and under any other Loan Document;
(ii) constituting Property sold or to be sold or disposed of as
part of or in connection with any disposition permitted hereunder;
(iii) consisting of an instrument evidencing Indebtedness or of
any other debt instrument, if the Indebtedness evidenced thereby has
been paid in full; or
(iv) if approved, authorized or ratified in writing by the
Required Lenders or all the Lenders, as the case may be, as provided
in subsection 9.1(f).
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this subsection 8.10(b). Notwithstanding anything herein or in any other Loan
Document to the contrary, Agent may release Liens upon payment in full of the
Obligations (other than contingent indemnification obligations to the extent no
unsatisfied claim has been asserted) notwithstanding that Rate Contract
Obligations may be outstanding.
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(c) Each Lender agrees with and in favor of each other Lender (which
agreement shall not be for the benefit of the Borrower or any of its
Subsidiaries) that the Borrower's Obligations under this Agreement and the other
Loan Documents shall be equally and ratably secured by any Property and/or other
collateral now or hereafter securing any obligations of the Borrower or any of
its Subsidiaries to such Lender, whether or not the same constitutes Collateral
hereunder.
8.11 Documentation Agent, Syndication Agent and Co-Agent. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Documentation Agent, Syndication Agent and Co-Agent
shall not have any duties or responsibilities in such capacities, nor shall the
Documentation Agent, Syndication Agent and Co-Agent have or be deemed to have
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Documentation Agent, Syndication Agent and Co-Agent.
ARTICLE IX - MISCELLANEOUS
9.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders, the Borrower and acknowledged by
the Agent, and then such waiver shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders, the Borrower and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to subsection 7.2(a));
(b) postpone or delay any date fixed for, or waive, any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document (other than any postponement or delay
of any date fixed for any mandatory prepayment of the Loans pursuant to
subsection 1.8(c), 1.8(d) or 1.8(e));
(c) reduce the principal of, or the rate of interest specified herein or
the amount of interest payable in cash specified herein on any Loan, or of any
fees or other amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for the Lenders or any of
them to take any action hereunder;
(e) amend this Section 9.1 or the definition of Required Lenders or any
provision providing for consent or other action by all Lenders; or
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(f) discharge Holdings, Borrower or any Subsidiary of Borrower from their
respective Obligations under the Loan Documents, or release all or substantially
all of the Collateral except as otherwise may be provided in this Agreement or
the other Loan Documents;
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Required Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
9.2 Notices.
(a) All notices, requests and other communications provided for hereunder
shall be in writing (including, unless the context expressly otherwise provides,
by facsimile transmission) and mailed by certified or registered mail, faxed or
delivered by personal or overnight delivery, to the address or facsimile number
specified for notices on the applicable signature page hereof; or, if directed
to the Borrower or the Agent, to such other address as shall be designated by
such party in a written notice to each of the other parties hereto given in
compliance herewith, or, if directed to any other party hereto, to such other
address as shall be designated by such party in a written notice given in
compliance herewith to the Borrower and the Agent.
(b) All such notices, requests and communications shall be effective (i) if
delivered in person, when delivered, (ii) if delivered by facsimile
transmission, on the date of transmission if transmitted on a Business Day
before 4:00 p.m. (Chicago time), otherwise on the next Business Day, (iii) if
delivered by overnight courier, one (1) Business Day after delivery to the
courier properly addressed and (iv) if mailed, upon the third (3rd) Business Day
after the date deposited into the U.S. Mail, certified or registered; except
that notices pursuant to Article I shall not be effective until actually
received by the Agent.
(c) The Borrower acknowledges and agrees that any agreement of the Agent
and the Lenders in Article I hereof to receive certain notices by telephone and
facsimile transmission is solely for the convenience and at the request of the
Borrower. The Agent and the Lenders shall be entitled to rely on the authority
of any Person purporting to be a Person authorized by the Borrower to give such
notice and the Agent and the Lenders shall not have any liability to the
Borrower or other Person on account of any action taken or not taken by the
Agent or the Lenders in reliance upon such telephonic or facsimile notice. The
obligation of the Borrower to repay the Loans shall not be affected in any way
or to any extent by any failure by the Agent and/or the Lenders to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Agent and/or the Lenders of a confirmation which is at variance with the terms
understood by the Agent and/or the Lenders to be contained in the telephonic or
facsimile notice.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. No course of dealing between Borrower, any Affiliate of
Borrower, Agent or any Lender shall be effective to amend, modify or discharge
any provision of this Agreement or any of the other Loan Documents. No provision
in any Loan Document and no course of dealing between the parties hereto or
thereto shall be deemed to
55
create a fiduciary duty owing by Agent or any Lender to Holdings, Borrower or
any of their Subsidiaries.
9.4 Costs and Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Borrower shall pay or reimburse:
(a) Antares (including in its capacity as Agent) within five (5) Business
Days after demand (except as otherwise provided in subsection 2.1(f)) for all
reasonable out-of-pocket costs and expenses incurred by Antares (including in
its capacity as Agent) in connection with the development, preparation,
syndication, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any other Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including the Attorney Costs
incurred by Antares (including in its capacity as Agent) with respect thereto
and for all reasonable out-of-pocket costs and expenses incurred by it in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies during the existence of an Event of Default (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding) under this
Agreement, any other Loan Document, and any such other documents;
(b) Lenders within five (5) Business Days after demand for all Attorney
Costs of one law firm, on behalf of all Lenders (other than Antares) incurred by
them in connection with the enforcement, attempted enforcement, or preservation
of any rights or remedies during the existence of an Event of Default (including
in connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding) under this
Agreement, any other Loan Document; and
(c) Agent within five (5) Business Days after demand for all out-of-pocket
appraisal, audit, environmental inspection and review (to the extent such
inspection or review is conducted as a result of Agent's reasonable belief that
a Default of subsection 4.3(e) or Section 4.8 may exist), in each case to the
extent permitted hereunder, search and filing costs, fees and expenses, incurred
or sustained by Agent in connection with the matters referred to under clause
(a) of this Section 9.4.
9.5 Indemnity. Whether or not the transactions contemplated hereby shall be
consummated, the Borrower shall indemnify, defend and hold harmless each Lender,
the Agent and each of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") from and against
any and all liabilities, obligations, actual losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses or disbursements (including,
Attorney Costs):
(a) subject to the limitations contained in subsection 9.4(b), of any kind
or nature whatsoever with respect to any investigation, litigation, action, suit
or proceeding (including any Insolvency Proceeding or appellate proceeding)
related to this Agreement or the Loans, or the transactions contemplated hereby
or thereby, or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto; and
56
(b) which may be incurred by or asserted against such Indemnified Person in
connection with or arising out of any pending or threatened investigation,
litigation or proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising out of or related to any Property of Borrower or any
of its Subsidiaries;
(all the foregoing, collectively, the "Indemnified Liabilities"); provided, that
the Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities to the extent arising from the gross
negligence, willful misconduct or bad faith of such Indemnified Person or its
officers, employees, agents and attorneys-in-fact, as determined by a court of
competent jurisdiction.
No action taken by legal counsel chosen by the Agent or any Lender in
defending against any investigation, litigation or proceeding or requested
remedial, removal or response action shall vitiate or any way impair the
Borrower's obligation and duty hereunder to indemnify and hold harmless the
Agent and each Lender. In no event shall any site visit, observation, or testing
by the Agent or any Lender (or any contractee of the Agent or any Lender) be
deemed a representation or warranty that Hazardous Materials are or are not
present in, on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither the Borrower nor any other Person
is entitled to rely on any site visit, observation, or testing by the Agent or
any Lender. Neither the Agent nor any Lender owes any duty of care to protect
the Borrower or any other Person against, or to inform the Borrower or any other
Person of, any Hazardous Materials or any other adverse condition affecting any
site or Property. Neither the Agent nor any Lender shall be obligated to
disclose to the Borrower or any other Person any report or findings made as a
result of, or in connection with, any site visit, observation, or testing by the
Agent or any Lender.
The obligations in this Section 9.5 shall survive payment of all other
Obligations. At the election of any Indemnified Person, the Borrower shall
defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of the Borrower. All amounts owing under this Section 9.5 shall be paid
within thirty (30) days after demand.
9.6 Marshaling; Payments Set Aside. Neither the Agent nor any Lender shall
be under any obligation to marshal any assets in favor of the Borrower or any
other Person or against or in payment of any or all of the Obligations. To the
extent that the Borrower makes a payment or payments to the Agent or any Lender,
or the Agent or any Lender enforces its Liens or exercises its rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent in its discretion) to be repaid to a trustee, receiver
or any other party in connection with any Insolvency Proceeding, or otherwise,
then:
(a) to the extent of such recovery the Obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred; and
57
(b) each Lender severally agrees to pay to the Agent upon demand its
ratable share of the total amount so recovered from or repaid by the Agent.
9.7 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; provided that any assignment by any Lender shall be
subject to the provisions of Section 9.8 hereof, and provided further that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each Lender.
9.8 Assignments, Participations, etc.
(a) Any Lender may, with (A) the written consent of Borrower, which consent
shall not be unreasonably withheld (provided that such consent shall not be
required (i) at any time that an Event of Default exists, (ii) in connection
with an assignment of a Term Loan to a Related Fund or (iii) in connection with
an assignment by Antares of the Term Loan, or any portion thereof, prior to
completion of the primary syndication), (B) the written consent of Agent, which
shall not be unreasonably withheld, and (C) with respect to any assignment of
any Revolving Loan Commitment, the written consent of all Issuing Lenders, at
any time assign and delegate to one or more Eligible Assignees (provided that
the written consent of the Agent or Borrower shall not be required in connection
with any assignment and delegation by a Lender to an Eligible Assignee that is
an Affiliate of such Lender) (each an "Assignee") all, or any part of, the
Loans, the Commitments and the other rights and obligations of such Lender
hereunder, in a minimum amount of $5,000,000 (or such lesser amount to which
Agent, in its sole discretion, may agree) or, if less, the entire Commitment or
Loan(s) of such Lender; provided, however, that the Borrower and the Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until:
(i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such
Lender and the Assignee;
(ii) such Lender and its Assignee shall have delivered to the
Borrower and the Agent an Assignment and Acceptance in form and
substance reasonably satisfactory to Agent, such Lender and its
Assignee (an "Assignment and Acceptance"); and
(iii) the assignor Lender or the Assignee has paid to the Agent a
processing fee in the amount of $3,500 provided no processing fee
shall be required to be paid in connection with an assignment by a
Lender to an Eligible Assignee that is an Affiliate of such Lender.
(b) Subject to the provisions of subsection 9.8(f) below, from and after
the date that the Agent notifies the assignor Lender that the Agent has received
and provided its consent with respect to an executed Assignment and Acceptance
and payment of the above-referenced processing fee:
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(i) 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 and Acceptance, shall have the rights and
obligations of a Lender under this Agreement and the other Loan
Documents; and
(ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan
Documents.
(c) Subject to the provisions of subsection 9.8(f) below, immediately upon
the making of the processing fee payment to the Agent in respect of the
Assignment and Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitment of the
assigning Lender to the same extent.
(d) Any Lender may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Borrower (a "Participant") participating
interests in any Loans, the Commitment of that Lender and the other interests of
that Lender (the "Originating Lender") hereunder and under the other Loan
Documents; provided, however, that:
(i) the Originating Lender's obligations under this Agreement
shall remain unchanged;
(ii) the Originating Lender shall remain solely responsible for
the performance of such obligations;
(iii) the Borrower and the Agent shall continue to deal solely
and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under this Agreement and
the other Loan Documents; and
(iv) no Lender shall transfer or grant any participating interest
under which the Participant shall have rights to approve any amendment
to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment, consent or
waiver would require unanimous consent of the Lenders as described in
the first proviso to Section 9.1.
In the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation.
(e) Notwithstanding any other provision contained in this Agreement or any
other Loan Document to the contrary, any Lender may (i) assign all or any
portion of the Loans held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Federal Reserve
Board and any Operating Circular issued by such Federal Reserve Bank, or (ii)
pledge all or any portion of the Loans held by it (and Notes evidencing
59
such Loans) to its unaffiliated lenders for collateral security purposes,
provided that any payment in respect of such assigned Loans made by the Borrower
to or for the account of the assigning or pledging Lender in accordance with the
terms of this Agreement shall satisfy the Borrower's obligations hereunder in
respect to such assigned or pledged Loans to the extent of such payment. No such
assignment or pledge shall release the assigning Lender from its obligations
hereunder.
(f) The Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 9.2 a copy of each Assignment and Acceptance delivered to
it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, the Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Commitments, Loans and any Notes evidencing such Loans recorded
therein for all purposes of this Agreement. Any assignment of any Commitment
and/or Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register. Any
assignment or transfer of all or part of a Commitment and/or Loan evidenced by a
Note shall be registered on the Register only upon a surrender or registration
of assignment or transfer of the Note evidencing such Loan, accompanied by a
duly executed Assignment and Acceptance; thereupon one or more new Notes in the
same aggregate principal amount shall be issued to the designated assignee and,
if applicable, assignor, and the old Notes shall be returned by the Agent to the
Borrower marked "cancelled". The Register shall be available for inspection by
the Borrower or any Lender (with respect to any entry relating to such Lender's
Commitments and Loans) at any reasonable time and from time to time upon
reasonable prior notice.
9.9 Confidentiality. Each of the Agent and the Lenders shall maintain in
confidence in accordance with its customary procedures for handling confidential
information, all written information that Borrower or any of its Subsidiaries,
or any of their authorized representatives, furnishes to the Agent or any Lender
("Confidential Information"), other than any such Confidential Information that
becomes generally available to the public other than as a result of a breach by
the Agent or any Lender of its obligations hereunder or that is or becomes
available to the Agent or such Lender from a source other than Borrower or any
of its Subsidiaries, or any of their authorized representatives, and that is
not, to the actual knowledge of the recipient thereof, subject to obligations of
confidentiality with respect thereto; provided, however, that the Agent and each
Lender shall in any event have the right to deliver copies of any such
documents, and to disclose any such information, to:
(a) (i) its directors, officers, trustees, partners, employees, agents,
attorneys, and professional consultants who are informed of the confidential
nature thereof and (ii) portfolio management services and rating agencies;
(b) any other Lender and any successor Agent;
(c) any Person to which such Lender offers to sell any Loan or any part
thereof or interest or participation therein (provided such Person agrees to
keep such information confidential on the terms set forth in this Section 9.9);
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(d) any federal or state regulatory authority or examiner, or any insurance
industry association, regulating or having jurisdiction over the Agent or such
Lender; and
(e) any other Person to which such delivery or disclosure may be necessary
or appropriate (i) in compliance with any applicable law, rule, regulation or
order, (ii) in response to any subpoena or other legal process or informal
investigative demand (in which event Agent or such Lender agrees to provide
notice thereof to Borrower), (iii) in connection with any litigation to which
the Agent or such Lender is a party (in which event Agent or such Lender agrees
to provide notice thereof to Borrower), or (iv) in connection with the
enforcement of the rights and remedies of the Agent or the Lenders under this
Agreement and the other Loan Documents at any time when an Event of Default
shall have occurred and be continuing.
The confidentiality provisions hereunder shall not apply to disclosures
consisting of general portfolio information that does not identify the Borrower.
9.10 Set-off; Sharing of Payments. In addition to any rights and remedies
now or hereafter granted under applicable law, and not by way of limitation of
any such rights or remedies at any time and from time to time, upon the
occurrence and during the continuance of any Event of Default, each Lender is
hereby authorized by the Borrower, with reasonably prompt subsequent notice to
the Borrower or to any other Person (any prior or contemporaneous notice being
hereby expressly waived by the Borrower) to set off and to appropriate and to
apply any and all
(a) balances held by such Lender at any of its offices for the account of
the Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to the Borrower or any of its Subsidiaries); and
(b) other Property at any time held or owing by such Lender to or for the
credit or for the account of the Borrower or any of its Subsidiaries;
against and on account of any and all Obligations which are not paid when due;
except that no Lender shall exercise such right without prior notice to the
Agent. Any Lender having a right to set off shall purchase for cash (and the
other Lenders shall sell) participations in each such other Lender's pro rata
share of the Obligations as would be necessary to cause such Lender to share the
benefit of such right of set-off with each other Lender in accordance with their
respective pro rata shares of the Obligations. The Borrower agrees, to the
fullest extent permitted by law, that (i) any Lender may exercise its right to
set off with respect to amounts in excess of its pro rata share of the
Obligations and may sell participations to other Lenders, and (ii) any Lender so
purchasing a participation in the Obligations held by other Lenders may exercise
all rights of setoff, bankers' lien, counterclaim or similar rights with respect
to such participation as fully as if such Lender were a direct holder of
Obligations in the amount of such participation. The Borrower hereby grants to
each Lender a security interest in all such deposits and other Property, whether
now existing or hereafter arising, held by each Lender for the purposes set
forth herein.
9.11 Notification of Addresses, Lending Offices, Etc. Each Lender shall
notify the Agent in writing of any changes in the address to which notices to
such Lender should be directed, of addresses of its Lending Office, of payment
instructions in respect of all payments to
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be made to it hereunder and of such other administrative information as the
Agent shall reasonably request.
9.12 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged
with each of the Borrower and the Agent.
9.13 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
Any Loan Document, or other agreement, document or instrument, delivered by
facsimile transmission shall have the same force and effect as if the original
thereof had been delivered.
9.14 Captions. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
9.15 Independence of Provisions. The parties hereto acknowledge that this
Agreement and the other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
9.16 Interpretation. This Agreement is the result of negotiations among,
and has been reviewed by counsel to, the Agent, the Borrower and other parties
hereto, and is the product of all parties hereto. Accordingly, this Agreement
and the other Loan Documents shall not be construed against the Lenders or the
Agent merely because of the Agent's or Lenders' involvement in the preparation
of such documents and agreements.
9.17 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Borrower, the Lenders and the
Agent, and their permitted successors and assigns, and no other Person shall be
a direct or indirect legal beneficiary of, or have any direct or indirect cause
of action or claim in connection with, this Agreement or any of the other Loan
Documents. Neither the Agent nor any Lender shall have any obligation to any
Person not a party to this Agreement or the other Loan Documents.
9.18 Governing Law and Jurisdiction.
(A) THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES; PROVIDED THAT THE AGENT AND THE
LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
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(B) BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY BORROWER AGAINST AGENT OR ANY LENDER OR
ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.19 Waiver of Jury Trial. THE BORROWER, THE LENDERS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT
ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
9.20 Entire Agreement; Release. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among Holdings,
the Borrower, the Lenders and the Agent, and supersedes all prior or
contemporaneous Agreements and understandings of such Persons, oral or written,
relating to the subject matter hereof and thereof, except for the fee letter
referenced in subsection 1.9(a), and any prior arrangements made with respect to
the payment by the Borrower of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the Agent
or the Lenders. Borrower has relied exclusively on the terms and provisions
contained in this Agreement and the other Loan Documents in its execution and
delivery hereof and thereof and entering into the
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transactions which are the subject hereof and thereof. Execution of this
Agreement by the Borrower constitutes a full, complete and irrevocable release
of any and all claims which the Borrower may have at law or in equity in respect
of all prior discussions and understandings, oral or written, relating to the
subject matter of this Agreement and the other Loan Documents. Neither Agent nor
any Lender shall be liable to Borrower or any other Person on any theory of
liability for any special, indirect, consequential or punitive damages.
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY
10.1 Taxes.
(a) Subject to subsection 10.1(g), any and all payments by the Borrower to
each Lender or the Agent under this Agreement shall be made free and clear of,
and without deduction or withholding for, any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Lender's net income by the jurisdiction under the laws of which such Lender
or the Agent, as the case may be, is organized or maintains a Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes").
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or Property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) Subject to subsection 10.1(g), the Borrower shall indemnify and hold
harmless each Lender and the Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 10.1) paid by such Lender or the Agent and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within thirty (30) days from the date any Lender or the Agent makes written
demand therefor.
(d) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then, subject to subsection 10.1(g):
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 10.1) such Lender or the
Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made;
(ii) the Borrower shall make such deductions; and
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(iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
(e) Within thirty (30) days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower shall furnish to the Agent the original or
a certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Agent.
(f) Each Lender that is not a citizen or resident of the United States of
America, a corporation, partnership or other entity created or organized in or
under the laws of the United States (or any jurisdiction thereof), or any estate
or trust that is subject to federal income taxation regardless of the source of
its income (a "Non-U.S. Lender") shall deliver to the Borrower and the Agent two
copies of each U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or any
subsequent versions thereof or successors thereto, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest", a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such
Non-U.S. Lender delivers a Form W-8, a certificate representing that such
Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the Code, is
not a ten percent (10%) shareholder (within the meaning of Section 871(h)(3)(B)
of the Code) of Borrower and is not a controlled foreign corporation related to
Borrower (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or a reduced rate of, U.S. federal withholding tax on all payments by
Borrower under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement. In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this subsection, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this subsection that such
Non-U.S. Lender is not legally able to deliver.
(g) The Borrower will not be required to pay any additional amounts in
respect of United States federal income tax pursuant to subsection 10.1(d) to
any Lender for the account of any Lending Office of such Lender:
(i) if the obligation to pay such additional amounts would not
have arisen but for a failure by such Lender to comply with its
obligations under subsection 10.1(f) in respect of such Lending
Office;
(ii) if such Lender shall have delivered to the Borrower a Form
W-8BEN and/or Form W-8ECI (or any subsequent versions thereof or
successors thereto) in respect of such Lending Office pursuant to
subsection 10.1(f), and such Lender shall not at any time be entitled
to exemption from deduction or withholding of United States federal
income tax in respect of payments by the Borrower hereunder for the
account of such Lending Office for any reason other than a change in
United States law, treaty or regulations or in the official
interpretation of such law or regulations by any Governmental
Authority charged
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with the interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of such Form
W-8BEN and/or Form W-8ECI (or any subsequent versions thereof or
successors thereto); or
(iii) if such Lender shall have delivered to the Borrower a Form
W-8 (or any subsequent versions thereof or successors thereto) in
respect of such Lending Office pursuant to subsection 10.1(f), and
such Lender shall not at any time be entitled to exemption from
deduction or withholding of United States federal income tax in
respect of payments by the Borrower hereunder for the account of such
Lending Office for any reason other than a change in the United States
law or regulations or any applicable tax treaty or regulations or in
the official interpretation of any such law, treaty or regulations by
any Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after
the date of delivery of such Form W-8 (or subsequent versions thereof
or successors thereto).
(h) If, at any time, the Borrower requests any Lender to deliver any forms
or other documentation pursuant to subsection 10.1(f), then the Borrower shall,
on demand of such Lender through the Agent, reimburse such Lender for any costs
and expenses (including Attorney Costs) reasonably incurred by such Lender in
the preparation or delivery of such forms or other documentation.
(i) If the Borrower is required to pay additional amounts to any Lender or
the Agent pursuant to subsection 10.1(d), then such Lender shall use its
reasonable best efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Borrower which may thereafter accrue if such change in
the judgment of such Lender is not otherwise disadvantageous to such Lender.
10.2 Illegality. (a) (a) If after the date hereof any Lender shall
determine that the introduction of any Requirement of Law, or any change in any
Requirement of Law or in the interpretation or administration thereof by the
applicable Governmental Authority, has made it unlawful, or that any central
bank or other Governmental Authority has asserted that it is unlawful, for any
Lender or its Lending Office to make LIBOR Rate Loans, then, on notice thereof
by such Lender to the Borrower through the Agent, the obligation of that Lender
to make LIBOR Rate Loans shall be suspended until such Lender shall have
notified the Agent and the Borrower that the circumstances giving rise to such
determination no longer exists.
(b) Subject to clause (c) below, if any Lender shall determine that it is
unlawful to maintain any LIBOR Rate Loan, the Borrower shall prepay in full all
LIBOR Rate Loans of such Lender then outstanding, together with interest accrued
thereon, either on the last day of the Interest Period thereof if such Lender
may lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such LIBOR
Rate Loans, together with any amounts required to be paid in connection
therewith pursuant to Section 10.4.
(c) If the obligation of any Lender to make or maintain LIBOR Rate Loans
has been terminated, the Borrower may elect, by giving notice to such Lender
through the Agent that all
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Loans which would otherwise be made by any such Lender as LIBOR Rate Loans shall
be instead Base Rate Loans.
(d) Before giving any notice to the Agent pursuant to this Section 10.2,
the affected Lender shall designate a different Lending Office with respect to
its LIBOR Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Lender, be
illegal or otherwise disadvantageous to the Lender.
10.3 Increased Costs and Reduction of Return.
(a) If any Lender shall determine that, due to either (i) the introduction
of, or any change in, or in the interpretation by the applicable Governmental
Authority of, any law or regulation or (ii) the compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), in the case of either clause (i) or (ii) subsequent to
the date hereof, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining any LIBOR Rate Loans, then
the Borrower shall be liable for, and shall from time to time, within thirty
(30) days of demand therefor by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender, additional amounts as
are sufficient to compensate such Lender for such increased costs; provided,
that the Borrower shall not be required to compensate a Lender pursuant to this
subsection for any increased costs incurred more than one hundred eighty (180)
days prior to the date that such Lender notifies the Borrower of the law, rule,
regulation, order, guideline, request or other legal requirement of any central
bank or other Governmental Authority (whether or not having the force of law)
giving rise to such increased costs and of such Lender's intention to claim
compensation therefor; provided further that, if such law, rule, regulation,
order, guideline, request or other legal requirement giving rise to such
increased costs is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.
(b) If any Lender shall have determined that:
(i) the introduction of any Capital Adequacy Regulation;
(ii) any change in any Capital Adequacy Regulation;
(iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof;
or
(iv) compliance by such Lender (or its Lending Office) or any
corporation controlling the Lender, with any Capital Adequacy
Regulation;
affects the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy
and such Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment(s), loans, credits or
obligations under this Agreement, then, within thirty (30) days of demand of
such Lender (with a copy to the Agent), the Borrower shall pay to such Lender,
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from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such increase; provided, that the Borrower shall not
be required to compensate a Lender pursuant to this subsection for any such
increase incurred more than one hundred eighty (180) days prior to the date that
such Lender notifies the Borrower of the Capital Adequacy Regulation giving rise
to such increase and of such Lender's intention to claim compensation therefor;
provided further that, if such Capital Adequacy Regulation giving rise to such
increase is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.
10.4 Funding Losses. The Borrower agrees to reimburse each Lender and to
hold each Lender harmless from any loss (but excluding loss of profit) or
expense which such Lender may sustain or incur as a consequence of:
(a) the failure of the Borrower to make any payment or mandatory prepayment
of principal of any LIBOR Rate Loan when due (including payments made after any
acceleration thereof);
(b) the failure of the Borrower to borrow, continue or convert a Loan after
the Borrower has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/Continuation;
(c) the failure of the Borrower to make any prepayment after the Borrower
has given a notice in accordance with Section 1.7;
(d) the prepayment (including pursuant to Section 1.8) by Borrower or any
Subsidiary of Borrower of a LIBOR Rate Loan on a day which is not the last day
of the Interest Period with respect thereto; or
(e) the conversion pursuant to Section 1.6 of any LIBOR Rate Loan to a Base
Rate Loan on a day that is not the last day of the applicable Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained (but
excluding loss of profit). Solely for purposes of calculating amounts payable by
the Borrower to the Lenders under this Section 10.4 and under subsection
10.3(a): each LIBOR Rate Loan made by a Lender (and each related reserve,
special deposit or similar requirement) shall be conclusively deemed to have
been funded at the LIBOR used in determining the interest rate for such LIBOR
Rate Loan by a matching deposit or other borrowing in the interbank eurodollar
market for a comparable amount and for a comparable period, whether or not such
LIBOR Rate Loan is in fact so funded.
10.5 Inability to Determine Rates. If the Agent shall have determined in
good faith that for any reason adequate and reasonable means do not exist for
ascertaining the LIBOR for any requested Interest Period with respect to a
proposed LIBOR Rate Loan or that the LIBOR applicable pursuant to subsection
1.3(a) for any requested Interest Period with respect to a proposed LIBOR Rate
Loan does not adequately and fairly reflect the cost to the Lenders of funding
such Loan, the Agent will forthwith give notice of such determination to the
Borrower
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and each Lender. Thereafter, the obligation of the Lenders to make or maintain
LIBOR Rate Loans hereunder shall be suspended until the Agent revokes such
notice in writing. Upon receipt of such notice, the Borrower may revoke any
Notice of Borrowing or Notice of Continuation/Conversion then submitted by it.
If the Borrower does not revoke such notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans.
10.6 Reserves on LIBOR Rate Loans. The Borrower shall pay to each Lender,
as long as such Lender shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional costs on the unpaid principal amount of
each LIBOR Rate Loan equal to actual costs of such reserves allocated to such
Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent manifest error), payable on each date
on which interest is payable on such Loan provided the Borrower shall have
received at least fifteen (15) days' prior written notice (with a copy to the
Agent) of such additional interest from the Lender. If a Lender fails to give
notice fifteen (15) days prior to the relevant Interest Payment Date, such
additional interest shall be payable fifteen (15) days from receipt of such
notice.
10.7 Certificates of Lenders. Any Lender claiming reimbursement or
compensation pursuant to this Article X shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to such Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
10.8 Survival. The agreements and obligations of the Borrower in this
Article X shall survive the payment of all other Obligations.
10.9 Replacement of Lender in Respect of Increased Costs. Within forty-five
(45) days after receipt by the Borrower of written notice and demand from any
Lender (an "Affected Lender") for payment of additional costs as provided in
Sections 10.1, 10.3 and 10.6, the Borrower may, at its option, notify the Agent
and such Affected Lender of the Borrower's intention to obtain, at the
Borrower's expense, a replacement Lender ("Replacement Lender") for such
Affected Lender, which Replacement Lender shall be reasonably satisfactory to
the Agent. In the event the Borrower obtains a Replacement Lender within ninety
(90) days following notice of its intention to do so, the Affected Lender shall
sell and assign its Loans and Commitments to such Replacement Lender, provided
that the Borrower has reimbursed such Affected Lender for its increased costs
for which it is entitled to reimbursement under this Agreement through the date
of such sale and assignment.
10.10 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 10.1(c) or
Section 10.3 with respect to such Lender, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such Lender)
to designate another lending office for any Loans affected by such event with
the object of avoiding or minimizing the consequences of such event; provided,
that such designation is made on terms that, in the sole judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic, legal
or regulatory disadvantage, and
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provided, further, that nothing in this Section 10.10 shall affect or postpone
any of the obligations of the Borrower or the rights of any Lender pursuant to
this Agreement or any other Loan Document.
ARTICLE XI - DEFINITIONS
11.1 Defined Terms. The following terms are defined in the Sections or
subsections referenced opposite such terms:
"Affected Lender" 10.9
"Agent's Fees" 1.9(a)
"Assignee" 9.8(a)
"Assignment and Acceptance" 9.8(a)(ii)
"BofA" 5.19
"BofA DACA" 5.19
"BofA DACA Termination Date" 5.19
"Borrower" Preamble
"Borrowing Base" 1.1(b)
"Calculation Year" 1.8(e)
"Capital Expenditures" Exhibit 4.2(b)
"Commitment Fee" 1.9(b)
"Compliance Certificate" 4.2(b)
"Confidential Information" 9.9
"Convenience Accounts" 5.19
"EBITDA" Exhibit 4.2(b)
"Environmental Permits" 3.12
"Event of Default" 7.1
"Excess Cash Flow" Exhibit 1.8(e)
"Fixed Charge Coverage Ratio" Exhibit 4.2(b
"Indemnified Person" 9.5
"Indemnified Liabilities" 9.5
"Interest Coverage Ratio" Exhibit 4.2(b)
"Lender" Preamble
"Lender Letter of Credit" 1.1(c)
"Letter of Credit Participation Agreement" 1.1(c)
"Letter of Credit Participation Fee" 1.9(c)
"Leverage Ratio" Exhibit 4.2(b)
"Maximum Revolving Loan Balance" 1.1(b)
"Modified Leverage Ratio" 1.8(e)
"Non-U.S. Lender" 10.1(f)
"Originating Lender" 9.8
"Other Taxes" 10.1(b)
"Participant" 9.8(d)
"Permitted Liens" 5.1
"Register" 9.8
"Replacement Lender" 10.9
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"Restricted Payments" 5.11
"Revolving Loan Commitment" 1.1(b)
"Revolving Loan" 1.1(b)
"Taxes" 10.1(a)
"Term Loan" 1.1(a)
"Term Loan Commitment" 1.1(a)
In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of fifty percent (50%) of
the capital stock, partnership interests or equity of any Person or otherwise
causing any Person to become a Subsidiary of the Borrower, or (c) a merger or
consolidation or any other combination with another Person (other than a merger
of a Wholly-Owned Subsidiary of Borrower with another Wholly-Owned Subsidiary of
Borrower).
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall for the purposes of this Agreement,
be deemed to control the other Person. Notwithstanding the foregoing, neither
the Agent nor any Lender shall be deemed an "Affiliate" of the Borrower or of
any Subsidiary of the Borrower.
"Agent" means Antares in its capacity as agent for the Lenders hereunder,
and any successor agent, in such capacity appointed pursuant to this Agreement.
"Agent-Related Persons" means Antares and any successor agent arising under
Section 8.9, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Aggregate Revolving Loan Commitment" means the combined Revolving Loan
Commitments of the Lenders, which shall initially be in the amount of
$30,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.
"Aggregate Term Loan Commitment" means the combined Term Loan Commitments
of the Lenders, which shall initially be in the amount of $50,000,000, as such
amount may be reduced from time to time pursuant to this Agreement.
"Antares" means Antares Capital Corporation, a Delaware corporation, acting
in its capacity as agent for the Lenders hereunder.
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"Applicable Margin" shall equal the applicable LIBOR margin or Base Rate
margin in effect from time to time determined as set forth below based upon the
applicable Credit Level then in effect:
Credit Level LIBOR Margin Base Rate Margin
------------ ------------ ----------------
I 2.75% 1.50%
II 3.00% 1.75%
III 3.50% 2.25%
The Applicable Margin shall be adjusted from time to time upon Agent's receipt
of rating information from S&P and/or Moody's, which, pursuant to the terms
hereof, results in an adjustment to the Credit Level then in effect. If such
Credit Level shall increase or decrease, then on the first day of the month
following the date of Agent's receipt of such rating information, the Applicable
Margin shall be adjusted in accordance therewith and shall remain at such
adjusted level until such time as the Credit Level requires adjustment pursuant
to the terms hereof; provided, however, if either S&P or Moody's ceases to
publish the rating, the Applicable Margins shall be calculated based on Credit
Level III.
"Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel or the allocated cost of internal
legal services and all disbursements of internal counsel.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. (S)101, et seq.), as amended and in effect from time to time and the
regulations issued from time to time thereunder.
"Base Rate" means, for any day, a rate of interest equal to the greater of
(a) the rate of interest which is identified as the "Prime Rate" and normally
published in the Money Rates section of The Wall Street Journal (or, if such
rate ceases to be so published, as quoted from such other generally available
and recognizable source as the Agent may select) and (b) the sum of the Federal
Funds Rate plus one half of one percent (0.5%). Any change in the Base Rate due
to a change in the "Prime Rate" or the Federal Funds Rate shall be effective on
the effective date of such change in the "Prime Rate" or the Federal Funds Rate.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower on the same day by the Lenders pursuant to Article I.
"Borrowing Base Certificate" means a certificate of the Borrower, in
substantially the form of Exhibit 11.1(a) hereto, duly completed as of a date
acceptable to the Agent in its sole discretion.
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"Borrower Pledge Agreement" means that certain Pledge Agreement dated as of
even date herewith, in form and substance reasonably acceptable to Agent and
Borrower made by Borrower in favor of the Agent, for the benefit of Agent and
the Lenders.
"Borrower Security Agreement" means that certain Security Agreement dated
as of even date herewith, in form and substance reasonably acceptable to Agent
and Borrower, made by Borrower in favor of Agent, for the benefit of Agent and
the Lenders.
"▇▇▇▇▇▇▇▇ Group" means ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
"▇▇▇▇▇▇▇▇ Investors" means ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇
▇▇▇▇.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois or New York, New York are authorized
or required by law to close and, if the applicable Business Day relates to any
LIBOR Rate Loan, a day on which dealings are carried on in the London interbank
market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Lender or of any corporation controlling a Lender.
"Capital Lease" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
"Capital Lease Obligations" means all monetary obligations of the Borrower
or any of its Subsidiaries under any Capital Leases.
"Cash Equivalents" means: (a) securities issued or fully guaranteed or
insured by the United States Government or any agency thereof having maturities
of not more than one (1) year from the date of acquisition; (b) certificates of
deposit, time deposits, repurchase agreements, reverse repurchase agreements, or
bankers' acceptances, having in each case a tenor of not more than one (1) year,
issued by any Lender, or by any U.S. commercial bank or any branch or agency of
a non-U.S. bank licensed to conduct business in the U.S. having combined capital
and surplus of not less than $250,000,000; (c) commercial paper of an issuer
rated at least A-1 by S&P or P-1 by Moody's and in either case having a tenor of
not more than twelve (12) months; (d) money market funds provided that
substantially all of the assets of such funds are comprised of securities of the
type described in clauses (a) through (c); and (e) mutual funds provided that
substantially all of the assets of such funds are comprised of securities of the
type described in clauses (a) through (c).
"Class L Purchase Agreement" means that certain Class L Common Stock
Purchase Agreement dated as of December 20, 2002 among Holdings and the Persons
listed on the Schedule of purchasers attached thereto.
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"Closing Date" means the date on which all conditions precedent set forth
in Section 2.1 are satisfied or waived by the Agent and all Lenders.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Collateral" means all Property and interests in Property and proceeds
thereof now owned or hereafter acquired by Holdings, the Borrower or any other
Person as debtor and their respective Subsidiaries and any other Person who has
granted a Lien to Agent, in or upon which a Lien now or hereafter exists in
favor of any Lender or the Agent for the benefit of the Agent and Lenders,
whether under this Agreement or under any other Collateral Documents executed by
any such Persons and delivered to the Agent.
"Collateral Documents" means, collectively, the Security Agreements, the
Mortgages, the Guarantees, the Pledge Agreements, the Deposit Account Control
Agreements, and all other security agreements, patent and trademark assignments,
lease assignments, guarantees and other similar agreements, and all amendments,
restatements, modifications or supplements thereof or thereto, by or between any
one or more of Holdings, the Borrower, Borrower's Subsidiaries or any other
Person pledging or granting a Lien on Collateral and the Agent for the benefit
of Agent and the Lenders now or hereafter delivered to the Agent pursuant to or
in connection with the transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed in accordance with
the UCC or comparable law) against Holdings, the Borrower or Borrower's
Subsidiaries as debtor in favor of any Lender or the Agent for the benefit of
Agent and the Lenders, as secured party.
"Commitment" means, for each Lender, the sum of its Revolving Loan
Commitment and Term Loan Commitment.
"Commitment Percentage" means, as to any Lender, the percentage equivalent
of such Lender's Revolving Loan Commitment or Term Loan Commitment divided by
the Aggregate Revolving Loan Commitment or Aggregate Term Loan Commitment, as
applicable.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person: (i) with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (ii) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (iii) under
any Rate Contracts; (iv) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement; or
(v) for the obligations of another through any agreement to purchase, repurchase
or otherwise acquire such obligation or any Property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another Person; provided, however, that Contingent Obligations shall
not include endorsements of instruments for deposit or collection, in each
instance, in the Ordinary Course of Business.
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The amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed or supported.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its Property is bound.
"Controlled Group" means the Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with the
Borrower pursuant to Section 414(b), (c), (m) or (o) of the Code or Section 4001
of ERISA.
"Conversion Date" means any date on which the Borrower converts a Base Rate
Loan to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.
"Credit Level" means the applicable Credit Level of the Loans from time to
time determined as set forth below based upon the applicable ratings assigned to
the Loans by each of S&P and Moody's as set forth below:
Rating
Credit Level (S&P/▇▇▇▇▇'▇)
------------ ---------------
I BB/Ba2 or above
II BB-/Ba3
III B+/B1 or below
For the purposes of determining (i) Applicable Margin and (ii) the amount of any
mandatory prepayment of the Loans pursuant to subsection 1.8(e), if the ratings
assigned to the Loans by each of S&P and ▇▇▇▇▇'▇ are such that, at any time, a
different Credit Level is associated with each such rating, the lower of the two
Credit Levels shall be the applicable Credit Level for the Loans. For purposes
of explanation only, if S&P assigns a rating of "BB" to the Loans (which rating
corresponds to a Credit Level of "I") and ▇▇▇▇▇'▇ assigns a rating of "Ba3" to
the Loans (which rating corresponds to a Credit Level of "II"), the applicable
Credit Level shall be "II".
"Default" means any event or circumstance which, with the giving of notice,
the lapse of a grace period, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Deposit Account Control Agreements" means, collectively, those certain
Deposit Account Control Agreements, each dated of even date herewith, between
Agent and Borrower and acknowledged and agreed to by ▇▇▇▇▇▇, Bank of America,
Wachovia Bank, N.A. and California Bank & Trust, respectively.
75
"Disposition" means (a) the sale, lease, conveyance or other disposition of
Property, other than (i) Events of Loss and (ii) sales or other dispositions
expressly permitted under subsections 5.2(a), (c), (d), (e), (f), (g) and (i),
and (b) the sale or transfer by the Borrower or any Subsidiary of the Borrower
of any equity securities issued by any Subsidiary of the Borrower and held by
such transferor Person.
"Dollars", "dollars" and "$" each mean lawful money of the United States of
America.
"Eligible Assignee" means any of: (a) a commercial bank organized under the
laws of the United States, or any state thereof; (b) a commercial bank organized
under the laws of any other country; (c) a finance company, insurance company or
other financial institution or fund which is engaged in making, purchasing or
otherwise investing in commercial loans for its own account in its Ordinary
Course of Business or (d) a Related Fund.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), Property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by the Borrower.
"Environmental Laws" means all foreign, federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, licenses, authorizations and permits of, and
agreements with, any Governmental Authorities, in each case relating to
environmental, health, safety and land use matters; including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b),
414(c), 414(m) or 414(o) of the Code or Section 4001 of ERISA.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified Plan
or a Multiemployer Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate
from a Qualified Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA);
(c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from
a Multiemployer Plan; (d) the filing of a notice of intent
76
to terminate, the treatment of a plan amendment as a termination under Section
4041 or 4041A of ERISA or the commencement of proceedings by the PBGC to
terminate a Qualified Plan or Multiemployer Plan subject to Title IV of ERISA;
(e) a failure by the Borrower or any member of the Controlled Group to make
required contributions to a Qualified Plan or Multiemployer Plan; (f) an event
or condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Qualified Plan or Multiemployer Plan; (g) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate; (h) an application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with respect to any
Plan; (i) a non-exempt prohibited transaction occurs with respect to any Plan
for which the Borrower or any Subsidiary of the Borrower may be directly or
indirectly liable; or (j) a violation of the applicable requirements of Section
404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the
Code by any fiduciary or disqualified person with respect to any Plan for which
the Borrower or any member of the Controlled Group may be directly or indirectly
liable.
"Event of Loss" means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property or (b) any actual
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upward
to the nearest 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided
that if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the Agent on
such day on such transactions as determined by the Agent in a commercially
reasonable manner.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantees" means the Holdings Guaranty and the Subsidiary Guaranty.
77
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Trust and Savings Bank.
"Hazardous Materials" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law.
"Holdings" means ▇▇▇▇▇▇▇▇ Group Holdings, Inc., a Delaware corporation.
"Holdings Guaranty" means that certain Guaranty, dated as of even date
herewith, in form and substance reasonably acceptable to Agent and Holdings,
made by Holdings in favor of the Agent, for the benefit of Agent and the
Lenders.
"Holdings Loans" means intercompany loans made by Borrower or one of its
Wholly-Owned Subsidiaries to Holdings to the extent that, at the time such loan
is made, a dividend from Borrower to Holdings would be permitted under
subsection 5.11 and provided the proceeds of such loans are used for the
purposes specified in subsection 5.11 and such loans are evidenced by promissory
notes, the sole originally executed copy of which shall be pledged to Agent, for
the benefit of Agent and Lenders, as security for the Obligations.
"Holdings Pledge Agreement" means that certain Pledge Agreement dated as of
even date herewith, in form and substance reasonably acceptable to Agent and
Holdings, made by Holdings in favor of the Agent, for the benefit of Agent and
the Lenders.
"Holdings Security Agreement" means the Security Agreement, dated as of
even date herewith, in form and substance reasonably satisfactory to Agent and
Holdings, made by Holdings in favor of the Agent, for the benefit of Agent and
the Lenders
"Indebtedness" of any Person means, without duplication: (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of Property or services (other than trade
payables and accrued operating expenses, in each instance, incurred in the
Ordinary Course of Business); (c) the face amount of all letters of credit
issued for the account of such Person and without duplication, all drafts drawn
thereunder and all reimbursement or payment obligations with respect to letters
of credit, surety bonds and other similar instruments issued by such Person; (d)
all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of Property, assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to Property acquired by the Person (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such Property); (f) all
Capital Lease Obligations; (g) the principal balance outstanding under any
synthetic lease, off-balance sheet loan or similar off-balance sheet financing
product; (h) all indebtedness referred to in clauses (a) through (g) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in Property
(including accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness;
and (i) all Contingent Obligations described in clause (i) of the definition
thereof in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (h) above. Notwithstanding anything to the
contrary contained herein, "Indebtedness" shall not include
78
Contingent Obligations of Borrower or any of Borrower's Subsidiaries incurred in
the Ordinary Course of Business with respect to surety and appeal bonds,
performance bonds and other similar obligations.
"Indemnity Agreement" means that certain Indemnity Agreement of even date
herewith by and among Holdings, Borrower, and ▇▇▇▇▇▇▇▇ Investors.
"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case in (a) and (b) above, undertaken under U.S. federal,
state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, (a) with respect to any LIBOR Rate Loan
(other than a LIBOR Rate Loan having an Interest Period of six (6) months) the
last day of each Interest Period applicable to such Loan, (b) with respect to
any LIBOR Rate Loan having an Interest Period of six (6) months, the last day of
each three (3) month interval, and (c) with respect to Base Rate Loans, the
first day of each calendar month.
"Interest Period" means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day such Loan is disbursed or continued or on the
Conversion Date on which a Base Rate Loan is converted to the LIBOR Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by
the Borrower in its Notice of Borrowing or Notice of Continuation/Conversion;
provided that:
(a) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise
end on a day which is not a Business Day, that Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period;
(c) no Interest Period for the Term Loan shall extend beyond the last
scheduled payment date therefor and no Interest Period for any Revolving Loan
shall extend beyond the Revolving Termination Date; and
(d) no Interest Period applicable to the Term Loan or portion thereof shall
extend beyond any date upon which is due any scheduled principal payment in
respect of the Term Loan unless the aggregate principal amount of the Term Loan
represented by Base Rate Loans or by LIBOR Rate Loans having Interest Periods
that will expire on or before such date is equal to or in excess of the amount
of such principal payment.
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"Issuing Lender" means any Lender, selected by Borrower and reasonably
acceptable to Agent, in its capacity as an issuer of one or more Lender Letters
of Credit hereunder and as the representative party for the Lenders under Letter
of Credit Participation Agreements; provided that ▇▇▇▇▇▇ shall be initially
designated as Issuing Lender with respect to certain Lender Letters of Credit.
If at any time no Lender shall have been selected as Issuing Lender, Antares
shall be the Issuing Lender until such time as any other Lender is selected as
Issuing Lender. For purposes of this Agreement, the term "Lender" shall include
the Issuing Lender.
"Lending Office" means, with respect to any Lender, the office or offices
of such Lender specified as its "Lending Office" opposite its name on the
applicable signature page hereto, or such other office or offices of such Lender
as it may from time to time notify the Borrower and the Agent.
"Letter of Credit Participation Liability" means, as to each Lender Letter
of Credit and each Letter of Credit Participation Agreement, all reimbursement
obligations and all other liabilities of Borrower or any of its Subsidiaries to
Agent and the Lenders in connection with the Lender Letter of Credit or to the
obligee with respect to the transaction for which the Letter of Credit
Participation Agreement was issued, whether contingent or otherwise, including
with respect to any letter of credit: (a) the amount available to be drawn or
which may become available to be drawn; (b) without duplication, all amounts
which have been paid or made available by the issuing bank or by the Agent under
such Lender Letter of Credit or Letter of Credit Participation Agreement, in
each instance, to the extent not reimbursed; and (c) all unpaid interest, fees
and expenses.
"LIBOR" means, for each Interest Period, the offered rate per annum for
deposits of Dollars for the applicable Interest Period that appears on Telerate
Page 3750 as of 11:00 A.M. (London, England time) two (2) Business Days prior to
the first day in such Interest Period. If no such offered rate exists, such rate
will be the rate of interest per annum, as determined by the Agent (rounded
upwards, if necessary, to the nearest 1/16 of 1%) at which deposits of Dollars
in immediately available funds are offered at 11:00 A.M. (London, England time)
two (2) Business Days prior to the first day in such Interest Period by major
financial institutions reasonably satisfactory to the Agent in the London
interbank market for such Interest Period for the applicable principal amount on
such date of determination.
"LIBOR Rate Loan" means a Loan that bears interest based on LIBOR.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
otherwise) or preference, priority or other security interest of any kind or
nature whatsoever (including those created by, arising under or evidenced by any
conditional sale or other title retention agreement, the interest of a lessor
under a Capital Lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as debtor,
under the UCC or any comparable law) and any contingent or other agreement to
provide any of the foregoing, but not including the interest of a lessor under a
lease which is not a Capital Lease.
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"Loan" means an extension of credit by a Lender to the Borrower pursuant to
Article I hereof, and may be a Base Rate Loan or a LIBOR Rate Loan.
"Loan Documents" means this Agreement, the Notes, the Collateral Documents
and all documents delivered to the Agent and/or any Lender in connection with
any of the foregoing.
"Management Redemption Notes" means all unsecured notes (i) issued by
Holdings to a holder of stock originally issued to a management equityholder and
(ii) subordinated to the Obligations, in each case in form and substance
reasonably acceptable to Agent.
"Margin Stock" means "margin stock" as such term is defined in Regulation
T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, Properties or financial
condition of the Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of Holdings, the Borrower, any of its Subsidiaries or
any other Person (other than Agent or Lenders) to perform in any material
respect its obligations under any Loan Document; or (c) a material adverse
effect upon (i) the legality, validity, binding effect or enforceability
(including the rights and remedies of Agent and Lenders) of any Loan Document,
or (ii) the perfection or priority of any Lien granted to the Lenders or to the
Agent for the benefit of the Agent and the Lenders under any of the Collateral
Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means any deed of trust, leasehold deed of trust, mortgage,
leasehold mortgage, deed to secure debt, leasehold deed to secure debt or other
document creating a Lien on real Property or any interest in real Property.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of
Section 4001(a)(3) of ERISA) and to which Borrower or any member of the
Controlled Group may have any liability.
"Net Issuance Proceeds" means, in respect of any issuance of debt or
equity, cash proceeds received in connection therewith, net of reasonable
out-of-pocket costs and expenses paid or incurred in connection therewith.
"Net Proceeds" means proceeds in cash, checks or other cash equivalent
financial instruments (including Cash Equivalents) as and when received by the
Person making a Disposition and insurance proceeds received on account of an
Event of Loss, net of: (a) in the event of a Disposition (i) the reasonable
out-of-pocket costs and expenses paid in connection therewith, (ii) sale, use or
other transaction taxes paid or payable as a result thereof, (iii) amounts
required to be applied to repay principal, interest and prepayment premiums and
penalties on Indebtedness secured by a Lien on the asset which is the subject of
such Disposition and (iv) any cash reserves established in connection with such
Disposition provided such amounts shall constitute Net Proceeds as and to the
extent such cash is returned to Borrower or its Subsidiaries and (b) in the
event of an Event of Loss, (i) all money actually applied to repair or
reconstruct the
81
damaged Property or Property affected by the condemnation or taking, (ii) all of
the costs and expenses reasonably incurred in connection with the collection of
such proceeds, award or other payments, and (iii) any amounts retained by or
paid to parties having superior rights to such proceeds, awards or other
payments.
"Note" means any Revolving Note or Term Note and "Notes" means all such
Notes.
"Notice of Borrowing" means a notice given by the Borrower to the Agent
pursuant to Section 1.5, in substantially the form of Exhibit 11.1(b) hereto.
"Notice of Continuation/Conversion" means a notice given by the Borrower to
the Agent pursuant to Section 1.6, in substantially the form of Exhibit 11.1(c)
hereto.
"Obligations" means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to any
Lender, the Agent, or any other Person required to be indemnified, that arises
under any Loan Document, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. "Obligations" shall not include any Rate
Contract Obligation.
"Ordinary Course of Business" means, in respect of any transaction
involving Holdings, the Borrower or any Subsidiary of the Borrower, the ordinary
course of such Person's business, as conducted by any such Person in accordance
with past practice and undertaken by such Person in good faith and not for
purposes of evading any covenant or restriction in any Loan Document.
"Organization Documents" means, (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (b) for any
partnership, the partnership agreement and, if applicable, certificate of
limited partnership and (c) for any limited liability company, the operating
agreement and articles or certificate of formation.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
"Permitted Acquisition" means any Acquisition by Borrower or any domestic
Wholly-Owned Subsidiary of Borrower of assets located in the United States or
capital stock or other equity securities of an entity organized under the laws
of the United States, any state thereof, or the District of Columbia, to the
extent that each of the following conditions shall have been satisfied:
(a) the conditions set forth in subsection 2.3 shall have been satisfied
regardless of whether or not the Acquisition will be financed in whole or in
part with proceeds of Loans;
82
(b) the Borrower shall have furnished to the Agent and each Lender at least
ten (10) Business Days prior to the consummation of such Acquisition (1) to the
extent available, an executed term sheet and/or commitment letter (setting forth
in reasonable detail the terms and conditions of such Acquisition) and, at the
request of the Agent, such other information and documents that the Agent may
reasonably request, including, without limitation, executed counterparts of the
respective agreements, documents or instruments pursuant to which such
Acquisition is to be consummated (including, without limitation, any related
management, non-compete, employment, option or other material agreements), any
schedules to such agreements, documents or instruments and all other material
ancillary agreements, instruments and documents to be executed or delivered in
connection therewith, (2) pro forma financial statements of the Borrower and its
Subsidiaries after giving effect to the consummation of such Acquisition, (3) a
certificate of the chief financial officer of the Borrower, demonstrating on a
pro forma basis compliance with all covenants set forth in Article VI hereof
(recomputed for the most recent month for which financial statements have been
delivered) after giving effect to the consummation of such Acquisition, (4) a
statement identifying non-core assets which Borrower intends to sell after
consummation of such Acquisition and (5) copies of such other agreements,
instruments and other documents in connection therewith as the Agent shall
reasonably request;
(c) the agreements, instruments and other documents referred to in
paragraph (b) above shall provide that (1) neither Borrower nor any of its
Subsidiaries shall, in connection with such Acquisition, assume or remain liable
in respect of any Indebtedness of the seller or sellers, or other obligation of
the seller or sellers (except for obligations incurred in the ordinary course of
business in operating the property so acquired and necessary and desirable to
the continued operation of such property and except for Indebtedness otherwise
permitted hereunder), and (2) all property to be so acquired in connection with
such Acquisition shall be free and clear of any and all Liens, except for
Permitted Liens (and if any such property is subject to any Lien not permitted
by this clause (2) then concurrently with such Acquisition such Lien shall be
released);
(d) the Target shall be engaged in business the Borrower is permitted to
engage in hereunder;
(e) such Acquisition shall be effected in such a manner so that the
acquired capital stock, other equity securities or assets are owned either by
Borrower or a domestic Wholly-Owned Subsidiary of Borrower and, if effected by
merger or consolidation, Borrower or a domestic Wholly-Owned Subsidiary shall be
the continuing or surviving Person;
(f) such Acquisition is not hostile and has been approved by the board of
directors (or other similar body) and/or the stockholders or other equityholders
of the Target;
(g) no Default or Event of Default shall then exist or would exist after
giving effect thereto and, without limiting the foregoing, after giving effect
to the Acquisition, the representations and warranties of Borrower and its
Subsidiaries contained herein and in the other Loan Documents shall be true and
correct; and
(h) after giving effect to such Acquisition on a pro forma basis, the
Maximum Revolving Loan Balance shall exceed the outstanding principal balance of
Revolving Loans by not less than $10,000,000.
83
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Borrower or any member of the Controlled Group sponsors or maintains
or to which the Borrower or any member of the Controlled Group may have
liability.
"Pledge Agreements" means the Borrower Pledge Agreement and the Holdings
Pledge Agreement.
"Pledged Collateral" has the meaning specified in the Pledge Agreements.
"Prior Indebtedness" means the Indebtedness and obligations specified on
Schedule 11.1 hereto.
"Pro Forma EBITDA" means, with respect to any Target, EBITDA for such
Target for the most recent twelve (12) month period for which financial
statements are available at the time of determination thereof, adjusted by cost
savings, including, without limitation, excess owner compensation, if any, which
are expected to be realized, in each case calculated by the Borrower and
approved by the Agent.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Purchase Agreement" means that certain Purchase Agreement dated December
20, 2002 among CIBC World Markets Corp., ▇▇▇▇▇▇ Brothers Inc., Borrower and
Subsidiaries of Borrower.
"Qualified Plan" means a pension plan (as defined in Section 3(2) of ERISA)
intended to be tax-qualified under Section 401(a) of the Code and which any
member of the Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.
"Rate Contract Obligations" means obligations of Borrower under a Rate
Contract between Borrower and a Lender, or an Affiliate of a Lender, permitted
hereunder.
"Rate Contracts" means swap agreements (as such term is defined in Section
101 of the Bankruptcy Code), hedge agreements and any other agreements or
arrangements designed to provide protection against fluctuations in interest or
currency exchange rates.
"Recapitalization" means the transactions consummated pursuant to the
Recapitalization Agreement.
84
"Recapitalization Agreement" means the Recapitalization Agreement dated as
of December 20, 2002 among Holdings, Borrower, Sponsor and certain Persons who
were stockholders of Borrower prior to the Recapitalization.
"Registration Rights Agreement" means that certain Registration Rights
Agreement of even date herewith among the Borrower, ▇▇▇▇▇▇ Brothers, Inc. and
CIBC World Markets Corp.
"Related Agreements" means the Senior Subordinated Notes Indenture, the
Senior Subordinated Notes, the Recapitalization Agreement, the Indemnity
Agreement, the Class L Purchase Agreement, the Purchase Agreement and the
Registration Rights Agreement.
"Related Fund" means (a) any fund, trust or similar entity that invests in
commercial loans in the Ordinary Course of Business and is advised or managed by
(i) a Lender, (ii) an Affiliate of a Lender, (iii) the same investment advisor
that manages a Lender or (iv) an Affiliate of an investment advisor that manages
a Lender or (b) any finance company, insurance company or other financial
institution which temporarily warehouses Loans for any Lender or any Person
described in clause (a) above.
"Related Transactions" means the transactions contemplated by the Related
Agreements and includes, without limitation, the funding of the Senior
Subordinated Notes, the Recapitalization and the acquisition by Sponsor of
capital stock of Holdings pursuant to the Class L Purchase Agreement.
"Reportable Event" means, as to any Plan, (a) any of the events set forth
in Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the thirty (30) day notice requirement under ERISA has been
waived in regulations issued by the PBGC, (b) a withdrawal from a Plan described
in Section 4063 of ERISA, or (c) a cessation of operations described in Section
4062(e) of ERISA.
"Required Lenders" means at any time (a) Lenders then holding more than
fifty percent (50%) of the sum of the Aggregate Revolving Loan Commitment then
in effect plus the aggregate unpaid principal balance of the Term Loan then
outstanding, or (b) if the Revolving Loan Commitments have been terminated,
Lenders then having more than fifty percent (50%) of the aggregate unpaid
principal amount of Loans then outstanding.
"Requirement of Law" means, as to any Person, any law (statutory or
common), ordinance, treaty, rule, regulation, order, policy, other legal
requirement or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Officer" means the chief executive officer, the president or
any vice president of the Borrower, or any other officer having substantially
the same authority and responsibility; or, with respect to compliance with
financial covenants or delivery of financial information, the chief financial
officer or the treasurer of the Borrower, or any other officer having
substantially the same authority and responsibility.
85
"Revolving Note" means a promissory note of the Borrower payable to the
order of a Lender, in substantially the form of Exhibit 11.1(d) hereto,
evidencing Indebtedness of the Borrower under the Revolving Loan Commitment of
such Lender.
"Revolving Termination Date" means the earlier to occur of: (a) December
19, 2008; and (b) the date on which the Aggregate Revolving Loan Commitment
shall terminate in accordance with the provisions of this Agreement.
"S&P" means Standard & Poor's Rating Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies.
"Security Agreements" means the Borrower Security Agreement, Holdings
Security Agreement and the Subsidiary Security Agreement.
"Senior Subordinated Notes" means those certain 11.75% Senior Subordinated
Notes due 2009 in the aggregate principal amount of up to $150,000,000 issued by
Borrower pursuant to the Senior Subordinated Notes Indenture, including all
notes issued in exchange or substitution therefor.
"Senior Subordinated Notes Indenture" means that certain Indenture dated as
of December 20, 2002 among Trustee and Borrower, as the same may be amended,
modified and/or supplemented from time to time as permitted herein and including
any other indenture pursuant to which any Senior Subordinated Notes are issued.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32)(A) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value (on a going
concern basis) of the Property of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured; (c) such Person is able to realize upon its
Property and generally pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's Property would constitute unreasonably small capital.
"Sponsor" means CIVC Sidecar Fund, L.P. and any other investment fund
controlled by or under common control of CIVC Sidecar Fund, L.P.
"Subordinated Indebtedness" means the Indebtedness of Borrower or any of
its Subsidiaries which is subordinated in right of payment to the Obligations
including, without limitation, Indebtedness evidenced by the Senior Subordinated
Notes.
"Subsidiary" of a Person means any corporation, association, limited
liability company, partnership, joint venture or other business entity of which
more than fifty percent (50%) of the
86
voting stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by such Person, or
one or more of the Subsidiaries of such Person, or a combination thereof.
"Subsidiary Guaranty" means that certain Guaranty, dated as of even date
herewith, in form and substance reasonably acceptable to Agent and Borrower,
made by each Subsidiary of Borrower in favor of the Agent, for the benefit of
Agent and the Lenders.
"Subsidiary Security Agreement" means the Security Agreement, dated as of
even date herewith, in form and substance reasonably satisfactory to Agent and
Borrower made by each Subsidiary of Borrower in favor of the Agent, for the
benefit of Agent and the Lenders
"Target" means any other Person or business unit or asset group of any
other Person acquired or proposed to be acquired in an Acquisition.
"Term Note" means a promissory note of the Borrower payable to the order of
a Lender, in substantially the form of Exhibit 11.1(e) hereto, evidencing the
Indebtedness of the Borrower to such Lender resulting from the Term Loan made to
the Borrower by such Lender.
"Trustee" means Bank One, N.A.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of Illinois.
"Unfunded Pension Liabilities" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used by the Plan's
actuaries for funding the Plan pursuant to Section 412 for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
"Wholly-Owned Subsidiary" means any Subsidiary in which (other than
directors' qualifying shares required by law) one hundred percent (100%) of the
equity securities, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Borrower, or by one or more of the
other Wholly-Owned Subsidiaries, or both.
"Withdrawal Liabilities" means, as of any determination date, the aggregate
amount of the liabilities, if any, pursuant to Section 4201 of ERISA if the
Controlled Group made a complete withdrawal from all Multiemployer Plans and any
increase in contributions pursuant to Section 4243 of ERISA.
11.2 Other Interpretive Provisions.
(a) Defined Terms. Unless otherwise specified herein or therein, all terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meanings of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not
87
otherwise defined herein and that are defined in the UCC shall have the meanings
therein described.
(b) The Agreement. The words "hereof", "herein", "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection,
section, schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) Certain Common Terms. The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced. The term "including" is not limiting and means
"including without limitation."
(d) Performance; Time. Whenever any performance obligation hereunder (other
than a payment obligation) shall be stated to be due or required to be satisfied
on a day other than a Business Day, such performance shall be made or satisfied
on the next succeeding Business Day. In the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and the
word "through" means "to and including." If any provision of this Agreement
refers to any action taken or to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be interpreted to encompass any and
all means, direct or indirect, of taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein, references to
agreements and other contractual instruments, including this Agreement and the
other Loan Documents, shall be deemed to include all subsequent amendments
thereto, restatements and substitutions thereof and other modifications and
supplements thereto which are in effect from time to time, but only to the
extent such amendments and other modifications are not prohibited by the terms
of any Loan Document.
(f) Laws. References to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
11.3 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied.
(b) References herein to "fiscal year", "fiscal quarter" and "fiscal month"
refer to such fiscal periods of the Borrower.
(c) If any change in GAAP results in a change in the calculation of the
financial covenants or interpretation of related provisions of this Agreement or
any other Loan Document, then the Borrower, the Agent and the Lenders agree to
amend such provisions of this Agreement so as to equitably reflect such changes
in GAAP with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such change in GAAP as if
88
such change had not been made, provided that, notwithstanding any other
provision of this Agreement, the Required Lenders' agreement to any amendment of
such provisions shall be sufficient to bind all Lenders.
[Balance of page intentionally left blank; signature pages follow]
89
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first above written.
THE ▇▇▇▇▇▇▇▇ GROUP, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Wire Transfers:
▇▇▇▇▇▇ Trust and Savings Bank
ABA Routing #: ▇▇▇-▇▇▇-▇▇▇
Account #: ▇▇▇-▇▇▇-▇
Reference: The ▇▇▇▇▇▇▇▇ Group, Ltd.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first above written.
ANTARES CAPITAL CORPORATION,
as Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Director
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Portfolio Manager - ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Address for payments:
Antares Capital Corporation
Account # 4070-6016
Citibank N.A., NY
ABA # ▇▇▇▇▇▇▇▇▇
Reference: ▇▇▇▇▇▇▇▇
Please advise ▇▇▇ ▇▇▇▇▇▇▇▇▇ at
(▇▇▇) ▇▇▇-▇▇▇▇ upon receipt
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first above written
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Duly Authorized Signatory
---------------------------------
Address for notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ Account Manager
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Counsel - Merchant Banking
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Lending office:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first above written
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Title: Loan Officer
---------------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Lending office:
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first above written
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
Address for notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Lending office:
▇▇▇▇▇▇ Trust & Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first above written
FIRSTRUST BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Vice President
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Address for notices:
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Attn: Fiorin Schmarak
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Lending office:
Firstrust Bank
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Schedule 1.1(a)
Term Loan Commitments
Antares Capital Corporation $25,750,000.00
General Electric Capital Corporation $ 7,750,000.00
LaSalle Bank National Association $ 7,750,000.00
▇▇▇▇▇▇ Trust and Savings Bank $ 6,200,000.00
Firstrust Bank $ 2,550,000.00
Schedule 1.1(b)
Revolving Loan Commitments
Antares Capital Corporation $7,250,000.00
General Electric Capital Corporation $7,250,000.00
LaSalle Bank National Association $7,250,000.00
▇▇▇▇▇▇ Trust and Savings Bank $5,800,000.00
Firstrust Bank $2,450,000.00