EXHIBIT 4.5.1
REVOLVING
CREDIT AND GUARANTY AGREEMENT
DATED AS OF AUGUST 6, 2004
AMONG
STANADYNE CORPORATION,
AS BORROWER,
STANADYNE AUTOMOTIVE HOLDING CORP. AND
CERTAIN SUBSIDIARIES OF STANADYNE CORPORATION,
AS GUARANTORS,
VARIOUS LENDERS,
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS SOLE LEAD ARRANGER, SOLE BOOKRUNNER AND SYNDICATION AGENT,
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
ANTARES CAPITAL CORPORATION
AS CO-DOCUMENTATION AGENT,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS CO-DOCUMENTATION AGENT
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$35,000,000 SENIOR SECURED REVOLVING CREDIT FACILITIES
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND INTERPRETATION.................................................................. 1
1.1. Definitions..................................................................................... 2
1.2. Accounting Terms................................................................................ 38
1.3. Interpretation, etc............................................................................. 39
SECTION 2. LOANS AND LETTERS OF CREDIT..................................................................... 39
2.1. Revolving Loans................................................................................. 39
2.2. Swing Line Loans................................................................................ 40
2.3. Issuance of Letters of Credit and Purchase of Participations Therein............................ 43
2.4. Pro Rata Shares; Availability of Funds.......................................................... 48
2.5. Use of Proceeds................................................................................. 48
2.6. Evidence of Debt; Register; Lenders' Books and Records; Notes................................... 49
2.7. Interest on Loans............................................................................... 49
2.8. Conversion/Continuation......................................................................... 51
2.9. Default Interest................................................................................ 52
2.10. Fees........................................................................................... 52
2.11. Scheduled Payments/Commitment Reductions....................................................... 53
2.12. Voluntary Prepayments/Commitment Reductions.................................................... 53
2.13. Mandatory Prepayments/Commitment Reductions.................................................... 55
2.14. Application of Prepayments/Reductions.......................................................... 57
2.15. General Provisions Regarding Payments.......................................................... 57
2.16. Ratable Sharing................................................................................ 59
2.17. Making or Maintaining Eurodollar Rate Loans.................................................... 60
2.18. Increased Costs; Capital Adequacy.............................................................. 61
2.19. Taxes; Withholding, etc........................................................................ 63
2.20. Obligation to Mitigate......................................................................... 65
2.21. Defaulting Lenders............................................................................. 66
2.22. Removal or Replacement of a Lender............................................................. 67
SECTION 3. CONDITIONS PRECEDENT............................................................................ 68
3.1. Closing Date.................................................................................... 68
3.2. Conditions to Each Credit Extension............................................................. 73
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................................................. 74
4.1. Organization; Requisite Power and Authority; Qualification...................................... 75
4.2. Capital Stock and Ownership..................................................................... 75
4.3. Due Authorization............................................................................... 75
4.4. No Conflict..................................................................................... 75
4.5. Governmental Consents........................................................................... 76
4.6. Binding Obligation.............................................................................. 76
4.7. Historical Financial Statements................................................................. 76
4.8. Projections..................................................................................... 76
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4.9. No Material Adverse Change...................................................................... 77
4.10. No Restricted Junior Payments.................................................................. 77
4.11. Adverse Proceedings, etc....................................................................... 77
4.12. Payment of Taxes............................................................................... 77
4.13. Properties..................................................................................... 77
4.14. Environmental Matters.......................................................................... 78
4.15. No Defaults.................................................................................... 79
4.16. Material Contracts............................................................................. 79
4.17. Governmental Regulation........................................................................ 79
4.18. Margin Stock................................................................................... 79
4.19. Employee Matters............................................................................... 79
4.20. Employee Benefit Plans......................................................................... 80
4.21. Certain Fees................................................................................... 80
4.22. Solvency....................................................................................... 80
4.23. Related Agreements............................................................................. 80
4.24. Compliance with Statutes, etc.................................................................. 81
4.25. Disclosure..................................................................................... 81
4.26. Subordination; Designation of the Credit Documents as "Designated Senior Indebtedness"; Etc... 81
4.27. Aggregate Borrowing Base Calculation........................................................... 82
SECTION 5. AFFIRMATIVE COVENANTS........................................................................... 82
5.1. Financial Statements and Other Reports.......................................................... 82
5.2. Existence....................................................................................... 87
5.3. Payment of Taxes and Claims..................................................................... 87
5.4. Maintenance of Properties....................................................................... 87
5.5. Insurance....................................................................................... 87
5.6. Inspections..................................................................................... 88
5.7. Lenders Meetings................................................................................ 88
5.8. Compliance with Laws............................................................................ 89
5.9. Environmental................................................................................... 89
5.10. Subsidiaries................................................................................... 90
5.11. Additional Material Real Estate Assets......................................................... 91
5.12. Interest Rate Protection....................................................................... 91
5.13. Further Assurances............................................................................. 92
5.14. Cash Management Systems........................................................................ 92
SECTION 6. NEGATIVE COVENANTS.............................................................................. 93
6.1. Indebtedness.................................................................................... 93
6.2. Liens........................................................................................... 95
6.3. Equitable Lien.................................................................................. 97
6.4. No Further Negative Pledges..................................................................... 97
6.5. Restricted Junior Payments...................................................................... 98
6.6. Restrictions on Subsidiary Distributions........................................................ 99
6.7. Investments..................................................................................... 100
6.8. Financial Covenants............................................................................. 101
6.9. Fundamental Changes; Disposition of Assets; Acquisitions........................................ 101
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6.10. Disposal of Subsidiary Interests............................................................... 102
6.11. Sales and Lease-Backs.......................................................................... 103
6.12. Transactions with Shareholders and Affiliates.................................................. 103
6.13. Conduct of Business............................................................................ 103
6.14. Permitted Activities of Holdings............................................................... 103
6.15. Amendments or Waivers of Certain Related Agreements............................................ 104
6.16. Amendments or Waivers with respect to Subordinated Indebtedness................................ 104
6.17. Fiscal Year.................................................................................... 104
6.18. No Other "Designated Senior Indebtedness"...................................................... 104
6.19. Maximum Consolidated Capital Expenditures...................................................... 104
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SECTION 7. GUARANTY........................................................................................ 105
7.1. Guaranty of the Obligations..................................................................... 105
7.2. Contribution by Guarantors...................................................................... 105
7.3. Payment by Guarantors........................................................................... 106
7.4. Liability of Guarantors Absolute................................................................ 106
7.5. Waivers by Guarantors........................................................................... 108
7.6. Guarantors' Rights of Subrogation, Contribution, etc............................................ 109
7.7. Subordination of Other Obligations.............................................................. 110
7.8. Continuing Guaranty............................................................................. 110
7.9. Authority of Guarantors or Borrower............................................................. 110
7.10. Financial Condition of Borrower and Guarantors................................................. 110
7.11. Bankruptcy, etc................................................................................ 111
7.12. Discharge of Guaranty Upon Sale of Guarantor................................................... 111
SECTION 8. EVENTS OF DEFAULT............................................................................... 112
8.1. Events of Default............................................................................... 112
8.2. Borrower's Right to Cure........................................................................ 115
SECTION 9. AGENTS ......................................................................................... 115
9.1. Appointment of Agents........................................................................... 115
9.2. Powers and Duties............................................................................... 116
9.3. General Immunity................................................................................ 116
9.4. Agents Entitled to Act as Lender................................................................ 117
9.5. Lenders' Representations, Warranties and Acknowledgment......................................... 117
9.6. Right to Indemnity.............................................................................. 118
9.7. Successor Administrative Agent, Collateral Agent and Swing Line Lender.......................... 118
9.8. Collateral Documents and Guaranty............................................................... 119
SECTION 10. MISCELLANEOUS.................................................................................. 120
10.1. Notices........................................................................................ 120
10.2. Expenses....................................................................................... 120
10.3. Indemnity...................................................................................... 121
10.4. Set-Off........................................................................................ 122
10.5. Amendments and Waivers......................................................................... 122
10.6. Successors and Assigns; Participations......................................................... 124
10.7. Independence of Covenants...................................................................... 127
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10.8. Survival of Representations, Warranties and Agreements......................................... 127
10.9. No Waiver; Remedies Cumulative................................................................. 127
10.10. Marshalling; Payments Set Aside............................................................... 128
10.11. Severability.................................................................................. 128
10.12. Obligations Several; Independent Nature of Lenders' Rights.................................... 128
10.13. Headings...................................................................................... 128
10.14. APPLICABLE LAW................................................................................ 128
10.15. CONSENT TO JURISDICTION....................................................................... 128
10.16. WAIVER OF JURY TRIAL.......................................................................... 129
10.17. Confidentiality............................................................................... 130
10.18. Usury Savings Clause.......................................................................... 130
10.19. Counterparts.................................................................................. 131
10.20. Effectiveness................................................................................. 131
10.21. USA Patriot Act............................................................................... 131
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APPENDICES: A Commitments
B Notice Addresses
SCHEDULES: 1.1(a) Certain Adjustments to Financial Covenant Definitions
1.1(b) Existing Capital Leases
3.1(i) Closing Date Mortgaged Properties
3.1(k) Phase I Report
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.13 Real Estate Assets
4.14 Certain Environmental Matters
4.17 Material Contracts
4.20 Employee Benefits Plans
5.9 Environmental Disclosure
5.14 Cash Management Systems
5.16 Post-Closing Obligations
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.12 Certain Affiliate Transactions
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
A-3 Issuance Notice
B-1 Revolving Loan Note
B-2 Swing Line Note
C Compliance Certificate
D Assignment Agreement
E Certificate Re: Non-bank Status
F-1 Closing Date Certificate
F-2 Solvency Certificate
G Counterpart Agreement
H Mortgage
I Landlord Waiver and Consent Agreement
J Borrowing Base Certificate
The Company agrees to furnish supplementally a copy of any omitted schedule or
exhibit to the Commission upon request.
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of August 6, 2004, is entered
into by and among STANADYNE CORPORATION, a Delaware corporation ("BORROWER"),
STANADYNE AUTOMOTIVE HOLDING CORP., a Delaware corporation ("HOLDINGS"), CERTAIN
SUBSIDIARIES OF STANADYNE CORPORATION, as Guarantors, the Lenders party thereto
from time to time, XXXXXXX XXXXX CREDIT PARTNERS L.P. ("GSCP"), as Sole Lead
Arranger, Sole Bookrunner and Syndication Agent, THE CIT GROUP/BUSINESS CREDIT,
INC. ("CIT"), as Collateral Agent (together with its permitted successors in
such capacity, "COLLATERAL AGENT"), and as Administrative Agent (together with
its permitted successors in such capacity, "ADMINISTRATIVE AGENT"), ANTARES
CAPITAL CORPORATION, as Co-Documentation Agent (in such capacity,
"CO-DOCUMENTATION AGENT") and LASALLE BANK NATIONAL ASSOCIATION, as
Co-Documentation Agent (in such capacity, "CO-DOCUMENTATION Agent").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Holdings owns all of the capital stock of Borrower;
WHEREAS, KSTA Acquisition, LLC has entered into the Stock Purchase
Agreement with the Sellers pursuant to which it has agreed to acquire Holdings;
WHEREAS, Lenders have agreed to extend certain revolving credit facilities
to Borrower, in an aggregate principal amount not to exceed $35.0 million of
Commitments;
WHEREAS, the proceeds of the Revolving Loans will be used to fund
permitted capital expenditures and Permitted Acquisitions and to provide for the
ongoing working capital requirements of Borrower following the Acquisition and
for general corporate purposes;
WHEREAS, Borrower has agreed to secure all of its Revolving Obligations by
granting to Collateral Agent, for the benefit of Revolving Secured Parties, a
First Priority Lien on its Liquid Collateral and granting a Second Priority Lien
on its Fixed Collateral;
WHEREAS, each Guarantor has agreed to guarantee the obligations of
Borrower hereunder and to secure its Revolving Obligations by granting to
Collateral Agent, for the benefit of Revolving Secured Parties, a First Priority
Lien on its Liquid Collateral, and a Second Priority Lien on its Fixed
Collateral, including a pledge of all of the Capital Stock of each of its
Domestic Subsidiaries and 65% of all the Capital Stock of each of its Foreign
Subsidiaries (excluding Stanadyne Amalgamations Private Limited and Stanadyne
Systems Private Limited).
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"ACCOUNTS" means, as to each Credit Party, all of such Credit
Party's "accounts" as defined in the UCC, whether now owned or hereafter
acquired, including, without limitation, all present and future rights of such
Credit Party to payment of a monetary obligation, whether or not earned by
performance, which is not evidenced by chattel paper or an instrument, (a) for
property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, (b) for services rendered or to be rendered, (c) for a
secondary obligation incurred or to be incurred, or (d) arising out of the use
of a credit or charge card or information contained on or for use with such a
card.
"ACQUISITION" means the acquisition by KSTA Acquisition, LLC of
Holdings in accordance with the Acquisition Documents.
"ACQUISITION DOCUMENTS" means the Stock Purchase Agreement and all
other material documents executed and delivered in accordance with the terms
thereof and in connection therewith.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, and subject to availability, a variable rate of interest equal to: (a) the
rate of interest determined by Administrative Agent at which deposits in U.S.
Dollars are offered for the relevant Interest Period based on information
presented on Telerate Systems at Page 3750 as of 11:00 A.M. (London time) on the
day which is two (2) Business Days prior to the first day of such Interest
Period, provided that, if at least two such offered rates appear on the Telerate
Page (or any successor thereof) 3750 in respect of such Interest Period, the
arithmetic mean of all such rates (as determined by Administrative Agent) will
be the rate used; divided by (b) a number equal to 1.0 minus the aggregate (but
without duplication) of the rates (expressed as a decimal fraction) of
Eurocurrency Reserve Requirements in effect on the day which is two (2) Business
Days prior to the beginning of such Interest Period or (b) if the rate under
clause (a) is not available, at Administrative Agent's election (i) the rate set
forth in the New York edition of The Wall Street Journal under the "Money Rates"
section for "London Interbank Offered Rates" or (ii) the applicable LIBOR quoted
to Administrative Agent by JPMorgan Chase Bank (or any successor thereof).
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Holdings or any of its Subsidiaries, threatened against or
affecting Holdings or any of its Subsidiaries or any property of Holdings or any
of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.17(b).
"AFFECTED LOANS" as defined in Section 2.17(b).
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"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 5% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise;
provided, that no Agent or Lender shall be deemed to be an "Affiliate" of any
Credit Party.
"AGENT" means each of Syndication Agent, Administrative Agent,
Collateral Agent and each Co-Documentation Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.16.
"AGGREGATE BORROWING BASE" means, as of any date of determination,
an amount equal to the sum at such time of:
(a) 85% of the book value of the Eligible Accounts; and
(b) the lesser of (1) 60% of the cost, calculated on a
first-in-first-out basis, of Eligible Inventory at such time and (2) 85%
of the appraised net orderly liquidation value of Eligible Inventory at
such time;
in each case, less any Reserves reasonably established by Administrative Agent
at such time. Administrative Agent shall have the right from time to time to
adjust any of the advance rates set forth above in its Permitted Discretion.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Revolving Credit and Guaranty Agreement,
dated as of August 6, 2004, as it may be amended, supplemented or otherwise
modified from time to time.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, (a) from the Closing
Date until the commencement of the first Interest Period commencing after the
date of delivery of the Compliance Certificate and the financial statements for
the second full Fiscal Quarter after the Closing Date, 0.50% per annum and (b)
thereafter, a percentage per annum, determined by reference to the Leverage
Ratio in effect from time to time as set forth below:
LEVERAGE APPLICABLE COMMITMENT
RATIO FEE PERCENTAGE
------------ ---------------------
> 2.50:1.00 0.50%
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< 2.50:1.00 0.375%
No change in the Applicable Commitment Fee Percentage shall be effective until
three Business Days after the date on which Administrative Agent shall have
received the applicable financial statements and a Compliance Certificate
pursuant to Section 5.1(d) calculating the Leverage
3
Ratio. At any time and so long as Borrower has not submitted to Administrative
Agent the applicable information as and when required under Section 5.1(d), the
Applicable Commitment Fee Percentage shall be determined as if the Leverage
Ratio were in excess of 2.50:1.00. Within one Business Day of receipt of the
applicable information under Section 5.1(d), Administrative Agent shall give
each Lender telefacsimile or telephonic notice (confirmed in writing) of the
Applicable Commitment Fee Percentage in effect from such date. No reduction in
the Applicable Commitment Fee Percentage hereunder shall be effected for so long
as any Default or Event of Default has occurred and is continuing.
"APPLICABLE MARGIN" means:
(a) from the Closing Date until the commencement of the first
interest period occurring after the date of delivery of the Compliance
Certificate and the financial statements for the second full Fiscal Quarter
after the Closing Date with respect to Revolving Loans and Swing Line Loans that
are Base Rate Loans, 1.25% per annum and with respect to Revolving Loans that
are Eurodollar Loans, 2.25% per annum; and
(b) thereafter, with respect to Revolving Loans and Swing Line
Loans, a percentage, per annum, determined by reference to the Leverage Ratio in
effect from time to time as set forth below:
APPLICABLE MARGIN FOR
APPLICABLE MARGIN FOR REVOLVING LOANS AND
REVOLVING LOANS SWING LINE LOANS
LEVERAGE RATIO (EURODOLLAR LOANS) (BASE RATE LOANS)
-------------- --------------------- ---------------------
> 3.00:1.00 2.25% 1.25%
-
< 3.00:1.00
> 2.00:1.00 2.00% 1.00%
-
< 2.00:1.00 1.75% 0.75%
No change in the Applicable Margin shall be effective until three Business Days
after the date on which Administrative Agent shall have received the applicable
financial statements and a Compliance Certificate pursuant to Section 5.1(d)
calculating the Leverage Ratio. At any time and so long as Borrower has not
submitted to Administrative Agent the applicable information as and when
required under Section 5.1(d), the Applicable Margin for Revolving Loans and
Swing Line Loans shall be determined as if the Leverage Ratio were in excess of
3.00:1.00. Within one Business Day of receipt of the applicable information
under Section 5.1(d), Administrative Agent shall give each Lender telefacsimile
or telephonic notice (confirmed in writing) of the Applicable Margin in effect
from such date. No reduction in the Applicable Margin hereunder shall be
effected for so long as any Default or Event of Default has occurred and is
continuing.
"ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property
4
with, any Person (other than Borrower or any Guarantor Subsidiary or, in the
case of a non-Guarantor Subsidiary, another non-Guarantor Subsidiary), in one
transaction or a series of transactions, of all or any part of Holdings' or any
of its Subsidiaries' businesses, assets or properties of any kind, whether real,
personal, or mixed and whether tangible or intangible, whether now owned or
hereafter acquired, including, without limitation, the Capital Stock of any of
Holdings' Subsidiaries, other than (i) inventory (or other assets) sold,
licensed or leased in the ordinary course of business (excluding any such sales,
licenses or leases by operations or divisions discontinued or to be
discontinued), (ii) disposals of obsolete, worn-out or surplus property for
aggregate consideration of less than $2,000,000 with respect to any transaction
or series of related transactions or in the aggregate during any Fiscal Year,
and (iii) sales of other assets at fair market value for aggregate consideration
of less than $2,000,000 with respect to any transaction or series of related
transactions or in the aggregate during any Fiscal Year.
"ASSET SALE PROCEEDS ACCOUNT" means an account established pursuant
to the terms of Section 6.9(c) which account shall be subject to a First
Priority Lien in favor of the Term Collateral Agent on behalf of the Term
Secured Parties and a Second Priority Lien in favor of the Revolving Collateral
Agent on behalf of the Revolving Secured Parties.
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or modifications as
may be approved by Administrative Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer, treasurer or controller.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate determined
by reference to the Base Rate.
"BENEFICIARY" means each Agent, Issuing Bank, Lender, Lender
Counterparty, and Indemnitee.
"BORROWER" means Stanadyne Corporation.
"BORROWING AVAILABILITY" means as of any date of determination, the
Aggregate Borrowing Base minus any Reserves (without duplication) reasonably
established by Administrative Agent as of such time, including, without
limitation, the Reserves provided for in Section 5.15.
5
"BORROWING BASE CERTIFICATE" means a certificate by Borrower's chief
financial officer substantially in the form of Exhibit J, with such modification
to form and presentation as Administrative Agent may reasonably request from
time to time, delivered by Borrower pursuant to Section 5.1(m).
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, the term "BUSINESS DAY" shall mean
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in Dollar deposits in the London interbank
market.
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand or
Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Xxxxx'x; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Xxxxx'x; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that has Tier 1 capital (as defined in
the regulations of its primary Federal banking regulator) of not less than
$100,000,000; and (v) shares of any money market mutual fund that (a) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Xxxxx'x.
"CERTIFICATE RE: NON-BANK STATUS" means a certificate substantially
in the form of Exhibit F.
6
"CHANGE OF CONTROL" means, at any time:
(i) Sponsor shall cease to beneficially own and control at least 51%
on a fully diluted basis of the economic and voting interests in the Capital
Stock of Holdings;
(ii) any Person or "group" (within the meaning of Rules 13d-3 and
13d-5 under the Exchange Act) other than Sponsor (a) shall have acquired
beneficial ownership of 35% or more on a fully diluted basis of the voting
and/or economic interest in the Capital Stock of Holdings or (b) shall have
obtained the power (whether or not exercised) to elect a majority of the members
of the board of directors (or similar governing body) of Holdings;
(iii) Holdings shall cease to beneficially own and control 100% on a
fully diluted basis of the economic and voting interest in the Capital Stock of
Borrower;
(iv) the majority of the seats (other than vacant seats) on the
board of directors (or similar governing body) of Borrower cease to be occupied
by Persons who either (a) were members of the board of directors of Borrower on
the Closing Date or (b) were nominated for election by Sponsor or the board of
directors of Borrower, a majority of whom were directors on the Closing Date or
whose election or nomination for election was previously approved by a majority
of such directors; or
(v) any "change of control" or similar event shall occur under the
Senior Subordinated Notes or the Refinancing Notes that would require Borrower
to tender for or otherwise give rise to an accelerated repayment of the Senior
Subordinated Notes or the Refinancing Notes.
"CLOSING DATE" means the first date on which the conditions
precedent set forth in Section 3.1 are satisfied or waived in accordance with
the terms hereof and the Term Loans are made to Borrower.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit G-1.
"CLOSING DATE MORTGAGED PROPERTY" as defined in Section 3.1(i).
"CO-DOCUMENTATION AGENT" is defined in the preamble hereto.
"COLLATERAL" means the Fixed Collateral and the Liquid Collateral.
"COLLATERAL AGENT" is defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Mortgages, the IP Security Agreements, the Control Agreements, the Landlord
Personal Property Collateral Access Agreements, if any, the Intercreditor
Agreement and all other instruments, documents and agreements delivered by any
Credit Party pursuant to this Agreement or any of the other Credit Documents in
order to, or purporting to, (a) grant to Collateral Agent, for the benefit of
Revolving Secured Parties, a Lien on any real, personal or mixed property of
that Credit Party as security for the Obligations and/or (b) perfect such Liens.
7
"COLLATERAL QUESTIONNAIRE" means a certificate in form satisfactory
to Administrative Agent that provides information with respect to the personal
or mixed property of each Credit Party.
"COMMINGLED INVENTORY" means Inventory of Borrower or a Guarantor
that is commingled (whether pursuant to a consignment, a toll manufacturing
agreement or otherwise) with Inventory of another Person (other than Borrower or
a Guarantor) at a location owned or leased by Borrower or a Guarantor to the
extent that such Inventory of Borrower or a Guarantor is not readily
identifiable.
"COMMITMENT" means the commitment of a Lender to make or otherwise
fund any Revolving Loan and to acquire participations in Letters of Credit and
Swingline Loans hereunder and "COMMITMENTS" means such commitments of all
Lenders in the aggregate. The amount of each Lender's Commitment is set forth on
Appendix A or in the applicable Assignment Agreement, subject to any adjustment
or reduction pursuant to the terms and conditions hereof. The aggregate amount
of the Commitments as of the Closing Date is $35,000,000.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C.
"COMPLIANCE PERIOD" means any period commencing on the date on which
the Borrowing Availability minus the Total Utilization of Revolving Commitments
is less than $5,000,000 for ten consecutive days and ending on the first date
thereafter on which the Borrowing Availability minus the Total Utilization of
Revolving Commitments has been equal to or greater than $5,000,000 for thirty
consecutive days.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount
determined for Borrower and its Subsidiaries on a consolidated basis equal to:
(i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Net Income, (b) Consolidated Interest Expense, (c) provisions
for taxes based on income, (d) total depreciation expense, (e) total
amortization expense, (f) Transaction Costs incurred and paid in such period,
(g) losses related to the redemption of SAC Notes not repurchased on or prior to
the Closing Date in the Debt Tender and (h) other non-Cash items (including
non-Cash purchase accounting adjustments) reducing Consolidated Net Income
(excluding any such non-Cash item to the extent that it represents an accrual or
reserve for potential Cash items in any future period or amortization of a
prepaid Cash item that was paid in a prior period) (i) management fees and
expenses permitted by Section 6.5(f), (j) transaction costs relating to
Permitted Acquisitions, dispositions, financings and debt extinguishment in an
aggregate amount not to exceed $2,500,000 in any Fiscal Year and (k)
restructuring charges in an amount not to exceed $5,000,000 per Fiscal Year,
plus (in any given Fiscal Year) up to $10,000,000 of unused amounts under this
clause (k) from prior Fiscal Years (or portions thereof) occurring since the
Closing Date, provided that the aggregate amount of restructuring charges
included in this clause (k) in all periods shall not exceed $25,000,000 in the
aggregate (in the case of clauses (b) through (k), (x) to the extent deducted in
determining Consolidated
8
Net Income and (y) unless applicable to Persons whose income (or losses) are not
included in Consolidated Net Income pursuant to clause (ii) of the definition
thereof), minus
(ii) other non-Cash items increasing Consolidated Net Income for
such period (excluding any such non-Cash item to the extent it represents the
reversal of an accrual or reserve for potential Cash item in any prior period).
Amounts for periods prior to the Closing Date shall be as set forth on Schedule
1.1A.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Borrower and its Subsidiaries during such
period determined on a consolidated basis that, in accordance with GAAP, are or
should be included in "purchase of property and equipment" or similar items
reflected in the consolidated statement of cash flows of Borrower and its
Subsidiaries, excluding the purchase price of Permitted Acquisitions and
purchases made with the proceeds of permitted Asset Sales or insurance coverage.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period, excluding any amount not payable
in Cash.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Borrower and its Subsidiaries on a
consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents and deferred taxes.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Borrower and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, excluding deferred taxes and the current portion of long
term debt and Capital Leases.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to:
(i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Adjusted EBITDA (but determined by adding back thereto, but
without duplication, any amounts deducted in the calculation of Consolidated Net
Income for such Fiscal Year that were paid, incurred, or accrued in violation of
any of the provisions of this Agreement), plus (b) the Consolidated Working
Capital Adjustment, minus
(ii) the sum, without duplication, of the amounts for such period of
(a) voluntary and scheduled repayments of Consolidated Total Debt to the extent
such payments are not prohibited by this Agreement (excluding repayments of (1)
Revolving Loans or Swing Line Loans or Term Loans or (2) other revolving loans
except to the extent the commitments with respect to such other revolving loans
are permanently reduced in connection with such repayment), (b) Consolidated
Capital Expenditures to the extent such Consolidated Capital Expenditures are
permitted under this Agreement (net of any proceeds of (y) any related
financings with respect to such expenditures and (z) any sales of assets used to
finance such expenditures), (c) Consolidated Cash Interest Expense to the extent
related to Indebtedness permitted under this Agreement, (d) taxes based on
income of Holdings and its Subsidiaries
9
payable in Cash with respect to such period and actually paid, (e) cash
consideration paid in respect of Permitted Acquisitions and (f) add-backs to
Consolidated Adjusted EBITDA pursuant to clauses (i), (j) and (k) of the
definition of Consolidated Adjusted EBITDA.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum, without
duplication, of the amounts determined for Borrower and its Subsidiaries on a
consolidated basis equal to (i) Consolidated Cash Interest Expense, (ii)
scheduled payments of principal on Consolidated Total Debt, (iii) Consolidated
Capital Expenditures and (iv) the portion of taxes based on income actually paid
in cash and provisions for cash income taxes.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Borrower and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Borrower
and its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under Interest Rate
Agreements, but excluding, however, any amounts referred to in Section 2.10(d)
payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period:
(i) the net income (or loss) of Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP, minus
(ii) (a) the income (or loss) of any Person (other than a Subsidiary
of Borrower) in which any other Person (other than Borrower or any of its
Subsidiaries) has an interest, except to the extent of the amount of dividends
or other distributions actually paid to Borrower or any of its Subsidiaries by
such Person during such period, (b) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary of Borrower or is merged into or
consolidated with Borrower or any of its Subsidiaries or that Person's assets
are acquired by Borrower or any of its Subsidiaries, (c) the income of any
Subsidiary of Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (d) any after-tax gains or losses attributable to
Asset Sales or returned surplus assets of any Pension Plan, and (e) (to the
extent not included in clauses (a) through (d) above) any net extraordinary
gains or net extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
(i) the aggregate stated balance sheet amount of all Indebtedness of Borrower
and its Subsidiaries determined on a consolidated basis in accordance with GAAP,
minus (ii) the sum of (x) Cash and Cash Equivalents on hand at Borrower and
Guarantor Subsidiaries and (y) Cash and Cash Equivalents on hand at
non-Guarantor Subsidiaries of Borrower in an amount not to exceed the amount of
Indebtedness of such non-Guarantor Subsidiary which is included in the
calculation of Consolidated Total Debt.
10
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONTROL AGREEMENTS" means each control agreement executed and
delivered by the Collateral Agent for the benefit of the Secured Parties, a
securities intermediary or depositary bank and the applicable Credit Party on
the Closing Date and each control agreement to be executed and delivered by
Collateral Agent, a securities intermediary or depositary bank and the
applicable Credit Party pursuant to the terms of the Pledge and Security
Agreement with such modifications as Collateral Agent may reasonably request or
approve.
"CONTROL INVESTMENT AFFILIATE" means, with respect to any Person,
any other Person that (a) directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person and (b) is organized
by such Person primarily for the purpose of making equity or debt investments in
one or more companies. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a Conversion/Continuation
Notice substantially in the form of Exhibit A-2.
"COUNTERPART AGREEMENT" means a Counterpart Agreement substantially
in the form of Exhibit G delivered by a Credit Party pursuant to Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if any,
the Collateral Documents, any documents or certificates executed by Borrower in
favor of Issuing Bank relating to Letters of Credit, and all other documents,
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent, Issuing Bank or any Lender in connection herewith (in each
case as such documents, instruments or agreements may be amended, restated,
supplemented or otherwise modified from time to time).
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"CREDIT EXTENSION" means the making of a Loan or the issuing of a
Letter of Credit.
"CREDIT PARTY" means each Person (other than any Agent, Issuing
Bank, Swingline Lender or any Lender or any other representative thereof or any
non-Affiliates of Borrower or its Subsidiaries) from time to time party to a
Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement, each of which is for the purpose of hedging
the foreign currency risk associated with Holdings' and its Subsidiaries'
operations and not for speculative purposes.
"CUSTOMER" means the account debtor with respect to any account
and/or prospective purchaser of goods, services or both with respect to any
contract or contract right, and/or any party who enters into or proposes to
enter into any contract or other arrangement with any Credit Party, pursuant to
which such Credit Party is to sell any personal property or perform any
services.
"DEBT TENDER" means the receipt of tender and consents by Borrower
of at least 50% in principal amount of the SAC Notes.
"DEFAULT" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the
excess, if any, of such Defaulting Lender's Pro Rata Share of the aggregate
outstanding principal amount of Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Loans) over the aggregate outstanding principal amount of
all Loans of such Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender, the
period commencing on the date of the applicable Funding Default and ending on
the earliest of the following dates: (i) the date on which all Commitments are
cancelled or terminated and/or the Obligations are declared or become
immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by
the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting
Lender or by the non-pro rata application of any voluntary or mandatory
prepayments of the Loans in accordance with the terms of Section 2.12 or Section
2.13 or by a combination thereof) and (b) such Defaulting Lender shall have
delivered to Borrower and Administrative Agent a written reaffirmation of its
intention to honor its obligations hereunder with respect to its Commitments,
and (iii) the date on which Borrower, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing.
"DEFAULTING LENDER" as defined in Section 2.21.
"DEFAULTED LOAN" as defined in Section 2.21.
12
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws
of the United States of America, any State thereof or the District of Columbia.
"ELIGIBLE ACCOUNTS" means all of the Accounts owned by Borrower or a
Guarantor and reflected in the most recent Borrowing Base Certificate delivered
by Borrower to Administrative Agent, except any Account to which any of the
exclusionary criteria set forth below applies. Administrative Agent shall have
the right to establish, modify or eliminate Reserves against Eligible Accounts
from time to time in its reasonable credit judgment, subject to the approval of
the Requisite Lenders, in the case of adjustments, new criteria or the
elimination of Reserves which have the effect of making additional credit in
excess of $5,000,000 available to Borrower; provided, however, for the avoidance
of doubt, no such approval shall be required in the case of any adjustment or
the elimination of Reserves caused by operation of the provisions of this
Agreement relating to the Aggregate Borrowing Base. An Account may not
constitute an Eligible Account unless such Account is subject to Collateral
Agent's (for the benefit of the Revolving Secured Parties) First Priority
perfected security interest, Collateral Agent's (for the benefit of the Term
Secured Parties) Second Priority perfected security interest and no other Lien
(other than Permitted Liens), and is evidenced by an invoice or other
documentary evidence reasonably satisfactory to Administrative Agent. Eligible
Accounts shall not include any Account of Borrower or any Guarantor if:
(a) it does not arise from the sale of Inventory or the performance
of services by Borrower or a Guarantor in the ordinary course of its business;
(b) it arises out of a sale made by Borrower or a Guarantor to an
Affiliate of Borrower or a Guarantor or to a Person controlled by an Affiliate
of Borrower or a Guarantor;
(c) it is due or unpaid more than ninety (90) days after the
original due date or one hundred twenty (120) days after the original invoice
date;
(d) fifty percent (50%) or more of the Accounts from such Customer
are not deemed Eligible Accounts hereunder;
(e) any covenant, representation or warranty contained in this
Agreement with respect to such Account has been breached;
(f) the Customer shall (i) apply for, suffer or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or call
a meeting of its general creditors, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its
present business, (iii) make a general assignment for the benefit of creditors,
(iv) commence a voluntary case under any state or federal bankruptcy laws (as
now or hereafter in effect), (v) be
13
adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vii) acquiesce
to, or fail to have dismissed, any petition which is filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;
(g) the sale to the Customer is on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper;
(h) Administrative Agent believes, in its reasonable judgment, that
collection of such Account is insecure or that such Account may not be paid by
reason of the Customer's financial inability to pay;
(i) for Accounts in excess of $500,000 in the aggregate, the
Customer is the United States of America, any state or any department, agency,
or instrumentality of any of them, unless Borrower or such Guarantor assigns its
right to payment of such Account to the Collateral Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq.
and 41 U.S.C. Sub-Section 15 et seq.) and has otherwise complied with other
applicable statutes or ordinances;
(j) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the Customer or the services giving rise to such
Account have not been performed or completed by Borrower or a Guarantor and
accepted by the Customer or the Account otherwise does not represent a final
sale;
(k) the Account is subject to any offset, deduction, defense,
dispute or counterclaim, the Customer is owed money as a creditor or supplier of
Borrower or a Guarantor or the Account is contingent in any respect or for any
reason; except that with respect to Accounts that are subject to offset as a
result of volume rebates owing to a customer by Borrower or a Guarantor, such
Accounts shall be deemed to be Eligible Accounts to the extent that the
aggregate amount of such Accounts exceeds the aggregate amount of the volume
rebate owing to such Customer;
(l) to the extent that Borrower or a Guarantor has made any
agreement with any Customer for any deduction therefrom, except for discounts or
allowances made in the ordinary course of business for prompt payment, all of
which discounts and allowances for prompt payment are reflected in the
calculation of the face value of each respective invoice related thereto;
(m) any return, rejection or repossession of any of the merchandise
giving rise to such Account has occurred;
(n) such Account is not payable to Borrower or a Guarantor;
(o) (i) such Account is from a Customer, excluding Deere and Company
and its Subsidiaries, whose aggregate Accounts with Borrower and Guarantors
exceeds 25% of all Eligible Accounts, but only to the extent of such excess over
25% or (ii) such Account is Deere and Company and its Subsidiaries, to the
extent Deere and Company's and its Subsidiaries'
14
aggregate Accounts with Borrower and Guarantors exceeds 50% of all Eligible
Accounts, but only to the extent of such excess over 50%;
(p) Accounts (other than (1) Deere and Company and its Subsidiaries,
(2) Ford Motor Company and its Subsidiaries, (3) Tritec Motors LTDA and its
Subsidiaries, (4) DaimlerChrysler AG and its Subsidiaries and (5) Accounts
covered by credit insurance in form and amount, and by an insurer, reasonably
satisfactory to Administrative Agent ) with respect to which the Customer is
organized in a jurisdiction outside of the United States, to the extent the
aggregate of such Accounts with Borrower and Guarantors exceeds 10% of all
Eligible Accounts, but only to the extent of such excess over 10%; or
(q) Accounts in excess of $500,000 in the aggregate with respect to
which the Customer is located in New Jersey, Minnesota, or any other state
denying creditors access to its courts in the absence of a Notice of Business
Activities Report or other similar filing, unless Borrower or Guarantor, as
applicable, is incorporated under the laws of such state or has either qualified
as a foreign corporation authorized to transact business in such state or has
filed a Notice of Business Activities Report or similar filing with the
applicable state agency for the then current year.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Related Fund with respect to a Lender (any two or more Related
Funds being treated as a single Eligible Assignee for all purposes hereof), and
(ii) any commercial bank, financial institution, insurance company, investment
or mutual fund or other entity that is an "accredited investor" (as defined in
Regulation D under the Securities Act) and which extends credit or buys loans as
one of its businesses; provided, none of Holdings, any Affiliate of Holdings or
Sponsor (other than Antares Capital Corporation in its capacity as a Lender)
shall be an Eligible Assignee.
"ELIGIBLE INVENTORY" means all of the Inventory (valued at the lower
of cost or market value, determined on a first-in-first-out basis) owned by
Borrower or a Guarantor and reflected in the most recent Borrowing Base
Certificate delivered by Borrower to Administrative Agent, except any Inventory
to which any of the exclusionary criteria set forth below applies.
Administrative Agent shall have the right to establish, modify or eliminate
Reserves against Eligible Inventory from time to time in its reasonable credit
judgment. In addition, Administrative Agent shall have the right, from time to
time, to adjust any of the criteria set forth below and to establish new
criteria with respect to Eligible Inventory, in its reasonable credit judgment,
subject to the approval of the Requisite Lenders, in the case of adjustments,
new criteria or the elimination of Reserves which have the effect of making
additional credit in excess of $5,000,000 available to Borrower. Eligible
Inventory shall not include any Inventory of Borrower or a Guarantor that:
(a) is not owned by Borrower or a Guarantor free and clear of all
Liens and rights of any other Person (including the rights of a purchaser that
has made progress payments and the rights of a surety that has issued a bond to
assure Borrower's or Guarantor's performance with respect to that Inventory),
except the Liens in favor of Collateral Agent and Permitted Liens in favor of
landlords and bailees to the extent permitted in Section 5.15 hereof, (subject
to Reserves established by Administrative Agent in accordance with Section 5.15
hereof and other Permitted Liens);
15
(b) with respect to Inventory exceeding $500,000 in the aggregate,
(i) is not located on premises owned, leased or rented by Borrower or a
Guarantor or (ii) is stored with a bailee (including, without limitation, a
processor or converter) at a leased location, unless either (x) a reasonably
satisfactory landlord waiver has been delivered to Administrative Agent, or (y)
Reserves reasonably satisfactory to Administrative Agent have been established
with respect thereto, or (iii) is stored with a bailee or warehouseman unless a
reasonably satisfactory, acknowledged bailee letter has been received by
Administrative Agent and Reserves reasonably satisfactory to Administrative
Agent have been established with respect thereto, or (iv) is located at an owned
location subject to a mortgage or other security interest in favor of a creditor
other than Collateral Agent unless a Landlord Personal Property Collateral
Access Agreement has been delivered to Administrative Agent, or (v) is located
on premises owned, leased or rented by a customer of Borrower or a Guarantor,
unless (A) Collateral Agent has been notified thereof in advance, (B) such
Inventory of Borrower or such Guarantor is clearly segregated from all Inventory
of such customer in a manner satisfactory to Collateral Agent in its reasonable
credit judgment, (C) all UCC filings deemed necessary or desirable by Collateral
Agent have been made, including, without limitation, all UCC filings in respect
of consigned inventory naming Customer as debtor and Borrower or Guarantor as
secured party and all assignments of such UCC filings by Borrower or Guarantor
to Collateral Agent, as assignee of the secured party, (D) a satisfactory
collateral agreement, with respect to, among other things, access,
acknowledgment of Collateral Agent's first priority Lien, UCC consignment
filings and said Customer's agreement to notify Collateral Agent in advance if
it changes its jurisdiction of organization, has been delivered to Collateral
Agent by such Customer and (E) in any event, the maximum aggregate amount of all
such Inventory, whether or not eligible, located on premises owned, leased or
rented by all Customers of Borrower and all Guarantors does not exceed
$25,000,000;
(c) is placed on consignment, except as expressly provided in
subpart (b) above;
(d) with respect to Inventory exceeding $250,000 in the aggregate,
is in transit, except inventory that is in transit (A) between locations owned
or leased by one or more of Borrower and a Guarantor, (B) between a location
owned or leased by Borrower or a Guarantor and a location not owned or leased by
Borrower or a Guarantor (a "THIRD PARTY LOCATION") or (C) between Third Party
Locations, provided that with respect to any such Third Party Location, a bailee
acknowledgment letter (in form and substance reasonably satisfactory to the
Collateral Agent) has been executed in favor of the Collateral Agent and
delivered to the Collateral Agent;
(e) is covered by a negotiable document of title, unless such
document has been delivered to Collateral Agent with all necessary endorsements,
free and clear of all Liens except those in favor of Collateral Agent and
Permitted Liens;
(f) is excess, obsolete, unsalable, shopworn, seconds, damaged or
unfit for sale;
(g) consists of display items or packing or shipping materials,
manufacturing supplies, fuel or replacement parts for equipment of Borrower and
its Subsidiaries;
(h) consists of goods that have been returned by the buyer and are
not in salable condition;
16
(i) is not of a type held for sale in the ordinary course of
Borrower's or Guarantor's business;
(j) is not subject to a First Priority Lien in favor of the
Collateral Agent on behalf of the Revolving Secured Parties and a Second
Priority Lien in favor of the Collateral Agent on behalf of the Term Secured
Parties; provided, that (i) no assets described in Section 2.2 of the Pledge and
Security Agreement shall be Eligible Inventory and (ii) no Inventory subject to
a Permitted Lien shall be Eligible Inventory to the extent, but only to the
extent, a Permitted Lien primes the First Priority Lien granted to the
Collateral Agent, as determined by Collateral Agent;
(k) breaches in any material respect any of the representations or
warranties pertaining to Inventory set forth in the Credit Documents;
(l) consists of any costs associated with "freight-in" charges;
(m) consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;
(n) does not conform to all standards imposed by any governmental
agency, division or department thereof which has regulatory authority over such
goods or the use or sale thereof;
(o) is Commingled Inventory; or
(p) is otherwise unacceptable to Administrative Agent in its
reasonable credit judgment.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or, within the preceding six years was,
sponsored, maintained or contributed to by, or required to be contributed by,
Holdings or any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order (including consent orders) or directive (conditional or otherwise), by any
Governmental Authority or any other Person, arising (i) pursuant to or in
connection with any actual or alleged violation of any Environmental Law; (ii)
in connection with any Hazardous Material or any actual or alleged Hazardous
Materials Activity; or (iii) in connection with any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all foreign or domestic, federal
or state (or any subdivision of either of them) or local statutes, ordinances,
orders (including consent orders), rules, regulations, judgments, treaties,
Governmental Authorizations, or any other requirements of Governmental
Authorities relating to or imposing standards of conduct concerning (i)
environmental matters, including those relating to any Hazardous Materials
Activity; (ii) the Release, generation, use, storage, transportation or disposal
of, or exposure to, Hazardous Materials; (iii) industrial hygiene, occupational
safety and health; (iv) natural resources or natural resource damages; (v) land
use or (vi) the protection of human, plant or
17
animal health or welfare, in any manner applicable to Holdings or any of its
Subsidiaries or any Facility.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; and (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member. Any former ERISA Affiliate of Holdings or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Holdings or any such Subsidiary
within the meaning of this definition to the extent that Holdings or such
Subsidiary could reasonably be expected to have any liability with respect
thereto under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to Holdings, any of
its Subsidiaries or any of their respective Affiliates pursuant to Section 4063
or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which is
reasonably likely to constitute grounds under ERISA for the termination of, or
the appointment by PGBC of a trustee to administer, any Pension Plan; (vi) the
imposition of liability on Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in
a complete or partial withdrawal (within the meaning of Sections 4203 and 4205
of ERISA) from any Multiemployer Plan if there is any potential liability
therefore, or the receipt by Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could give rise to the
imposition on Holdings or any of its Subsidiaries, including through any joint
and several liability with any of their respective ERISA Affiliates, of fines,
penalties, taxes or related charges under Chapter 43 of the Internal Revenue
Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA
in respect of any Employee Benefit Plan; (ix) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of
18
any trust forming part of any Pension Plan to qualify for exemption from
taxation under Section 501(a) of the Internal Revenue Code; or (x) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EUROCURRENCY RESERVE REQUIREMENTS" for any day, as applied to a
Eurodollar Rate Loan, shall mean the aggregate (without duplication) of the
maximum rates of reserve requirements (expressed as a decimal fraction) in
effect with respect to the Administrative Agent and/or any present or future
Lender or participant on such day (including, without limitation, basic,
supplemental, marginal and emergency reserves under Regulation D or any other
applicable regulations of the Board of Governors of the Federal Reserve System
or other governmental authority having jurisdiction with respect thereto, as now
and from time to time in effect, dealing with reserve requirements prescribed
for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) maintained by the Agent and/or any such Lenders or
participants (such rate to be adjusted to the nearest one sixteenth of one
percent (1/16 of 1%) or, if there is not a nearest one sixteenth of one percent
(1/16 of 1%), to the next higher one sixteenth of one percent (1/16 of 1%)).
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the conditions or events set forth
in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXISTING CAPITAL LEASES" means the Capital Leases listed on
Schedule 1.1(b) entered into by Stanadyne Corporation or a Subsidiary thereof as
indicated thereon prior to the date hereof.
"EXISTING INDEBTEDNESS" means the pre-existing Indebtedness of
Borrower and its Subsidiaries on the Closing Date described in Schedule 1.1B
hereto.
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased or operated by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per annum
(expressed, as a decimal, rounded upwards, if necessary, to the next higher
1/100 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, (i) if such day
is not a Business Day, the Federal Funds Rate for such day shall be such rate on
19
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) 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 charged to Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such certification is required, the certification
of the chief financial officer of Borrower that such financial statements fairly
present, in all material respects, the financial condition of Borrower and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments and in the case of interim financial
statements, the absence of footnotes.
"FINANCIAL PLAN" as defined in Section 5.1(i).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created on any Collateral pursuant to any Collateral Document, that such Lien is
prior in right to any other Lien thereon, other than Permitted Liens described
in clauses (b) through (f), (i), (j), (k), (l) and (p) of Section 6.2.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Borrower and its Subsidiaries
ending on December 31 of each calendar year or, with respect to any
non-Guarantor Subsidiaries only, December 31 or November 30 of each calendar
year, as the case may be.
"FIXED CHARGE COVERAGE RATIO" means the ratio as of the last day of
any Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the twelve-month
period then ending; provided, solely with respect to this definition, the amount
calculated pursuant to clause (k) of the definition of Consolidated Adjusted
EBITDA shall be limited to restructuring charges of $5,000,000 per Fiscal Year
without giving effect to any permitted carryover in such clause, to (ii)
Consolidated Fixed Charges for such four-Fiscal Quarter Period.
"FIXED COLLATERAL" means, collectively, all of the real, personal
and mixed property in which Second Priority Liens are purported to be granted
pursuant to the Collateral Documents as security for the Revolving Obligations
and shall include all "Fixed Collateral" as defined in the Intercreditor
Agreement.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to a
mortgage in favor of Collateral Agent, for the benefit of the Term Secured
Parties or the Revolving Secured Parties, and located in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide
hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FUNDING DEFAULT" as defined in Section 2.21.
"FUNDING GUARANTORS" as defined in Section 7.2.
20
"FUNDING NOTICE" means a notice substantially in the form of Exhibit
A-1.
"GAAP" means, subject to the limitations on the application thereof
set forth in Xxxxxxx 0.0, Xxxxxx Xxxxxx of America generally accepted accounting
principles in effect as of the date of determination thereof.
"GOVERNMENTAL ACTS" means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, approval, plan, directive, consent order or consent decree of or
from any Governmental Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GSCP" means Xxxxxxx Xxxxx Credit Partners L.P.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means each of Holdings and each Domestic Subsidiary of
Holdings (other than Borrower).
"GUARANTOR SUBSIDIARY" means each Guarantor other than Holdings.
"GUARANTY" means the guaranty of each Guarantor set forth in Section
7.
"HAZARDOUS MATERIALS" means any chemical, compound, constituent,
material, waste or substance, which is prohibited, limited or regulated by any
Governmental Authority or pursuant to any Environmental Law or which may or
could pose a hazard to the health and safety of any Persons or to the indoor or
outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, future,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement entered into with a Lender Counterparty in order to satisfy the
requirements of this
21
Agreement or otherwise in the ordinary course of Holdings' or any of its
Subsidiaries' businesses.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if
any, that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing Date, (i)
the audited financial statements of Borrower and its Subsidiaries, for the
immediately preceding three (3) Fiscal Years, consisting of balance sheets and
the related consolidated statements of income, stockholders' equity and cash
flows for such Fiscal Years, and (ii) the unaudited financial statements of
Borrower and its Subsidiaries as at the most recently ended Fiscal Quarter,
consisting of a balance sheet and the related consolidated statements of income,
stockholders' equity and cash flows for the three-, six-or nine-month period, as
applicable, ending on such date, and, in the case of clauses (i) and (ii),
certified by the chief financial officer of Borrower that they fairly present,
in all material respects, the financial condition of Borrower and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments and in the case of interim financial
statements, the absence of footnotes.
"HOLDINGS" as defined in the preamble hereto.
"IMMATERIAL SUBSIDIARY" means, as of any date, any Subsidiary whose
total assets, as of that date, are less than $100,000 and whose total revenues
for the most recent twelve-month period do not exceed $100,000.
"INCREASED-COST LENDERS" as defined in Section 2.22.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money; (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) (except to the
extent disputed in good faith) due more than six months from the date of
incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument; (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person; (vi) the face amount of any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (vii) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the Indebtedness of another; (viii) any obligation of such
Person the primary purpose or intent of which is to provide assurance to an
obligee that the obligation of the obligor thereof will be paid or discharged,
or
22
any agreement relating thereto will be complied with, or the holders thereof
will be protected (in whole or in part) against loss in respect thereof; (ix)
any liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (b) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (a) or (b) of this
clause (ix), the primary purpose or intent thereof is as described in clause
(viii) above; and (x) all obligations of such Person in respect of any exchange
traded or over the counter derivative transaction, including, without
limitation, any Interest Rate Agreement, Currency Agreement and any commodities
hedging agreement, whether entered into for hedging or speculative purposes;
provided, in no event shall obligations under any Interest Rate Agreement, any
Currency Agreement or any commodities hedging agreement be deemed "Indebtedness"
for any purpose under Section 6.8.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), costs (including the
reasonable costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or xxxxx any past, present or future Hazardous Materials
Activity), reasonable expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
reasonable fees or expenses incurred by Indemnitees in enforcing the indemnity
contained in Section 10.3), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of (i) this
Agreement or the other Credit Documents or the transactions contemplated hereby
or thereby (including the Lenders' agreement to make Credit Extensions or the
use or intended use of the proceeds thereof, or any enforcement of any of the
Credit Documents (including any sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Guaranty)); (ii) the
statements contained in the commitment letter delivered by any Lender to KSTA
Acquisition LLC with respect to the transactions contemplated by this Agreement;
or (iii) any Environmental Claim or any Hazardous Materials Activity relating to
or arising from, directly or indirectly, any past, present or future activity,
operation, land ownership, or practice of Holdings or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INSTALLMENT" as defined in Section 2.11(a).
"INSTALLMENT DATE" as defined in Section 2.11(a).
23
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement, dated
as of the Closing Date, by and among Collateral Agent, Term Collateral Agent and
Grantors.
"INTEREST PAYMENT DATE" means with respect to (i) any Base Rate
Loan, each of January 1, April 1, July 1 and October 1 of each year, commencing
on the first such date to occur after the Closing Date and the final maturity
date of such Loan; and (ii) any Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Loan; provided, in the case of each Interest
Period of longer than three months "Interest Payment Date" shall also include
each date that is three months, or an integral multiple thereof, after the
commencement of such Interest Period.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate Loan,
an interest period of one-, two-, three- or six-months (or, with the consent of
each affected Lender, nine- or twelve-months), as selected by Borrower in the
applicable Funding Notice or Conversion/Continuation Notice, (i) initially,
commencing on the Credit Date or Conversion/Continuation Date thereof, as the
case may be; and (ii) thereafter, commencing on the day on which the immediately
preceding Interest Period expires; provided, (a) if an Interest Period would
otherwise expire on a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day unless no further Business Day occurs
in such month, in which case such Interest Period shall expire on the
immediately preceding Business Day; (b) any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clauses (c) and (d), of this definition, end on the
last Business Day of a calendar month; and (c) no Interest Period with respect
to any portion of the Revolving Loans shall extend beyond the Revolving
Commitment Termination Date.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedging agreement or other similar agreement or arrangement, each of which is
for the purpose of hedging the interest rate exposure associated with Holdings'
and its Subsidiaries' operations and not for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the date that is two Business Days prior to the first day of
such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVENTORY" means, as to Borrower or a Guarantor, (i) all
"inventory" as defined in Article 9 of the UCC and (ii) all goods held for sale
or lease or to be furnished under contracts of service or so leased or
furnished, all raw materials, work in process, finished goods, and materials
used or consumed in the manufacture, packing, shipping, advertising, selling,
leasing, furnishing or production of such inventory or otherwise used or
consumed in such Person's business; all goods in which such Person has an
interest in mass or a joint or other interest or right of any kind; and all
goods which are returned to or repossessed by such Person, all computer programs
embedded in any goods and all accessions thereto and products thereof (in each
case, regardless of whether characterized as inventory under the UCC).
24
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a Guarantor
Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Holdings from any Person
(other than Holdings or any Guarantor Subsidiary), of any Capital Stock of such
Person; and (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Holdings or any of its Subsidiaries to any other Person (other than Holdings
or any Guarantor Subsidiary), including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from sales
to that other Person in the ordinary course of business but excluding accounts
receivable that are not so included. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment.
"IP SECURITY AGREEMENT" means each IP Security Agreement, dated as
of the Closing Date, by and among Borrower, each Guarantor and Collateral Agent.
"ISSUANCE NOTICE" means an Issuance Notice in the form of Exhibit
A-3.
"ISSUING BANK" means CIT or any of its Affiliates as Issuing Bank
hereunder, together with its permitted successors and assigns in such capacity,
or a bank or other legally authorized Person selected by Administrative Agent in
such Person's capacity as an issuer of a Letter of Credit.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, pursuant to which, among other things, the landlord
consents to the granting of a Mortgage on such Leasehold Property by the Credit
Party tenant, such Landlord Consent and Estoppel to be in form and substance
acceptable to Collateral Agent in its reasonable discretion, but in any event
sufficient for Collateral Agent to obtain a Title Policy with respect to such
Mortgage.
"LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT" means a
Landlord Waiver and Consent Agreement substantially in the form of Exhibit I
with such amendments or modifications as may be approved by Collateral Agent.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit
Party as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Collateral Agent in its reasonable
discretion as not being required to be included in the Collateral.
"LENDER" means each financial institution listed on the signature
pages hereto as a Lender, and any other Person that becomes a party hereto
pursuant to an Assignment Agreement.
25
"LENDER COUNTERPARTY" means each Lender or Agent or any Affiliate of
a Lender or an Agent, counterparty to a Hedge Agreement (including any Person
who is a Lender (and any Affiliate thereof) as of the Closing Date but
subsequently, whether before or after entering into a Hedge Agreement, ceases to
be a Lender).
"LETTER OF CREDIT" means a commercial or standby letter of credit
issued or to be issued by Issuing Bank pursuant to this Agreement.
"LETTER OF CREDIT SUBLIMIT" means the lesser of (i) $15,000,000 and
(ii) the aggregate unused amount of the Commitments then in effect.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is, or at any time thereafter may
become, available for drawing under all Letters of Credit then outstanding, and
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Bank and not theretofore reimbursed by or on behalf of Borrower.
"LEVERAGE RATIO" means the ratio as of the last day of any Fiscal
Quarter or other date of determination of:
(i) Consolidated Total Debt as of such day; to
(ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period
ending on such date (or if such date of determination is not the last day of a
Fiscal Quarter, for the four-Fiscal Quarter period ending as of the most
recently concluded Fiscal Quarter);
provided, however, (a) for purposes of determining Consolidated Total Debt for
use in computing the Leverage Ratio at the end of any Fiscal Quarter or other
date of determination, the average daily balance of any revolving credit
facility during the four-Fiscal Quarter period referred to in clause (ii) above
shall be substituted for the balance of such facility outstanding on the last
day of such Fiscal Quarter or other date of determination and (b) Consolidated
Adjusted EBITDA shall be pro forma for Permitted Acquisitions as if they had
occurred on the first day of the four-Fiscal Quarter period then ending.
"LIEN" means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and
any lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (ii) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.
"LIQUID COLLATERAL" means, collectively, all of the personal
property in which First Priority Liens are purported to be granted pursuant to
the Collateral Documents as security for the Revolving Obligations and shall
include, without limitation, all Accounts and Inventory of Borrower and
Guarantors and shall include all "Liquid Collateral" as defined in the
Intercreditor Agreement.
"LOAN" means a Revolving Loan and/or a Swing Line Loan.
26
"MARGIN STOCK" as defined in Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on and/or
material adverse developments with respect to (i) the business operations,
properties, assets, condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries, taken as a whole; (ii) the impairment (other than as a
result of circumstances covered by clause (i) above) of the ability of any
Credit Party to fully and timely perform its Revolving Obligations; (iii) the
legality, validity, binding effect or enforceability against a Credit Party of a
Credit Document to which it is a party; or (iv) the rights and remedies
available to, or conferred upon, any Agent, any Lender or any Secured Party
under any Credit Document.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Credit Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.
"MATERIAL REAL ESTATE ASSET" means (i)(a) any fee-owned Real Estate
Asset having a fair market value in excess of $1,000,000 as of the date of the
acquisition thereof and (b) all Leasehold Properties upon or in which Holdings
or any of its Subsidiaries conducts manufacturing, assembly or similar
operations which operations account for more than 10% of the manufacturing and
assembly revenues of Borrower and its Subsidiaries taken as a whole, and (c)
Leasehold Properties that are subject to a sale and leaseback permitted under
Section 6.11 or (ii) any Real Estate Asset that the Requisite Lenders have
determined is material to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Holdings or any Subsidiary
thereof, including Borrower.
"MOODY'S" means Xxxxx'x Investor Services, Inc.
"MORTGAGE" means a Mortgage or Deed of Trust substantially in the
form of Exhibit J, as it may be amended, supplemented or otherwise modified from
time to time.
"MULTIEMPLOYER PLAN" means any "multiemployer plan" as defined in
Section 3(37) of ERISA with respect to which Holdings, any Subsidiary or any
ERISA Affiliate has, or would reasonably be expected to have, any liability
(whether absolute or contingent).
"NAIC" means The National Association of Insurance Commissioners,
and any successor thereto.
"NARRATIVE REPORT" means, with respect to the financial statements
for which such narrative report is required, a narrative report describing the
operations of Borrower and its Subsidiaries in the form prepared for
presentation to senior management thereof for the applicable Fiscal Quarter or
Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such period to which such financial statements relate.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an
amount equal to:
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(i) Cash payments (including any Cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received by Holdings or any of its Subsidiaries
from such Asset Sale, minus
(ii) any bona fide direct costs or expenses incurred in connection
with such Asset Sale and payable to a Person that is not Holdings or a
Subsidiary thereof, including without limitation, (a) income or gains taxes
payable by the seller as a result of any gain recognized in connection with such
Asset Sale, (b) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness permitted to be incurred under
Section 6.1 (other than the Loans or the Term Loans) that is secured by a Lien
on the stock or assets in question and that is required to be repaid under the
terms thereof as a result of such Asset Sale and (c) a reasonable reserve for
any indemnification payments (fixed or contingent) attributable to seller's
indemnities and representations and warranties to purchaser in respect of such
Asset Sale undertaken by Holdings or a Subsidiary thereof in connection with
such Asset Sale and (d) brokers fees, accountant fees and expenses, counsel fees
and expenses and other termination costs.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to:
(i) any Cash payments or proceeds received by Holdings or any of its
Subsidiaries (a) under any casualty insurance policy in respect of a covered
loss thereunder or (b) as a result of the taking of any assets of Holdings or
any of its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, minus
(ii) (a) any actual and reasonable costs incurred by Holdings or any
of its Subsidiaries in connection with the adjustment or settlement of any
claims of Holdings or such Subsidiary in respect thereof and payable to a Person
that is not Holdings or its Subsidiaries, (b) any bona fide direct costs
incurred in connection with any sale of such assets as referred to in clause
(i)(b) of this definition, including income taxes payable as a result of any
gain recognized in connection therewith and (c) actual and reasonable counsel
fees and expenses.
"NON-CASH PAY" means:
(a) with respect to any Preferred Stock, that such Preferred Stock
is not Cash-Pay Preferred Stock; and
(b) with respect to any Capital Stock (other than Preferred Stock),
that such Capital Stock does not require any cash payments (whether in respect
of dividends, redemption, repurchase or otherwise) to be made thereon or in
respect thereof on or prior to the date that is 91 days after the Revolving
Commitment Termination Date.
"NON-US LENDER" as defined in Section 2.19(c).
"NOTE" means a Revolving Loan Note or a Swing Line Note.
"NOTICE" means a Funding Notice, an Issuance Notice, or a
Conversion/Continuation Notice.
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"OBLIGATIONS" means the Revolving Obligations and the Term
Obligations.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended and (v) with respect to any other business
entity, the agreement or documents analogous to any of the foregoing. In the
event any term or condition of this Agreement or any other Credit Document
requires any Organizational Document to be certified by a secretary of state or
similar governmental official, the reference to any such "Organizational
Document" shall only be to a document of a type customarily certified by such
governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any employee benefit plan within the meaning of
Section 3(3) of ERISA, other than a Multiemployer Plan, which is subject to
Title IV of ERISA, and with respect to which Holdings, any Subsidiary or any
ERISA Affiliate has, or would reasonably be expected to have, any liability
(whether absolute or contingent).
"PERMITTED ACQUISITION" means any acquisition by Borrower or any of
its wholly-owned Guarantor Subsidiaries, whether by purchase, merger or
otherwise, of all or substantially all of the assets of, all of the Capital
Stock of, or a business line or unit or a division of, any Person; provided,
(i) immediately prior to, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom;
(ii) all transactions in connection therewith shall be
consummated in accordance with all applicable laws and in conformity with
all applicable Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, all of
the Capital Stock (except for any such Securities in the nature of
directors' qualifying shares required pursuant to applicable law) acquired
or otherwise issued by such Person or any newly formed Subsidiary of
Borrower in connection with such acquisition shall be owned 100% by
Borrower or a Guarantor Subsidiary thereof, and Borrower shall have taken,
or caused to be taken, as of the date such Person becomes a Subsidiary of
Company, each of the actions set forth in Sections 5.10 and/or 5.11, as
applicable;
(iv) Holdings and its Subsidiaries shall be in compliance with
any applicable financial covenants set forth in Section 6.8 on a pro forma
basis after giving effect to such acquisition as of the last day of the
Fiscal Quarter most recently ended, (as determined in accordance with
Section 1.3;
29
(v) Borrower shall have delivered to Administrative Agent at
least 10 Business Days prior to such proposed acquisition (x) all material
transactional documents (which may be in draft form) in connection
therewith, (y) a Compliance Certificate evidencing compliance with Section
6.8, if applicable, as required under clause (iv) above, together with all
relevant financial information with respect to such acquired assets,
including, without limitation, the aggregate consideration for such
acquisition and any other information required to demonstrate compliance
with Section 6.8 and (z) a Borrowing Base Certificate demonstrating
compliance with clause (vii) below;
(vi) any Person or assets or division as acquired in
accordance herewith (y) shall be in same business or lines of business in
which Borrower and/or its Subsidiaries are engaged as of the Closing Date
or a business reasonably related thereto and (z) shall have generated
positive cash flow for the twelve-month period most recently ended prior
to the date of such acquisition; and
(vii) immediately after giving effect thereto, the Borrowing
Availability shall be no less than $10,000,000.
"PERMITTED CURE SECURITY" means a Non-Cash Pay equity security of
Holdings issued pursuant to Section 8.2.
"PERMITTED DISCRETION" means the reasonable exercise of the
Administrative Agent's good faith judgment in consideration of any factor which
is reasonably likely to (i) adversely affect the value of any Collateral, the
enforceability or priority of the Liens thereon or the amount that the
Administrative Agent and the Lenders would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
thereof or (ii) materially increase the likelihood that the Lenders would not
receive payment in full in cash for all of the Obligations.
"PERMITTED LIENS" means each of the Liens permitted pursuant to
Section 6.2.
"PERMITTED REFINANCING" means, as to any Indebtedness, the
Refinancing of such Indebtedness ("Refinancing Indebtedness"); provided that, in
the case of such Refinancing Indebtedness, the following conditions are
satisfied:
(i) the weighted average life to maturity of such Refinancing
Indebtedness shall be greater than or equal to the weighted average life
to maturity of the Indebtedness being refinanced, and the first scheduled
principal payment in respect of such Refinancing Indebtedness shall not be
earlier than the first scheduled principal payment in respect of the
Indebtedness being refinanced;
(ii) the principal amount of such Refinancing Indebtedness
shall be less than or equal to the principal amount then outstanding of
the Indebtedness being refinanced;
(iii) the respective obligor or obligors shall be the same on
the Refinancing Indebtedness as on the Indebtedness being refinanced;
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(iv) the security, if any, for the Refinancing Indebtedness
shall be the same as that for the Indebtedness being refinanced (except to
the extent that less security is granted to holders of Refinancing
Indebtedness); and
(v) no material terms applicable to such Refinancing
Indebtedness or, if applicable, the related guarantees of such Refinancing
Indebtedness (including covenants, events of default, remedies and
acceleration rights) shall be materially more favorable to the refinancing
lenders than the terms that are applicable under the instruments and
documents governing the Indebtedness being refinanced, in each case, taken
as a whole.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PHASE I REPORT" means, with respect to any Facility, a report that
is either (A) set forth on Schedule 3.1(k), or (B) in form and substance
reasonably satisfactory to Administrative Agent that (i) conforms to the ASTM
Standard Practice for Environmental Site Assessments: Phase I Environmental Site
Assessment Process, E 1527-00, (ii) was conducted no more than six months prior
to the date such report is required to be delivered hereunder, by one or more
environmental consulting firms reasonably satisfactory to Administrative Agent,
(iii) includes an assessment of asbestos-containing materials at such Facility,
(iv) is accompanied by (a) an estimate of the reasonable worst-case cost of
investigating and remediating any Hazardous Materials Activity identified in the
Phase I Report as giving rise to an actual or potential material violation of
any Environmental Law or as presenting a material risk of giving rise to a
material Environmental Claim, and (b) a current compliance audit. All Phase I
Reports shall expressly specify that the report may be relied on by
Administrative Agent or Administrative Agent shall have received a reliance
letter so stating.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement, dated as of the Closing Date, by and among Borrower, each Guarantor
and Collateral Agent.
"PREFERRED STOCK" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or priority,
in respect of dividends or distribution upon liquidation, over some other class
of capital stock issued by such corporation.
"PRIME RATE" means the rate of interest quoted in The Wall Street
Journal, Money Rates Section as the Prime Rate (currently defined as the base
rate on corporate loans posted by at least 75% of the nation's thirty (30)
largest banks), as in effect from time to time. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Any Agent or any other Lender may make commercial loans or
other loans at rates of interest at, above or below the Prime Rate.
"PRINCIPAL OFFICE" means, for each of Administrative Agent, Swing
Line Lender and Issuing Bank, such Person's "Principal Office" as set forth on
Appendix B, or such other
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office as such Person may from time to time designate in writing to Borrower,
Administrative Agent and each Lender.
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means with respect to all payments, computations
and other matters relating to the Commitment or Revolving Loans of any Lender or
any Letters of Credit issued or participations purchased therein by any Lender
or any participations in any Swing Line Loans purchased by any Lender, the
percentage obtained by dividing (a) the Revolving Exposure of that Lender by (b)
the aggregate Revolving Exposure of all Lenders.
"REAL ESTATE ASSET" means, at any time of determination, any
interest (fee or leasehold) then owned by any Credit Party in any real property.
"RECORD DOCUMENT" means, with respect to any Leasehold Property, (i)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (ii)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form reasonably
satisfactory to Collateral Agent.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document has been recorded in all places necessary or
desirable, in Administrative Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrancers of
the affected real property.
"REFINANCE" means, in respect of any Indebtedness, to refinance,
extend, renew, defease, amend, modify, supplement, restructure, replace, refund
or repay, or to issue other Indebtedness, in exchange or replacement for, such
Indebtedness in whole or in part. "REFINANCED" and "REFINANCING" shall have
correlative meanings.
"REFINANCING NOTE INDENTURE" means the trust indenture pursuant to
which any Refinancing Notes may be issued in accordance with the terms of this
Agreement, as such indenture may be further amended, restated, supplemented,
modified, extended, renewed or replaced from time to time in accordance with
Section 6.16 of this Agreement.
"REFINANCING NOTES" as defined in Section 6.1(k).
"REFUNDED SWING LINE LOANS" as defined in Section 2.2(b)(iv).
"REGISTER" as defined in Section 2.6(b).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" as defined in Section 2.3(d).
32
"RELATED AGREEMENTS" means, collectively, the Stock Purchase
Agreement, the Stockholders Agreement and the documents governing the Senior
Subordinated Notes, the Refinancing Notes and the Existing Capital Leases.
"RELATED FUND" means any investment fund that is (i) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit and (ii) is administered and managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, seepage, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any Hazardous Material into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Material),
including the movement of any Hazardous Material through the air, soil, surface
water or groundwater.
"REPLACEMENT LENDER" as defined in Section 2.22.
"REQUISITE LENDERS" means one or more Lenders having or holding
Revolving Exposure and representing more than 50% of the sum of the aggregate
Revolving Exposure of all Lenders.
"RESERVES" means (a) reserves reasonably established by
Administrative Agent from time to time against Eligible Inventory pursuant to
Section 5.15, (b) reserves established by Administrative Agent from time to time
against Eligible Inventory, in the full amount necessary to cover all shipping
and other charges for items shipped by boat, (c) reserves established by
Administrative Agent pursuant to specific terms of Credit Documents other than
the Credit Agreement, and (d) such other reserves against Eligible Accounts,
Eligible Inventory or Borrowing Availability of any Credit Party that
Administrative Agent may, in its reasonable credit judgment, establish from time
to time, including, without limitation, reserves established on account of any
Liens which may be prior in right to the First Priority Lien of Collateral Agent
for the benefit of the Revolving Secured Parties, including, without limitation,
any Liens which may be permitted under Section 6.2(q).
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Holdings or Borrower now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class; (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Holdings or Borrower now or hereafter outstanding; (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of Holdings or Borrower now
or hereafter outstanding; (iv) management or similar fees payable to Sponsor or
any of its Affiliates; (v) any payment or prepayment of principal of, premium,
if any, or interest on, or redemption, purchase, repurchase, retirement,
defeasance (including in-substance or legal defeasance), sinking fund or similar
payment (or any offer to do any of the foregoing) with respect to the Senior
Subordinated Notes, the Refinancing Notes, the SAC Notes and any other
Indebtedness which is subordinated to the Revolving Obligations.
33
"REVOLVING COMMITMENT PERIOD" means the period from the Closing Date
to but excluding the Revolving Commitment Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to occur
of (i) the fifth (5th) anniversary of the Closing Date, (ii) the date the
Commitments are permanently reduced to zero pursuant to Section 2.12(b) or 2.13,
and (iii) the date of the termination of the Commitments pursuant to Section
8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of any
date of determination, (i) prior to the termination of the Commitments, that
Lender's Commitment; and (ii) after the termination of the Commitments, the sum
of (a) the aggregate outstanding principal amount of the Revolving Loans of that
Lender, (b) in the case of Issuing Bank, the aggregate Letter of Credit Usage in
respect of all Letters of Credit issued by that Lender (net of any
participations by Lenders in such Letters of Credit), (c) the aggregate amount
of all participations by that Lender in any outstanding Letters of Credit or any
unreimbursed drawing under any Letter of Credit, (d) in the case of Swing Line
Lender, the aggregate outstanding principal amount of all Swing Line Loans (net
of any participations therein by other Lenders), and (e) the aggregate amount of
all participations therein by that Lender in any outstanding Swing Line Loans.
"REVOLVING LOAN" means a Loan made by a Lender to Borrower pursuant
to Section 2.1(a).
"REVOLVING LOAN NOTE" means a promissory note in the form of Exhibit
B-1, as it may be amended, supplemented or otherwise modified from time to time.
"REVOLVING OBLIGATIONS" means all obligations of every nature of
each Credit Party from time to time owed to the Agents (including former
Agents), the Lenders or any of them, under any Credit Document, whether for
principal, interest (including interest which, but for the filing of a petition
in bankruptcy with respect to such Credit Party, would have accrued on any
Revolving Obligation, whether or not a claim is allowed against such Credit
Party for such interest in the related bankruptcy proceeding), reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification
(including, without limitation, pursuant to Section 10.3 hereof) or otherwise.
"REVOLVING SECURED PARTIES" has the meaning assigned to such term in
the Pledge and Security Agreement.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"SAC NOTES" means the 10.25% Senior Subordinated Notes dated as of
December 11, 1997 by Stanadyne Automotive Corp., as issuer.
"SECOND PRIORITY" means, with respect to any Lien purported to be
created on any Collateral pursuant to any Collateral Document, that such Lien is
prior in right to any other Lien thereon, other than the First Priority Lien in
favor of the Collateral Agent for the benefit of the Term Secured Parties and
Permitted Liens described in clauses (b) through (f), (i), (j), (k), (l) and
34
(p) of Section 6.2 and that such Lien is subordinate to the First Priority Lien
in the manner set forth in the Intercreditor Agreement.
"SECURED PARTIES" means the Revolving Secured Parties and the Term
Secured Parties.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SELLERS" means American Industrial Partners Capital Fund II, L.P.,
and the other stockholders of Stanadyne Automotive Holding Corp. set forth on
Schedule I to the Stock Purchase Agreement.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated as of
the date hereof pursuant to which Borrower has issued its Senior Subordinated
Notes due 2014, as such indenture may be further amended, restated,
supplemented, modified, extended, renewed or replaced from time to time in
accordance with Section 6.16 of this Agreement.
"SENIOR SUBORDINATED NOTES" means Borrower's unsecured Senior
Subordinated Notes due 2014, dated the date hereof, and any registered senior
subordinated notes having substantially identical terms and issued pursuant to
the Senior Subordinated Indenture in exchange for the initial, unregistered
Senior Subordinated Notes, together with any additional senior subordinated
notes issued under the Senior Subordinated Note Indenture after the Closing Date
and expressly permitted hereunder.
"SOLE LEAD ARRANGER" as defined in the preamble hereto.
"SOLVENCY CERTIFICATE" means a Solvency Certificate of the chief
financial officer of Holdings substantially in the form of Exhibit G-2.
"SOLVENT" means, with respect to any Credit Party, that as of the
date of determination, both (i) (a) the sum of such Credit Party's debt
(including contingent liabilities) does not exceed the present fair saleable
value of such Credit Party's present assets; (b) such Credit Party's capital is
not unreasonably small in relation to its business as contemplated on the
Closing Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Person is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any
35
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under Statement of Financial Accounting Standard No. 5).
"SPONSOR" means Kohlberg IV, L.P., its Control Investment
Affiliates, Co-Investment Partners, L.P., a Delaware limited partnership,
Massachusetts Mutual Life Insurance Company, a Massachusetts corporation, Tower
Square Capital Partners L.P., a Delaware limited partnership, National City
Equity Partners, LLC, an Ohio limited liability company, Xxxxxxxx Xxxx Private
Equity Fund V L.P., a Guernsey limited partnership, Antares Capital Corporation,
a Delaware corporation, Wilton Private Equity Fund, LLC, a Delaware limited
liability company, DuPont Pension Trust, a Massachusetts trust, and Xxxxx
Xxxxxxx, an individual.
"SPONSOR EQUITY" means the Capital Stock of Holdings purchased by
Sponsor on or prior to the Closing Date in an aggregate Cash amount equal to not
less than 26% of the Purchase Price (as defined in the Stock Purchase
Agreement).
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement dated
as of June 23, 2004 among KSTA Acquisition, LLC and the Sellers and other
parties thereto.
"SUBJECT TRANSACTION" as defined in Section 1.3.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
"SWING LINE LENDER" means CIT in its capacity as Swing Line Lender
hereunder, together with its permitted successors and assigns in such capacity.
"SWING LINE LOAN" means a Loan made by Swing Line Lender to Borrower
pursuant to Section 2.2.
"SWING LINE NOTE" means a promissory note in the form of Exhibit
B-2, as it may be amended, supplemented or otherwise modified from time to time.
"SWING LINE SUBLIMIT" means the lesser of (i) $5,000,000 and (ii)
the aggregate unused amount of Commitments then in effect.
"SWING LINE SWEEP PERIOD" as defined in Section 2.2(b)(vii).
"SYNDICATION AGENT" as defined in the preamble hereto.
36
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided, "Tax on the overall net income" of a Person
shall (i) be construed as a reference to a tax imposed by the jurisdiction or
any subdivision thereof in which that Person is organized or in which that
Person's applicable principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business (a "RELEVANT TAX
JURISDICTION") on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office) and (ii)
include all franchise taxes, branch taxes, taxes on doing business or taxes on
the overall capital or net worth of any such Person (and/or in the case of a
Lender, its Principal Office), in each case imposed by any Relevant Tax
Jurisdiction in lieu of income, profits or gains taxes.
"TERM COLLATERAL AGENT" means the "Collateral Agent" as defined in
the Term Credit Agreement or any collateral agent under a Permitted Refinancing
of the Term Credit Agreement.
"TERM CREDIT AGREEMENT" means the Credit and Guaranty Agreement,
dated as of the date hereof, by and among Borrower, the Guarantors, and GSCP, as
Administrative Agent, Sole Lead Arranger, Sole Bookrunner, Collateral Agent and
Syndication Agent, with regard to $65,000,000 in Term Loans, as it may be
amended, supplemented or otherwise modified from time to time.
"TERM LOANS" means the Term Loans under (and as defined in) the Term
Credit Agreement, and includes any Permitted Refinancings thereof.
"TERM OBLIGATIONS" means the Term Obligations under (and as defined
in) the Term Credit Agreement, and includes any Permitted Refinancings thereof.
"TERM SECURED PARTIES" as defined in the Term Credit Agreement, or
any credit agreement or comparable document in respect of a Permitted
Refinancing of the Term Loans.
"TERMINATED LENDER" as defined in Section 2.22.
"TITLE POLICY" as defined in Section 3.1(i).
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing Issuing Bank for any
amount drawn under any Letter of Credit, but not yet so applied), (ii) the
aggregate principal amount of all outstanding Swing Line Loans, and (iii) the
Letter of Credit Usage.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Holdings, Borrower or any of Borrower's Subsidiaries on or before the Closing
Date in connection with the Transactions.
37
"TRANSACTIONS" means consummation of the Acquisition, the
contribution of Sponsor Equity, the completion of the Debt Tender, the
assumption of the Existing Capital Leases, the repayment of the Existing
Indebtedness, the entering into of this Agreement and the Term Credit Agreement
and the issuance of the Senior Subordinated Notes.
"TYPE OF LOAN" means (i) with respect to Revolving Loans, a Base
Rate Loan or a Eurodollar Rate Loan, and (ii) with respect to Swing Line Loans,
a Base Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNADJUSTED EURODOLLAR RATE COMPONENT" means that component of the
interest costs to Borrower in respect of a Eurodollar Rate Loan that is based
upon the rate obtained pursuant to clause (i) of the definition of Adjusted
Eurodollar Rate.
1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Holdings to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). For purposes of
determining compliance with the covenants contained in Section 6 and the
calculation of the Leverage Ratio all accounting terms herein shall be
interpreted and all accounting determinations hereunder (in each case, unless
otherwise provided for or defined herein) shall be made in accordance with GAAP
as used in the most recent of the annual financial statements referred to in
Section 4.7 and applied on a basis consistent with the application used in the
financial statements referred to in Section 4.7; provided, further, that if
Borrower notifies Administrative Agent that Borrower wishes to amend any
covenant in Section 2.13 or Section 6 or the Leverage Ratio or any related
definition to eliminate the effect of any change in GAAP occurring after the
date of this Agreement on the operation of such covenant (or if Administrative
Agent notifies Borrower that the Requisite Lenders wish to amend Section 2.13 or
Section 6 or the Leverage Ratio or any related definition for such purpose),
then (i) Borrower and Administrative Agent shall negotiate in good faith to
agree upon an appropriate amendment to such covenant and (ii) Borrower's
compliance with such covenant and the Leverage Ratio shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective until such covenant is amended in a manner satisfactory to Borrower
and the Requisite Lenders. For the purposes of determining compliance under
Sections 6.1, 6.2, 6.6, 6.7 and 6.8 with respect to any amount in a currency
other than Dollars, such amount shall be deemed to equal the Dollar equivalent
thereof at the time such amount was incurred or expended, as the case may be.
1.3. CERTAIN CALCULATIONS. With respect to any period during which a
Permitted Acquisition or an Asset Sale has occurred (each, a "SUBJECT
TRANSACTION"), Consolidated Adjusted EBITDA (except with respect to calculations
of Consolidated Excess Cash Flow) and the components of Consolidated Fixed
Charges shall be calculated with respect to such period on a pro forma basis
(including pro forma adjustments arising out of events which are directly
attributable to a specific transaction or which are to be implemented by the
business subject to that transaction or by Borrower and its Subsidiaries as a
result of such Subject Transaction, are
38
factually supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X promulgated
under the Securities Act and as interpreted by the staff of the Securities and
Exchange Commission or as otherwise reasonably approved by Administrative Agent,
which would include cost savings resulting from head count reduction, closure of
facilities and similar restructuring charges, which pro forma adjustments shall
be certified by the chief financial officer of Borrower) using the historical
financial statements of any business so acquired or to be acquired or sold or to
be sold and the consolidated financial statements of Borrower and its
Subsidiaries which shall be reformulated as if such Subject Transaction, and any
Indebtedness incurred or repaid in connection therewith, had been consummated or
incurred or repaid at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding Loans incurred during such period).
1.4. INTERPRETATION, ETC. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not non limiting language (such as "without limitation"
or "but not limited to" or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that
fall within the broadest possible scope of such general statement, term or
matter. In 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". Unless the context otherwise requires (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented and otherwise modified in accordance with the
terms hereof, (ii) any references herein to any Person shall be construed to
include such Person's successors and assigns, and (iii) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1. REVOLVING LOANS.
(a) Revolving Commitments. During the Revolving Commitment Period,
subject to the terms and conditions hereof, each Lender severally agrees to make
Revolving Loans to Borrower in an aggregate amount up to but not exceeding such
Lender's Commitment; provided, that after giving effect to the making of any
Revolving Loans in no event shall the Total Utilization of Revolving Commitments
exceed the lesser of (i) the Commitments then in effect and (ii) the Borrowing
Availability then in effect, provided, further, that no Revolving Loans shall be
made on the Closing Date. Amounts borrowed pursuant to this Section 2.1(a)
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may be repaid and, subject to the terms and conditions of this Agreement,
reborrowed during the Revolving Commitment Period. Each Lender's Commitment
shall expire on the Revolving Commitment Termination Date and all Revolving
Loans and all other amounts owed hereunder with respect to the Revolving Loans
and the Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Except pursuant to Sections 2.2(b)(iv), 2.2(b)(vii) and
2.3(d), Revolving Loans that are Base Rate Loans shall be made in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 in
excess of that amount (or such lesser amounts as may be necessary pursuant
to Sections 2.2(b)(iv) and (vii)), and Revolving Loans that are Eurodollar
Rate Loans shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $100,000 in excess of that amount (or such lesser
amounts as may be necessary pursuant to Sections 2.2(b)(iv) and (vii)).
(ii) Whenever Borrower desires that Lenders make Revolving
Loans, Borrower shall deliver to Administrative Agent a fully executed and
delivered Funding Notice no later than 12:00 p.m. (noon) (New York City
time) at least three Business Days in advance of the proposed Credit Date
in the case of a Eurodollar Rate Loan, and at least one Business Day in
advance of the proposed Credit Date in the case of a Revolving Loan that
is a Base Rate Loan. Except as otherwise provided herein, a Funding Notice
for a Revolving Loan that is a Eurodollar Rate Loan shall be irrevocable
on and after the related Interest Rate Determination Date, and Borrower
shall be bound to make a borrowing in accordance therewith.
(iii) Notice of receipt of each Funding Notice in respect of
Revolving Loans, together with the amount of each Lender's Pro Rata Share
thereof, if any, and the applicable interest rate, shall be provided by
Administrative Agent to each applicable Lender by telefacsimile with
reasonable promptness, but (provided Administrative Agent shall have
received such notice by 12:00 p.m. (noon) (New York City time)) not later
than 2:00 p.m. (New York City time) on the same day as Administrative
Agent's receipt of such Notice from Borrower.
(iv) Each Lender shall make the amount of its Revolving Loan
available to Administrative Agent not later than 12:00 p.m. (New York City
time) on the applicable Credit Date by wire transfer of same day funds in
Dollars, at Administrative Agent's Principal Office. Except as provided
herein, upon satisfaction or waiver of the conditions precedent specified
herein, Administrative Agent shall make the proceeds of such Revolving
Loans available to Borrower on the applicable Credit Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such
Revolving Loans received by Administrative Agent from Lenders to be
credited to the account of Borrower at Administrative Agent's Principal
Office or such other account as may be designated in writing to
Administrative Agent by Borrower.
2.2. SWING LINE LOANS.
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(a) Swing Line Loans Commitments. During the Revolving Commitment
Period, subject to the terms and conditions hereof, Swing Line Lender hereby
agrees to make Swing Line Loans to Borrower in an aggregate amount up to but not
exceeding the Swing Line Sublimit; provided, that after giving effect to the
making of any Swing Line Loan, in no event shall the Total Utilization of
Revolving Commitments exceed the lesser of (i) the Commitments then in effect
and (ii) the Borrowing Availability then in effect, provided, further, that no
Swing Line Loans shall be made on the Closing Date. Amounts borrowed pursuant to
this Section 2.2 may be repaid and, subject to the terms and conditions of this
Agreement, reborrowed during the Revolving Commitment Period. Swing Line
Lender's Commitment shall expire on the Revolving Commitment Termination Date
and all Swing Line Loans and all other amounts owed hereunder with respect to
the Swing Line Loans and the Commitments shall be paid in full no later than
such date.
(b) Borrowing Mechanics for Swing Line Loans.
(i) Swing Line Loans shall be made in an aggregate minimum
amount of $100,000 and integral multiples of $25,000 in excess of that
amount.
(ii) Whenever Borrower desires that Swing Line Lender make a
Swing Line Loan, Borrower shall deliver to Administrative Agent a Funding
Notice no later than 12:00 p.m. (New York City time) on the proposed
Credit Date.
(iii) Swing Line Lender shall make the amount of its Swing
Line Loan available to Administrative Agent not later than 2:00 p.m. (New
York City time) on the applicable Credit Date by wire transfer of same day
funds in Dollars, at Administrative Agent's Principal Office. Except as
provided herein, upon satisfaction or waiver of the conditions precedent
specified herein, Administrative Agent shall make the proceeds of such
Swing Line Loans available to Borrower on the applicable Credit Date by
causing an amount of same day funds in Dollars equal to the proceeds of
all such Swing Line Loans received by Administrative Agent from Swing Line
Lender to be credited to the account of Borrower at Administrative Agent's
Principal Office, or to such other account as may be designated in writing
to Administrative Agent by Borrower.
(iv) With respect to any Swing Line Loans which have not been
voluntarily prepaid by Borrower pursuant to Section 2.12, Swing Line
Lender may at any time in its sole and absolute discretion deliver to
Administrative Agent (with a copy to Borrower), no later than 11:00 a.m.
(New York City time) at least one Business Day in advance of the proposed
Credit Date, a notice (which shall be deemed to be a Funding Notice given
by Borrower) requesting that each Lender holding a Commitment make
Revolving Loans that are Base Rate Loans to Borrower on such Credit Date
in an amount equal to the amount of such Swing Line Loans (the "REFUNDED
SWING LINE LOANS") outstanding on the date such notice is given which
Swing Line Lender requests Lenders to prepay. Promptly after receipt by
Administrative Agent of such notice, Administrative Agent shall notify
each such Lender thereof. Anything contained in this Agreement to the
contrary notwithstanding, (1) the proceeds of such Revolving Loans made by
the Lenders (other than Swing Line Lender) shall be immediately delivered
by Administrative Agent to Swing Line Lender (and not to Borrower) and
applied to repay a
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corresponding portion of the Refunded Swing Line Loans and (2) on the day
such Revolving Loans are made, Swing Line Lender's Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds of
a Revolving Loan made by Swing Line Lender to Borrower, and such portion
of the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the Swing
Line Note of Swing Line Lender but shall instead constitute part of Swing
Line Lender's outstanding Revolving Loans to Borrower and shall be due
under the Revolving Loan Note issued by Borrower to Swing Line Lender.
Borrower hereby authorizes Administrative Agent and Swing Line Lender to
charge Borrower's accounts with Administrative Agent and Swing Line Lender
(up to the amount available in each such account) in order to immediately
pay Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Lenders, including the
Revolving Loans deemed to be made by Swing Line Lender, are not sufficient
to repay in full the Refunded Swing Line Loans. If any portion of any such
amount paid (or deemed to be paid) to Swing Line Lender should be
recovered by or on behalf of Borrower from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the
loss of the amount so recovered shall be ratably shared among all Lenders
in the manner contemplated by Section 2.16.
(v) If for any reason Revolving Loans are not made pursuant to
Section 2.2(b)(iv) in an amount sufficient to repay any amounts owed to
Swing Line Lender in respect of any outstanding Swing Line Loans on or
before the third Business Day after demand for payment thereof by Swing
Line Lender, each Lender holding a Commitment shall be deemed to, and
hereby agrees to, have purchased a participation in such outstanding Swing
Line Loans, and in an amount equal to its Pro Rata Share of the applicable
unpaid amount together with accrued interest thereon. Upon one Business
Day's notice from Swing Line Lender, each Lender holding a Commitment
shall deliver to Swing Line Lender an amount equal to its respective
participation in the applicable unpaid amount in same day funds at the
Principal Office of Swing Line Lender. In order to evidence such
participation each Lender holding a Commitment agrees to enter into a
participation agreement at the request of Swing Line Lender in form and
substance reasonably satisfactory to Swing Line Lender. In the event any
Lender holding a Commitment fails to make available to Swing Line Lender
the amount of such Lender's participation as provided in this paragraph,
Swing Line Lender shall be entitled to recover such amount on demand from
such Lender together with interest thereon for three Business Days at the
rate customarily used by Swing Line Lender for the correction of errors
among banks and thereafter at the Base Rate, as applicable.
(vi) Notwithstanding anything contained herein to the
contrary, (1) each Lender's obligation to make Revolving Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and shall not be
affected by any circumstance, including without limitation (A) any
set-off, counterclaim, recoupment, defense or other right which such
Lender may have against Swing Line Lender, any Credit Party or any other
Person for any reason whatsoever; (B) the occurrence or continuation of a
Default or Event of Default; (C) any adverse change in
42
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of any Credit Party; (D) any breach of this
Agreement or any other Credit Document by any party hereto or thereto; or
(E) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided that such obligations of each
Lender are subject to the condition that Swing Line Lender believed in
good faith that all conditions under Section 3.2 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans were
satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line
Loans were made, or the satisfaction of any such condition not satisfied
had been waived by the Requisite Lenders prior to or at the time such
Refunded Swing Line Loans or other unpaid Swing Line Loans were made; and
(2) Swing Line Lender shall not be obligated to make any Swing Line Loans
(A) if it has elected not to do so after the occurrence and during the
continuation of a Default or Event of Default or (B) at a time when a
Funding Default exists unless Swing Line Lender has entered into
arrangements reasonably satisfactory to it and Borrower to eliminate Swing
Line Lender's risk with respect to the Defaulting Lender's participation
in such Swing Line Loan, including by cash collateralizing such Defaulting
Lender's Pro Rata Share of the outstanding Swing Line Loans.
(vii) Notwithstanding anything contained herein to the
contrary, no Swing Line Loans may be outstanding for more than ten
consecutive days. To the extent a Swing Line Loan has not been voluntarily
prepaid by Borrower pursuant to Section 2.12 within ten days of the making
of such Swing Line Loan by Swing Line Lender, then Swing Line Lender shall
request Lenders make Revolving Loans pursuant to Section 2.2(b)(iv). The
amount of any such Swingline Amounts prepaid or repaid pursuant to Section
2.2(b)(iv) may not be reborrowed for a period of three days. Nothing in
this clause (vii) shall be construed to impose any additional obligations,
except the obligation to request Revolving Loans pursuant to the
immediately preceding sentence, on the Swing Line Lender other than those
obligations otherwise set forth in this Agreement.
2.3. ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS THEREIN.
(a) Letters of Credit. During the period from the Closing Date until
the thirtieth (30th) day before the end of the Revolving Commitment Period,
subject to the terms and conditions hereof, Issuing Bank agrees to issue Letters
of Credit for the account of Borrower in an aggregate amount up to but not
exceeding the Letter of Credit Sublimit; provided:
(i) each Letter of Credit shall be denominated in Dollars;
(ii) the stated amount of each Letter of Credit shall not be
less than $250,000 or such lesser amount as is acceptable to Issuing Bank;
(iii) after giving effect to such issuance, (y) the Letter of
Credit Usage shall not exceed the Letter of Credit Sublimit and (z) the
Total Utilization of Revolving Commitments shall not exceed the lesser of
the Commitments then in effect and the Borrowing Availability then in
effect.;
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(iv) in no event shall any standby Letter of Credit have an
expiration date later than the earlier of (1) the tenth (10th) Business
Day prior to the Revolving Commitment Termination Date and (2) the date
which is one year from the date of issuance of such standby Letter of
Credit;
(v) in no event shall any commercial Letter of Credit have an
expiration date later than the earlier of (1) the tenth (10th) day prior
to the Revolving Loan Commitment Termination Date and (2) the date which
is 180 days from the date of issuance of such commercial Letter of Credit;
(vi) in no event shall any Letter of Credit be issued if such
Letter of Credit is otherwise unacceptable to Issuing Bank in its
reasonable discretion; and
(vii) all such Letters of Credit shall provide for sight
drawings.
Subject to the foregoing, Issuing Bank may agree that a standby Letter of Credit
will automatically be extended for one or more successive periods not to exceed
one year each, unless Issuing Bank elects not to extend for any such additional
period; provided, that Issuing Bank shall not extend any such Letter of Credit
if it has received written notice that an Event of Default has occurred and is
continuing at the time Issuing Bank must elect to allow such extension;
provided, further, in the event a Funding Default exists, Issuing Bank shall not
be required to issue any Letter of Credit unless Issuing Bank has entered into
arrangements satisfactory to it, Administrative Agent and Borrower to eliminate
Issuing Bank's risk with respect to the participation in Letters of Credit of
the Defaulting Lender, including by cash collateralizing such Defaulting
Lender's Pro Rata Share of the Letter of Credit Usage.
(b) Notice of Issuance. Whenever Borrower desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent (with a copy to
Issuing Bank) an Issuance Notice no later than 12:00 p.m. (New York City time)
at least three Business Days, or such shorter period as may be agreed to by
Issuing Bank in any particular instance, in advance of the proposed date of
issuance. Upon satisfaction or waiver of the conditions set forth in Section
3.2, Issuing Bank shall issue the requested Letter of Credit only in accordance
with Issuing Bank's standard operating procedures. Promptly after the issuance
or amendment of a standby Letter of Credit, Issuing Bank shall notify Borrower
and Administrative Agent, in writing, of such issuance or amendment and such
notice shall be accompanied by a copy of such issuance or amendment. Upon
receipt of such notice, Administrative Agent shall promptly notify each Lender,
in writing, of such Letter of Credit or amendment and if so requested by a
Lender, Administrative Agent shall furnish such Lender with a copy of such
Letter of Credit or amendment. With regards to commercial Letters of Credit,
Issuing Bank shall furnish Administrative Agent, by facsimile, on the first
Business Day of each week with a report detailing the daily aggregate commercial
Letter of Credit outstandings for the previous week. In the event of any
conflict between the terms of a Letter of Credit or Letter of Credit application
and this Agreement, the terms of this Agreement shall govern and control.
(c) Responsibility of Issuing Bank With Respect to Requests for
Drawings and Payments. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, Issuing Bank shall be responsible
only to examine the documents delivered under such Letter of Credit with
reasonable care so as to ascertain whether they appear on their
44
face to be in accordance with the terms and conditions of such Letter of Credit.
As between Borrower and Issuing Bank, Borrower assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by Issuing Bank, by the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, Issuing Bank shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such
Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason;
(iii) failure of the beneficiary of any such Letter of Credit
to comply fully with any conditions required in order to draw upon such
Letter of Credit so long as such conditions are complied with in all
material respects;
(iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of
Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control
of Issuing Bank, including any Governmental Acts;
and none of the above shall affect or impair, or prevent the vesting of, any of
Issuing Bank's rights or powers hereunder. Without limiting the foregoing and in
furtherance thereof, any action taken or omitted by Issuing Bank under or in
connection with the Letters of Credit or any documents and certificates
delivered thereunder, if taken or omitted in good faith, shall not give rise to
any liability on the part of Issuing Bank to Borrower. Notwithstanding anything
to the contrary contained in this Section 2.3(c), Borrower shall retain any and
all rights it may have against Issuing Bank for any liability to the extent
arising solely out of the gross negligence or willful misconduct of Issuing Bank
or from honoring a Letter of Credit that does not comply in all material
respects with the conditions to draw on such Letter of Credit.
(d) Reimbursement by Borrower of Amounts Drawn or Paid Under Letters
of Credit. In the event Issuing Bank has determined to honor a drawing under a
Letter of Credit, it
45
shall promptly notify Borrower and Administrative Agent, and Borrower shall
reimburse Issuing Bank on or before the Business Day immediately following the
date on which such drawing is honored (the "REIMBURSEMENT DATE") in an amount in
Dollars and in same day funds equal to the amount of such honored drawing;
provided, anything contained herein to the contrary notwithstanding, (i) unless
Borrower shall have notified Administrative Agent and Issuing Bank prior to
10:00 a.m. (New York City time) on the date such drawing is honored that
Borrower intends to reimburse Issuing Bank for the amount of such honored
drawing with funds other than the proceeds of Revolving Loans, Borrower shall be
deemed to have given a timely Funding Notice to Administrative Agent requesting
Lenders having a Commitment to make Revolving Loans that are Base Rate Loans on
the Reimbursement Date in an amount in Dollars equal to the amount of such
honored drawing (and Administrative Agent shall promptly notify each such Lender
having a Commitment of such deemed request), and (ii) subject to satisfaction or
waiver of the conditions specified in Section 3.2, Lenders shall, on the
Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount
of such honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse Issuing Bank for the amount of such honored
drawing; and provided further, if for any reason proceeds of Revolving Loans are
not received by Issuing Bank on the Reimbursement Date in an amount equal to the
amount of such honored drawing, Borrower shall reimburse Issuing Bank, on
demand, in an amount in same day funds equal to the excess of the amount of such
honored drawing over the aggregate amount of such Revolving Loans, if any, which
are so received. Nothing in this Section 2.3(d) shall be deemed to relieve any
Lender having a Commitment from its obligation to make Revolving Loans on the
terms and conditions set forth herein, and Borrower shall retain any and all
rights it may have against any such Lender resulting from the failure of such
Lender to make such Revolving Loans under this Section 2.3(d).
(e) Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit made in accordance with
Section 3.2, each Lender having a Commitment shall be deemed to have purchased,
and hereby agrees to irrevocably purchase, from Issuing Bank a participation in
such Letter of Credit and any drawings honored thereunder in an amount equal to
such Lender's Pro Rata Share (with respect to the Commitments) of the maximum
amount which is or at any time may become available to be drawn thereunder. In
the event that Borrower shall fail for any reason to reimburse Issuing Bank as
provided in Section 2.3(d), Issuing Bank shall promptly notify each Lender of
the unreimbursed amount of such honored drawing and of such Lender's respective
participation therein based on such Lender's Pro Rata Share of the Commitments.
Each Lender shall make available to Issuing Bank an amount equal to its
respective participation, in Dollars and in same day funds, at the office of
Issuing Bank specified in such notice, not later than 12:00 p.m. (New York City
time) on the first Business Day (under the laws of the jurisdiction in which
such office of Issuing Bank is located which is also a Business Day in New York
City) after the date notified by Issuing Bank. In the event that any Lender
fails to make available to Issuing Bank on such business day the amount of such
Lender's participation in such Letter of Credit as provided in this Section
2.3(e), Issuing Bank shall be entitled to recover such amount on demand from
such Lender together with interest thereon for three Business Days at the rate
customarily used by Issuing Bank for the correction of errors among banks and
thereafter at the Base Rate. Nothing in this Section 2.3(e) shall be deemed to
prejudice the right of any Lender to recover from Issuing Bank any amounts made
available by such Lender to Issuing Bank pursuant to this Section in the event
that it is determined that the payment with respect to a Letter of Credit in
46
respect of which payment was made by such Lender constituted gross negligence or
willful misconduct on the part of Issuing Bank. In the event Issuing Bank shall
have been reimbursed by other Lenders pursuant to this Section 2.3(e) for all or
any portion of any drawing honored by Issuing Bank under a Letter of Credit,
Issuing Bank shall distribute to each Lender which has paid all amounts payable
by it under this Section 2.3(e) with respect to such honored drawing such
Lender's Pro Rata Share of all payments subsequently received by Issuing Bank
from Borrower in reimbursement of such honored drawing when such payments are
received. Any such distribution shall be made to a Lender at its primary address
set forth below its name on Appendix B or at such other address as such Lender
may request.
(f) Obligations Absolute. The obligation of Borrower to reimburse
Issuing Bank for drawings honored under the Letters of Credit issued by it and
to repay any Revolving Loans made by Lenders pursuant to Section 2.3(d) and the
obligations of Lenders under Section 2.3(e) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms hereof under
all circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for
whom any such transferee may be acting), Issuing Bank, Lender or any other
Person or, in the case of a Lender, against Borrower, whether in
connection herewith, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Borrower or one
of its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by Issuing Bank under any Letter of Credit
against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Holdings or any of its Subsidiaries;
(vi) any breach hereof or any other Credit Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Default shall
have occurred and be continuing;
47
provided, in each case, that payment by Issuing Bank under the applicable Letter
of Credit shall not have constituted gross negligence or willful misconduct of
Issuing Bank under the circumstances in question.
(g) Indemnification. Without duplication of any obligation of
Borrower under Section 10.2 or 10.3, in addition to amounts payable as provided
herein, Borrower hereby agrees to protect, indemnify, pay and save harmless
Issuing Bank from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and reasonable expenses (including reasonable fees,
expenses and disbursements of counsel) which Issuing Bank may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit by Issuing Bank, other than as a result of (1) the gross
negligence or willful misconduct of Issuing Bank or (2) the wrongful dishonor by
Issuing Bank of a proper demand for payment made under any Letter of Credit
issued by it, or (ii) the failure of Issuing Bank to honor a drawing under any
such Letter of Credit as a result of any Governmental Act.
2.4. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all participations
purchased, by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder or purchase a participation required hereby nor shall any
Commitment of any Lender be increased or decreased as a result of a default by
any other Lender in such other Lender's obligation to make a Loan requested
hereunder or purchase a participation required hereby.
(b) Availability of Funds. Unless Administrative Agent shall have
been notified by any Lender prior to the applicable Credit Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender's Loan requested on such Credit Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on such
Credit Date and Administrative Agent may, in its sole discretion (subject to
Section 3.2(a)), but shall not be obligated to, make available to Borrower a
corresponding amount on such Credit Date. If such corresponding amount is not in
fact made available to Administrative Agent by such Lender, Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from such Credit Date until
the date such amount is paid to Administrative Agent, at the customary rate set
by Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the rate payable hereunder for Base Rate
Loans. Nothing in this Section 2.4(b) shall be deemed to relieve any Lender from
its obligation to fulfill its Commitments hereunder or to prejudice any rights
that Borrower may have against any Lender as a result of any default by such
Lender hereunder.
2.5. USE OF PROCEEDS. The proceeds of the Revolving Loans, Swing Line
Loans and Letters of Credit made after the Closing Date shall be applied by
Borrower for working capital and general corporate purposes of Holdings and its
Subsidiaries, including Permitted
48
Acquisitions and capital expenditures permitted hereunder. No portion of the
proceeds of any Credit Extension shall be used in any manner that causes or
might cause such Credit Extension or the application of such proceeds to violate
Regulation T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation thereof or to violate the
Exchange Act.
2.6. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Obligations of Borrower
to such Lender, including the amounts of the Loans made by it and each repayment
and prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Borrower, absent manifest error; provided, that the failure to make
any such recordation, or any error in such recordation, shall not affect any
Lender's Commitments or Borrower's Obligations in respect of any applicable
Loans; and provided, further, in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register shall
govern.
(b) Register. Administrative Agent shall maintain at its Principal
Office a register for the recordation of the names and addresses of Lenders and
the Commitments and Loans of each Lender from time to time (the "REGISTER"). The
Register shall be available for inspection by Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
Administrative Agent shall record in the Register the Commitments and the Loans,
and each repayment or prepayment in respect of the principal amount of the
Loans, and any such recordation shall be conclusive and binding on Borrower and
each Lender, absent manifest error; provided, that the failure to make any such
recordation, or any error in such recordation, shall not affect any Lender's
Commitments or Borrower's Obligations in respect of any Loan. Borrower hereby
designates CIT to serve as Borrower's agent solely for purposes of maintaining
the Register as provided in this Section 2.6, and Borrower hereby agrees that,
to the extent CIT serves in such capacity, CIT and its officers, directors,
employees, agents and affiliates shall constitute "Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
Borrower (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date, or at any time thereafter, Borrower shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Borrower's receipt of such notice) a Note or Notes to
evidence such Lender's Revolving Loan or Swing Line Loan, as the case may be.
2.7. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Loan shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:
(i) in the case of Revolving Loans:
49
(1) if a Base Rate Loan, at the Base Rate plus the
Applicable Margin; or
(2) if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus the Applicable Margin; and
(ii) in the case of Swing Line Loans, at the Base Rate plus
the Applicable Margin.
(b) The basis for determining the rate of interest with respect to
any Loan (except Swing Line Loans, which can be made and maintained as Base Rate
Loans only), and the Interest Period with respect to any Eurodollar Rate Loan,
shall be selected by Borrower and notified to Administrative Agent and Lenders
pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as
the case may be; provided, until the earlier of thirty (30) days after the
Closing Date or the date that Syndication Agent notifies Borrower that the
primary syndication of the Loans and Commitments has been completed, as
reasonably determined by Syndication Agent, the Revolving Loans shall be
maintained as either (1) Eurodollar Rate Loans having an Interest Period of no
longer than one month or (2) Base Rate Loans. If on any day a Loan is
outstanding with respect to which a Funding Notice or Conversion/Continuation
Notice has not been delivered to Administrative Agent in accordance with the
terms hereof specifying the applicable basis for determining the rate of
interest, then for that day such Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no more
than five (5) Interest Periods outstanding at any time. In the event Borrower
fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the
applicable Funding Notice or Conversion/Continuation Notice, such Loan (if
outstanding as a Eurodollar Rate Loan) will be automatically converted into a
Base Rate Loan on the last day of the then-current Interest Period for such Loan
(or if outstanding as a Base Rate Loan will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan). In the event Borrower fails to
specify an Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, Borrower shall be deemed to
have selected an Interest Period of one month. As soon as practicable after
10:00 a.m. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Borrower and
each Lender.
(d) Interest payable pursuant to Section 2.7(a) shall be computed
(i) in the case of Base Rate Loans based upon the Prime Rate on the basis of a
365-day or 366-day year, as the case may be, and (ii) in the case of Eurodollar
Rate Loans or Base Rate Loans not based upon the Prime Rate, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date
50
of payment of such Loan or the expiration date of an Interest Period applicable
to such Loan or, with respect to a Base Rate Loan being converted to a
Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided, if a Loan
is repaid on the same day on which it is made, one day's interest shall be paid
on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan
shall be payable in arrears on and to (i) each Interest Payment Date applicable
to that Loan; (ii) upon any prepayment of that Loan, whether voluntary or
mandatory, to the extent accrued on the amount being prepaid; and (iii) at
maturity, including final maturity; provided, however, with respect to any
voluntary prepayment of a Base Rate Loan, accrued interest shall instead be
payable on the applicable Interest Payment Date.
(f) Borrower agrees to pay to Issuing Bank, with respect to drawings
honored under any Letter of Credit, interest on the amount paid by Issuing Bank
in respect of each such honored drawing from the date such drawing is honored to
but excluding the date such amount is reimbursed by or on behalf of Borrower at
a rate equal to (i) for the period from the date such drawing is honored to but
excluding the applicable Reimbursement Date, the rate of interest otherwise
payable hereunder with respect to Revolving Loans that are Base Rate Loans, and
(ii) thereafter, a rate which is 2% per annum in excess of the rate of interest
otherwise payable hereunder with respect to Revolving Loans that are Base Rate
Loans.
(g) Interest payable pursuant to Section 2.7(f) shall be computed on
the basis of a 365/366-day year for the actual number of days elapsed in the
period during which it accrues, and shall be payable on demand or, if no demand
is made, on the date on which the related drawing under a Letter of Credit is
reimbursed in full. Promptly upon receipt by Issuing Bank of any payment of
interest pursuant to Section 2.7(f), Issuing Bank shall distribute to each
Lender, out of the interest received by Issuing Bank in respect of the period
from the date such drawing is honored to but excluding the date on which Issuing
Bank is reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of any Revolving Loans), the amount that such
Lender would have been entitled to receive in respect of the letter of credit
fee that would have been payable in respect of such Letter of Credit for such
period if no drawing had been honored under such Letter of Credit. In the event
Issuing Bank shall have been reimbursed by Lenders for all or any portion of
such honored drawing, Issuing Bank shall distribute to each Lender which has
paid all amounts payable by it under Section 2.3(e) with respect to such honored
drawing such Lender's Pro Rata Share of any interest received by Issuing Bank in
respect of that portion of such honored drawing so reimbursed by Lenders for the
period from the date on which Issuing Bank was so reimbursed by Lenders to but
excluding the date on which such portion of such honored drawing is reimbursed
by Borrower.
2.8. CONVERSION/CONTINUATION.
(a) Subject to Section 2.17 and so long as no Default or Event of
Default shall have occurred and then be continuing, Borrower shall have the
option:
(i) to convert at any time all or any part of any Revolving
Loan equal to $1,000,000 and integral multiples of $100,000 in excess of
that amount from one Type of
51
Loan to another Type of Loan; provided, a Eurodollar Rate Loan may only
be converted on the expiration of the Interest Period applicable to such
Eurodollar Rate Loan unless Borrower shall pay all amounts due under
Section 2.17 in connection with any such conversion; or
(ii) upon the expiration of any Interest Period applicable to
any Eurodollar Rate Loan, to continue all or any portion of such Loan
equal to $1,000,000 and integral multiples of $100,000 in excess of that
amount as a Eurodollar Rate Loan.
(b) Borrower shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Borrower shall be bound to effect a conversion or continuation in accordance
therewith.
2.9. DEFAULT INTEREST. The principal amount of all Loans not paid when due
and, to the extent permitted by applicable law, any interest payments on the
Loans or any fees or other amounts owed hereunder not paid when due, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate that is 2.0% per annum in excess of the interest rate otherwise
payable hereunder with respect to the applicable Loans (or, in the case of any
such fees and other amounts, at a rate which is 2.0% per annum in excess of the
highest interest rate otherwise then payable hereunder for Base Rate Loans);
provided, in the case of Eurodollar Rate Loans, upon the expiration of the
Interest Period in effect at the time any such increase in interest rate is
effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and
shall thereafter bear interest payable upon demand at a rate which is 2.0% per
annum in excess of the highest interest rate otherwise then payable hereunder
for Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this Section 2.9 is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
2.10. FEES.
(a) Borrower agrees to pay to Lenders having Revolving Exposure:
(i) commitment fees equal to (1) the average of the daily
difference between (a) the Commitments, and (b) the sum of (x) the
aggregate principal amount of outstanding Revolving Loans plus (y) the
Letter of Credit Usage plus (z) solely with respect to the calculation of
commitment fees relating to the Commitment of Swing Line Lender,
outstanding Swing Line Loans, times (2) the Applicable Commitment Fee
Percentage; and
52
(ii) letter of credit fees equal to (1) the Applicable Margin
for Revolving Loans that are Eurodollar Rate Loans, times (2) the average
aggregate daily maximum amount available to be drawn under all such
Letters of Credit (regardless of whether any conditions for drawing could
then be met and determined as of the close of business on any date of
determination).
All fees referred to in this Section 2.10(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.
(b) Borrower agrees to pay directly to Issuing Bank, for its own
account, the following fees:
(i) a fronting fee equal to 0.125%, per annum, times the
average aggregate daily maximum amount available to be drawn under all
Letters of Credit (determined as of the close of business on any date of
determination); and
(ii) such documentary and processing charges for any issuance,
amendment, transfer or payment of a Letter of Credit as are in accordance
with Issuing Bank's standard schedule for such charges and as in effect at
the time of such issuance, amendment, transfer or payment, as the case may
be.
(c) All fees referred to in Section 2.10(a) and 2.10(b)(i) shall be
calculated on the basis of a 360-day year and the actual number of days elapsed
and shall be payable quarterly in arrears on January 1, April 1, July 1 and
October 1 during the Revolving Commitment Period, commencing on the first such
date to occur after the Closing Date, and on the Revolving Commitment
Termination Date.
(d) In addition to any of the foregoing fees, Borrower agrees to pay
to Agents such other fees in the amounts and at the times separately agreed
upon.
2.11. SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS. Revolving Loans and
Swingline Loans shall be paid in full on the Revolving Commitment Termination
Date.
2.12. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(1) with respect to Base Rate Loans (other than Swing
Line Loans), Borrower may prepay any such Loans on any Business Day
in whole or in part, in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount;
(2) with respect to Eurodollar Rate Loans, Borrower may
prepay any such Loans on any Business Day
53
in whole or in part in an aggregate minimum amount of $1,000,000 and
integral multiples of $100,000 in excess of that amount; and
(3) with respect to Swing Line Loans, Borrower may
prepay any such Loans on any Business Day in whole or in part in an
aggregate minimum amount of $100,000, and integral multiples of
$25,000 in excess of that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's prior written
or telephonic notice in the case of Base Rate Loans (other than
Swing Line Loans);
(2) upon not less than three Business Days' prior
written or telephonic notice in the case of Eurodollar Rate Loans;
and
(3) upon written or telephonic notice on the date of
prepayment, in the case of Swing Line Loans;
in each case given to Administrative Agent or Swing Line Lender, as the case may
be, by 12:00 p.m. (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (and
Administrative Agent will promptly transmit such telephonic or original notice
for Revolving Loans, as the case may be, by telefacsimile or telephone promptly
confirmed in writing to each Lender) or Swing Line Lender, as the case may be.
Upon the giving of any such notice, the principal amount of the Loans specified
in such notice shall become due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be applied as specified in Section
2.14(a).
(b) Voluntary Commitment Reductions.
(i) Borrower may, upon not less than three Business Days'
prior written or telephonic notice confirmed in writing to Administrative
Agent (which original written or telephonic notice Administrative Agent
will promptly transmit by telefacsimile or telephone promptly confirmed in
writing to each applicable Lender), at any time and from time to time
terminate in whole or permanently reduce in part, without premium or
penalty, the Commitments in an amount up to the amount by which the
Commitments exceed the Total Utilization of Revolving Commitments at the
time of such proposed termination or reduction; provided, any such partial
reduction of the Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 in excess of that amount.
(ii) Borrower's notice to Administrative Agent shall designate
the date (which shall be a Business Day) of such termination or reduction
and the amount of any partial reduction, and such termination or reduction
of the Commitments shall be effective on the date specified in Borrower's
notice and shall reduce the Commitment of each Lender proportionately to
its Pro Rata Share thereof.
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2.13. MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Asset Sales. Subject to Section 2.14(b), no later than the first
Business Day following the date of receipt by Holdings or any of its
Subsidiaries of any Net Asset Sale Proceeds, Borrower shall prepay the Loans and
the Commitments shall be permanently reduced as set forth in Section 2.14(b) in
an aggregate amount equal to such amount of Net Asset Sale Proceeds; provided,
so long as no Default or Event of Default shall have occurred and be continuing,
Borrower shall have the option, directly or through one or more of its
Subsidiaries, to invest Net Asset Sale Proceeds within three hundred-sixty (360)
days of receipt thereof in productive assets used in the business of Borrower
and its Subsidiaries; provided, further, pending any such investment all such
Net Asset Sale Proceeds shall be applied to prepay Revolving Loans to the extent
outstanding (without a reduction in Commitments).
(b) Insurance/Condemnation Proceeds. Subject to Section 2.14(b), no
later than the first Business Day following the date of receipt by Holdings or
any of its Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds in excess of $1,000,000 during any Fiscal Year,
Borrower shall prepay the Loans and/or the Commitments shall be permanently
reduced as set forth in Section 2.14(b) in an aggregate amount equal to such
amount of Net Insurance/Condemnation Proceeds; provided, so long as no Default
or Event of Default shall have occurred and be continuing, Borrower shall have
the option, directly or through one or more of its Subsidiaries to invest such
Net Insurance/Condemnation Proceeds within three hundred-sixty (360) days of
receipt thereof in productive assets used in the business of Holdings and its
Subsidiaries, which investment may include the repair, restoration or
replacement of the applicable assets in respect thereof; provided, further,
pending any such investment all such Net Insurance/Condemnation Proceeds, as the
case may be, shall be applied to prepay Revolving Loans to the extent
outstanding (without a reduction in Commitments).
(c) Issuance of Equity Securities. Subject to Section 2.14(b), on
the date of receipt by Holdings of any Cash proceeds from a capital contribution
to, or the issuance of any Capital Stock of, Holdings (other than (i) pursuant
to any employee stock or stock option compensation plan, (ii) equity issued to
Sponsor, all or substantially all of the Cash proceeds of which are utilized by
Borrower for capital expenditures permitted hereunder or Investments otherwise
permitted hereunder, or (iii) equity issued pursuant to Section 8.2 hereof),
Borrower shall prepay the Loans and the Commitments shall be permanently reduced
as set forth in Section 2.14(b) in an aggregate amount equal to 75.0% of such
proceeds, net of underwriting discounts and commissions and other reasonable
costs and expenses associated therewith payable to a Person that is not Holdings
or one of its Affiliates (except Sponsor, provided such reasonable costs and
expenses payable to Sponsor were approved by the disinterested members of the
Borrower's board of directors and it is a one-time fee), including reasonable
legal fees and expenses, provided, during any period in which the Leverage Ratio
(determined for any such period by reference to the most recent Compliance
Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio)
shall be 3.00:1.00 or less, Borrower shall only be required to make the
prepayments and/or reductions otherwise required by this Section 2.13(c) in an
amount equal to 50.0% of such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith payable
to a Person that is not Holdings or one of its Subsidiaries or Affiliates
(except Sponsor, provided such reasonable costs and
55
expenses payable to Sponsor were approved by the disinterested members of the
Borrower's board of directors and it is a one-time fee).
(d) Issuance of Debt. Subject to Section 2.14(b), no later than the
first Business Day following the date of receipt by Holdings or any of its
Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of
Holdings or any of its Subsidiaries (other than with respect to any Indebtedness
permitted to be incurred pursuant to Section 6.1 (except for Indebtedness
incurred pursuant to Section 6.1(k) the proceeds of which are not used to prepay
the Senior Subordinated Notes), but expressly including the proceeds of any sale
and leaseback pursuant to Section 6.11), Borrower shall prepay the Loans and/or
the Commitments shall be permanently reduced as set forth in Section 2.14(b) in
an aggregate amount equal to 100% of such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith payable to a Person that is not Holdings or one of its Subsidiaries or
Affiliates (except Sponsor, provided such reasonable costs and expenses payable
to Sponsor were approved by the disinterested members of the Borrower's board of
directors and it is a one-time fee), including reasonable legal fees and
expenses.
(e) Consolidated Excess Cash Flow. Subject to Section 2.14(b), in
the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year
(commencing with Fiscal Year 2005), Borrower shall, no later than one
hundred-twenty five (125) days after the end of such Fiscal Year, prepay the
Loans and the Commitments shall be permanently reduced as set forth in Section
2.14(b) in an aggregate amount equal to (i) 75.0% of such Consolidated Excess
Cash Flow minus (ii) optional prepayments of the Term Loans and, to the extent
of a Commitment reduction, Revolving Loans, in each case, during such Fiscal
Year; provided, during any period in which the Leverage Ratio (determined for
any such period by reference to the most recent Compliance Certificate delivered
pursuant to Section 5.1(d) calculating the Leverage Ratio) shall be 3.00:1.00 or
less, Borrower shall only be required to make the prepayments and/or reductions
otherwise required by this Section 2.13(e) in an amount equal to 50.0% of such
Consolidated Excess Cash Flow.
(f) Revolving Loans and Swing Loans. Borrower shall from time to
time prepay first, the Swing Line Loans, and second, the Revolving Loans to the
extent necessary so that the Total Utilization of Revolving Commitments shall
not at any time exceed the Commitments then in effect.
(g) Borrowing Base. Borrower shall from time to prepay first, the
Swing Line Loans, and second, the Revolving Loans to the extent necessary so
that the Total Utilization of Revolving Commitments shall not exceed at any time
the Borrowing Availability then in effect.
(h) Prepayment Certificate. Concurrently with any prepayment of the
Loans and/or reduction of the Commitments pursuant to Sections 2.13(a) through
2.13(e), Borrower shall deliver to Administrative Agent a certificate of an
Authorized Officer demonstrating the calculation of the amount of the applicable
net proceeds or Consolidated Excess Cash Flow, as the case may be. In the event
that Borrower shall subsequently determine that the actual amount received
exceeded the amount set forth in such certificate, Borrower shall promptly make
an additional prepayment of the Loans and/or the Commitments shall be
permanently reduced in an amount equal to such excess as set forth in Section
2.14(b), and Borrower shall concurrently
56
therewith deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the derivation of such excess.
2.14. APPLICATION OF PREPAYMENTS/REDUCTIONS.
(a) Application of Voluntary Prepayments by Type of Loans. Any
prepayment of any Loan pursuant to Section 2.12(a) shall be applied as follows:
first, to repay outstanding Swing Line Loans to the full
extent thereof; and
second, to repay outstanding Revolving Loans.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount required to be paid pursuant to Sections 2.13(a) through 2.13(e) shall be
applied as follows:
first, to prepay Term Loans to the full extent thereof (to be
applied first, on a pro rata basis to reduce the scheduled Installments of
principal of such Term Loans during the next twelve months, and second, on
a pro rata basis, to reduce the remaining scheduled Installments of
principal of such Term Loans);
second, to prepay the Swing Line Loans to the full extent
thereof and to permanently reduce the Commitments by the amount of such
prepayment;
third, to prepay the Revolving Loans to the full extent
thereof and to further permanently reduce the Commitments by the amount of
such prepayment;
fourth, to prepay outstanding reimbursement obligations with
respect to Letters of Credit and to further permanently reduce the
Commitments by the amount of such prepayment;
fifth, to cash collateralize Letters of Credit and to further
permanently reduce the Commitments by the amount of such cash
collateralization; and
sixth, to further permanently reduce the Commitments to the
full extent thereof.
(c) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment thereof shall be applied first to Base
Rate Loans to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by Borrower pursuant to Section 2.17(c).
2.15. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Borrower of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 p.m. (New York City time) on the date
due at Administrative Agent's Principal Office for the account of
57
Lenders; funds received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Borrower on the next succeeding Business
Day.
(b) All payments in respect of the principal amount of any Loan
(other than voluntary prepayments of Base Rate Revolving Loans) shall be
accompanied by payment of accrued interest on the principal amount being repaid
or prepaid.
(c) Administrative Agent shall promptly distribute to each Lender at
such address as such Lender shall indicate in writing such Lender's applicable
Pro Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due to such Lender, including,
without limitation, all fees payable to such Lender with respect thereto, to the
extent received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of "Interest
Period", whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Commitment fees and
any Letter of Credit fees hereunder.
(f) Borrower hereby authorizes Administrative Agent to charge
Borrower's accounts with Administrative Agent in order to cause timely payment
to be made to Administrative Agent of all principal, Letter of Credit
reimbursements, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose).
(g) Administrative Agent shall deem any payment by or on behalf of
Borrower hereunder that is not made in same day funds prior to 12:00 p.m. (New
York City time) to be a non-conforming payment. Any such payment shall not be
deemed to have been received by Administrative Agent until the later of (i) the
time such funds become available funds, and (ii) the applicable next Business
Day. Administrative Agent shall give prompt telephonic notice to Borrower and
each applicable Lender (confirmed in writing) if any payment is non-conforming.
Any non-conforming payment may constitute or become a Default or Event of
Default in accordance with the terms of Section 8.1(a). Interest shall continue
to accrue on any principal as to which a non-conforming payment is made until
such funds become available funds (but in no event less than the period from the
date of such payment to the next succeeding applicable Business Day) at the rate
determined pursuant to Section 2.9 from the date such amount was due and payable
until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and not otherwise
been waived, and the maturity of the Obligations shall have been accelerated
pursuant to Section 8.1, all payments or proceeds received by Agents hereunder
in respect of any of the Obligations, including from payments or proceeds in
respect of any sale, or any collection from, or other
58
realization upon, all or any part of the Collateral, shall be applied, subject
to the terms of the Intercreditor Agreement, as follows:
(i) first, to the payment of all costs and expenses of any
such sale, collection or other realization, including reasonable
compensation to the Collateral Agent and its agents and counsel, and all
other expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith, and all amounts for which the
Collateral Agent is entitled to indemnification hereunder or under the
Pledge and Security Agreement (in its capacity as the Collateral Agent and
not as a Lender) and all advances made by the Collateral Agent under the
Pledge and Security Agreement for the account of the applicable Grantor,
and to the payment of all costs and expenses paid or incurred by the
Collateral Agent in connection with the exercise of any right or remedy
hereunder or under the Pledge and Security Agreement, all in accordance
with the terms hereof or thereof;
(ii) second, to the extent of any excess of such proceeds, to
the payment of all other Obligations for the ratable benefit of the
Lenders and the Lender Counterparties in such order as they may elect; and
(iii) third, to the extent of any excess of such proceeds, to
the payment to or upon the order of the applicable Credit Party or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
2.16. RATABLE SHARING. Lenders hereby agree among themselves that, except
as otherwise provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the Collateral, if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms hereof),
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to such Lender hereunder or
under the other Credit Documents (collectively, the "AGGREGATE AMOUNTS DUE" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (a) notify Administrative
Agent and each other Lender of the receipt of such payment and (b) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided, if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Borrower or otherwise (and whether as a result
of any demand, settlement, litigation or otherwise), those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without
interest. Borrower expressly consents to the foregoing arrangement and agrees
that
59
any holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder directly by Borrower.
2.17. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
(a) Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have reasonably determined (which determination
shall be final and conclusive and binding upon all parties hereto), on any
Interest Rate Determination Date with respect to any Eurodollar Rate Loans, that
by reason of circumstances affecting the London interbank market adequate and
fair means do not exist for ascertaining the interest rate applicable to such
Loans on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Borrower and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Borrower
and Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Funding Notice or Conversion/Continuation Notice given by Borrower
with respect to the Loans in respect of which such determination was made shall
be deemed to be rescinded by Borrower.
(b) Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrower and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an "AFFECTED LENDER" and it shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to Borrower
and Administrative Agent of such determination (which notice Administrative
Agent shall promptly transmit to each other Lender). Thereafter (1) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (2) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Borrower pursuant to a
Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall
make such Loan as (or continue such Loan as or convert such Loan to, as the case
may be) a Base Rate Loan, (3) the Affected Lender's obligation to maintain its
outstanding Eurodollar Rate Loans (the "AFFECTED LOANS") shall be terminated at
the earlier to occur of the expiration of the Interest Period then in effect
with respect to the Affected Loans or when required by law, and (4) the Affected
Loans shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a Eurodollar Rate Loan then being
requested by Borrower pursuant to a Funding Notice or a Conversion/Continuation
Notice, Borrower shall have the option, subject to the provisions of
60
Section 2.17(c), to rescind such Funding Notice or Conversion/Continuation
Notice as to all Lenders by giving notice (by telefacsimile or by telephone
confirmed in writing) to Administrative Agent of such rescission on the date on
which the Affected Lender gives notice of its determination as described above
(which notice of rescission Administrative Agent shall promptly transmit to each
other Lender). Except as provided in the immediately preceding sentence, nothing
in this Section 2.17(b) shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar
Rate Loans in accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods. Borrower shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by such Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss of anticipated profits (including, without limitation, the
Applicable Margin)) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not
occur on a date specified therefor in a Funding Notice or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Conversion/Continuation Notice
or a telephonic request for conversion or continuation; (ii) if any prepayment
or other principal payment of, or any conversion of, any of its Eurodollar Rate
Loans occurs on a date prior to the last day of an Interest Period applicable to
that Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not
made on any date specified in a notice of prepayment given by Borrower.
(d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.17 and under
Section 2.18 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.17 and under
Section 2.18.
2.18. INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.19 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (which term shall include
Issuing Bank and Swingline Lender for purposes of this Section 2.18(a)) shall
determine (which determination shall, absent manifest error, be final
61
and conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or Governmental Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law): (i) subjects such Lender (or its applicable
lending office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of the other Credit
Documents or any of its obligations hereunder or thereunder or any payments to
such Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder; (ii) imposes, modifies or holds applicable
any reserve (including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Adjusted Eurodollar Rate); or (iii) imposes any
other condition (other than with respect to a Tax matter) on or affecting such
Lender (or its applicable lending office) or its obligations hereunder or the
London interbank market; and the result of any of the foregoing is to increase
the cost to such Lender of agreeing to make, making or maintaining Loans
hereunder or to reduce any amount received or receivable by such Lender (or its
applicable lending office) with respect thereto; then, in any such case,
Borrower shall promptly pay to such Lender, upon receipt of the statement
referred to in the next sentence, such additional amount or amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Such Lender shall deliver to Borrower
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to such
Lender under this Section 2.18(a), which statement shall be conclusive and
binding upon all parties hereto absent manifest error. Failure or delay on the
part of any Lender, Issuing Bank or Swingline Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's, Issuing
Bank's or Swingline Lender's right to demand such compensation; provided that
Borrower shall not be required to compensate a Lender, Issuing Bank or Swingline
Lender pursuant to this Section for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender, Issuing Bank
or Swingline Lender, as the case may be, notifies Borrower of the change giving
rise to such increased costs or reductions and of such Lender's, Issuing Bank's
or Swingline Lender's intention to claim compensation therefor (except that, if
the change giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).
(b) Capital Adequacy Adjustment. In the event that any Lender (which
term shall include Issuing Bank and Swingline Lender for purposes of this
Section 2.18(b)) shall have determined that the adoption, effectiveness,
phase-in or applicability after the Closing Date of any law, rule or regulation
(or any provision thereof) regarding capital adequacy, or any change therein or
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or
62
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not having the force
of law) of any such Governmental Authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on the capital of
such Lender or any Person controlling such Lender as a consequence of, or with
reference to, such Lender's Loans or Commitments or Letters of Credit, or
participations therein or other obligations hereunder with respect to the Loans
or the Letters of Credit to a level below that which such Lender or such
controlling Person could have achieved but for such adoption, effectiveness,
phase-in, applicability, change or compliance (taking into consideration the
policies of such Lender or such controlling Person with regard to capital
adequacy), then from time to time, within five Business Days after receipt by
Borrower from such Lender of the statement referred to in the next sentence,
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such controlling Person on an after-tax basis for such
reduction. Such Lender shall deliver to Borrower (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 2.18(b),
which statement shall be conclusive and binding upon all parties hereto absent
manifest error. Notwithstanding the foregoing, Borrower shall not be required to
compensate a Lender, Issuing Bank or Swingline Lender pursuant to this Section
for any increased costs incurred or reductions suffered more than nine months
prior to the date that such Lender, Issuing Bank or Swingline Lender, as the
case may be, notifies Borrower of the change giving rise to such increased costs
or reductions and of such Lender's, Issuing Bank's or Swingline Lender's
intention to claim compensation therefor (except that, if the change giving rise
to such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).
2.19. TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.
(b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any Tax
(other than a Tax on the overall net income of any Lender) from any sum paid or
payable by any Credit Party to Administrative Agent or any Lender (which term
shall include Issuing Bank and Swingline Lender for purposes of this Section
2.19(b)) under any of the Credit Documents:
(i) Borrower shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Borrower
becomes aware of it;
(ii) Borrower shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay
is imposed on any Credit
63
Party) for its own account or (if that liability is imposed on
Administrative Agent or such Lender, as the case may be) on behalf of and
in the name of Administrative Agent or such Lender;
(iii) the sum payable by such Credit Party in respect of which
the relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such Lender, as
the case may be, receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment been required
or made; and
(iv) within thirty days after paying any sum from which it is
required by law to make any deduction or withholding, and within thirty
days after the due date of payment of any Tax which it is required by
clause (ii) above to pay, Borrower shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided, no such additional amount shall be required to be paid to any Lender
under clause (iii) above except to the extent that any change after the date
hereof (in the case of each Lender listed on the signature pages hereof on the
Closing Date) or after the effective date of the Assignment Agreement pursuant
to which such Lender became a Lender (in the case of each other Lender) in any
such requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date hereof or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(c) Evidence of Exemption From U.S. Withholding Tax. Each Lender
that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes
(a "NON-US LENDER") shall deliver to Administrative Agent for transmission to
Borrower, on or prior to the Closing Date (in the case of each Lender listed on
the signature pages hereof on the Closing Date) or on or prior to the date of
the Assignment Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in the
determination of Borrower or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue Service
Form W-8ECI (or any successor forms), properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Borrower to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees or other
amounts payable under any of the Credit Documents, or (ii) if such Lender is not
a "bank" or other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form W-8BEN or W-8ECI
pursuant to clause (i) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8BEN (or any successor form),
properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by Borrower to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any
64
payments to such Lender of interest payable under any of the Credit Documents.
Each Lender required to deliver any forms, certificates or other evidence with
respect to United States federal income tax withholding matters pursuant to this
Section 2.19(c) hereby agrees, from time to time after the initial delivery by
such Lender of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such Lender shall
promptly deliver to Administrative Agent for transmission to Borrower two new
original copies of Internal Revenue Service Form W-8BEN or W-8ECI, or a
Certificate re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8BEN (or any successor form), as the case may be, properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Borrower to
confirm or establish that such Lender is not subject to deduction or withholding
of United States federal income tax with respect to payments to such Lender
under the Credit Documents, or notify Administrative Agent and Borrower of its
inability to deliver any such forms, certificates or other evidence. Borrower
shall not be required to pay any additional amount to any Non-US Lender under
Section 2.19(b)(iii) if such Lender shall have failed (1) to deliver the forms,
certificates or other evidence referred to in the second sentence of this
Section 2.19(c), or (2) to notify Administrative Agent and Borrower of its
inability to deliver any such forms, certificates or other evidence, as the case
may be; provided, if such Lender shall have satisfied the requirements of the
first sentence of this Section 2.19(c) on the Closing Date or on the date of the
Assignment Agreement pursuant to which it became a Lender, as applicable,
nothing in this last sentence of Section 2.19(c) shall relieve Borrower of its
obligation to pay any additional amounts pursuant this Section 2.19 in the event
that, as a result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in the interpretation, administration
or application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the fact
that such Lender is not subject to withholding as described herein.
(d) If and to the extent that any Lender is able, in its sole
opinion, to receive any tax refund arising out of or in conjunction with any
deduction or withholding which gives rise to an obligation of Borrower to pay
any Tax (other than a Tax on the overall net income of any Lender) pursuant to
this Section 2.19 then such Lender shall, to the extent that in its sole opinion
it can do so without prejudice to the retention of the refund and without any
other adverse tax consequences for such Lender, reimburse to Borrower at such
time as such refund shall have actually been received by such Lender such amount
as such Lender shall, in its sole opinion, have determined to be attributable to
the relevant deduction or withholding and as will leave such Lender in no better
or worse position than it would have been in if the payment of such Tax had not
been required.
2.20. OBLIGATION TO MITIGATE. Each Lender (which term shall include
Issuing Bank and Swingline Lender for purposes of this Section 2.20) agrees
that, as promptly as practicable after the officer of such Lender responsible
for administering its Loans or Letters of Credit, as the case may be, becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender
to receive payments under Section 2.17, 2.18 or 2.19, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or
maintain its Credit Extensions, including any Affected Loans, through
65
another office of such Lender, or (b) take such other measures as such Lender
may deem reasonable, if as a result thereof the circumstances which would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts which would otherwise be required to be paid to such Lender pursuant to
Section 2.17, 2.18 or 2.19 would be materially reduced and if, as determined by
such Lender in its sole discretion, the making, issuing, funding or maintaining
of such Commitments, Loans or Letters of Credit through such other office or in
accordance with such other measures, as the case may be, would not otherwise
adversely affect such Commitments, Loans or Letters of Credit or the interests
of such Lender; provided, such Lender will not be obligated to utilize such
other office pursuant to this Section 2.20 unless Borrower agrees to pay all
incremental expenses incurred by such Lender as a result of utilizing such other
office as described in clause (i) above. A certificate as to the amount of any
such expenses payable by Borrower pursuant to this Section 2.20 (setting forth
in reasonable detail the basis for requesting such amount) submitted by such
Lender to Borrower (with a copy to Administrative Agent) shall be conclusive
absent manifest error.
2.21. DEFAULTING LENDERS. Anything contained herein to the contrary
notwithstanding, in the event that any Lender, other than at the direction or
request of any regulatory agency or authority, defaults (a "DEFAULTING LENDER")
in its obligation to fund (a "FUNDING DEFAULT") any Revolving Loan or its
portion of any unreimbursed payment under Section 2.2(b)(iv) or 2.3(e) (in each
case, a "DEFAULTED LOAN"), then (a) during any Default Period with respect to
such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
"Lender" for purposes of voting on any matters (including the granting of any
consents or waivers) with respect to any of the Credit Documents; (b) to the
extent permitted by applicable law, until such time as the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero, (i) any
voluntary prepayment of the Revolving Loans shall, if Borrower so directs at the
time of making such voluntary prepayment, be applied to the Revolving Loans of
other Lenders as if such Defaulting Lender had no Revolving Loans outstanding
and the Revolving Exposure of such Defaulting Lender were zero, and (ii) any
mandatory prepayment of the Revolving Loans shall, if Borrower so directs at the
time of making such mandatory prepayment, be applied to the Revolving Loans of
other Lenders (but not to the Revolving Loans of such Defaulting Lender) as if
such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender,
it being understood and agreed that Borrower shall be entitled to retain any
portion of any mandatory prepayment of the Revolving Loans that is not paid to
such Defaulting Lender solely as a result of the operation of the provisions of
this clause (b); (c) such Defaulting Lender's Commitment and outstanding
Revolving Loans and such Defaulting Lender's Pro Rata Share of the Letter of
Credit Usage shall be excluded for purposes of calculating the Commitment fee
payable to Lenders pursuant to Section 2.10 in respect of any day during any
Default Period with respect to such Defaulting Lender, and such Defaulting
Lender shall not be entitled to receive any Commitment fee pursuant to Section
2.10 with respect to such Defaulting Lender's Commitment in respect of any
Default Period with respect to such Defaulting Lender; and (d) the Total
Utilization of Revolving Commitments as at any date of determination shall be
calculated as if such Defaulting Lender had funded all Defaulted Loans of such
Defaulting Lender. No Commitment of any Lender shall be increased or otherwise
affected, and, except as otherwise expressly provided in this Section 2.21,
performance by Borrower of its obligations hereunder and the other Credit
Documents shall not be excused or otherwise modified as a result of any Funding
Default or the operation of this Section 2.21. The rights and remedies against a
Defaulting Lender under this Section 2.21 are in addition to other rights and
remedies which
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Borrower may have against such Defaulting Lender with respect to any Funding
Default and which Administrative Agent or any Lender may have against such
Defaulting Lender with respect to any Funding Default.
2.22. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to the
contrary notwithstanding, in the event that: (a) (i) any Lender (an
"INCREASED-COST LENDER") shall give notice to Borrower that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.17, 2.18 or 2.19, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five Business Days after Borrower's request for such withdrawal; or (b)
(i) any Lender shall become a Defaulting Lender, (ii) the Default Period for
such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender
shall fail to cure the default as a result of which it has become a Defaulting
Lender within five Business Days after Borrower's request that it cure such
default; or (c) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.5(b), the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"NON-CONSENTING LENDER") whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "TERMINATED LENDER"), Borrower may, by giving written
notice to Administrative Agent and any Terminated Lender of its election to do
so, elect to cause such Terminated Lender (and such Terminated Lender hereby
irrevocably agrees) to assign its outstanding Loans and its Commitments, if any,
in full to one or more Eligible Assignees (each a "REPLACEMENT LENDER") in
accordance with the provisions of Section 10.6; provided, (1) on the date of
such assignment, the Replacement Lender shall pay to Terminated Lender an amount
equal to the sum of (A) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal
to all unreimbursed drawings that have been funded by such Terminated Lender,
together with all then unpaid interest with respect thereto at such time and (C)
an amount equal to all accrued, but theretofore unpaid fees owing to such
Terminated Lender pursuant to Section 2.10; (2) on the date of such assignment,
Borrower shall pay any amounts payable to such Terminated Lender pursuant to
Section 2.17(c), 2.18 or 2.19 or otherwise as if it were a prepayment; and (3)
in the event such Terminated Lender is a Non-Consenting Lender, each Replacement
Lender shall consent, at the time of such assignment, to each matter in respect
of which such Terminated Lender was a Non-Consenting Lender; provided, Borrower
may not make such election with respect to any Terminated Lender that is also an
Issuing Bank unless, prior to the effectiveness of such election, Borrower shall
have caused each outstanding Letter of Credit issued thereby to be cancelled.
Upon the prepayment of all amounts owing to any Terminated Lender and the
termination of such Terminated Lender's Commitments, if any, such Terminated
Lender shall no longer constitute a "Lender" for purposes hereof; provided, any
rights of such Terminated Lender to indemnification hereunder shall survive as
to such Terminated Lender.
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SECTION 3. CONDITIONS PRECEDENT
3.1. CLOSING DATE. The obligation of any Lender to make a Credit Extension
on or after the Closing Date is subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions on or before the
Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent shall
have received:
(i) sufficient copies of each Organizational Document executed
and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender, each dated the Closing Date or a recent date
prior thereto;
(ii) signature and incumbency certificates of the officers of
such Person executing the Credit Documents to which it is a party;
(iii) resolutions of the Board of Directors or similar
governing body of each Credit Party approving and authorizing the
execution, delivery and performance of this Agreement and the other Credit
Documents and the Related Agreements to which it is a party or by which it
or its assets may be bound as of the Closing Date, certified as of the
Closing Date by its secretary or an assistant secretary as being in full
force and effect without modification or amendment;
(iv) a good standing certificate from the applicable
Governmental Authority of each Credit Party's jurisdiction of
incorporation, organization or formation and in each jurisdiction in which
it is qualified as a foreign corporation or other entity to do business
(each of which shall be listed on Schedule 4.1), each dated a recent date
prior to the Closing Date; and
(v) such other documents as Administrative Agent may
reasonably request.
(c) Organizational and Capital Structure. The organizational
structure and capital structure of Holdings and its Subsidiaries, both before
and after giving effect to Transactions, shall be as set forth on Schedule 4.1.
(d) Capitalization of Holdings and Borrower. (i) On the Closing
Date, Sponsor shall have made the contribution of Sponsor Equity and Borrower
shall have received the proceeds thereof; and (ii) On the Closing Date, Borrower
shall have issued $160,000,000 of Senior Subordinated Notes which, together with
Sponsor Equity and the proceeds of the Term Loans, shall be sufficient to
consummate the Acquisition and the transactions contemplated in connection
therewith and to pay all Transaction Costs.
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(e) Consummation of Transactions.
(i) (1) All conditions set forth in the Acquisition Documents
and documents related to the Senior Subordinated Notes shall have been
satisfied or the fulfillment of any such conditions shall have been waived
with the consent of Administrative Agent (which consent shall not be
unreasonably withheld) and (2) the Transactions shall have become
effective in accordance with the terms of the Related Agreements.
(ii) Administrative Agent shall have received a fully executed
or conformed copy of each Related Agreement and any documents executed in
connection therewith. Each Related Agreement shall be in full force and
effect, shall include terms and provisions reasonably satisfactory to
Administrative Agent and no provision thereof shall have been modified or
waived in any respect reasonably determined by Administrative Agent to be
material, in each case without the consent of Administrative Agent.
(f) Existing Indebtedness; Debt Tender. On the Closing Date,
Holdings and its Subsidiaries shall have:
(i) repaid in full all outstanding Existing Indebtedness;
(ii) terminated any commitments to lend or make other
extensions of credit thereunder;
(iii) delivered to Administrative Agent all documents or
instruments necessary to release all Liens securing Existing Indebtedness
or other obligations of Holdings and its Subsidiaries thereunder being
repaid on the Closing Date; and
(iv) made arrangements reasonably satisfactory to
Administrative Agent with respect to the cancellation of any letters of
credit outstanding thereunder or the issuance of Letters of Credit to
support the obligations of Holdings and its Subsidiaries with respect
thereto.
Administrative Agent shall be reasonably satisfied that an irrevocable notice of
redemption for all outstanding SAC Notes has been deposited with the trustee and
sufficient funds have been irrevocably deposited to fund such redemption and the
Debt Tender shall have occurred, each on terms reasonably acceptable to
Administrative Agent.
(g) Transaction Costs. On or prior to the Closing Date, Borrower
shall have delivered to Administrative Agent Borrower's reasonable best estimate
of the Transaction Costs (other than fees payable to any Agent).
(h) Governmental Authorizations and Consents. Each Credit Party
shall have obtained all Governmental Authorizations and all consents of other
Persons, in each case that are reasonably necessary in connection with the
transactions contemplated by the Credit Documents and the Related Agreements and
each of the foregoing shall be in full force and effect and in form and
substance reasonably satisfactory to Administrative Agent. All applicable
waiting
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periods shall have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose adverse
conditions on the transactions contemplated by the Credit Documents or the
Related Agreements or the financing thereof and no action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable agency to
take action to set aside its consent on its own motion shall have expired.
(i) Real Estate Assets. In order to create in favor of Collateral
Agent, for the benefit of Revolving Secured Parties, a valid and, subject to any
filing and/or recording referred to herein, perfected Second Priority security
interest in certain Real Estate Assets, Borrower and each applicable Guarantor
shall have used their commercially reasonable efforts to obtain and deliver to
Collateral Agent, in the case of each Leasehold Property listed on Schedule
3.1(i), (I) a Landlord Consent and Estoppel and (II) evidence that such
Leasehold Property is a Recorded Leasehold Interest, and Collateral Agent shall
have received from Borrower and each applicable Guarantor:
(i) fully executed and notarized Mortgages, in proper form for
recording in all appropriate places in all applicable jurisdictions,
encumbering each Real Estate Asset listed in Schedule 3.1(i) (each, a
"CLOSING DATE MORTGAGED PROPERTY");
(ii) an opinion of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) in each state in which a Closing Date
Mortgaged Property is located addressed to the Agents and the Lenders and
dated as of the Closing Date with respect to the enforceability of the
form(s) of Mortgages to be recorded in such state and such other matters
as Collateral Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Collateral Agent;
(iii) (A) ALTA mortgagee title insurance policies or
unconditional commitments therefor issued by one or more title companies
reasonably satisfactory to Collateral Agent with respect to each Closing
Date Mortgaged Property (each, a "TITLE POLICY"), in amounts not less than
the fair market value of each Closing Date Mortgaged Property, together
with a title report issued by a title company with respect thereto, dated
not more than thirty days prior to the Closing Date and copies of all
recorded documents listed as exceptions to title or otherwise referred to
therein, each in form and substance reasonably satisfactory to Collateral
Agent and (B) evidence reasonably satisfactory to Collateral Agent that
such Credit Party has paid to the title company or to the appropriate
governmental authorities all expenses and premiums of the title company
and all other sums required in connection with the issuance of each Title
Policy and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Mortgages for
each Closing Date Mortgaged Property in the appropriate real estate
records; and
(iv) evidence of flood insurance with respect to each Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve
System, in form and substance reasonably satisfactory to Collateral Agent.
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(j) Personal Property Collateral. In order to create in favor of
Collateral Agent, for the benefit of the Revolving Secured Parties, a valid,
perfected Second Priority security interest in the personal property Fixed
Collateral, and a valid, perfected First Priority security interest in the
personal property Liquid Collateral, Collateral Agent shall have received:
(i) evidence reasonably satisfactory to Collateral Agent of
the compliance by each Credit Party with their obligations under the
Pledge and Security Agreement and the other Collateral Documents
(including, without limitation, their obligations to execute and deliver
UCC financing statements, originals of securities, instruments and chattel
paper and any agreements perfecting the security interest in deposit
and/or securities accounts as provided therein);
(ii) a completed Collateral Questionnaire dated the Closing
Date and executed by an Authorized Officer of each Credit Party, together
with all attachments contemplated thereby, including (A) the results of a
recent search, by a Person satisfactory to Collateral Agent, of all
effective UCC financing statements (or equivalent filings) made with
respect to any personal or mixed property of any Credit Party in the
jurisdictions specified in the Collateral Questionnaire, together with
copies of all such filings disclosed by such search, and (B) UCC
termination statements (or similar documents) duly authorized for filing
by all applicable Persons for filing in all applicable jurisdictions as
may be necessary to terminate any effective UCC financing statements (or
equivalent filings) disclosed in such search (other than any such
financing statements in respect of Permitted Liens);
(iii) opinions of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) with respect to the creation and
perfection of the security interests in favor of Collateral Agent in such
Collateral and such other matters governed by the laws of each
jurisdiction in which any Credit Party or any personal property Collateral
is located and the laws of any other applicable jurisdictions addressed to
the Agents and the Lenders and dated as of the Closing Date, in each case
as Collateral Agent may reasonably request, in form and substance
reasonably satisfactory to Collateral Agent; and
(iv) evidence that each Credit Party shall have taken or
caused to be taken any other action, executed and delivered or caused to
be executed and delivered any other agreement, document and instrument
(including without limitation, (i) a Landlord Personal Property Collateral
Access Agreement executed by the landlord of any Leasehold Property and by
the applicable Credit Party and (ii) any intercompany notes evidencing
Indebtedness permitted to be incurred pursuant to Section 6.1(b)) and made
or caused to be made any other filing and recording (other than as set
forth herein) reasonably required by Collateral Agent.
(k) Environmental Reports. Administrative Agent shall have received
reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent, regarding environmental matters relating
to the Facilities, which reports shall include a Phase I Report for each of the
Facilities specified by Administrative Agent.
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(l) Historical Financial Statements; Projections. The Lenders shall
have received from Borrower (i) the Historical Financial Statements, (ii) the
Projections and (iii) pro forma consolidated balance sheet of Borrower and its
Subsidiaries as at the Closing Date, reflecting the consummation of the
Transaction, which pro forma financial statements shall be in form and substance
reasonably satisfactory to Administrative Agent. Such financial statements shall
show pro forma Consolidated Adjusted EBITDA of Borrower after giving effect to
the Transactions (calculated in accordance with Regulation S-X and including
only those adjustment that the Sole Lead Arranger reasonably agrees are
appropriate) (i) for the twelve month period ended April 30, 2004 of not less
than $50.7 million and (ii) for any subsequent twelve month period for which
financial statements are available of not less than $50.0 million.
(m) Evidence of Insurance. Collateral Agent shall have received a
certificate from Borrower's insurance broker or other evidence reasonably
satisfactory to it that all insurance required to be maintained pursuant to
Section 5.5 is in full force and effect, together with endorsements naming the
Collateral Agent, for the benefit of the Revolving Secured Parties, as
additional insured and loss payee thereunder to the extent required under
Section 5.5.
(n) Opinions of Counsel to Credit Parties. Lenders shall have
received originally executed copies of the favorable written opinions of Ropes &
Xxxx LLP, counsel for Credit Parties, addressed to the Agents and the Revolving
Secured Parties, as to such other matters as Administrative Agent and Collateral
Agent may reasonably request, dated as of the Closing Date and otherwise in form
and substance reasonably satisfactory to Administrative Agent (and each Credit
Party hereby instructs such counsel to deliver such opinions to Agents and
Secured Parties).
(o) Fees. Borrower shall have paid to Agents the fees payable on the
Closing Date referred to in Section 2.10(d).
(p) Solvency Certificate. On the Closing Date, Administrative Agent
shall have received a Solvency Certificate from the chief financial officer of
Borrower, dated the Closing Date and addressed to Administrative Agent and
Lenders, in form, scope and substance reasonably satisfactory to Administrative
Agent, with appropriate attachments and demonstrating that after giving effect
to the consummation of Transactions, Borrower and its Subsidiaries are and will
be Solvent.
(q) Closing Date Certificate. Holdings and Borrower shall have
delivered to Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
(r) Credit Rating. The credit facilities provided for under this
Agreement shall have been assigned a credit rating by either S&P and Xxxxx'x in
each case reasonably satisfactory to the Agents.
(s) Closing Date. Lenders shall have made the initial Term Loans
under the Term Credit Agreement to Borrower contemporaneously herewith.
(t) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or
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before any arbitrator or Governmental Authority that, in the reasonable opinion
of Administrative Agent, singly or in the aggregate, materially impairs the
Transactions, the financing thereof or any of the other transactions
contemplated by the Credit Documents or the Related Agreements, or that could
have a Material Adverse Effect.
(u) Chief Financial Officer Certificate. Holdings and Borrower shall
have delivered to Administrative Agent and Lenders an originally executed chief
financial officer certificate certifying that the pro forma Leverage Ratio as at
the Closing Date and for the most recent twelve-month period for which financial
statements are available of Borrower and its Subsidiaries for the twelve-month
period then ended (which pro forma ratio shall be calculated reflecting the
Transactions on a pro forma basis and shall be acceptable to the Lenders) shall
not be greater than 4.5 to 1.0.
(v) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent and its counsel shall be reasonably
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
(w) Borrowing Base Certificate; Liquidity. Administrative Agent
shall have received a Borrowing Base Certificate with customary supporting
documentation and supplemental reporting to be agreed upon between
Administrative Agent and Borrower.
(x) Appraisal. Administrative Agent shall have received an
independent audit prepared by a firm reasonably satisfactory to Administrative
Agent with respect to the Accounts and Inventory of Borrower and the Guarantors,
all in form and substance reasonably satisfactory to Administrative Agent.
(y) Patriot Act. Administrative Agent shall have received all
documentation and other information required by bank regulatory authorities
under applicable "know-your-customer" and anti-money laundering rules and
regulations, including the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001).
Each Lender, by delivering its signature page to this Agreement, shall be deemed
to have acknowledged receipt of, and consented to and approved, each Credit
Document and each other document required to be approved by any Agent, Requisite
Lenders or Lenders, as applicable on the Closing Date.
3.2. CONDITIONS TO EACH CREDIT EXTENSION.
(a) Conditions Precedent. The obligation of each Lender to make any
Loan, or Issuing Bank to issue any Letter of Credit, on any Credit Date,
including the Closing Date, are subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions precedent:
(i) Administrative Agent shall have received a fully executed
and delivered Funding Notice or Issuance Notice, as the case may be;
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(ii) after making the Credit Extensions requested on such
Credit Date, the Total Utilization of Revolving Commitments shall not
exceed the lesser of (x) Commitments then in effect and (y) the Borrowing
Availability then in effect;
(iii) as of such Credit Date, the representations and
warranties contained herein and in the other Credit Documents shall be
true and correct in all material respects on and as of that Credit Date to
the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall have
been true and correct in all material respects on and as of such earlier
date;
(iv) as of such Credit Date, no event shall have occurred and
be continuing or would result from the consummation of the applicable
Credit Extension that would constitute an Event of Default or a Default;
(v) on or before the date of issuance of any Letter of Credit,
Administrative Agent shall have received all other information required by
the applicable Issuance Notice, and such other documents or information as
Issuing Bank may reasonably require in connection with the issuance of
such Letter of Credit; and
(vi) the Borrower shall represent and warrant that after
giving effect to such Credit Extension (other than the issuance of Letters
of Credit), the aggregate Cash and Cash Equivalents of Holdings and its
Subsidiaries will not exceed $10,000,000.
Any Agent or Requisite Lenders shall be entitled, but not obligated to, request
and receive, prior to the making of any Credit Extension, additional information
reasonably satisfactory to the requesting party confirming the satisfaction of
any of the foregoing if, in the good faith judgment of such Agent or Requisite
Lenders such request is warranted under the circumstances.
(b) Notices. Any Notice shall be executed by an Authorized Officer
in a writing delivered to Administrative Agent. In lieu of delivering a Notice,
Borrower may give Administrative Agent telephonic notice by the required time of
any proposed borrowing, conversion/continuation or issuance of a Letter of
Credit, as the case may be; provided each such notice shall be promptly
confirmed in writing by delivery of the applicable Notice to Administrative
Agent on or before the applicable date of borrowing, continuation/conversion or
issuance. Neither Administrative Agent nor any Lender shall incur any liability
to Borrower in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized on behalf of Borrower or for
otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders, Swingline Lender and Issuing Bank to enter
into this Agreement and to make each Credit Extension to be made thereby, each
Credit Party represents and warrants to each Lender, Swingline Lender and
Issuing Bank, on the Closing Date and on each Credit Date, that the following
statements are true and correct (it being understood and
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agreed that the representations and warranties made on the Closing Date are
deemed to be made concurrently with the consummation of the Transactions
contemplated hereby):
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each of
Holdings and its Subsidiaries:
(a) is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization as identified in Schedule 4.1;
(b) has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry out the transactions contemplated thereby; and
(c) is qualified to do business and in good standing in every jurisdiction
where its assets are located and wherever necessary to carry out its business
and operations, except in jurisdictions where the failure to be so qualified or
in good standing has not had, and could not be reasonably expected to have, a
Material Adverse Effect.
4.2. CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each of Holdings
and its Subsidiaries has been duly authorized and validly issued and is fully
paid and non-assessable. Except as set forth on Schedule 4.2, as of the date
hereof, there is no existing option, warrant, call, right, commitment or other
agreement to which Holdings or any of its Subsidiaries is a party requiring, and
there is no membership interest or other Capital Stock of Holdings or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Holdings or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Holdings or any of its Subsidiaries or other
Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of
Holdings or any of its Subsidiaries. Schedule 4.2 correctly sets forth the
ownership interest of Holdings and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date both before and after giving effect to the
Transactions.
4.3. DUE AUTHORIZATION. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.
4.4. NO CONFLICT. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not:
(a) violate any provision of any law or any governmental rule or
regulation applicable to Holdings or any of its Subsidiaries, any of the
Organizational Documents of Holdings or any of its Subsidiaries, or any order,
judgment or decree of any court or other agency of government binding on
Holdings or any of its Subsidiaries;
(b) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of Holdings or
any of its Subsidiaries;
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(c) result in or require the creation or imposition of any Lien upon any
of the properties or assets of Holdings or any of its Subsidiaries (other than
any Liens created under any of the Credit Documents in favor of Collateral
Agent, on behalf of Secured Parties); or
(d) require any approval of stockholders, members or partners or any
approval or consent of any Person under any Contractual Obligation of Holdings
or any of its Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to Lenders.
4.5. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except as otherwise set
forth in the Stock Purchase Agreement, and except for filings and recordings
with respect to the Collateral to be made, or otherwise delivered to Collateral
Agent for filing and/or recordation, as of the Closing Date.
4.6. BINDING OBLIGATION. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
4.7. HISTORICAL FINANCIAL STATEMENTS. The Historical Financial Statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position, on a consolidated basis, of the Persons
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows, on a consolidated basis, of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments and in the case of interim statements, to the
absence of footnotes. As of the Closing Date, neither Holdings nor any of its
Subsidiaries has any contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
Historical Financial Statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Holdings and any of its
Subsidiaries taken as a whole.
4.8. PROJECTIONS. On and as of the Closing Date, the Projections of
Holdings and its Subsidiaries for the period Fiscal Year 2004 through and
including Fiscal Year 2008 (the "PROJECTIONS") are based on good faith estimates
and assumptions made by the management of Holdings; provided, that the
Projections are not to be viewed as facts and that actual results during the
period or periods covered by the Projections may differ from such Projections
and that the differences may be material; provided, further, as of the Closing
Date, management of Holdings believed that the Projections were reasonable.
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4.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 2003, no event,
circumstance or change has occurred that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect.
4.10. NO RESTRICTED JUNIOR PAYMENTS. Since December 31, 2003, neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.5.
4.11. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.12. PAYMENT OF TAXES. Except as otherwise permitted under Section 5.3,
all tax returns and reports of Holdings and its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon Holdings and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable. Holdings knows of no proposed tax assessment against
Holdings or any of its Subsidiaries which is not being contested by Holdings or
such Subsidiary in good faith and by appropriate proceedings; provided, such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
4.13. PROPERTIES.
(a) Title. Each of Holdings and its Subsidiaries has, subject to
Permitted Liens, (i) good, sufficient and legal title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), and (iii) good title to (in
the case of all other personal property), all of their respective properties and
assets reflected in their respective Historical Financial Statements referred to
in Section 4.7 and in the most recent financial statements delivered pursuant to
Section 5.1, in each case except for assets disposed of since the date of such
financial statements in the ordinary course of business or as otherwise
permitted under Section 6.9. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Real Estate Assets, and (ii) all
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Estate Asset of any Credit Party, regardless of whether such Credit
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under
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such lease, sublease or assignment. Each agreement listed in clause (ii) of the
immediately preceding sentence is in full force and effect and Holdings does not
have knowledge of any default that has occurred and is continuing thereunder,
and each such agreement constitutes the legally valid and binding obligation of
each applicable Credit Party, enforceable against such Credit Party in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles.
4.14. ENVIRONMENTAL MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect or as otherwise set
forth on Schedule 4.14:
(a) neither Holdings nor any of its Subsidiaries nor any of their
respective past or present Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with any
Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity;
(b) neither Holdings nor any of its Subsidiaries (i) has, or has
received or is aware of, any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or applicable Environmental Laws (including Governmental Authorizations required
by Environmental Laws) with regard to any past or present Facilities or
operations, (ii) has knowledge or reason to believe that any such notice will be
received or is being threatened, (iii) is or has been reason within the last
five years in non-compliance with Environmental Laws, including any and all
Governmental Authorizations required by Environmental Laws, or (iv) has assumed
any liability of any other Person under applicable Environmental Laws;
(c) neither Holdings nor any of its Subsidiaries has either been
notified in writing by a Governmental Agency or by any other Person that it may
be a potentially responsible party or received any letter or request for
information under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9604) or any comparable state
law;
(d) there are and, to each of Holdings' and its Subsidiaries'
knowledge, have been, no facts, circumstances, conditions, occurrences, or
Hazardous Materials Activities which could reasonably be expected to (i) form
the basis of an Environmental Claim against Holdings or any of its Subsidiaries;
(ii) cause any Facility to become subject to any Lien, restriction on ownership,
occupancy, use or transferability under any Environmental Law; or (iii) require
any Facility to be upgraded or modified in order to remain in compliance with
current and reasonably foreseeable future requirements under Environmental Law;
(e) neither Holdings nor any of its Subsidiaries nor, to any Credit
Party's knowledge, any predecessor of Holdings or any of its Subsidiaries, has
filed any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, and none of Holdings' or any
of its Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent ;
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(f) no event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Release of Hazardous
Materials, or any Hazardous Materials Activity.
4.15. NO DEFAULTS. Neither Holdings nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
4.16. MATERIAL CONTRACTS. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts are in full force and
effect and no defaults currently exist thereunder.
4.17. GOVERNMENTAL REGULATION. Neither Holdings nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. Neither Holdings nor any of its Subsidiaries
is a "registered investment company" or a company "controlled" by a "registered
investment company" or a "principal underwriter" of a "registered investment
company" as such terms are defined in the Investment Company Act of 1940.
4.18. MARGIN STOCK. Neither Holdings nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of the Loans made to such Credit Party will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock or for any purpose that
violates, or is inconsistent with, the provisions of Regulation T, U or X of
said Board of Governors.
4.19. EMPLOYEE MATTERS. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Holdings or any of its Subsidiaries, or to the knowledge of Holdings and
Borrower, threatened against any of them before the National Labor Relations
Board and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement that is so pending against Holdings or any of
its Subsidiaries or to the knowledge of Holdings and Borrower, threatened
against any of them, (b) no strike or work stoppage in existence or to the
knowledge of Holdings threatened involving Holdings or any of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect, and (c) to
the knowledge of Holdings and Borrower, no union representation question
existing with respect to the employees of Holdings or any of its Subsidiaries
and, to the knowledge of Holdings and Borrower, no union organization activity
that is taking place, except (with respect to any matter specified in clause
(a), (b) or (c) above, either individually or in the aggregate) such as is not
reasonably likely to have a Material Adverse Effect.
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4.20. EMPLOYEE BENEFIT PLANS. Holdings and each of its Subsidiaries are in
compliance with all applicable provisions and requirements of ERISA and the
Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan, except as would not
reasonably be expected to have a Material Adverse Effect. Each Employee Benefit
Plan which is intended to qualify under Section 401(a) of the Internal Revenue
Code has received a favorable determination letter from the Internal Revenue
Service indicating that such Employee Benefit Plan is so qualified and nothing
has occurred subsequent to the issuance of such determination letter which would
reasonably be expected to cause such Employee Benefit Plan to lose its qualified
status. No liability to the PBGC (other than required premium payments), the
Internal Revenue Service, any Employee Benefit Plan (other than the payment of
benefits in the ordinary course) or any trust established under Title IV of
ERISA has been or is expected to be incurred by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates, except as would not
reasonably be expected to have a Material Adverse Effect. No ERISA Event has
occurred or is reasonably expected to occur, except as would not reasonably be
expected to have a Material Adverse Effect. Except to the extent required under
Section 4980B of the Internal Revenue Code or similar state laws or as set forth
on Schedule 4.20, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates. Holdings, each of its Subsidiaries and each of their ERISA
Affiliates have complied in all material respects with the requirements of
Section 515 of ERISA with respect to each Multiemployer Plan and are not in
material "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan.
4.21. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.
4.22. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.23. RELATED AGREEMENTS.
(a) Delivery. Holdings and Borrower have delivered to Administrative
Agent complete and correct copies of (i) each Related Agreement and of all
exhibits and schedules thereto as of the date hereof and (ii) copies of any
material amendment, restatement, supplement or other modification to or waiver
of each Related Agreement entered into after the date hereof.
(b) Representations and Warranties. Except to the extent otherwise
expressly set forth herein or in the schedules hereto, and subject to the
qualifications set forth therein, each of the representations and warranties
given by any Credit Party in any Related Agreement is true and correct in all
material respects as of the Closing Date (or as of any earlier date to which
such representation and warranty specifically relates). Notwithstanding anything
in the Related Agreement to the contrary, the representations and warranties of
each Credit Party set forth in this Section 4.23 shall, solely for purposes
hereof, survive the Closing Date for the benefit of Lenders.
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(c) Governmental Approvals. All Governmental Authorizations and all
other authorizations, approvals and consents of any other Person required by the
Related Agreements or to consummate the Transactions have been obtained and are
in full force and effect.
(d) Conditions Precedent. On the Closing Date, (i) all of the
conditions to effecting or consummating the Transactions set forth in the
Related Agreements have been duly satisfied or, with the consent of
Administrative Agent (which may not be unreasonably withheld) waived, and (ii)
the Transactions have been consummated in accordance with the Related Agreements
and all applicable laws.
4.24. COMPLIANCE WITH STATUTES, ETC. Each of Holdings and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any Governmental
Authorizations issued under such Environmental Laws with respect to any such
Real Estate Asset or the operations of Holdings or any of its Subsidiaries),
except such non-compliance that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
4.25. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Holdings or any of
its Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact (known to Holdings or Borrower, in the case of any document not furnished
by either of them) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Holdings or Borrower to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Holdings or
Borrower (other than matters of a general economic nature or affecting
Borrower's industry generally) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
4.26. SUBORDINATION; DESIGNATION OF THE CREDIT DOCUMENTS AS "DESIGNATED
SENIOR INDEBTEDNESS"; ETC.
(a) (i) The subordination provisions contained in the documents
governing the Senior Subordinated Notes, the Refinancing Notes and any
guarantees of such Senior Subordinated Notes and Refinancing Notes are
enforceable against Holdings, Borrower and any of its Subsidiaries party thereto
and the holders of such Indebtedness, and (ii) all Obligations of the Credit
Parties (to the extent they are obligors with respect to the Senior Subordinated
Notes, the Refinancing Notes or any guarantees of such Senior Subordinated Notes
and Refinancing
81
Notes) hereunder and in the other Credit Documents are covered by and included
in the definitions of "Designated Senior Debt" and "Senior Debt" (or any
comparable definitions) included in the respective subordination provisions
contained in the documentation governing the Senior Subordinated Notes, the
Refinancing Notes and any guarantees of such Senior Subordinated Notes and
Refinancing Notes. In addition, Borrower hereby designates the Obligations under
this Agreement as "Designated Senior Debt" for the purposes of the definition of
"Designated Senior Debt" (or any comparable definition) contained in the Senior
Subordinated Notes Indenture, the Refinancing Notes and any guarantees of such
Senior Subordinated Notes and Refinancing Notes.
(b) All incurrences of Loans and issuances of Letters of Credit as
permitted under this Agreement are, and when incurred or issued will be,
permitted under (and shall give rise to no breach or violation of any of) the
SAC Notes, the Senior Subordinated Notes and the Refinancing Notes.
4.27. AGGREGATE BORROWING BASE CALCULATION. The calculation by Borrower of
the Aggregate Borrowing Base and the valuation thereunder is accurate in all
respects.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Commitment is
in effect and until payment in full of all Obligations and cancellation or
expiration of all Letters of Credit, each Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Borrower will deliver to
Administrative Agent (and Administrative Agent shall promptly deliver to each
Lender):
(a) Monthly Reports. As soon as available, and in any event within
thirty (30) days after the end of each month ending after the Closing Date, (i)
the consolidated balance sheet of Borrower and its Subsidiaries as at the end of
such month and the related consolidated statements of income and cash flows of
Borrower and its Subsidiaries for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the Financial Plan for the current Fiscal Year, to the extent prepared on a
monthly basis, all in reasonable detail (it being understood that such monthly
statements are not, for this purpose, required to be prepared in accordance with
GAAP) and (ii) a reconciliation of the Eligible Accounts trial balance of
Borrower and the Guarantors to Borrower's most recent Borrowing Base
Certificate, in each case accompanied by such supporting detail and
documentation as shall be requested by Administrative Agent in its reasonable
discretion;
(b) Quarterly Financial Statements. As soon as available, and in any
event within forty-five days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, (i) the consolidated balance sheets of Borrower
and its Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income, stockholders' equity and cash flows of
Borrower and its Subsidiaries for such Fiscal Quarter and for the period from
the beginning of
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the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures from the
Financial Plan for the current Fiscal Year, all in reasonable detail, together
with a Financial Officer Certification and a Narrative Report with respect
thereto, (ii) a reconciliation of the Eligible Inventory by location to the most
recent Borrowing Base Certificate, accompanied by such supporting detail and
documentation as shall be requested by Administrative Agent in its reasonable
discretion and (iii) an aging of accounts payable and a reconciliation of that
accounts payable aging to the monthly financial statements delivered pursuant to
Section 5.1(a), in each case accompanied by such supporting detail and
documentation as shall be requested by Administrative Agent in its reasonable
discretion;
(c) Annual Financial Statements. As soon as available, and in any
event within one hundred five (105) days after the end of each Fiscal Year, (i)
the consolidated balance sheets of Borrower and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Borrower and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial statements, in
reasonable detail, together with a Financial Officer Certification and a
Narrative Report with respect thereto; and (ii) with respect to such
consolidated financial statements a report thereon of Deloitte & Touche LLP or
other independent certified public accountants of recognized national standing
selected by Borrower, and reasonably satisfactory to Administrative Agent (which
report shall be unqualified as to going concern and scope of audit, and shall
state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of Borrower and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards) together with a written statement by such
independent certified public accountants stating (1) that their audit
examination has included a review of the terms of the Credit Documents, (2)
whether, in connection therewith, any condition or event that constitutes a
Default or an Event of Default under Section 6.8 has come to their attention
and, if such a condition or event has come to their attention, specifying the
nature and period of existence thereof, and (3) that nothing has come to their
attention that causes them to believe that the information contained in any
Compliance Certificate is not correct or that the matters set forth in such
Compliance Certificate are not stated in accordance with the terms hereof;
(d) Compliance Certificate. Together with each delivery of financial
statements of Holdings and its Subsidiaries pursuant to Sections 5.1(b) and
5.1(c) or as may be required pursuant to Section 6.8, a duly executed and
completed Compliance Certificate;
(e) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Holdings and its Subsidiaries delivered
pursuant to Section 5.1(b) or 5.1(c) will differ in any material respect from
the consolidated financial statements that would have been delivered pursuant to
such
83
subdivisions had no such change in accounting principles and policies been made,
then, together with the first delivery of such financial statements after such
change, one or more statements of reconciliation for all such prior financial
statements in form and substance reasonably satisfactory to Administrative
Agent;
(f) Notice of Default. Promptly upon any officer of Holdings or
Borrower obtaining knowledge:
(i) of any condition or event that constitutes a Default or an
Event of Default or that notice has been given to Holdings or Borrower
with respect thereto;
(ii) that any Person has given any notice to Holdings or any
of its Subsidiaries or taken any other action with respect to any event or
condition set forth in Section 8.1(b);
(iii) of the occurrence of any event or change that has caused
or evidences, either in any case or in the aggregate, a Material Adverse
Effect; or
(iv) that any Person has given any notice to Holdings or any
of its Subsidiaries or taken any other action with respect to any
condition or event that constitutes a default under any lease of a Real
Estate Asset subject to a Mortgage;
a certificate of its Authorized Officers specifying the nature and period of
existence of such condition, event or change, or specifying the notice given and
action taken by any such Person and the nature of such claimed Event of Default,
Default, default, event or condition, and what action Borrower has taken, is
taking and proposes to take with respect thereto;
(g) Notice of Litigation. Promptly upon any officer of Holdings or
Borrower obtaining knowledge of (i) the institution of, or non-frivolous threat
of, any Adverse Proceeding not previously disclosed in writing by Borrower to
Lenders, or (ii) any material development in any Adverse Proceeding that, in the
case of either (i) or (ii) if adversely determined, could be reasonably expected
to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to Holdings or Borrower to
enable Lenders and their counsel to evaluate such matters;
(h) ERISA. (i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Holdings or any of its Subsidiaries or any of their
then existing ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto; and
(ii) with reasonable promptness, copies of (1) all notices received by Holdings
or any of its Subsidiaries or any of their then-existing ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (2) copies of such
other documents or governmental reports or filings relating to any Employee
Benefit Plan (including without limitation any Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Holdings,
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any of its Subsidiaries or any of their then-existing ERISA Affiliates with the
Internal Revenue Service with respect to each Pension Plan) as Administrative
Agent shall reasonably request;
(i) Financial Plan. As soon as practicable and in any event no later
than thirty days after the beginning of each Fiscal Year, a consolidated plan
and financial forecast for such Fiscal Year (a "FINANCIAL PLAN"), including (i)
a forecasted consolidated balance sheet and forecasted consolidated statements
of income and cash flows of Borrower and its Subsidiaries for each such Fiscal
Year, together with pro forma Compliance Certificates for each such Fiscal Year
and an explanation of the assumptions on which such forecasts are based, (ii)
forecasted consolidated statements of income and cash flows of Borrower and its
Subsidiaries for each month of the first Fiscal Year included in the Financial
Plan and (iii) a schedule of projected restructuring charges for such Fiscal
Year;
(j) Insurance Report. As soon as practicable and in any event by no
later than five (5) Business Days after the annual renewal date, a summary
report in form and substance reasonably satisfactory to Administrative Agent
outlining all material insurance coverage maintained as of the date of such
report by Holdings and its Subsidiaries and all material insurance coverage
planned to be maintained by Holdings and its Subsidiaries in the immediately
succeeding Fiscal Year;
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Holdings or Borrower;
(l) Notice Regarding Material Contracts. Promptly, and in any event
within ten Business Days (i) after any Material Contract of Holdings or any of
its Subsidiaries is terminated or amended in a manner that is materially adverse
to Holdings or such Subsidiary, as the case may be, or (ii) after any new
Material Contract is entered into, a written statement describing such event,
with copies of such material amendments or new contracts, delivered to
Administrative Agent (to the extent such delivery is permitted by the terms of
any such Material Contract, provided, no such prohibition on delivery shall be
effective if it were bargained for by Holdings or its applicable Subsidiary with
the intent of avoiding compliance with this Section 5.1(l)), and an explanation
of any actions being taken with respect thereto;
(m) Borrowing Base Certificate. As soon as available, and in any
event within twenty (20) days after the last Business Day of each calendar month
ending after the Closing Date, a Borrowing Base Certificate with respect to the
Borrower and Guarantors (including a individual breakdown of the information in
the Borrowing Base Certificate with respect to Precision Engine Products Corp.)
dated as of the last Business Day of such month, together with any additional
schedules and other information that Administrative Agent may reasonably
request; provided, that, upon the occurrence and continuation of a Default or
Event of Default, such Borrowing Base Certificates and any additional schedules
and other information shall be delivered as often as reasonably requested by
Administrative Agent;
(n) Notice of Compliance Period. Promptly upon any officer of
Holdings or Borrower obtaining knowledge of the commencement of a Compliance
Period, or the
85
termination of a Compliance Period, Borrower shall provide written notice
thereof to the Administrative Agent.
(o) Information Regarding Collateral. Borrower will furnish to
Collateral Agent prompt written notice of any change (i) in any Credit Party's
organizational name, (ii) in any Credit Party's identity or organizational
structure, (iii) in any Credit Party's jurisdiction of organization or (iv) in
any Credit Party's Federal Taxpayer Identification Number or organizational
identification number. Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for
Collateral Agent (for the benefit of the Revolving Secured Parties) to continue
at all times following such change to have a valid, legal and perfected First
Priority security interest in all the Liquid Collateral and a valid, legal and
perfected Second Priority security interest in all the Fixed Collateral; and for
the Collateral Agent at all times following such change to have such valid,
legal and perfected security interests as contemplated in the Collateral
Documents. Borrower also agrees promptly to notify Collateral Agent if any
material portion of the Collateral is damaged or destroyed;
(p) Annual Collateral Verification. Each year, at the time of
delivery of annual financial statements with respect to the preceding Fiscal
Year pursuant to Section 5.1(c), Borrower shall deliver to the Collateral Agent
an Officer's Certificate either confirming that there has been no change in such
information since the date of the Collateral Questionnaire delivered on the
Closing Date or the date of the then most recent certificate delivered pursuant
to this Section, as applicable, or identifying such changes; and
(q) Other Information. (A) Promptly upon their becoming available,
copies of:
(i) all financial statements, reports, notices and proxy
statements sent or made available generally by Holdings to its security
holders acting in such capacity or by any Subsidiary of Holdings to its
security holders other than Holdings or another Subsidiary of Holdings;
(ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by Holdings or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority;
and
(iii) all press releases and other statements made available
generally by Holdings or any of its Subsidiaries to the public concerning
material developments in the business of Holdings or any of its
Subsidiaries, and
(B) such other information and data with respect to Holdings or any
of its Subsidiaries as from time to time may be reasonably requested by
Administrative Agent or any Lender.
Documents required to be delivered pursuant to Sections 5.1(a),
5.1(b), 5.1(c), 5.1(e) or 5.1(i) may be delivered electronically, and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Borrower posts such documents or provides a link thereto on Borrower's website
on the Internet at the website address listed on Appendix B; or (ii) on which
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such documents are posted on Borrower's behalf on IntraLinks/IntraAgency or
another relevant website, if any, to which each Lender and Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
Administrative Agent); provided, however, that: (x) Borrower shall deliver paper
copies of such documents to Administrative Agent until a written request to
cease delivering paper copies is given by Administrative Agent and (y) Borrower
shall notify (which may be by facsimile or electronic mail) Administrative Agent
of the posting of any such documents and provide to Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance Borrower shall be
required to provide paper copies of the Compliance Certificates to
Administrative Agent. Except for such Compliance Certificates, Administrative
Agent shall have no obligation to request the delivery or to maintain copies of
the documents referred to above, and in any event shall have no responsibility
to monitor compliance by Borrower with any such request for delivery.
5.2. EXISTENCE. Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights,
franchises, licenses and Governmental Authorizations material to its business;
provided, no Credit Party or any of its Subsidiaries shall be required to
preserve any such right, franchise, licenses and Governmental Authorizations or
if the preservation thereof is no longer desirable in the conduct of the
business of such Person, and the loss thereof is not disadvantageous in any
material respect to such Person or to Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been made
therefor, and (b) in the case of a Tax or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Tax or claim. No
Credit Party will, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
(other than Holdings or any of its Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Holdings and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
5.5. INSURANCE. Borrower will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Holdings and its
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Subsidiaries as may customarily be carried or maintained under similar
circumstances by Persons of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for such Persons. Without limiting the generality of the
foregoing, Holdings will maintain or cause to be maintained (a) flood insurance
with respect to each Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, in each case in compliance
with any applicable regulations of the Board of Governors of the Federal Reserve
System, and (b) replacement value casualty insurance on the Collateral under
such policies of insurance, with such insurance companies, in such amounts, with
such deductibles, and covering such risks as are at all times carried or
maintained under similar circumstances by Persons of established reputation
engaged in similar businesses. Each such policy of insurance shall (i) name
Collateral Agent, on behalf of the Revolving Secured Parties, as an additional
insured thereunder as its interests may appear and (ii) in the case of each
casualty insurance policy contain a loss payable clause or endorsement,
reasonably satisfactory in form and substance to Collateral Agent, that names
Collateral Agent, on behalf of the Revolving Secured Parties, as the loss payee
thereunder and provides for at least thirty days' prior written notice to
Collateral Agent of any modification or cancellation of such policy.
5.6. INSPECTIONS. Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of any Credit Party and any of its
respective Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested; provided, however, that each Lender
shall at all times coordinate with Administrative Agent regarding the frequency
and timing of such visits and inspections so as to reasonably minimize the
burden imposed on the Credit Parties. Additionally Borrower and the Credit
Parties shall permit any authorized representatives designated by Administrative
Agent to conduct, twice per Fiscal Year, audits or other examination of all
books, records, Eligible Inventory and Eligible Accounts of Credit Parties, each
such audit to be in scope and substance reasonably satisfactory to
Administrative Agent all upon reasonable notice and at such reasonable times as
may reasonably be requested, or, upon the occurrence and continuance of a
Default or Event of Default, at any time at the request of (and as frequently as
may be requested by) Administrative Agent. Further, each Credit Party shall
provide Administrative Agent, at its request, with, or allow Administrative
Agent or its representatives to perform, (i) a desktop appraisal for each of the
first three Fiscal Quarters of each Fiscal Year and (ii) a complete appraisal
with respect thereto for one quarter of such Fiscal Year, or upon the occurrence
and continuance of a Default or an Event of Default, at any time at the request
of Administrative Agent.
5.7. LENDERS MEETINGS. Holdings and Borrower will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Borrower's corporate offices (or at such other location as may be agreed to by
Borrower and Administrative Agent) at such time as may be agreed to by Borrower
and Administrative Agent.
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5.8. COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall cause
each of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9. ENVIRONMENTAL.
(a) Environmental Disclosure. Holdings will deliver to
Administrative Agent:
(i) as soon as practicable following receipt thereof, copies
of all environmental audits, investigations, analyses and reports
(including any Phase I Reports) of any kind or character, whether prepared
by personnel of Holdings or any of its Subsidiaries or by independent
consultants, Governmental Authorities or any other Persons, with respect
to material environmental matters at any Facility or with respect to any
Environmental Claims;
(ii) promptly upon the occurrence thereof, written notice
describing in reasonable detail (1) any Release required to be reported to
any Governmental Authority under any applicable Environmental Laws (or any
Governmental Authorization issued thereunder) other than any Release (A)
that occurred in the ordinary course of business and in material
compliance with Environmental Law, or (B) that could not reasonably result
in an Environmental Claim that would have a Material Adverse Effect; (2)
any remedial action taken by Holdings or any other Person in response to
(A) any Hazardous Materials Activities the existence or occurrence of
which could reasonably result in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (B) any
Environmental Claims that, individually or in the aggregate, could
reasonably result in a Material Adverse Effect, and (3) Holdings' or
Borrower's discovery of any occurrence or condition on any Facility or
real property adjoining or in the vicinity of any Facility that could
cause such Facility or any part thereof to be subject to any material
restrictions on the ownership, occupancy, transferability or use thereof
under any Environmental Laws;
(iii) as soon as practicable following the sending or receipt
thereof by Holdings or any of its Subsidiaries, a copy of any and all
written communications with respect to (1) any Environmental Claims that,
individually or in the aggregate, could reasonably result in a Material
Adverse Effect, and (2) any request for information from any Governmental
Authority that suggests such Governmental Authority is investigating
whether Holdings or any of its Subsidiaries may be potentially responsible
for any Hazardous Materials Activity;
(iv) prompt written notice describing in reasonable detail (1)
any proposed acquisition of stock, assets, or property by Holdings or any
of its Subsidiaries that could reasonably be expected to (A) expose
Holdings or any of its Subsidiaries to, or result in, Environmental Claims
that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (B) affect the ability of Holdings
or any of its Subsidiaries to maintain in full force and effect all
material Governmental
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Authorizations required under any Environmental Laws for their respective
operations and (2) any proposed action to be taken by Holdings or any of
its Subsidiaries to modify current operations in a manner that could
reasonably be expected to subject Holdings or any of its Subsidiaries to
any additional material obligations or requirements under any
Environmental Laws; and
(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to this
Section 5.9(a).
(b) Hazardous Materials Activities. Subject to Schedule 5.9, each
Credit Party shall, at its sole cost and expense, promptly take or cause to be
taken, and shall cause each of its Subsidiaries promptly to take or cause to be
taken, any and all actions reasonably necessary to (i) cure any violation of
Environmental Laws by such Credit Party or its Subsidiaries that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (ii) reasonably effectuate remediation of any Hazardous
Materials in, on, under or from any Facility or otherwise related to any
Hazardous Material Activity that could reasonably be expected to have a Material
Adverse Effect when such remediation is either (A) required under any
Environmental Law or (B) reasonably requested by Administrative Agent in
writing, and (iii) make an appropriate response to any Environmental Claim
against such Credit Party or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder where failure to do so could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(c) Environmental Covenants. Subject to Schedule 5.9, each Credit
Party will take or cause to be taken, and shall cause each of its Subsidiaries
to take or cause to be taken, such actions as reasonably necessary to ensure
that: (a) all uses and operations on or of any Facility shall be in material
compliance with all Environmental Laws and Governmental Authorizations issued
pursuant thereto; (b) keep or cause all Facilities free and clear of any
material Lien imposed pursuant to Environmental Laws; (c) conduct and complete
all investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws (d) there shall be no Releases of
Hazardous Materials in, on, under or from any Facility that would be reasonably
likely to result in an Environmental Claim that could reasonably be expected to
have a Material Adverse Effect; and (e) there shall be no Hazardous Materials
in, on, or under any Facility, except those that are both (i) in material
compliance with all Environmental Laws and with Governmental Authorizations
issued pursuant thereto, if and to the extent required, and (ii) in amounts not
materially in excess of that reasonably necessary for the conduct of the
business of such Credit Party or Subsidiary.
5.10. SUBSIDIARIES. In the event that any Person becomes a Domestic
Subsidiary of Borrower, Borrower shall (a) promptly cause such Domestic
Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and
Security Agreement and Intercreditor Agreement by executing and delivering to
Administrative Agent and Collateral Agent a Counterpart Agreement, and (b) take
all such actions and execute and deliver, or cause to be executed and delivered,
all such documents, instruments, agreements, and certificates as are similar to
those
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described in Sections 3.1(b), 3.1(i), 3.1(j), 3.1(k) and 3.1(n). In the event
that any Person becomes a Foreign Subsidiary of Borrower, and the ownership
interests of such Foreign Subsidiary are owned by Borrower or by any Domestic
Subsidiary thereof, Borrower shall, or shall cause such Domestic Subsidiary to,
deliver, all such documents, instruments, agreements, and certificates as are
similar to those described in Sections 3.1(b), and Borrower shall take, or shall
cause such Domestic Subsidiary to take, all of the actions referred to in
Section 3.1(j) necessary to grant and to perfect a Second Priority Lien in favor
of Collateral Agent, for the benefit of the Revolving Secured Parties, under the
Pledge and Security Agreement in 65% of such ownership interests. With respect
to each such Subsidiary, Borrower shall promptly send to Administrative Agent
written notice setting forth with respect to such Person (i) the date on which
such Person became a Subsidiary of Borrower, and (ii) all of the data required
to be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of
Borrower; provided, such written notice shall be deemed to supplement Schedule
4.1 and 4.2 for all purposes hereof.
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS. In the event that any Credit
Party acquires a Material Real Estate Asset or a Real Estate Asset owned or
leased on the Closing Date becomes a Material Real Estate Asset and such
interest has not otherwise been made subject to the Second Priority Lien of the
Collateral Documents in favor of Collateral Agent, for the benefit of the
Revolving Secured Parties, then such Credit Party, as soon as practical after
and, in any event, no later than 30 days after, acquiring such Material Real
Estate Asset, shall take all such actions and execute and deliver, or cause to
be executed and delivered, all such mortgages, documents, instruments,
agreements, opinions and certificates similar to those described in Sections
3.1(i), 3.1(j) and 3.1(k) with respect to each such Material Real Estate Asset
that Collateral Agent shall reasonably request to create a valid and, subject to
any filing and/or recording referred to herein, perfected Second Priority Lien
in favor of Collateral Agent, for the benefit of the Revolving Secured Parties,
in such Material Real Estate Assets. In addition to the foregoing, Borrower
shall, at the request of Requisite Lenders, deliver, from time to time, to
Administrative Agent such appraisals as are required by law or regulation of
Real Estate Assets with respect to which Collateral Agent has been granted a
Lien for the benefit of the Revolving Secured Parties.
5.12. INTEREST RATE PROTECTION. No later than sixty (60) days following
the Closing Date and at all times thereafter, Borrower shall maintain, or cause
to be maintained, in effect one or more Interest Rate Agreements for a term of
not less than three (3) years and otherwise in form and substance reasonably
satisfactory to Administrative Agent, such that the amount of not less than
50.0% of the aggregate notional principal amount of the total Indebtedness for
borrowed money (excluding Revolving Loans) of Borrower and its Subsidiaries
outstanding from time to time (based on the assumption that such notional
principal amount was a Eurodollar Rate Loan with an Interest Period of three
months) shall be either (i) fixed rate Indebtedness or (ii) subject to Interest
Rate Agreements effectively limiting the Unadjusted Eurodollar Rate Component of
the interest costs to Borrower to a rate reasonably acceptable to Administrative
Agent. Notwithstanding the foregoing, Borrower shall not be required to so
maintain such Interest Rate Agreements to the extent that the aggregate notional
principal amount of the Interest Rate Agreements of Borrower and its
Subsidiaries otherwise required by this Section 5.12 is less than $20,000,000.
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5.13. FURTHER ASSURANCES. At any time or from time to time upon the
request of Administrative Agent, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent or Collateral Agent may reasonably
request to ensure that the Obligations are guarantied by the Guarantors and are
secured by substantially all of the assets of Holdings and its Subsidiaries and
all of the outstanding Capital Stock of Borrower and its Subsidiaries (subject
to limitations contained in the Credit Documents with respect to Foreign
Subsidiaries). In addition, each Credit Party will provide Lenders with any
information requested pursuant to Section 10.21.
5.14. CASH MANAGEMENT SYSTEMS. Holdings and its Subsidiaries shall
establish and maintain cash management systems reasonably acceptable to
Administrative Agent. Such systems shall be outlined on Schedule 5.14 (as it may
be amended from time to time with the consent of Administrative Agent).
5.15. LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS, BAILEE LETTERS AND REAL
ESTATE PURCHASES. Each Credit Party shall use its reasonable efforts to obtain a
landlord's agreement, mortgagee agreement or bailee letter, as applicable, from
the lessor of each leased property, mortgagee of owned property or bailee with
respect to any warehouse, processor or converter facility or other location
where any material amount of Collateral is stored or located, which agreement or
letter shall (unless otherwise agreed to in writing by Administrative Agent)
contain a waiver or subordination of all Liens or claims that the landlord,
mortgagee or bailee may assert against the Collateral at that location, and
shall otherwise be reasonably satisfactory in form and substance to
Administrative Agent. With respect to such locations or warehouse space leased
or owned as of the Closing Date and thereafter, if the Collateral Agent has not
received a landlord or mortgagee agreement or bailee letter as of the Closing
Date (or, if later, as of the date such location is acquired or leased), any
Eligible Inventory at that location shall, in Administrative Agent's reasonable
discretion, be subject to such Reserves as may be established by Administrative
Agent in its reasonable credit judgment. After the Closing Date, Borrower will
use its commercially reasonable best efforts to ensure that no real property or
warehouse space where any material amount of the Collateral is located shall be
leased by any Credit Party and no more than 5% of the Inventory that is to be
included in the Aggregate Borrowing Base shall be shipped to a processor or
converter under arrangements established after the Closing Date without the
prior written consent of Collateral Agent (which consent may not be unreasonably
withheld but may be conditioned upon the establishment of Reserves reasonably
acceptable to Administrative Agent) or, unless and until a reasonably
satisfactory landlord agreement or bailee letter, as appropriate, shall first
have been obtained with respect to such location. Each Credit Party shall timely
and fully pay and perform its obligations under all leases and other agreements
with respect to each leased location or public warehouse where any Collateral is
or may be located except to the extent that the same are being contested in good
faith.
5.16. POST-CLOSING OBLIGATIONS. Borrower shall satisfy and perform each
obligation set forth on Schedule 5.16 within the time frame set forth for such
obligation on Schedule 5.16; provided that the Administrative Agent, in its
reasonable discretion, may extend such time frames to provide for reasonable
extensions.
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SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Commitment is
in effect and until payment in full of all Obligations and cancellation or
expiration of all Letters of Credit, such Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 6.
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Term Obligations and the Revolving Obligations;
(b) Indebtedness of any Guarantor Subsidiary to Borrower or to any
other Guarantor Subsidiary, or of Borrower to any Guarantor Subsidiary;
provided, (i) all such Indebtedness shall be evidenced by promissory notes and
all such notes shall be subject to a Second Priority Lien in favor of Collateral
Agent (for the benefit of the Revolving Secured Parties) pursuant to the Pledge
and Security Agreement, (ii) all such Indebtedness shall be unsecured and
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement that in any such case, is reasonably satisfactory to
Administrative Agent, and (iii) any payment by any such Guarantor Subsidiary
under any guaranty of the Obligations shall result in a pro tanto reduction of
the amount of any Indebtedness owed by such Subsidiary to Borrower or to any of
its Subsidiaries for whose benefit such payment is made;
(c) Indebtedness incurred by Holdings or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guaranties or letters of credit, surety
bonds or performance bonds securing the performance of Borrower or any such
Subsidiary pursuant to such agreements, in connection with Permitted
Acquisitions or permitted dispositions of any business, assets or Subsidiary of
Holdings or any of its Subsidiaries;
(d) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business;
(e) Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(f) guaranties in the ordinary course of business of the obligations
of suppliers, customers, franchisees and licensees of Holdings and its
Subsidiaries;
(g) guaranties by Borrower of Indebtedness of a Guarantor Subsidiary
or guaranties by a Subsidiary of Borrower of Indebtedness of Borrower or a
Guarantor Subsidiary with respect, in each case, to Indebtedness otherwise
permitted to be incurred pursuant to this Section 6.1;
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(h) Indebtedness described in Schedule 6.1, but not any extensions,
renewals or replacements of such Indebtedness except (i) renewals and extensions
expressly provided for in the agreements evidencing any such Indebtedness as the
same are in effect on the date of this Agreement and (ii) refinancings and
extensions of any such Indebtedness if the terms and conditions thereof are not
less favorable to the obligor thereon or to the Lenders than the Indebtedness
being refinanced or extended, and the average life to maturity thereof is
greater than or equal to that of the Indebtedness being refinanced or extended;
provided, such Indebtedness permitted under the immediately preceding clause (i)
or (ii) above shall not (A) include Indebtedness of an obligor that was not an
obligor with respect to the Indebtedness being extended, renewed or refinanced,
(B) exceed in a principal amount the Indebtedness being renewed, extended or
refinanced or (C) be incurred, created or assumed if any Default or Event of
Default has occurred and is continuing or would result therefrom;
(i) on or prior to September 30, 2004, Indebtedness evidenced by any
SAC Notes not repurchased in the Debt Tender in an aggregate principal amount
not to exceed $12,000,000;
(j) Indebtedness with respect to (i) Capital Leases, (ii) purchase
money Indebtedness (including any such purchase money Indebtedness acquired in
connection with a Permitted Acquisition), provided, any such purchase money
Indebtedness (x) shall be secured only by the asset acquired in connection with
the incurrence of such Indebtedness, (y) shall constitute not less than 75% and
not more than 100% of the aggregate consideration paid with respect to such
asset; and (z) the Indebtedness incurred pursuant to clauses (i) and (ii)
collectively shall not exceed $7,500,000 at any time; (iii) the Existing Capital
Leases and (iv) Permitted Refinancings of the foregoing;
(k) (x) the Senior Subordinated Notes and (y) senior subordinated
unsecured debt securities issued to redeem the Senior Subordinated Notes in
full, in an aggregate principal amount of up to the sum of the aggregate
outstanding principal amount of the Senior Subordinated Notes (but in any event
not to exceed $160,000,000) plus any reasonable and customary transaction costs
and fees (approved by Administrative Agent) and required premium incurred in
connection therewith (the "REFINANCING NOTES"); provided that the proceeds
thereof are used to prepay or redeem the Senior Subordinated Notes and/or prepay
the Term Loans, or a portion thereof, and reasonable and customary fees,
commissions, legal fees and other costs and expenses incurred in connection with
such issuance and redemption or prepayment; provided, further, that (i)(A) the
terms of such additional Indebtedness shall not contain any cross-default
provisions (other than for material non-payment, and may include a
cross-acceleration provision), (B) the terms of the Refinancing Notes shall not
contain any financial maintenance covenants, (C) the Refinancing Notes shall not
be secured by any asset of Borrower or any of its Subsidiaries, (D) no portion
of the principal of the Refinancing Notes shall be scheduled to be redeemed,
repurchased or otherwise repaid or prepaid (other than as a result of a change
of control, acceleration or such other provision as shall be customary for
comparable high-yield debt securities) prior to the date that is ninety-one (91)
days after the Revolving Commitment Termination Date, and (E) the Refinancing
Notes shall otherwise, taken as a whole, be on terms no less favorable to the
Lenders than the terms of the Senior Subordinated Notes; and (ii) after giving
effect to the incurrence of the Refinancing Notes, no Default or Event of
Default shall exist or would result therefrom;
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(l) Indebtedness under Hedge Agreements or any commodities hedging
agreement entered into for the purpose of hedging risks associated with
Holdings' and its Subsidiaries' operations and not for speculative purposes;
(m) (i) Indebtedness of any Foreign Subsidiary, consisting of local
lines of credit incurred in the ordinary course of business of such Foreign
Subsidiary and not guaranteed by a Guarantor Subsidiary, in an aggregate amount
not to exceed at any time the U.S. dollar equivalent of $7,500,000 and (ii)
Indebtedness of any Foreign Subsidiary, consisting of an Investment made by a
Credit Party to such Foreign Subsidiary as permitted by Section 6.7(j); and
(n) (i) Indebtedness of non-Guarantor Subsidiaries to other
non-Guarantor Subsidiaries and (ii) Indebtedness of Borrower or Guarantor
Subsidiaries to non-Guarantor Subsidiaries in an amount not to exceed $2,000,000
in the aggregate at any time outstanding;
(o) Indebtedness to finance the repurchase price of Holdings stock
from former employees; provided such Indebtedness is subordinated to the
Revolving Obligations on terms and conditions reasonably acceptable to the
Administrative Agent;
(p) Indebtedness assumed in Permitted Acquisitions and any deferred
purchase price for Permitted Acquisitions in an amount not to exceed $2,500,000
per acquisition and $7,500,000 in the aggregate at any time outstanding; and
(q) other unsecured Indebtedness of Holdings and its Subsidiaries in an
aggregate amount not to exceed at any time $10,000,000.
6.2. LIENS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Collateral Agent for the benefit of the
Revolving Secured Parties granted pursuant to any Credit Document and Liens in
favor of the Collateral Agent for the benefit of the Term Secured Parties
granted pursuant to any Credit Document (as defined in the Term Credit
Agreement), as in effect on the date hereof and as amended, supplemented or
modified from time to time in accordance with the terms of the Intercreditor
Agreement;
(b) Liens for Taxes not then due or, if due, if obligations with
respect to such Taxes are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted;
(c) statutory Liens of landlords, banks (and rights of set-off),
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law (other than any such Lien imposed pursuant to Section 401
(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each case
incurred in the ordinary course of business (i) for
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amounts not yet overdue or (ii) for amounts that are overdue and that are being
contested in good faith by appropriate proceedings, so long as such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made for any such contested amounts;
(d) Liens incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Holdings or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any lease
of real estate permitted hereunder and any restriction, lien or encumbrance that
the interest or title of such lessor or sublessor may be subject to;
(g) Liens solely on any xxxx xxxxxxx money deposits made by Holdings
or any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(k) (i) licenses of patents, trademarks and other intellectual
property rights granted by Holdings or any of its Subsidiaries in the ordinary
course of business and not interfering in any respect with the ordinary conduct
of the business of Borrower or such Subsidiary and (ii) leases or subleases
granted by Holdings or any of its Subsidiaries to third parties in respect of
surplus property which is not fundamental to the operation of the business in
the ordinary course of business; provided that such leases and subleases are on
arms-length, commercial terms and otherwise satisfactory to Administrative
Agent;
(l) Liens described in Schedule 6.2 or, with respect to Real Estate
Assets, on a title report delivered pursuant to Section 3.1(i)(iii);
(m) Liens securing Indebtedness permitted pursuant to 6.1(j);
provided, any such Lien shall encumber only the asset acquired with the proceeds
of such Indebtedness;
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(n) Liens securing Indebtedness of Foreign Subsidiaries permitted
pursuant to Section 6.1(m), provided that such Liens only attach to the assets
of Foreign Subsidiaries;
(o) Liens securing judgments for the payment of money (except to the
extent giving rise to an Event of Default under Section 8.1(h));
(p) Liens that are contractual rights of setoff (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness or (ii) pertaining to pooled deposit and/or sweep
accounts of Borrower and/or any Subsidiary of Borrower to permit satisfaction of
overdraft or similar obligations incurred in the ordinary course of business of
Borrower and the Subsidiaries of Borrower; and
(q) other Liens securing Indebtedness in an aggregate amount not to
exceed $2,500,000 at any time outstanding; provided such Liens shall not be on
any assets constituting Liquid Collateral owned by the Borrower or any Guarantor
unless the Collateral Agent shall have given its written consent to such a Lien
(such consent not to be unreasonably withheld).
6.3. EQUITABLE LIEN. If any Credit Party or any of its Subsidiaries shall
create or assume any Lien upon any of its properties or assets (a) of a kind or
nature comparable to the Fixed Collateral, whether now owned or hereafter
acquired, other than Permitted Liens, it shall make or cause to be made
effective provisions whereby the Term Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness (other than the
Revolving Obligations) secured thereby as long as any such Indebtedness shall be
so secured and the Revolving Obligations will (x) so long as the Term
Obligations are so secured, have a Second Priority Lien on such properties or
assets and (y) if the Term Obligations have been discharged, be secured by such
Lien equally and ratably with any and all other Indebtedness secured thereby as
long as any such Indebtedness shall be so secured and (b) of a kind or nature
comparable to the Liquid Collateral, whether now owned or hereafter acquired, it
shall make or cause to be made effective provisions whereby the Revolving
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness (other than the Term Obligations) secured thereby as long as
any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.
6.4. NO FURTHER NEGATIVE PLEDGES. except with respect to:
(a) specific property encumbered to secure payment of particular
Indebtedness or to be sold pursuant to an executed agreement with respect to a
permitted Asset Sale;
(b) restrictions contained in agreements with respect to Indebtedness
incurred by Foreign Subsidiaries in accordance with this Agreement (provided
that such restrictions are limited to the property or assets of such Foreign
Subsidiary and its Subsidiaries);
(c) restrictions contained in (x) the Senior Subordinated Notes Indenture,
(y) the indenture in respect of the Refinancing Notes (provided that such
restrictions are no less favorable to the Lenders than those contained in the
Senior Subordinated Notes Indenture) and (z) the Term Credit Agreement or any
document evidencing a Permitted Refinancing thereof
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(provided that such restrictions are no less favorable to the Lenders than those
contained in the Term Credit Agreement);
(d) restrictions by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be);
(e) Liens permitted to be incurred under Section 6.2 and restrictions in
the agreements relating thereto that limit the right of Borrower to dispose of
or transfer the assets subject to such Liens;
(f) provisions limiting the disposition or distribution of assets or
property in joint venture agreements, sale-leaseback agreements, stock sale
agreements and other similar agreements, which limitation is applicable only to
the assets that are the subject of such agreements;
(g) any encumbrance or restriction in connection with an acquisition of
property, so long as such encumbrance or restriction relates solely to the
property so acquired and was not created in connection with or in anticipation
of such acquisition; and
(h) restrictions imposed by customary provisions in partnership
agreements, limited liability company organizational governance documents, joint
venture agreements and other similar agreements that restrict the transfer of
ownership interests in such partnership, limited liability company, joint
venture or similar Person;
no Credit Party nor any of its Subsidiaries shall enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.
6.5. RESTRICTED JUNIOR PAYMENTS. No Credit Party shall, nor shall it
permit any of its Subsidiaries or Affiliates through any manner or means or
through any other Person to, directly or indirectly, declare, order, pay, make
or set apart, or agree to declare, order, pay, make or set apart, any sum for
any Restricted Junior Payment except that:
(a) Borrower may make regularly scheduled payments of interest in respect
of Senior Subordinated Notes or Refinancing Notes in accordance with the terms
of, and only to the extent required by, and subject to the subordination
provisions contained in, the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued;
(b) Borrower may prepay or redeem the Senior Subordinated Notes in full
with the proceeds of the Refinancing Notes;
(c) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, Borrower may make Restricted Junior
Payments to Holdings (and Holdings may make Restricted Junior Payments to its
corporate parent) (i) in an aggregate amount not to exceed $250,000 in any
Fiscal Year, to the extent necessary to permit Holdings (or its corporate
parent) to pay general administrative costs and expenses and (ii) to the extent
necessary to permit Holdings (or
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its corporate parent) to discharge the consolidated tax liabilities of Holdings
(or its corporate parent) and its Subsidiaries, in each case so long as Holdings
(or its corporate parent) applies the amount of any such Restricted Junior
Payment for such purpose;
(d) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, Borrower may repurchase the SAC Notes
which were not tendered in connection with the Debt Tender;
(e) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, Holdings may purchase or redeem (and
Borrower may declare and pay dividends or make other distributions to Holdings
the proceeds of which are to be used by Holdings to so purchase or redeem), and
may make Restricted Junior Payments to Holdings' corporate parent to redeem,
Capital Stock of Holdings or its corporate parent, as the case may be (including
related stock appreciation rights or similar securities) held by then present or
former officers or employees of Holdings, Borrower or any of their Subsidiaries
or by any Pension Plan upon such person's death, disability, retirement or
termination of employment or under the terms of any such Pension Plan or any
other agreement under which such shares of stock or related rights were issued;
provided that the aggregate amount of such purchases or redemptions under this
paragraph (e) shall not exceed in any Fiscal Year $2,000,000 plus the unused
portion of the permitted Restricted Junior Payments under this paragraph (e)
from the immediately prior Fiscal Year (which carryover amount may only be
utilized in such current Fiscal Year and not in subsequent Fiscal Years); and
(f) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, Holdings may pay management fees to the
Sponsor in an amount not to exceed $1,000,000 per Fiscal Year and reasonable
one-time transaction fees and reasonable expenses; provided that if such
one-time transaction fees and expenses exceed $250,000 they shall have been
approved by the disinterested members of the Borrower's board of directors.
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided herein,
in the Term Credit Agreement or any document evidencing a Permitted Refinancing
thereof (provided that such restrictions are no less favorable to the Lenders
than those contained in the Term Credit Agreement), in the Senior Subordinated
Notes Indenture or in the indenture in respect of the Refinancing Notes (as long
as such encumbrances or restrictions are no less favorable to the Lenders than
those contained in the Senior Subordinated Notes Indenture) or (with respect to
encumbrances or restrictions on the ability of any Foreign Subsidiary of
Holdings only) in any documentation evidencing the local lines of credit of
Foreign Subsidiaries expressly permitted by Section 6.1(m), no Credit Party
shall, nor shall it permit any of its Subsidiaries to, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any Subsidiary of Borrower to:
(a) pay dividends or make any other distributions on any of such
Subsidiary's Capital Stock owned by Borrower or any other Subsidiary of
Borrower;
(b) repay or prepay any Indebtedness owed by such Subsidiary to Borrower
or any other Subsidiary of Borrower;
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(c) make loans or advances to Borrower or any other Subsidiary of
Borrower; or
(d) transfer any of its property or assets to Borrower or any other
Subsidiary of Borrower;
other than restrictions:
(i) in agreements evidencing Indebtedness permitted by Section
6.1(j) that impose restrictions on the property so acquired;
(ii) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses,
joint venture agreements and similar agreements entered into in the
ordinary course of business;
(iii) that are or were created by virtue of any transfer of,
agreement to transfer or option or right with respect to any property,
assets or Capital Stock not otherwise prohibited under this Agreement;
(iv) in any instrument governing Indebtedness or Capital Stock
of a Person acquired by Borrower or any of its Subsidiaries as in effect
at the time of such acquisition (except to the extent such Indebtedness or
Capital Stock was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired; provided that, in
the case of Indebtedness, such Indebtedness was permitted by Section 6.1
to be incurred;
(v) in any agreement for the sale or other disposition of a
Subsidiary that restricts distributions by that Subsidiary pending the
sale or other disposition; and
(vi) in provisions in agreements or instruments which prohibit
the payment of dividends or the making of other distributions with respect
to any class of Capital Stock of a Person other than on a pro rata basis.
6.7. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) equity Investments owned as of the Closing Date in any
Subsidiary and Investments made after the Closing Date in any wholly owned
Guarantor Subsidiaries of Borrower;
(c) Investments (i) in any Securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors and (ii)
consisting of deposits, prepayments and other credits to suppliers made in the
ordinary course of business of Holdings and its Subsidiaries;
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(d) intercompany loans to the extent permitted under Section 6.1(b)
and intercompany guaranties to the extent permitted under Section 6.1(g);
(e) Consolidated Capital Expenditures permitted by Section 6.19;
(f) loans and advances to employees of Holdings and its Subsidiaries
made in the ordinary course of business in an aggregate principal amount not to
exceed $1,000,000 in the aggregate at any one time outstanding;
(g) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.9;
(h) Investments described in Schedule 6.7;
(i) other Investments in an aggregate amount not to exceed at any
time $5,000,000 plus the portion of Excess Cash Flow not used for mandatory
prepayments of the Loans;
(j) Investments in Foreign Subsidiaries of Holdings in an aggregate
amount not to exceed $5,000,000 per Fiscal Year;
(k) Investments received in lieu of Cash in connection with Asset
Sales expressly permitted by Section 6.9;
(l) Notes from buyers of permitted dispositions in an aggregate
amount not to exceed $2,500,000 at any one time outstanding; and
(m) Notes from employees for sale of Holdings stock.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
Payment not otherwise permitted under the terms of Section 6.5.
6.8. FINANCIAL COVENANTS. During any Compliance Period, Borrower shall not
permit the Fixed Charge Coverage Ratio to be less than 1.00:1.00. Within five
days of the last day of any Fiscal Quarter during which a Compliance Period is
occurring on such last day, the Borrower shall provide to Administrative Agent a
Compliance Certificate calculating the Fixed Charge Coverage Ratio based on the
most recent monthly financial statements delivered pursuant to Section 5.1(a).
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), exchange, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business, assets
or property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible, whether now owned or hereafter acquired, or acquire by
purchase or otherwise (other than purchases or other acquisitions of inventory,
materials, supplies, equipment and capital
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expenditures in the ordinary course of business) the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any Person or
any division or line of business or other business unit of any Person, except:
(a) (i) any Subsidiary of Holdings may be merged with or into
Borrower or any Guarantor Subsidiary, and any Subsidiary of Holdings (other than
Borrower or a Guarantor Subsidiary (other than an Immaterial Subsidiary)) may be
liquidated, wound up or dissolved (following the transfer of all its assets to
Borrower or a Guarantor Subsidiary), and all or any part of the business,
property or assets of any Subsidiary of Holdings may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to Borrower or any Guarantor Subsidiary; provided, in the case of
such a merger, Borrower or such Guarantor Subsidiary, as applicable shall be the
continuing or surviving Person and (ii) any non-Guarantor Subsidiary of Holdings
may be merged with or into Holdings or any Subsidiary of Holdings, and any
non-Guarantor Subsidiary of Holdings may be liquidated, wound up or dissolved
(following the transfer of all its assets to Borrower or a Subsidiary of
Borrower), and all or any part of the business, property or assets of any
non-Guarantor Subsidiary of Holdings may be conveyed, sold, leased, transferred
or otherwise disposed of, in one transaction or a series of transactions, to
Borrower or any Subsidiary of Borrower;
(b) sales or other dispositions of assets that do not constitute
Asset Sales;
(c) Asset Sales, the proceeds of which (valued at the principal
amount thereof in the case of non-Cash proceeds consisting of notes or other
debt Securities and valued at fair market value in the case of other non-Cash
proceeds) are less than $15,000,000 when aggregated with the proceeds of all
other Asset Sales made within the same Fiscal Year; provided (1) the
consideration received for such assets shall be in an amount at least equal to
the fair market value thereof (determined in good faith by the board of
directors of Borrower (or similar governing body)), (2) no less than 75% thereof
shall be paid in Cash, (3) the Net Asset Sale Proceeds thereof shall be applied
as required by Section 2.13(a) and (4) pending such application pursuant to
Section 2.13(a) or any other use of such Net Asset Sale Proceeds permitted
hereby, Borrower shall deposit all such Net Asset Sale Proceeds to the extent
derived from assets constituting Fixed Collateral in the Asset Sale Proceeds
Account;
(d) disposals of obsolete, worn out or surplus property;
(e) Permitted Acquisitions, the consideration for which constitutes
(i) less than $5,000,000 in the aggregate in any Fiscal Year and (ii) less than
$15,000,000 in the aggregate from the Closing Date to the date of determination;
and
(f) Investments made in accordance with Section 6.7.
6.10. DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale of all of its
interests in the Capital Stock of any of its Subsidiaries in compliance with the
provisions of Section 6.9, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, (a) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
qualify directors if required by applicable law; or (b) permit any of its
Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital
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Stock of any of its Subsidiaries, except to another Credit Party (subject to the
restrictions on such disposition otherwise imposed hereunder), or to qualify
directors if required by applicable law.
6.11. SALES AND LEASE-BACKS. Unless the proceeds resulting from such
transaction are used to prepay Loans to the extent required by Section 2.13, no
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as a guarantor or other surety
with respect to any lease of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, which such Credit Party (a) has sold or
transferred or is to sell or to transfer to any other Person (other than
Holdings or any of its Subsidiaries), or (b) intends to use for substantially
the same purpose as any other property which has been or is to be sold or
transferred by such Credit Party to any Person (other than Holdings or any of
its Subsidiaries) in connection with such lease.
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 5% or more of any class of Capital Stock of Holdings or any of its
Subsidiaries or with any Affiliate of Holdings or of any such holder, on terms
that are less favorable to Holdings or that Subsidiary, as the case may be, than
those that might be obtained at the time from a Person who is not such a holder
or Affiliate; provided, the foregoing restriction shall not apply to (a) any
transaction between Borrower and any Guarantor Subsidiary; (b) reasonable and
customary fees paid to members of the board of directors (or similar governing
body) of Holdings and its Subsidiaries; (c) compensation arrangements for
officers and other employees of Holdings and its Subsidiaries entered into in
the ordinary course of business; (d) transactions described in Schedule 6.12;
and (f) transactions permitted under Sections 6.1(b), (g), (m)(ii), (n) and (o),
6.5(c), (e) and (f), and 6.7(d), (f), (j) and (m).
6.13. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in by such Credit Party on the
Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.
6.14. PERMITTED ACTIVITIES OF HOLDINGS. Holdings shall not (a) incur,
directly or indirectly, any Indebtedness or any other obligation or liability
whatsoever other than (x) obligations not constituting Indebtedness incurred in
the ordinary course of its business as a holding company and not otherwise
restricted by this Section 6.14 and (y) the Revolving Obligations, the Term
Obligations or its obligations in respect of the Senior Subordinated Notes or
any Refinancing Notes; (b) create or suffer to exist any Lien upon any property
or assets now owned or hereafter acquired by it other than the Liens created
under the Collateral Documents to which it is a party; (c) engage in any
business or activity or own any assets other than (i) holding 100% of the
Capital Stock of Borrower, (ii) performing its obligations and activities
incidental thereto under the Credit Documents, and to the extent not
inconsistent therewith, the Related Agreements; and (iii) making Restricted
Junior Payments and Investments to the extent permitted by this Agreement; (d)
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person; (e) sell or otherwise dispose of
any Capital Stock of any of its directly owned Subsidiaries; (f) create or
acquire any Subsidiary or make or
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own any Investment in any Person other than Borrower; or (g) fail to hold itself
out to the public as a legal entity separate and distinct from all other
Persons.
6.15. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Except as set
forth in Section 6.16, no Credit Party shall nor shall it permit any of its
Subsidiaries to, agree to any amendment, restatement, supplement or other
modification to, or waiver of, any of its rights under any Related Agreement
(other than agreements with respect to the Senior Subordinated Notes and
Refinancing Notes which are subject to the provisions of Section 6.16) after the
Closing Date that would be materially adverse to Borrower, any other Credit
Party, Administrative Agent or the Lenders.
6.16. AMENDMENTS OR WAIVERS WITH RESPECT TO SUBORDINATED INDEBTEDNESS. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or
otherwise change the terms of the Senior Subordinated Notes or Refinancing
Notes, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on the Senior Subordinated Notes or Refinancing Notes, change (to earlier
dates) any dates upon which payments of principal or interest are due thereon,
change any event of default or condition to an event of default with respect to
the Senior Subordinated Notes or the Refinancing Notes (other than to eliminate
any such event of default or increase any grace period related thereto), change
the redemption, prepayment or defeasance provisions of the Senior Subordinated
Notes or the Refinancing Notes, change the subordination provisions of the
Senior Subordinated Notes or the Refinancing Notes (or of any guaranty thereof),
or if the effect of such amendment or change, together with all other amendments
or changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such Senior
Subordinated Notes or Refinancing Notes (or a trustee or other representative on
their behalf) which would be adverse to any Credit Party or Lenders.
6.17. FISCAL YEAR. (i) No Credit Party shall, nor shall it permit any of
its Guarantor Subsidiaries to change its Fiscal Year-end from December 31 and
(ii) no Credit Party shall permit any non-Guarantor Subsidiaries to change its
Fiscal Year-end from December 31 or November 30, as the case may be.
6.18. NO OTHER "DESIGNATED SENIOR INDEBTEDNESS". No Credit Party shall
designate, or permit the designation of, any Indebtedness (other than under this
Agreement or the other Credit Documents) as "Designated Senior Debt" or
"Designated Senior Indebtedness" or a comparable term evidencing such
designation for the purposes of the definition of the same or the subordination
provisions contained in the Senior Subordinated Notes Indenture or the
Refinancing Note Indenture without the consent of Administrative Agent.
6.19. MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES. Holdings shall not, and
shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures, in any Fiscal Year, in an aggregate amount for Holdings and its
Subsidiaries in excess of $25,000,000; provided, such amount for any Fiscal Year
shall be increased by an amount equal to the excess, if any, (but in no event
more than $12,500,000) of such amount for the previous Fiscal Year (as adjusted
in accordance with this proviso) over the actual amount of Consolidated Capital
Expenditures for such previous Fiscal Year (which carryover amount may only be
utilized in such current Fiscal Year and not in subsequent Fiscal Years).
Notwithstanding anything to the
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contrary herein, the covenant set forth in this Section 6.19 shall be tested
only during each, if any, Compliance Period and such test shall be with respect
to the then current Fiscal Year.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty to Administrative Agent for the ratable benefit of the Beneficiaries
the due and punctual payment and performance in full of all Revolving
Obligations when the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) or any other provision of the Bankruptcy Code) (collectively, the
"GUARANTEED OBLIGATIONS").
7.2. CONTRIBUTION BY GUARANTORS. All Guarantors desire to allocate among
themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"FUNDING GUARANTOR") under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor's Aggregate Payments to equal
its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the "FAIR SHARE CONTRIBUTION AMOUNT" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.
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7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Borrower to pay
any of the Guaranteed Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) or any other provision of the Bankruptcy
Code), Guarantors will upon demand pay, or cause to be paid, in Cash, to
Administrative Agent for the ratable benefit of Beneficiaries, an amount equal
to the sum of the unpaid principal amount of all Guaranteed Obligations then due
as aforesaid, accrued and unpaid interest on such Guaranteed Obligations
(including interest which, but for Borrower's becoming the subject of a case
under the Bankruptcy Code, would have accrued on such Guaranteed Obligations,
whether or not a claim is allowed against Borrower for such interest in the
related bankruptcy case) and all other Guaranteed Obligations then owed to
Beneficiaries as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional,
constitute primary obligations of such Guarantor and not a contract of surety to
the maximum extent permitted by law, and to the extent permitted by applicable
law shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) the obligations of each Guarantor hereunder are independent of
the obligations of Borrower and the obligations of any other guarantor
(including any other Guarantor) of the obligations of Borrower, and a separate
action or actions may be brought and prosecuted against such Guarantor whether
or not any action is brought against Borrower or any of such other guarantors
and whether or not Borrower is joined in any such action or actions;
(c) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guaranteed Obligations;
(d) any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability
hereof or giving rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from time to time may:
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(i) renew, extend, accelerate, increase the rate of interest
on, or otherwise change the time, place, manner or terms of payment of the
Guaranteed Obligations;
(ii) settle, compromise, release or discharge, or accept or
refuse any offer of performance with respect to, or substitutions for, the
Guaranteed Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other
obligations;
(iii) request and accept other guaranties of the Guaranteed
Obligations and take and hold security for the payment hereof or the
Guaranteed Obligations;
(iv) release, surrender, exchange, substitute, compromise,
settle, rescind, waive, alter, subordinate or modify, with or without
consideration, any security for payment of the Guaranteed Obligations, any
other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations;
(v) enforce and apply any security now or hereafter held by or
for the benefit of such Beneficiary in respect hereof or the Guaranteed
Obligations and direct the order or manner of sale thereof, or exercise
any other right or remedy that such Beneficiary may have against any such
security, in each case as such Beneficiary in its discretion may determine
consistent herewith or the applicable Hedge Agreement and any applicable
security agreement, including foreclosure on any such security pursuant to
one or more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or subrogation
or other right or remedy of any Guarantor against Borrower or any security
for the Guaranteed Obligations; and
(vi) exercise any other rights available to it under the
Credit Documents or the Hedge Agreements; and
(e) this Guaranty and the obligations of Guarantors hereunder shall
be valid and enforceable and to the extent permitted by applicable law shall not
be subject to any reduction, limitation, impairment, discharge or termination
for any reason (other than payment in full of the Guaranteed Obligations),
including the occurrence of any of the following, whether or not any Guarantor
shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement
or election not to assert or enforce, or the stay or enjoining, by order
of court, by operation of law or otherwise, of the exercise or enforcement
of, any claim or demand or any right, power or remedy (whether arising
under the Credit Documents or the Hedge Agreements, at law, in equity or
otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for
the payment of the Guaranteed Obligations;
(ii) any rescission, waiver, amendment or modification of, or
any consent to departure from, any of the terms or provisions (including
provisions relating to events of default) hereof, any of the other Credit
Documents, any of the Hedge Agreements or
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any agreement or instrument executed pursuant thereto, or of any other
guaranty or security for the Guaranteed Obligations, in each case whether
or not in accordance with the terms hereof or such Credit Document, such
Hedge Agreement or any agreement relating to such other guaranty or
security (provided that no Credit Document to which such Guarantor is a
party may be amended without its written consent);
(iii) the Guaranteed Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable
in any respect;
(iv) the application of payments received from any source
(other than payments received pursuant to the other Credit Documents or
any of the Hedge Agreements or from the proceeds of any security for the
Guaranteed Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guaranteed Obligations) to the
payment of indebtedness other than the Guaranteed Obligations, even though
any Beneficiary might have elected to apply such payment to any part or
all of the Guaranteed Obligations;
(v) any Beneficiary's consent to the change, reorganization or
termination of the corporate structure or existence of Holdings or any of
its Subsidiaries and to any corresponding restructuring of the Guaranteed
Obligations;
(vi) any failure to perfect or continue perfection of a
security interest in any collateral which secures any of the Guaranteed
Obligations;
(vii) any defenses, set-offs or counterclaims which Borrower
may allege or assert against any Beneficiary in respect of the Guaranteed
Obligations, including failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and
satisfaction and usury; and
(viii) any other act or thing or omission, or delay to do any
other act or thing, which may or might in any manner or to any extent vary
the risk of any Guarantor as an obligor in respect of the Guaranteed
Obligations.
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the benefit
of Beneficiaries to the extent permitted by applicable law:
(a) any right to require any Beneficiary, as a condition of payment
or performance by such Guarantor, to (i) proceed against Borrower, any other
guarantor (including any other Guarantor) of the Guaranteed Obligations or any
other Person, (ii) proceed against or exhaust any security held from Borrower,
any such other guarantor or any other Person, (iii) proceed against or have
resort to any balance of any Deposit Account or credit on the books of any
Beneficiary in favor of Borrower or any other Person, or (iv) pursue any other
remedy in the power of any Beneficiary whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Borrower or any other Guarantor
including any defense based on or arising out of the lack of validity or the
unenforceability of the Guaranteed Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of Borrower
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or any other Guarantor from any cause other than payment in full in Cash of the
Guaranteed Obligations;
(c) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions in
the administration of the Guaranteed Obligations, except behavior which amounts
to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms hereof and any legal or
equitable discharge of such Guarantor's obligations hereunder, (ii) the benefit
of any statute of limitations affecting such Guarantor's liability hereunder or
the enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any security interest or lien or
any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
hereof, notices of default hereunder, under the Hedge Agreements or under any
agreement or instrument related thereto, notices of any renewal, extension or
modification of the Guaranteed Obligations or any agreement related thereto,
notices of any extension of credit to Borrower and notices of any of the matters
referred to in Section 7.4 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or afforded by
law which limit the liability of or exonerate guarantors or sureties, or which
may conflict with the terms hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guaranteed Obligations shall have been indefeasibly paid in full and the
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled or collateralized with Cash, each Guarantor hereby waives any
claim, right or remedy, direct or indirect, that such Guarantor now has or may
hereafter have against Borrower or any other Guarantor or any of its assets in
connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against
Borrower with respect to the Guaranteed Obligations, (b) any right to enforce,
or to participate in, any claim, right or remedy that any Beneficiary now has or
may hereafter have against Borrower, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full and the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled or collateralized with
Cash, each Guarantor shall withhold exercise of any right of contribution such
Guarantor may have against any other guarantor (including any other Guarantor)
of the Guaranteed Obligations, including, without limitation, any such right of
contribution as contemplated by Section 7.2. Each Guarantor
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further agrees that, to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification such Guarantor may have against Borrower or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Borrower, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full, the
Commitments shall not have terminated and all Letters of Credit shall not have
expired or been cancelled or collateralized with Cash, such amount shall be held
in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith
be paid over to Administrative Agent for the benefit of Beneficiaries to be
credited and applied against the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Borrower or
any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR")
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been paid in
full and the Commitments shall have terminated and all Letters of Credit shall
have expired or been cancelled. Each Guarantor hereby irrevocably waives any
right to revoke this Guaranty as to future transactions giving rise to any
Guaranteed Obligations.
7.9. AUTHORITY OF GUARANTORS OR BORROWER. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Borrower
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. FINANCIAL CONDITION OF BORROWER AND GUARANTORS. Any Credit Extension
may be made to Borrower or continued from time to time, and any Hedge Agreements
may be entered into from time to time, in each case without notice to or
authorization from any Guarantor regardless of the financial or other condition
of Borrower or any other Guarantor at the time of any such grant or continuation
or at the time such Hedge Agreement is entered into, as the case may be. No
Beneficiary shall have any obligation to disclose or discuss with any Guarantor
its assessment, or any Guarantor's assessment, of the financial condition of
Borrower or any other Guarantor. Each Guarantor has adequate means to obtain
information from Borrower and each other Guarantor on a continuing basis
concerning the financial condition of Borrower and the other Guarantors and
their respective abilities to perform their respective obligations under the
Credit Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for
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being and keeping informed of the financial condition of Borrower and the other
Guarantors and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Borrower and any other Guarantor now
known or hereafter known by any Beneficiary.
7.11. BANKRUPTCY, ETC. (a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against Borrower or any
other Guarantor. The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Borrower or any
other Guarantor or by any defense which Borrower or any other Guarantor may have
by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should
be determined without regard to any rule of law or order which may relieve
Borrower of any portion of such Guaranteed Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Administrative Agent, or allow the
claim of Administrative Agent in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed
Obligations are paid by Borrower, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise (and whether as a result of any demand,
settlement, litigation or otherwise), and any such payments which are so
rescinded or recovered shall constitute Guaranteed Obligations for all purposes
hereunder.
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the Capital
Stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) to a Person
other than Holdings or any of its Subsidiaries, in accordance with the terms and
conditions hereof, the Guaranty of such Guarantor or such successor in interest,
as the case may be, hereunder shall automatically be discharged and released
without any further action by any Beneficiary or any other Person effective as
of the time of such Asset Sale.
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SECTION 8. EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT. If any one or more of the following conditions or
events shall occur:
(a) Failure to Make Payments When Due. Failure by Borrower to pay
(i) when due any installment of principal of any Loan, whether at stated
maturity, by acceleration, by notice of voluntary prepayment, by mandatory
prepayment or otherwise; (ii) when due any amount payable to Issuing Bank in
reimbursement of any drawing under a Letter of Credit; or (iii) any interest on
any Loan or any fee or any other amount due hereunder within five days after the
date due thereof; or
(b) Default in Other Agreements. (i) Failure of any Credit Party or
any of their respective Subsidiaries to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an
individual or aggregate principal amount of $5,000,000 or more, in each case
beyond the grace period, if any, provided therefor; (ii) breach or default by
any Credit Party with respect to any other material term of (1) one or more
items of Indebtedness in the individual or aggregate principal amounts referred
to in clause (i) above or (2) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness, in each case beyond the
grace period, if any, provided therefor, if the effect of such breach or default
is to cause, or to permit the holder or holders of that Indebtedness (or a
trustee or agent on behalf of such holder or holders), to cause, that
Indebtedness to become or be declared due and payable (or redeemable), or to
require the prepayment, redemption, repurchase or defeasance of, or to cause
Holdings, Borrower or any of its Subsidiaries to make any offer to prepay,
redeem, repurchase or defease that Indebtedness (other than an asset sale
proceeds offer with respect to the Senior Subordinated Notes or the Refinancing
Notes to the extent otherwise permitted hereunder), prior to its stated maturity
or the stated maturity of any underlying obligation, as the case may be; or
(iii) any Event of Default (as defined in the Senior Subordinated Note
Indenture, any Refinancing Notes Indenture or the Term Credit Agreement or any
credit agreement or comparable document in respect of a Permitted Refinancing of
the Term Loans) shall occur under the Senior Subordinated Note Indenture, any
Refinancing Notes Indenture, the Term Credit Agreement or any credit agreement
or comparable document in respect of a Permitted Refinancing of the Term Loans;
or
(c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.5, Section
5.2, Section 5.5 or Section 6; or
(d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein or
any of the other Credit
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Documents, other than any such term referred to in any other provision of this
Section 8.1, and such default shall not have been remedied or waived within
thirty days after the earlier of (i) an Authorized Officer of such Credit Party
becoming aware of such default or (ii) receipt by Borrower of notice from
Administrative Agent or any Lender of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A
court of competent jurisdiction shall enter a decree or order for relief in
respect of Holdings or any of its Subsidiaries (other than an Immaterial
Subsidiary) in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
which decree or order is not stayed; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against Holdings or any of its Subsidiaries (other than its
Immaterial Subsidiaries) under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Holdings or any of its Subsidiaries (other than its
Immaterial Subsidiaries), or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Holdings or
any of its Subsidiaries (other than its Immaterial Subsidiaries) for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Holdings or any of its Subsidiaries (other than its Immaterial
Subsidiaries), and any such event described in this clause (ii) shall continue
for sixty days without having been dismissed, bonded or discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc.. (i)
Holdings or any of its Subsidiaries shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Holdings or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the board of
directors (or similar governing body) of Holdings or any of its Subsidiaries (or
any committee thereof) shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to herein or in Section 8.1(f); or
(h) Judgments and Attachments. Any money judgment, writ or warrant
of attachment or similar process involving in any individual case or in the
aggregate at any time an amount in excess of $5,000,000 (in either case to the
extent not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Holdings or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of sixty days (or in any event later than five days prior to the date of
any proposed sale thereunder); or
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(i) Dissolution. Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order shall remain undischarged or unstayed for a period in
excess of thirty days; or
(j) Employee Benefit Plans. (i) There shall occur one or more ERISA
Events which individually or in the aggregate results in or would reasonably be
expected to result in liability of Holdings or any of its Subsidiaries,
including through any joint and several liability with any of their respective
ERISA Affiliates, in excess of $5,000,000 during the term hereof; or (ii) there
shall occur the imposition of a Lien or security interest under Section 412(n)
of the Internal Revenue Code or under ERISA.
(k) Change of Control. A Change of Control shall occur; or
(l) Guaranties, Collateral Documents and other Credit Documents. At
any time after the execution and delivery thereof, (i) the Guaranty for any
reason, other than the satisfaction in full in Cash of all Obligations, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void or any Guarantor shall repudiate its
obligations thereunder, (ii) this Agreement or any Collateral Document ceases to
be in full force and effect (other than by reason of a release of Collateral in
accordance with the terms hereof or thereof or the satisfaction in full in Cash
of the Obligations in accordance with the terms hereof) or shall be declared
null and void, or Collateral Agent shall not have or shall cease to have valid
and perfected Liens in any Collateral purported to be covered by the Collateral
Documents with the priorities required by the relevant Collateral Document, in
each case for any reason other than the failure of Collateral Agent or any
Secured Party to take any action within its control, or (iii) any Credit Party
shall contest the validity or enforceability of any Credit Document in writing
or deny in writing that it has any further liability, including with respect to
future advances by Lenders, under any Credit Document to which it is a party or
(iv) the Loans shall cease to constitute "Designated Senior Indebtedness" or
"Designated Senior Debt" (or a comparable term evidencing such designation)
under the subordination provisions of the Senior Subordinated Notes or the
Refinancing Notes or shall be invalidated or otherwise cease to be legal, valid
and binding obligations of the parties thereto, enforceable in accordance with
their terms;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence and during the
continuance, of any other Event of Default, at the request of (or with the
consent of) Requisite Lenders, upon notice to Borrower by Administrative Agent,
(A) the Commitments, if any, of each Lender having such Commitments and the
obligation of Issuing Bank to issue any Letter of Credit shall immediately
terminate; (B) each of the following shall immediately become due and payable,
in each case without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by each Credit Party: (I) the
unpaid principal amount of and accrued interest on the Loans, (II) an amount
equal to the maximum amount that may at any time be drawn under all Letters of
Credit then outstanding (regardless of whether any beneficiary under any such
Letter of Credit shall have presented, or shall be entitled at such time to
present, the drafts or other documents or certificates required to draw under
such Letters of Credit), and (III) all other Obligations; provided, the
foregoing shall not affect in any way the obligations of Lenders under Section
2.2(b)(iv) or Section 2.3(e); (C) Administrative Agent may, subject to the
Intercreditor
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Agreement, cause Collateral Agent to enforce any and all Liens and security
interests created pursuant to Collateral Documents; and (D) Administrative Agent
shall direct Borrower to pay (and Borrower hereby agrees upon receipt of such
notice, or upon the occurrence of any Event of Default specified in Section
8.1(f) and (g), to pay) to Administrative Agent such additional amounts of Cash,
to be held as security for Borrower's reimbursement Obligations in respect of
Letters of Credit then outstanding, equal to the Letter of Credit Usage at such
time.
8.2. BORROWER'S RIGHT TO CURE.
(a) Notwithstanding anything to the contrary contained in Section
8.1, in the event that Holdings and Borrower fail to comply with the
requirements of Section 6.8(a), Holdings shall have the right to issue Permitted
Cure Securities for cash or otherwise receive cash contributions to the capital
of Holdings (which, or the proceeds of which, shall be contributed to Borrower)
in an amount not to exceed $5,000,000 in any Fiscal Quarter or $10,000,000 in
any Fiscal Year. Such amounts shall be added to Consolidated EBITDA for purposes
of determining compliance with Section 6.8(a) for the Fiscal Quarter immediately
preceding the Fiscal Quarter in which they are so received by Borrower. If after
giving effect to the foregoing recalculation, Borrower shall then be in
compliance with the requirements of Section 6.8, then Borrower shall be deemed
to have satisfied the requirements of Section 6.8 as of the relevant date of
determination with the same effect as though there had been no failure to comply
therewith at such date, and the applicable breach or default of Section 6.8
which had occurred shall be deemed cured for all purposes of the Credit
Documents.
(b) Notwithstanding anything herein to the contrary, (i) in no event
shall Holdings or Borrower be entitled to exercise the right described in clause
(a) above in more than two Fiscal Quarters during any Fiscal Year, and (ii) in
no event may the right described in clause (a) above be exercised more than four
times in the aggregate during the Revolving Commitment Period.
SECTION 9. AGENTS
9.1. APPOINTMENT OF AGENTS. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. CIT is
hereby appointed Administrative Agent hereunder and under the other Credit
Documents and each Lender hereby authorizes Administrative Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. CIT is
hereby appointed Collateral Agent hereunder and under the other Credit
Documents, and each Lender hereby authorizes Collateral Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents.
LaSalle Bank National Association and Antares Capital Corporation are each
hereby appointed Co-Documentation Agents hereunder, and each Lender hereby
authorizes Co-Documentation Agents to act as its agent in accordance with the
terms hereof and the other Credit Documents. Each Agent hereby agrees to act
upon the express conditions contained herein and the other Credit Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and no Credit Party shall have any rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties hereunder, each Agent shall act solely as an agent of Lenders and does
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not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Holdings or any of its Subsidiaries.
Each of Syndication Agent, Co-Documentation Agent and Collateral Agent, without
consent of or notice to any party hereto, may assign any and all of its rights
or obligations hereunder to any of its Affiliates. As of the Closing Date, none
of GSCP, in its capacity as Syndication Agent, nor LaSalle Bank National
Association or Antares Capital Corporation, in their capacities as
Co-Documentation Agents, shall have any obligations but shall be entitled to all
benefits of this Section 9.
9.2. POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
9.3. GENERAL IMMUNITY.
(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any
Credit Party to any Agent or any Lender in connection with the Credit Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of any Credit Party or any other Person liable for the payment
of any Obligations, nor shall any Agent be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Credit Documents or as to the
use of the proceeds of the Loans or as to the existence or possible existence of
any Event of Default or Default or to make any disclosures with respect to the
foregoing. Anything contained herein to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.
(b) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received written instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 10.5) and, upon receipt of such instructions from
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Requisite Lenders (or such other Lenders, as the case may be), such Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Holdings and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting hereunder or any of the
other Credit Documents in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
Section 10.5).
9.4. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, lending, trust, financial
advisory or other business with Holdings or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Borrower for services in connection herewith and otherwise
without having to account for the same to Lenders.
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Holdings and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter, and no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this Agreement
on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date. Notwithstanding anything herein to the contrary, each Lender also
acknowledges that the lien and the security interest granted to the Collateral
Agent for the benefit of the Revolving Secured Parties pursuant to the Pledge
and Security Agreement and the exercise of any right or remedy by the Collateral
Agent thereunder are subject to the provisions of the Intercreditor Agreement.
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9.6. RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent, to the extent that such Agent shall
not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Credit Documents; provided, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct. If any indemnity furnished to any Agent
for any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided further, this sentence shall not be deemed
to require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the proviso in the immediately preceding sentence.
9.7. SUCCESSOR ADMINISTRATIVE AGENT, COLLATERAL AGENT AND SWING LINE
LENDER. Administrative Agent may resign at any time by giving thirty days' prior
written notice thereof to Lenders and Borrower, and Administrative Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Borrower and Administrative Agent and signed
by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Borrower, to appoint a successor Administrative Agent. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent and the retiring or removed Administrative Agent
shall promptly (i) transfer to such successor Administrative Agent all records
and other documents necessary or appropriate in connection with the performance
of the duties of the successor Administrative Agent under the Credit Documents,
and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Administrative Agent, whereupon
such retiring or removed Administrative Agent shall be discharged from its
duties and obligations hereunder. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent hereunder. Any resignation
or removal of Administrative Agent pursuant to this Section shall also
constitute the resignation or removal of (i) Administrative Agent as agent for
the Borrower under Section 2.6(b) and (ii) of CIT or its successor as Collateral
Agent, and any successor Administrative Agent appointed pursuant to this Section
shall, upon its acceptance of such appointment, become (i) successor agent for
the Borrower under Section 2.6(b) and (ii) the successor Collateral Agent for
all purposes hereunder and under the Credit Documents and such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or
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removed Collateral Agent under this Agreement and the other Credit Documents,
and the retiring or removed Collateral Agent under this Agreement and the other
Credit Documents shall promptly (i) transfer to such successor Collateral Agent
all sums, Securities and other items of Collateral held under this Agreement or
the other Credit Documents, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Collateral Agent under this Agreement or the other Credit Documents,
and (ii) execute and deliver to such successor Collateral Agent or otherwise
authorize the filing of such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Collateral Agent of the security interests created
under the Credit Documents, whereupon such retiring or removed Collateral Agent
shall be discharged from its duties and obligations under this Agreement and
other Credit Documents. After any retiring or removed Collateral Agent's
resignation or removal under this Agreement and other Credit Documents, the
provisions of this Section 9 and the other Credit Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement or the other Credit Documents while it was the Collateral Agent
hereunder or thereunder. Any resignation or removal of Administrative Agent
pursuant to this Section shall also constitute the resignation or removal of CIT
or its successor as Swing Line Lender, and any successor Administrative Agent
appointed pursuant to this Section shall, upon its acceptance of such
appointment, become the successor Swing Line Lender for all purposes hereunder.
In such event (a) Borrower shall prepay any outstanding Swing Line Loans made by
the retiring or removed Administrative Agent in its capacity as Swing Line
Lender, (b) upon such prepayment, the retiring or removed Administrative Agent
and Swing Line Lender shall surrender any Swing Line Note held by it to Borrower
for cancellation, and (c) Borrower shall issue, if so requested by successor
Administrative Agent and Swing Line Lender, a new Swing Line Note to the
successor Administrative Agent and Swing Line Lender, in the principal amount of
the Swing Line Loan Sublimit then in effect and with other appropriate
insertions.
9.8. COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents under Collateral Documents and Guaranty. Each Lender
hereby further authorizes Administrative Agent or Collateral Agent, as
applicable, on behalf of and for the benefit of Lenders, to be the agent for and
representative of Lenders with respect to the Guaranty, the Collateral and the
Collateral Documents. Subject to Section 10.5, without further written consent
or authorization from Lenders, Administrative Agent or Collateral Agent, as
applicable, may execute any documents or instruments necessary to (i) release
any Lien for the benefit of the Revolving Secured Parties encumbering any item
of Collateral that is the subject of a sale or other disposition of assets to a
Person other than Holdings or any of its Subsidiaries permitted hereby or to
which Requisite Lenders (or such other Lenders as may be required to give such
consent under Section 10.5) have otherwise consented or (ii) release any
Guarantor from the Guaranty pursuant to Section 7.12 or with respect to which
Requisite Lenders (or such other Lenders as may be required to give such consent
under Section 10.5) have otherwise consented.
(b) Right to Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Credit Documents to the contrary notwithstanding,
Borrower, Administrative Agent, Collateral Agent and each Lender hereby agree
that (i) no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder and under the Collateral Documents
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may be exercised solely by Administrative Agent or Collateral Agent, as
applicable, on behalf of Lenders or Revolving Secured Parties, as applicable, in
accordance with the terms of this Agreement and the Collateral Documents, and
(ii) in the event of a foreclosure by Collateral Agent on any of the Collateral
pursuant to a public or private sale, Collateral Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and Collateral
Agent, as agent for and representative of Secured Parties (but not any Lender or
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1. NOTICES. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given to a Credit
Party, Syndication Agent, Collateral Agent, Administrative Agent, Swing Line
Lender or Issuing Bank, shall be sent to such Person's address as set forth on
Appendix B or in the other relevant Credit Document, and in the case of any
Lender, the address as indicated on Appendix B or otherwise indicated to
Administrative Agent in writing. Each notice hereunder shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service and signed for against receipt thereof, upon
receipt of telefacsimile or telex, or three Business Days after depositing it in
the United States mail with postage prepaid and properly addressed; provided, no
notice to any Agent shall be effective until received by such Agent.
10.2. EXPENSES. Whether or not the transactions contemplated hereby shall
be consummated, Borrower agrees to pay promptly (a) all the actual and
reasonable costs and expenses of preparation of the Credit Documents and any
consents, amendments, waivers or other modifications thereto; (b) all the
reasonable costs of furnishing all opinions by counsel for Borrower and the
other Credit Parties; (c) the reasonable fees, expenses and disbursements of
counsel to Agents in connection with the negotiation, preparation, execution and
administration of the Credit Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Borrower; (d) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Collateral Agent, for the benefit of Revolving
Secured Parties, including filing and recording fees, expenses and taxes, stamp
or documentary taxes, search fees, title insurance premiums and reasonable fees,
expenses and disbursements of counsel to each Agent and of counsel providing any
opinions that any Agent or Requisite Lenders may request in respect of the
Collateral or the Liens created pursuant to the Collateral Documents; (e) all
the actual costs and reasonable fees, expenses and disbursements of any
auditors, accountants, consultants or appraisers (but in no event for more than
one commercial audit and one appraisal per Fiscal Year except after the
occurrence of and during the continuance of a Default or Event of Default, which
right to payment is exclusive of the similar rights to payment under the Term
Credit Agreement); (f) all the actual costs and reasonable expenses (including
the reasonable fees, expenses and disbursements of any appraisers, consultants,
advisors and agents employed or retained by Collateral Agent and its counsel) in
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connection with the custody or preservation of any of the Collateral; (g) all
other actual and reasonable costs and expenses incurred by each Agent in
connection with the syndication of the Loans and Commitments and the
negotiation, preparation and execution of the Credit Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; and (h) after the occurrence of a Default or an Event of
Default, all actual and reasonable (such reasonableness determined in the sole
discretion of the Administrative Agent) costs and expenses, including reasonable
(such reasonableness determined in the sole discretion of the Administrative
Agent) attorneys' fees and costs of settlement, incurred by any Agent and
Lenders in enforcing any Obligations of or in collecting any payments due from
any Credit Party hereunder or under the other Credit Documents by reason of such
Default or Event of Default (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy cases or proceedings;
provided that Borrower shall not be required to pay the fees and expenses of
more than one counsel for Lenders other than the Administrative Agent (who shall
be entitled to be paid the fees and expenses of its counsel notwithstanding the
foregoing).
10.3. INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section 10.2,
whether or not the transactions contemplated hereby shall be consummated, each
Credit Party agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless, each Agent and Lender and the officers,
partners, directors, trustees, employees, agents, advisors and Affiliates of
each Agent and each Lender (each, an "INDEMNITEE"), from and against any and all
Indemnified Liabilities; provided, no Credit Party shall have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of such Indemnitee. To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in this Section 10.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(b) To the extent permitted by applicable law, no Credit Party shall
assert, and each Credit Party hereby waives, any claim against Lenders, Agents
and their respective Affiliates, directors, employees, attorneys, agents or
advisors, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby or referred to herein
or therein, the transactions contemplated hereby or thereby, any Loan or the use
of the proceeds thereof or any act or omission or event occurring in connection
therewith, and Holdings and Borrower hereby waives, releases and agrees not to
xxx upon any such claim or any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor.
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10.4. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder, the Letters of Credit and participations
therein and under the other Credit Documents, including all claims of any nature
or description arising out of or connected hereto, the Letters of Credit and
participations therein or with any other Credit Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 2 and although such obligations and liabilities, or
any of them, may be contingent or unmatured.
10.5. AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of the Requisite
Lenders.
(b) Affected Lenders' Consent. Without the written consent of each
Lender (other than a Defaulting Lender) that would be directly affected thereby,
no amendment, modification, termination, or consent shall be effective if the
effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment (but
not prepayment);
(iii) extend the stated expiration date of any Letter of
Credit beyond the Revolving Commitment Termination Date;
(iv) reduce the rate of interest on any Loan (other than any
waiver of any increase in the interest rate applicable to any Loan
pursuant to Section 2.9 or by reason of amendments to the defined terms
used in computing the Leverage Ratio) or any fee payable hereunder or any
other amount payable under any Credit Document;
(v) reduce or forgive the amount due and payable or extend the
time for payment of any such interest or fees;
(vi) reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit;
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(vii) amend, modify, terminate or waive any provision of this
Section 10.5(b) or Section 10.5(c);
(viii) amend any provision of Section 2.16 or amend the
definition of "REQUISITE LENDERS" or "PRO RATA SHARE";
(ix) release all or substantially all of the Fixed Collateral,
the Liquid Collateral or any of the Guarantors from the Guaranty except as
expressly provided in the Credit Documents; or
(x) consent to the assignment or transfer by any Credit Party
of any of its rights and obligations under any Credit Document.
(c) Other Consents. No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall:
(i) increase, or postpone the scheduled date of expiration of,
any Commitment of any Lender over the amount thereof then in effect
without the consent of such Lender; provided, no amendment, modification
or waiver of any condition precedent, covenant, Default or Event of
Default shall constitute an increase in any Commitment of any Lender;
(ii) amend, modify, terminate or waive any provision hereof
relating to the Swing Line Sublimit or the Swing Line Loans without the
consent of Swing Line Lender;
(iii) amend, modify, terminate or waive any obligation of
Lenders relating to the purchase of participations in Letters of Credit as
provided in Section 2.3(e) without the written consent of Administrative
Agent and of Issuing Bank;
(iv) amend, modify, terminate or waive any provision of
Section 9 as the same applies to any Agent, or any other provision hereof
as the same applies to the rights or obligations of any Agent, in each
case without the consent of such Agent;
(v) increase the advance rates applicable to the Aggregate
Borrowing Base over those in effect on the Closing Date without the
consent of (i) the Administrative Agent, in the case of any advance rate
increase that would result in an increase in the Aggregate Borrowing Base
of up to $5,000,000, and (ii) one or more Lenders having or holding
Revolving Exposure and representing more than 70% of the sum of the
aggregate Revolving Exposure of all Lenders, in the case of any advance
rate increase that would result in an increase in the Aggregate Borrowing
Base of more than $5,000,000; or
(vi) except in accordance with subsection (v) above, amend or
modify the definition of "Aggregate Borrowing Base" without the written
consent of the Requisite Lenders (it being understood that the
establishment, modification or elimination of Reserves and adjustment,
establishment and elimination of criteria for
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Eligible Accounts and Eligible Inventory, in each case by Administrative
Agent in accordance with the terms hereof, will not be deemed such an
amendment or modification).
(d) Execution of Amendments, etc. Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of such Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.5
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by a Credit Party, on such Credit Party.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders. Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, Affiliates of each of the Agents and Lenders and
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Register. Borrower, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or Loan
shall be effective, in each case, unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been delivered to and
accepted by Administrative Agent and recorded in the Register as provided in
Section 10.6(e). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments or
Loans.
(c) Right to Assign. Each Lender shall have the right at any time to
sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of its
Commitment or Loans owing to it or other Obligation (provided, however, that
each such assignment shall be of a uniform, and not varying, percentage of all
rights and obligations under and in respect of any Loan and any related
Commitments):
(i) to any Person meeting the criteria of clause (i) of the
definition of the term of "Eligible Assignee" upon the giving of notice to
Borrower and Administrative Agent; and
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(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of "Eligible Assignee" and, in the case of
assignments of Revolving Loans or Commitments to any such Person (except
in the case of assignments made by or to GSCP), consented to by each of
Borrower and Administrative Agent (such consent not to be (x) unreasonably
withheld, conditioned or delayed or, (y) in the case of Borrower, required
at any time an Event of Default shall have occurred and then be
continuing); provided, further each such assignment pursuant to this
Section 10.6(c)(ii) shall be in an aggregate amount of not less than
$3,000,000 (or such lesser amount as may be agreed to by Borrower and
Administrative Agent or as shall constitute the aggregate amount of the
Commitments and Revolving Loans of the assigning Lender) with respect to
the assignment of the Commitments and Revolving Loans.
(d) Mechanics. The assigning Lender and the assignee thereof shall
execute and deliver to Administrative Agent an Assignment Agreement, and such
forms, certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such Assignment
Agreement may be required to deliver to Administrative Agent pursuant to Section
2.19(c). Notwithstanding anything to the contrary herein or in any Assignment
Agreement, in the case of an assignment to a Person meeting the criteria of
clause (i) of the definition of the term "Eligible Assignee" of the assigning
Lender, such assignment shall be effective between such assigning Lender and
such Eligible Assignee immediately without compliance with the conditions for
assignment under Sections 10.6(b) through (d), but shall not be effective with
respect to any Credit Party, Administrative Agent, any other Agent, any Issuing
Bank, any Swing Line Lender or any Lender, and each Credit Party, Administrative
Agent, each other Agent, each Issuing Bank, each Swing Line Lender and each
Lender shall be entitled to deal solely and directly with such assigning Lender
under any such assignment, in each case, until the conditions for assignment
under Sections 10.6(b) through (d) have been complied with.
(e) Notice of Assignment. Upon its receipt of a duly executed and
completed Assignment Agreement (and any forms, certificates or other evidence
required by this Agreement in connection therewith), Administrative Agent shall
record the information contained in such Assignment Agreement in the Register,
shall give prompt notice thereof to Borrower and shall maintain a copy of such
Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon executing and delivering an Assignment
Agreement, as the case may be, represents and warrants as of the Closing Date or
as of the applicable Effective Date (as defined in the applicable Assignment
Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and
expertise in the making of or investing in commitments or loans such as the
applicable Commitments or Loans, as the case may be; and (iii) it will make or
invest in, as the case may be, its Commitments or Loans for its own account in
the ordinary course of its business and without a view to distribution of such
Commitments or Loans within the meaning of the Securities Act or the Exchange
Act or other federal securities laws (it being understood that, subject to the
provisions of this Section 10.6, the disposition of such Commitments or Loans or
any interests therein shall at all times remain within its exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions of
this Section 10.6, as of the "Effective Date" specified in the applicable
Assignment Agreement:
125
(i) the assignee thereunder shall have the rights and obligations of a "Lender"
hereunder to the extent such rights and obligations hereunder have been assigned
to it pursuant to such Assignment Agreement and shall thereafter be a party
hereto and a "Lender" for all purposes hereof; (ii) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned thereby pursuant to such Assignment Agreement, relinquish its rights
(other than any rights which survive the termination hereof under Section 10.8)
and be released from its obligations hereunder (and, in the case of an
Assignment Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations hereunder, such Lender shall cease to be a party
hereto; provided, anything contained in any of the Credit Documents to the
contrary notwithstanding, (y) Issuing Bank shall continue to have all rights and
obligations thereof with respect to Letters of Credit issued by it until the
cancellation or expiration of such Letters of Credit and the reimbursement of
any amounts drawn thereunder and (z) such assigning Lender shall continue to be
entitled to the benefit of all indemnities hereunder as specified herein with
respect to matters arising out of the prior involvement of such assigning Lender
as a Lender hereunder); (iii) the Commitments shall be modified to reflect the
Commitment of such assignee and any Commitment of such assigning Lender, if any;
and (iv) if any such assignment occurs after the issuance of any Note hereunder,
the assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Notes to
Administrative Agent for cancellation, and thereupon Borrower shall issue and
deliver new Notes, if so requested by the assignee and/or assigning Lender, to
such assignee and/or to such assigning Lender, with appropriate insertions, to
reflect the new Commitments and/or outstanding Loans of the assignee and/or the
assigning Lender.
(h) Participations. Each Lender shall have the right at any time to
sell one or more participations to any Person (other than Holdings, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Commitments,
Loans or in any other Obligation. The holder of any such participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or waiver that would (i)
extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Revolving Commitment
Termination Date) in which such participant is participating, or reduce the rate
or extend the time of payment of interest or fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Commitments shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under this Agreement or
(iii) release all or substantially all of the Collateral under the Collateral
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. Borrower agrees that
each participant shall be entitled to the benefits of Sections 2.17(c), 2.18 and
2.19 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, (i) a
participant shall not be entitled to receive any greater payment under Section
2.18 or 2.19 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such participant, unless the sale of the
participation to such participant is
126
made with Borrower's prior written consent and (ii) a participant that would be
a Non-US Lender if it were a Lender shall not be entitled to the benefits of
Section 2.19 unless Borrower is notified of the participation sold to such
participant and such participant agrees, for the benefit of Borrower, to comply
with Section 2.19 as though it were a Lender. To the extent permitted by law,
each participant also shall be entitled to the benefits of Section 10.4 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.16 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other assignment
permitted pursuant to this Section 10.6, (i) any Lender may assign and/or pledge
all or any portion of its Loans, the other Obligations owned by or owed by or to
such Lender, and its Notes, if any, to secure obligations of such Lender
including, without limitation, to any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any operating circular issued by such Federal Reserve Bank
and (ii) any Lender may assign and/or pledge all or any portion of its Loans,
the other Obligations owned by or owed to such Lender, and its Notes, if any, to
secure obligations of such Lender to any holders of obligations owed, or
securities issued, by such Lender as collateral security for such obligations or
securities, or to any trustee for, or any other representative of such holders;
provided, no Lender, as between Borrower and such Lender, shall be relieved of
any of its obligations hereunder as a result of any such assignment and pledge,
and provided, further, in no event shall the applicable Federal Reserve Bank,
pledgee or trustee be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
10.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.17(c), 2.18, 2.19, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.16, 9.3(b)
and 9.6 shall survive the payment of the Loans, the cancellation or expiration
of the Letters of Credit and the reimbursement of any amounts drawn thereunder,
and the termination hereof.
10.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Credit Documents or any of the Hedge Agreements. Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be
127
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
10.10. MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Credit Party
or any other Person or against or in payment of any or all of the Obligations.
To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or Administrative Agent or Secured Parties enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause or otherwise (and whether as a result of any demand, settlement,
litigation or otherwise), then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.11. SEVERABILITY. In case any provision in or obligation hereunder or
under any Note shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out herefrom and it shall not be necessary for any other Lender
to be joined as an additional party in any proceeding for such purpose.
10.13. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1401) WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF OTHER THAN SUCH SECTION 5-1401.
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT,
OR ANY OF THE OBLIGATIONS,
128
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX
XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT,
EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES
THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE
CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES
THAT SERVICE AS PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
AND (e) AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE
COURTS OF ANY OTHER JURISDICTION.
10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
TO ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
129
10.17. CONFIDENTIALITY. Each Lender shall hold all non-public information
regarding Borrower and its Subsidiaries and their businesses identified as such
by Borrower and obtained by such Lender pursuant to the requirements hereof in
accordance with customary procedures for handling confidential information of
such nature, it being understood and agreed by Borrower that, in any event, a
Lender may make (i) disclosures of such information to Affiliates of such Lender
and to such Lender's and such Lender's Affiliates' directors, officers,
employees, agents and advisors (and to other persons authorized by a Lender or
Agent to organize, present or disseminate such information in connection with
disclosures otherwise made in accordance with this Section 10.17), (ii)
disclosures of such information reasonably required by any bona fide or
potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation by such Lender of any Loans
or any participations therein or by any direct or indirect contractual
counterparties (or the professional advisors thereto) in Hedge Agreements
(provided, such counterparties and advisors are advised of and agree to be bound
by the provisions of this Section 10.17), (iii) disclosure to any rating agency
when required by it, provided that, prior to any disclosure, such rating agency
shall undertake in writing to preserve the confidentiality of any confidential
information relating to the Credit Parties received by it from any of the Agents
or any Lender, and (iv) disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal or judicial
process; provided, unless specifically prohibited by applicable law or court
order, each Lender shall make reasonable efforts to notify Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition or
other routine examination of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information.
10.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, Borrower shall pay to Administrative Agent an
amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and Borrower to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made hereunder
or be refunded to Borrower.
130
10.19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
10.20. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrower and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
10.21. USA PATRIOT ACT. Each Lender hereby notifies Borrower that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), it is required to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow such Lender to
identify Borrower in accordance with such Act.
[Remainder of page intentionally left blank]
131
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
STANADYNE CORPORATION
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
STANADYNE AUTOMOTIVE HOLDING CORP.
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
PRECISION ENGINE PRODUCTS CORP.
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
S-1
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Sole Lead Arranger, Sole Bookrunner,
Syndication Agent and a Lender
By: /s/ XXXXXX XXXXXX
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Authorized Signatory
S-2
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent, Collateral Agent, Swing
Line Lender and a Lender
By: /s/ XXXXX X. XXXXXXX, XX.
------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Vice President
S-3
ANTARES CAPITAL CORPORATION, as Co-
Documentation Agent and a Lender
By: /s/ XXXXXXX X. XXXXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
S-4
LASALLE BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent and a Lender
By: /s/ XXXX XXXXXXXX
-----------------------------
Name: Xxxx Xxxxxxxx
Title: First Vice President
S-5
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
COMMITMENTS
LENDER COMMITMENT PRO RATA SHARE
------ ---------- --------------
Xxxxxxx Sachs Credit Partners L.P. $ 5,000,000 14.29%
The CIT Group/Business Credit, Inc. $10,000,000 28.57%
Antares Capital Corporation $10,000,000 28.57%
LaSalle Bank National Association $10,000,000 28.57%
----------- -----
TOTAL $35,000,000 100%
=========== =====
X-0
XXXXXXXX X
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
STANADYNE CORPORATION
00 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Telecopier: 000-000-0000
in each case, with a copy to:
Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx
Telecopier: 000-000-0000
B-1
XXXXXXX SACHS CREDIT PARTNERS L.P.,
as Sole Lead Arranger, Sole Bookrunner,
Syndication Agent and a Lender
Xxxxxxx Xxxxx Credit Partners L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx
Telecopier: 000-000-0000
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
APPENDIX B-2
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent, Collateral Agent,
Swing Line Lender, Issuing Bank and a Lender
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Regional Credit Manager
Telecopier: 000-000-0000
APPENDIX B-3
ANTARES CAPITAL CORPORATION
as Co-Documentation Agent and a Lender
000 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telecopier: 000-000-0000
APPENDIX B-4
LASALLE BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent and a Lender
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telecopier: 000-000-0000
APPENDIX B-5
EXHIBIT B-1 TO
REVOLVING CREDIT AND GUARANTY AGREEMENT
REVOLVING LOAN NOTE
$[1][___,___,___]
FOR VALUE RECEIVED, STANADYNE CORPORATION, a Delaware corporation
("COMPANY"), promises to pay [NAME OF LENDER] ("PAYEE") or its registered
assigns, on or before August 6, 2010, the lesser of (a) [1][DOLLARS]
($[1][___,___,___]) and (b) the unpaid principal amount of all advances made by
Payee to Company as Revolving Loans under the Revolving Credit Agreement
referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Revolving Credit and Guaranty Agreement, dated as of August 6, 2004 (as it may
be amended, supplemented or otherwise modified, the "REVOLVING CREDIT
AGREEMENT"; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Company, STANADYNE AUTOMOTIVE
HOLDING CORP., certain Subsidiaries of Company, as Guarantors, the Lenders party
thereto from time to time, XXXXXXX XXXXX CREDIT PARTNERS L.P., as Sole Lead
Arranger, Sole Bookrunner and Syndication Agent, and THE CIT GROUP/BUSINESS
CREDIT, INC., as Administrative Agent and Collateral Agent.
This Note is one of the "Revolving Loan Notes" in the aggregate principal
amount of $35,000,000 and is issued pursuant to and entitled to the benefits of
the Revolving Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loans evidenced
hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Principal Office of Administrative Agent or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Revolving Credit Agreement. Unless and until an Assignment Agreement effecting
the assignment or transfer of the obligations evidenced hereby shall have been
accepted by Administrative Agent and recorded in the Register, Company, each
Agent and Lenders shall be entitled to deem and treat Payee as the owner and
holder of this Note and the obligations evidenced hereby. Payee hereby agrees,
by its acceptance hereof, that before disposing of this Note or any part hereof
it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided, the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligations of Company hereunder with respect to payments
of principal of or interest on this Note.
----------
[1] Lender's Revolving Credit Commitment
EXHIBIT B-1-1
This Note is subject to mandatory prepayment and to prepayment at the
option of Company, each as provided in the Revolving Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Revolving Credit
Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Revolving Credit Agreement.
No reference herein to the Revolving Credit Agreement and no provision of
this Note or the Revolving Credit Agreement shall alter or impair the
obligations of Company, which are absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective times,
and in the currency herein prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in the Revolving Credit Agreement, incurred in
the collection and enforcement of this Note. Company and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
EXHIBIT B-1-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
STANADYNE CORPORATION
By: _______________________
Title:
EXHIBIT B-1-3
TRANSACTIONS ON
REVOLVING LOAN NOTE
Amount of Loan Amount of Principal Outstanding Principal Notation
Date Made This Date Paid This Date Balance This Date Made By
---- -------------- ------------------- --------------------- --------
EXHIBIT B-1-4
EXHIBIT B-2 TO
REVOLVING CREDIT AND GUARANTY AGREEMENT
SWING LINE NOTE
$[1][___,___,___]
FOR VALUE RECEIVED, STANADYNE CORPORATION, a Delaware corporation
("COMPANY"), promises to pay to The CIT Group/Business Credit, Inc., as Swing
Line Lender ("PAYEE"), on or before August 6, 2010, the lesser of (a)
[_______________] ($[___________]) and (b) the unpaid principal amount of all
advances made by Payee to Company as Swing Line Loans under the Revolving Credit
Agreement referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Revolving Credit and Guaranty Agreement, dated as of August 6, 2004 (as it may
be amended, supplemented or otherwise modified, the "REVOLVING CREDIT
AGREEMENT"; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Company, STANADYNE AUTOMOTIVE
HOLDING CORP., certain Subsidiaries of Company, as Guarantors, the Lenders party
thereto from time to time XXXXXXX XXXXX CREDIT PARTNERS L.P., as Sole Lead
Arranger, Sole Bookrunner and Syndication Agent, and THE CIT GROUP/BUSINESS
CREDIT, INC., as Administrative Agent and Collateral Agent.
This Note is the "Swing Line Note" and is issued pursuant to and entitled
to the benefits of the Revolving Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Swing Line Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Principal Office of Swing Line Lender or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Revolving Credit Agreement.
This Note is subject to mandatory prepayment and to prepayment at the
option of Company, each as provided in the Revolving Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be
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[1] Swing Line Sublimit
EXHIBIT B-2-1
declared to be, due and payable in the manner, upon the conditions and with the
effect provided in the Revolving Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Revolving Credit Agreement.
No reference herein to the Revolving Credit Agreement and no provision of
this Note or the Revolving Credit Agreement shall alter or impair the
obligations of Company, which are absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective times,
and in the currency herein prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in the Revolving Credit Agreement, incurred in
the collection and enforcement of this Note. Company and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
EXHIBIT B-2-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
STANADYNE CORPORATION
By:____________________________
Title:
EXHIBIT B-2-3
TRANSACTIONS ON
SWING LINE NOTE
Amount of Loan Amount of Principal Outstanding Principal Notation
Date Made This Date Paid This Date Balance This Date Made By
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EXHIBIT B-2-4